Good day, and thank you for standing by. Welcome to the Ultragenyx First Quarter 2022 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you'd like to have assistance during the conference, please press star zero. I would now like to hand the conference over to your speaker today, Joshua Higa.
Good afternoon, and welcome to the Ultragenyx Pharmaceutical Financial Results and Corporate Update Conference Call for the First Quarter of 2022. We have issued a press release detailing our financial results, which you can find on our website at ultragenyx.com. I am Joshua Higa, Director of Investor Relations. Joining me on this call are Emil Kakkis, Chief Executive Officer and President, Erik Harris, Chief Commercial Officer, Mardi Dier, Chief Financial Officer, and Camille Bedrosian, Chief Medical Officer. I would like to remind everyone that during today's call we will be making forward-looking statements. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. Please refer to the risk factors discussed in our latest SEC filings. I'll now turn the call over to Emil.
Thanks, Josh, and good afternoon, everyone. In the first quarter, we continued to make progress across our diverse clinical and commercial programs. In the late-stage clinical pipeline, we're now enrolling patients in three registrational studies with a fourth to initiate later this year. This includes the three gene therapy programs for glycogen storage disease type 1a, Wilson disease, and ornithine transcarbamylase deficiency, as well as our anti-sclerostin antibody for osteogenesis imperfecta. The GTX-102 study for Angelman syndrome is progressing well and we remain confident in the program. The results we shared in 2020 from the original five patients led us to reimagine what is possible for patients with Angelman syndrome. Given the importance of this program, we've looked at ways, various ways to accelerate this program.
Recently we amended our agreement with GeneTx to allow us an additional option to acquire them at an earlier time point based on interim data. I'll let Camille share more in her section about the favorable safety profile and enrollment status across the regions. We also look forward to providing a more robust interim update in mid-2022. On the commercial side, the teams continue developing and executing their plans to define more patients who could benefit from Crysvita, Dojolvi, and Mepsevii. These efforts are supported by the work our clinical and regulatory teams are doing with country-specific authorities to enable greater access to these therapies. In the first quarter, we also closed on the strategic partnership with Regeneron, which pairs our expertise in global rare disease launches with the industry leader in antibody drug discovery and development.
We'll leverage our global commercial medical affairs regulatory functions to bring Evkeeza, a novel, highly potent, and approved antibody to patients where the current standard of care does not adequately reduce the LDL cholesterol in patients with HoFH. Since closing the deal, we transferred the marketing authorization in Europe and have begun the process to submit reimbursement dossiers. While this review process and negotiations can take time, we will leverage the team that currently supports Mepsevii and Dojolvi to respond to requests for named patient access within Europe. Feedback from the KOL community has been enthusiastic for the important role Evkeeza could play in the management of familial hypercholesterolemia. Evkeeza gives us a fourth product across five different indications that will be generating revenue for the company. This creates a diversified base of value that will help support our continued clinical execution for years to come.
I'll let the team go into more detail on their progress in the quarter. Erik, can you begin?
Thank you, Emil, and good afternoon, everyone. Commercialization teams have continued to adapt and evolve their strategies to meet the constantly changing landscape. For Crysvita, within the North American territory, the strong underlying demand from adult and pediatric patients with XLH and TIO continues. Compliance among patients who are already on therapy remains high, with patients reflecting on how much better they feel once they start receiving Crysvita. In the first quarter, approximately 80 new patients began therapy, which is consistent with the steady growth we have seen over the last few quarters. These increases are largely driven by the community prescribers, where nearly 50 new doctors wrote a prescription in the first quarter. In Latin America, we are continuing to see accelerating demand for Crysvita, driven by patients seeking therapy through the named patient programs.
This is particularly the case in Brazil, the largest market in the region, where we are in the final stages of full reimbursement negotiations with the authorities. Ordering in this region can be variable from quarter to quarter, but it is clear there is a strong demand for Crysvita from the patient and medical communities. Crysvita revenue in the first quarter 2022 grew 29% compared to the first quarter of 2021. As is typical, there was some seasonality as patients worked through the reauthorization process with their insurance providers at the beginning of the year.
As we saw in 2021, we expect stronger revenues in the second half of the year, and we maintain that 2022 Crysvita revenue in Ultragenyx territories will be between $250 million and $260 million, representing 30% growth in the product's fifth year. Turning now to Dojolvi. As a reminder, we will no longer provide detailed start form and other metrics for this program since we are past the early quarters of launch. In the U.S., the number of new start forms and patients on reimbursed therapy are consistent with the steady growth we saw in recent quarters. While we are seeing utilization at nearly all of the major centers for inborn errors of metabolism, we have begun to find new prescribers at some of the neuromuscular centers of excellence.
We will increase our efforts on these specialists as we look to expand the network of prescribers. Outside of the U.S., use of Dojolvi continues through our named patient and early access programs in Europe. In France and Italy, there continues to be meaningful demand through our named patient program. In Brazil, the health authorities approved Dojolvi for the treatment of both pediatric and adult patients with LC-FAOD late last year. We are continuing to work through the process to get full reimbursement approval, but this can take a little bit of time to complete. For the year, we are reaffirming the guidance range of $55 million-$65 million that we put out in January. I commend the team's work to generate more than 50% growth in this product's third year post-approval.
With that, I'll turn the call over to Mardi to share more details on our financial results for the quarter.
Thanks, Erik. Earlier today, we issued a press release that included financial results for the quarter, which I will briefly summarize. Company revenue for the three months ended March 31, 2022, totaled $79.9 million. Crysvita revenue in Ultragenyx territories was $54.6 million, including $45.2 million from the North America profit share territories and net product sales of $9.4 million in other regions. Total royalty revenue for the sales of Crysvita in the European territory was $4.8 million. Dojolvi revenue for the first quarter of 2022 was $12.4 million. Mepsevii revenue for the same period was $4.9 million. We expect these revenues may modestly increase over time.
We also recognized $3.2 million of revenue in the first quarter related to tech transfer as part of our strategic manufacturing partnership with Daiichi Sankyo around our PCL and HEK293 technologies. Recall, in the fourth quarter of 2021, the technology transfer activities were substantially completed and revenue from this agreement going forward will be minimal. Excluding Daiichi revenue in both periods, total revenue has grown 35% in the quarter compared to the first quarter of 2021. Our total operating expenses for the first quarter of 2022 were $216.6 million, which includes research and development expenses of $143.2 million, SG&A expenses of $67.3 million, and cost of sales of $6.1 million. I should note this also includes expense-related non-cash stock-based compensation of $29.4 million.
As we have discussed in prior quarters, we continue to expect our R&D spend to somewhat increase in 2022 as we support three pivotal gene therapy clinical studies, the UX143 phase II/III clinical study in OI, and the Angelman phase I/II study, and the phase I/II study for our most advanced mRNA program, UX053 and GSD III, and a number of other preclinical activities as we get ready to advance the next programs into the clinic. We also expect SG&A to modestly increase in 2022 as we continue to support the expansion and launches of our existing commercial products and the launch of Evkeeza. For the quarter ended March 31, 2022, net loss was $152.3 million or $2.19 per share. The net loss includes $9.3 million decrease in the fair value of equity investment.
Our net cash used for the first quarter 2022 also includes the $30 million upfront payment for the closing of the Regeneron collaboration agreement and significant investments in our gene therapy manufacturing plant, which we are planning to be operational in 2023. We ended the quarter with approximately $814 million in cash equivalents, and marketable securities. This puts us in a very solid position to achieve critical clinical milestones and expand our global commercial presence. Now I'll turn the call over to Camille to touch on some of our clinical programs.
Thank you, Mardi, and I too wish everyone a good afternoon. In my section, I will briefly provide status updates for our six clinical stage programs, including the GTX-102 phase I/II study being conducted by our partner, GeneTx, before turning the call back to Emil. Starting with the gene therapy programs, DTX-401 for the treatment of glycogen storage disease type 1a or GSD1a, is currently dosing patients in a randomized placebo-controlled phase III study. Similarly, UX701 for the treatment of Wilson disease is currently dosing patients in a seamless phase I/II/III randomized placebo-controlled study. DTX-301 for the treatment of ornithine transcarbamylase or OTC deficiency, is currently in the final stage of the study startup and site activation.
We anticipate the first patients will enter the four- to eight-week baseline screening period in mid-2022, after which they will be dosed in the phase III randomized placebo-controlled study. Outside of gene therapy, UX143 or setrusumab, an anti-sclerostin antibody, has begun dosing patients in the seamless phase II/III study for pediatric and young adult patients with osteogenesis imperfecta. We are also planning to initiate an additional study in children less than five years old in the second half of the year. GTX-102, the ASO in development with our collaborator, GeneTx, for patients with Angelman syndrome, continues to dose patients under the amended phase I/II protocol. In the U.K. and Canada, both cohorts 4 and 5 have expanded following a review of available safety data by the respective DSMBs. We began dosing patients in December, with some receiving up to five doses so far.
As we have previously indicated, the initial assessments of these patients have shown early and encouraging signs of clinical activity in multiple domains, similar to that which we saw in the original five patients at these low doses. To date, there have been no drug-related safety issues or lower extremity weakness in the newly treated patients. In the U.S., eight patients allocated 1-to-1 in the drug and comparator groups have been enrolled. We have received some anecdotal reports of limited improvements from these patients being dosed who have received drug at the 2 mg dose level. To reiterate, a most important finding for this stage of the study across all regions, there have been no reports of lower extremity weakness in any of the patients treated under the amended protocol. We look forward to providing a more robust update on this program in mid-2022.
UX053, our first mRNA treatment modality being developed for Glycogen Storage Disease Type III, is currently dosing patients in the single ascending dose arm of the phase I/II study. Preliminary data from that arm, as well as initiation of repeat dosing phase of the study, are anticipated in the second half of this year. With these updates, I will now turn back the call to Emil. Thank you.
Thank you, Camille. Before we shift to the Q&A portion of the call, I'll provide a quick reminder of the key upcoming milestones for the company. For GTX-102 in Angelman syndrome, we'll provide an interim update in mid-2022 on cohorts 4 and 5 in the Canada and U.K. arm of the study, as well as available safety and efficacy data from the patients treated in the U.S. We continue to be confident in this program and look for opportunities to accelerate development. For UX143 in osteogenesis imperfecta, we'll continue enrolling patients in the phase II portion of the study and expect to provide an update on the dose strategy we have selected for the phase III portion in the second half of the year. Separately, we expect to initiate a study in children under five years old in the second half of the year.
Across the gene therapy pipeline, we'll continue enrolling the phase III for DTX401 and the phase I/II/III for UX701. We also expect to finalize study startup activities for DTX301 and begin dosing patients in mid-2022. On the manufacturing side, we will continue to build out our facility at Bedford, Massachusetts, which is on track to begin producing material next year. For UX053 in the second half of the year, we expect to share single-dose data from the first part of the phase I/II study and to initiate the repeat dosing study stage. All these programs create a distinct opportunity to make a meaningful difference for patients with a rare genetic disease. We look forward to sharing further updates with you throughout the year. You also may have seen that we have launched our inaugural ESG report for 2021 last month.
This report is a meaningful evolution of the journey we've been on for the last 12 years as a company. We'll continue to build on this foundation and report on our progress. With that, let's move on to your questions. Operator, please provide the Q&A instructions.
Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. We ask that you limit your questions to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from Gena Wang with Barclays.
Thank you for taking my questions. I have two questions on Angelman program. Emil, maybe can you comment on any chemistry differences between your locked nucleic acid versus Roche's locked nucleic acid? My second question is, you know, based on comments you made that early dosing for the GTX-102, should we expect some robust clinical benefit at the mid-year update, beyond the two CGI score improvement in two domain to support the right dose?
Thank you, Gena. On the chemistry differences, I'm not deeply familiar with the specifics of the Roche molecule and all the different linkages because there are a lot of linkages. We know that it's a locked nucleic acid gapmer like ours is. There are some specific differences on the sequence, no doubt, and some other minor chemistry changes. I think the biggest difference is between where these are targeted. The overall safety profile of a product, it's not just the chemistry, it's also the dose and the potency that will determine it. We believe based where ours is targeted, it is very potent and that the dose range will be at a lower end of the range, which is partly, in part related to the potency of the locked nucleic acid type of ASO.
We're confident about the chemistry we have. While they both have LNA, locked nucleic acid components, I can't say that those differences that you can make any conclusions from those differences alone. Now, with regard to the opt-in, the opt-in just gives us an opportunity to execute earlier on interim data, and it just gives an opportunity to potentially accelerate the program. The decision on efficacy is not, it doesn't indicate, that we would need more or better or worse efficacy. It's just an option for us based on the interim data to execute the acquisition earlier under a different, somewhat different set of terms. We think it's a potential way for us to accelerate the program depending on what we see in and out mid-year.
Thank you.
Thank you. Our next question comes from Yigal Nochomovitz with Citigroup.
With partners at Memorial Sloan Kettering Cancer Center who have conducted this study, we do have this intent to.
Operator, this might not be related to our call.
We'll move on to the next question. Tazeen Ahmad with Bank of America.
Hi. Okay, thanks for taking my questions. Emil, I just wanted to get a sense from you on how you plan on aligning protocols going forward between FDA and EU regulators, assuming that you're gonna move into your pivotal study for Angelman. Secondly, can you just talk about the cadence of growth for Crysvita thus far? It's starting to move into sort of the mid-stage of growth. You know, what was the main growth driver this quarter, and where do you see the remaining opportunity for growth on a go-forward basis? Thank you.
Good. Well, I'll deal with the protocol piece first, then Erik maybe can talk about the areas of growth for Crysvita after I finish with the first part. On aligning protocols, it's not actually that difficult. Both protocols are treating essentially a once a month, but it's just a different dose and regimen for administration. Our expectation to align them is we'll align them in the phase II. We'll take our data from ex-U.S., from Canada and the U.K. that show us that the drug is safe and that the new administration strategy is appropriate, and bring that data along with the other safety data we have to the U.S. and request that they open essentially that, an amendment that will align all three regions under the same protocol.
We think we have enough data at this point to be able to show that the new regimen and the doses are safe. While we have been dosing patients at 2 mg, it would give us an opportunity then to bring the higher dosing in that we're using ex U.S. The other part we would align is for individuals who happen to be at lower doses, whether in the U.S. or outside the U.S., if a dose was determined that need to be higher, we'll provide a make up dose to those patients that will help bring their load level up in line with the other patients, so we'll get them where they need to be.
We'll take the data then and get the U.S. open, we believe, with that ex-U.S. data and get everyone aligned in phase II. From there, going forward in phase III, then we'd have all regions aligned on a single phase III program. Let's talk about the Crysvita cadence of growth. As you know, some of it's been moving toward adults, but Erik maybe can provide a little more color on the growth in Crysvita over time.
Yeah. As far as Crysvita is concerned, we're expecting to see steady growth in North America as we've seen. You know, we've been building momentum in Latin America for the last couple of quarters. We expect that to continue to accelerate in growth. Although it, you know, as we stated, the growth is recognized in stages. It's kinda lumpy in how it grows from quarter to quarter. Overall, on an annual basis, it should be steady accelerating growth.
When you look at Europe, we're seeing steady sales growth in named patient sales for Dojolvi with some expansion across Europe for named patient sales for Dojolvi, and expect to start to recognize meaningful growth of Evkeeza revenue in 2023 and beyond.
Thanks, Erik. I think in the U.S., I think one of the elements of color that we could provide here is that there is a continuing shift to more adult patients than pediatric patients, and that nearly half the scripts or prescriptions, the new start forms are coming from new prescribers with new adult patients. There's a very broad, diverse group of doctors out there who are treating patients. That's by seeking and finding those patients. We'll continue to find patients. When we find them, we have a very high rate of conversion to people who actually want to be prescribed, so it's about getting the word out. That's continuing to be a driver of steady growth, is finding those new doctors, new patients in the U.S., and we'll continue driving that activity. Hopefully that's good for you, Tazeen.
Yeah. That's good. Thanks, Emil.
Thank you. Our next question comes from Yaron Werber with Cowen.
Hi. This is Brendan on for Yaron. Thanks for taking the questions, guys. Just a couple quick ones from us. First I wanted to ask actually about the OTC pivotal study. I just wanted to see what you can tell us maybe about enrollment and recruitment there. I know originally this was thinking to get underway earlier this year, and now looks like it's gonna be closer to starting screening mid-year. Just wanted to see if there's any color you could provide.
On Angelman, assuming the mid-year update really focuses on the ex-U.S. studies, as the U.S. kind of gets going here, do you have a sense of maybe a timing over the next six to 12 months of your planned cadence for additional updates from potentially higher doses? Thanks.
Good. The OTC program, among the three gene therapy programs, we had set the DTX-401 for GSD1A as kind of our priority. There were a lot of patients ready. We were able to get through the process a little faster and are driving that one ahead, which is now enrolling. We purposely then put the OTC program a little further behind. Remember, we're running four pivotal programs at once, which is a lot for any company. The OTC is by design a little bit behind. It has not started enrolling, but the sites are getting started and we've gotten through the process and regulatory process. I think we're lined up to go ahead and we'll start enrolling, and I think we'll do fine.
DTX-401 clearly will, I think, be the first gene therapy to get through the phase III process and yield data. Now, with regard to Angelman, right now we're coming out mid-year with the current dose regimen. What we said in the past is that we would expect to take what we've learned and what doses we've cleared and initiate new cohorts starting at those new doses, so we can load patients a little at the higher doses that have been cleared as safe. We would expect to be doing that this year. If we then are able to show that that dose is safe and is our achieving threshold across patients, that we would then expand it to a larger cohort of patients to collect more data.
While that larger cohort would be enrolling later this year, we would then be beginning the process of planning and discussing regulatory authorities of the phase III. The phase III would be expected to be something we'd start next year. Does that give you a little more color on the timeline then?
Yeah, that's great. Thanks very much, Emil.
Thank you. Our next question comes from Cory Kasimov with JPMorgan.
Hi, this is Tiffany on for Cory. So at this stage with Angelman, do you have any idea of how many U.S. patients you can expect initial safety and efficacy data from, at the mid-year update? What would be the cutoff for inclusion there? Would it be, you know, simply any data ahead of a specified date before the readout or kind of a required follow-up through a certain amount of time? Thanks.
Well, we would expect, since we said that all eight patients in the U.S. were enrolled and four patients dosed at the 2 mg dose level, you know, we would expect to provide all the data we have on them at that point in time. There would certainly be a certain amount of formal data, but we would provide what we know about how the patients are doing at that time to give people more of an interim look. Remember, this is not a final end of the story study update, it's just an interim look. We'll provide as much as we can on four patients that will have received multiple doses of 2 mg, as well as then the patients ex-U.S. in cohorts 4 and 5 that would've gotten the higher doses and been going through the titration.
Got it.
Okay.
A total of like 16 patients.
Yeah, well, where we've enrolled in Cohort 5 and then the 4. Yes.
Okay, great. Thanks.
Thank you. Our next question comes from Yigal Nochomovitz from Citigroup.
Hi, Emil and team. Thank you very, very much for taking the questions. Apologies for earlier, I was juggling multiple calls. Just a question on the guidance for Crysvita in the Ultragenyx territories. As far as I understand, you did $55.5 million in 4Q 2021, $54.6 million in the most recent quarter. Just if you could help elaborate a little bit on the rationale behind the $250 million-$260 million, just 'cause based on the last two quarters, it does seem perhaps a touch aggressive. Thank you.
Yeah, well, we have some experience now or a bit of time on the program, so we're actually comfortable with how it performs and how the second half of the year is stronger. Maybe Erik, do you wanna touch on that or Mardi?
Erik?
Yeah. With regards to the steady growth in North America, you know, we're seeing an accelerating growth in LatAm and expecting potential full reimbursement by the end of the year, which will help speed up the transition patients that have been waiting for treatment through the injunction process, name patient sales process.
Yep. Latin America will contribute. Did you wanna add something?
I was just gonna add, Yigal, if you look at the quarterly progression in 2021, you know, in terms of how the sales progressed throughout the year, we expect the same in 2022 as well. You're gonna see, you know, first quarter always has seasonality impact and the prep work, et cetera. Then there's just some timing between Q4 and Q1. You should see in the second half of the year that the revenues continue, yeah, continue to accelerate. Yeah, we feel good about the guidance range of $250-$260, so we're reconfirming that today.
Yep.
Okay. Thank you.
Real pattern. Yeah, seasonal patterns plus improvement in Latin America. We feel good about what Crysvita continuing to grow. I think the demand is strong and the compliance and persistence has been excellent. People, once they get on, they really do stay on this drug, probably as good as any we've ever seen. We think it's a great product, will continue to grow. All right.
Okay.
Next question.
Mm-hmm. Oh, can I ask another one? Thank you.
Oh.
Oh.
Go ahead.
You have time? Okay. Thank you.
You're on.
Okay. Hopefully this wasn't already asked, but in terms of just the quarter-over-quarter trends for North America, I'm assuming that the $45 million in this most recent quarter was a seasonal effect. If you could just comment on, rest of world looked very, very nice increase quarter-over-quarter. If you could just comment a little bit on the thinking behind that.
Yeah. Well, maybe Erik, you wanna talk through this, the quarter-over-quarter thing? I think it's kind of reiterating what we just went through.
Go ahead, Erik.
Yeah. Consistent with what Mardi was just stating, the first quarter was pretty much in line with our expectations. We had anticipated some seasonality, as you stated, as a result of the reoptimization process. In addition, you know, the Omicron virus impacted us a bit more than it had than COVID had impacted us previously, as we had about three-quarters of our sales force out on protocol at some point in the first two months of the year. There was some impact there. Consistent with previous years, we're expecting steady growth throughout the year with quarterly splits, consistent with what you saw in 2021 with increasing sales in the second half of the year.
With regards to the rest of the world, you know, I had stated the increasing momentum in Latin America as more and more patients are being granted injunctions and receiving reimbursed therapy, and that's gonna continue to accelerate as we get full reimbursement in Brazil and across other countries in Latin America. Then with regards to Europe, we've seen steady growth in named patient sales with Dojolvi, typically driven by France and Italy, and now we're expanding that across other countries in Europe. Subsequently, the potential for meaningful increasing revenue in 2023 with Evkeeza.
Good. Hopefully that answered your question. If not, let's go on to the next question.
Yeah. Thank you.
Next caller. Thank you.
Thank you. Next, we have Joon Lee with Truist Securities.
Hi. Thanks for taking our question. In the prepared remarks regarding GTX-102, you mentioned enrolling in a drug and a comparator group. Can you elaborate on what you mean by the comparator group? Also you said you have administered up to five doses in some patients. Are you able to share if that's in cohort 4, 5, or in the U.S.? Thank you.
Yeah. In the U.S., with the FDA agreement that we were gonna dose, we dosed four patients with 2 mg once per month. That was the agreement. They also want us to enroll another four patients, not randomized, but another four patients to be enrolled to simply just do the assessments on them without drug dosing. All right. That's the four comparators. That was described before, but perhaps it got missed. That, that's what's happening ex-U.S. The question on up to five, we're talking about the patients now ex-U.S. The first few patients have actually gotten all four doses plus one maintenance dose. All right. That's five doses, all right. Others have lesser numbers.
We haven't put out the specifics of all of the time course of all of it, but the point would be that we have now multiple patients who've gotten five doses of drug without any lower extremity weakness. It's just to clarify the issue that simply exposing the patient to the drug repeatedly is not gonna cause the problem by itself at any dose level that we're at. Yeah.
Just to clarify, you know, what's the rationale for having a comparator that is not a placebo? I don't understand. I mean, is that-
Well, I think they wanna know.
Is that a placebo?
Well, you want me to read the FDA's mind. The FDA was looking. Knowing that a placebo was hard to do, I think what they were looking for is some measure of how consistent you would do these complex psychologist-driven tests on a patient and how that would look like, just to understand the variability of the methods when they're done repeatedly. That's the basis for it. It's not a true control. I think they just wanted to look at how much variation would you see just in measuring patients with the people doing it. It's a test of the system really and not really a control group in that sense. It's fine. I think what we're confident is patients don't really change much. There's no doubt when you do measures like this, there's gonna be some variation.
The question is whether what we see in our patients is beyond variation, and we've addressed that before to say that the impressive change seen, for example, in the Vineland score that was presented last year at FAST showed that the level of change observed was far beyond what you would see in placebo change over time or control group for natural history. We're comfortable, but that's what those four patients are for, and we're complying with the FDA's request on just having four more patients getting assessed.
Thank you.
Thank you. Okay. Let's move on.
Thank you. The next question comes from Joseph Schwartz with SVB Securities.
Hi, I'm Julie dialing in for Joe. Thank you for taking our questions. You've previously mentioned using a multi-domain responder index as a possible endpoint for GTX-102. Curious what the receptivity is to that endpoint from the regulatory agencies in phase III. Then secondly, are there other domains you would consider for the MDRI besides the five in the CGI-I-AS? Do you know what the minimally important differences are for the individual domains to set as a threshold to be considered a responder? Thank you.
Wow, this is a deep dive into clinical study design. Very good. Thank you. For those of you who don't know what the multi-domain responder index is, it's a technique for just analyzing endpoints that allows you to capture the totality of the data across multiple domains. I've written a paper on it with our head of biometrics, PK Tandon. We've also had meetings with the FDA, including a large number of senior FDA people, about the meaning of the approach. They are interested in it. They have questions still. But it needs kind of a test case, and perhaps Angelman is the test case. It's not been accepted yet, although it was accepted in the sense that we ran an MDRI in our Mepsevii program that was approved.
It did, in my mind, hit the endpoint in a small study showing the power of the MDRI to capture efficacy. If we were to approach it in Angelman syndrome, we would the five domains we're talking about are probably the ones we would pick. The seizure domain, because they're on seizure meds, and they've all been in control, there's not much power there. If they were having a lot of seizures, it could be also a domain. But I think the other domains we would use are basically the communication domain, receptive and expressive, as well as sleep behavior, which basically through the Vineland. We would also look at fine motor and gross motor scales.
For each of those scales, like the Bayley for expressive communication and the fine motor, those tools have normative data as well as what are considered MIDs, data to support them. Not necessarily in Angelman syndrome, but in general. We think there's a lot of those types of thresholds that we could capture. We have an entire team headed by Ali Turner, who's terrific at this stuff, and they can generate more MIDs or supportive data. We feel like it's a very powerful way to look at heterogeneous complex diseases like Angelman. That said, if we had to, we could do CGI. We see tremendous power in the CGI, and the FDA has accepted it before. I don't see any risk here. We do one or the other.
We can always put the MDRI as a secondary and gain the benefit of it there if we get approved off of a primary CGI Angelman syndrome. At this point, I feel like the good part is we're talking about magnitude of changes that are meaningful, easily captured, therefore, you can do it practically any way you want to, and that'll work.
Okay, great. Thank you very much.
Thank you. Our next question comes from Maury Raycroft with Jefferies.
Hi, thanks for taking my question. I was gonna ask a question about Angelman safety. Based on the time course of the SAE in your original patient number two disclosed previously, it appears to be a peak dose effect, but how do you get comfortable with cumulative dosing effects since the SAE occurred about six to 30 days after the last dose, across the five patients?
Well, the reason we get comfort that it's not a cumulative is because the actual dose, cumulative dose at which someone had the problem was highly variable between patients and unrelated to the severity. One patient, the fifth patient, had one dose, only 20, and had the effect. We had also the first patient that had 106 mg and had mild problems. There's not much relationship to the accumulation and the time course of the effect, like the six days or so. The time course of the adverse effect doesn't fit the efficacy effect. This has nothing to do with the drug acting as an ASO in the brain tissue. It has to do with an effect that's very local, like something irritating the nerves there, right?
It is really something operating on a different time course, different mechanism, and everything we have says it's a concentration-dependent effect. What we're seeing right now, dosing for as many months as we have, is we're not seeing the effect of accumulation causing the problem, right, Maury? That was your question. We've dosed. While we told you, we dose now multiple patients have given five doses over months, right, and not seen the effect. If accumulation would have done it, then they would have had a problem, but they haven't. I think it verifies our view that this is an acute toxic kind of effect due to high concentration. It's more like an irritation of the meninges and the nerve roots.
We think that the change in administration methods, dosing administration method are gonna mitigate that, and we think we've seen that that's true.
Got it. Okay. That's really helpful. Thanks for taking my question.
Sure.
Thank you. Our next question comes from Salveen Richter with Goldman Sachs.
Hi, this is Tommy on for Salveen. Thanks for taking our question. Wanted to follow up about Angelman safety. Basically your confidence that the SAEs were dose specific rather than molecule specific, specifically as it relates to, like, the chemistry and the binding site of your ASO. An update maybe of where you're at now with dose escalation, what level you think could be reached by the update. Thank you.
Sure. Thanks for your question. I think you're asking whether the safety effect was related to the molecule versus the chemistry. I think from the safety work done on the molecule, meaning the sequence itself, we're comfortable that it's not hitting off-site target effects in other situations. When you look at the pattern of the safety effect, the fact it peaks in a week or two and then declining over several weeks, it doesn't fit the specific antisense oligonucleotide pattern of its concentration and presence. It fits a different kind of thing. What we do know, and it's been published, that ASOs in general have a nonspecific chemistry toxicity kind of thing that we demonstrated in vitro. If you put a lot of it in there, it goes in, will bind certain proteins and cause some toxicities.
This tells you just have to manage the local concentration carefully at the time you administer it. That chemistry effect can be enhanced by being a locked nucleic acid, but the locked nucleic acid also gives you longer half-life and greater potency. The question is, how do you balance those benefits of locked nucleic acid versus the toxicity issues? I think there are ways to look at that. We think with the molecule we have, where it's targeting and the fact that only a mg in a monkey can provide sufficient knockdown, which is well below what's been seen with other ASOs, we think we have the level of potency that the benefit of LNA can be obtained without risking the toxicity issues that happen from those more stable and those type of ASOs.
Thanks. Just to follow up on the dose escalation, the progress there. Thanks.
Well, as we've said, we have several patients have gone through five doses, which means they've gone through the four doses and have gone into maintenance. We haven't really disclosed all the levels of dose titration. There has been titration, and we'll put out all that detail on titration to what dose level and outcomes in all the patients at the midyear. It's not really appropriate to start putting that out yet. As I said, multiple patients have reached five, which means they had four loading doses and then one dose of their maintenance regimen, which happens three months after the fourth dose.
Thank you.
Thank you. Our next question comes from Dae Gon Ha with Stifel.
Dae Gon, are you there? Operator, why don't we move to the next question?
Okay. Our next question comes from Jeff Hung with Morgan Stanley.
Thanks for taking my question. Can you talk about what we should expect to see from the setrusumab and the UX053 updates later this year?
Sure. In setrusumab, we expect to have almost 40 patients enrolled that'll have gotten two months of dosing, and we'll have the information on their biomarker, the P1NP biomarker, which were based on the historical data from the ASTEROID study in 90 patients, showed a nice correlation between their bone mineral density improvements and that, and the P1NP. We'll look at the P1NP marker and other data, safety, and efficacy to help make a decision. We put out what our decision is on the dosing algorithms for pediatric and adult patients in the disease. You'll learn about safety, biomarker information at a high level, and then we'll talk about what our dosing strategy going forward and our plan to start phase III. That's setrusumab.
For UX053, we're gonna have basically single dose, a single ascending dose data in which we'll look at the safety, of course, and as well as effects on glucose and other biomarkers and clinical assessments as well. Because it's early and it's only a single dose, we wouldn't expect to see dramatic clinical benefit at this point. We're looking to see clinical activity in the biomarkers endpoints that would help us assess that the mRNA being delivered is being translated, the enzyme is active, and is doing what it needs to do in the liver.
Thank you.
Good.
The next question comes from Joel Beatty with Baird.
Hi, thanks for taking the question. First one is on Crysvita. Once patients start therapy, what's the rate of them sticking on therapy? Have you seen any drop-off there? And then also for gene therapy and manufacturing, once the plant is operational next year, how does the capacity of that plant compare to the clinical pipeline programs you have in development?
Okay. The persistence or compliance you're talking about was for Crysvita?
Yes.
The Crysvita persistence is in the high 90 percentile range, so it's quite excellent. Compliance is in the 90%+ range. We see these are really good numbers for compliance and persistence so far. I think part of the reason for that is patients can feel when they're on the drug and when they're not on the drug. If they miss a dose, the phosphate will start to fall, and they'll feel that effect of that, and that just tells them they need to get back on. We think that the fact that they can feel when their phosphate goes down is probably a factor in why they're staying compliant, and once they get on, they wanna stay on.
That's the gene therapy plant. It's about 100,000 sq ft plant. It will have ultimately two suites, independent suites that can run up to 2,000-L production and can turn over a number of runs a year. It should be able to handle a significant fraction of our total, although our plan was still to use a hybrid model with some contract manufacturing to supplement it. If we hit our marks and we get where we wanna be on commercializing gene therapy, we have also the ability, we have additional land that we have purchased next to the plant that we can add, essentially double the plant up with two more suites that could make double the total capacity.
Within those ranges, we have a good fraction of what we're doing in, but we still are planning a hybrid model, not a complete takeover of manufacturing. If push comes to shove, we certainly would have the capacity ultimately to take on the programs we have short of Duchenne. If the Duchenne program does well and hits the clinic, the quantity of product required for that program will be substantial, and we'll need more capacity.
Great. Thank you.
Our next question comes from Laura Chico with Wedbush.
Thank you very much for taking the question. I guess I wanted to take a step back and, for Emil and team, how should we be thinking about the potential for longer-term revenue guidance targets? Obviously, Kakkis, you have considerable experience with this, but you're approaching a transition point. Just kind of wondering, what is the potential for longer-range targets? And then maybe secondarily, how do you balance becoming profitable with continuing to expand your pipeline efforts at this point? Thank you very much.
Thank you, Laura. Well, first of all, I think our expectation is to see steady growth and the addition of Evkeeza is to help also fill out the pipeline growth. Crysvita will be continuing to grow, we believe, along with Dojolvi, which is doing really well. That puts us on track with the three products and now adding Evkeeza to hit substantial revenue growth every year in the, you know, 30%+ range or more. We feel very good about where that's taking us. Now with regard to our pipeline, our plan here was to run about 68 clinical stage programs at the same time, Laura, and then not to grow beyond that, to be able to run 68 clinical stage programs. Once you become commercial, it's separate, but in development stage 68.
The idea is that we wanna create a certain size of spend around R&D that would generate a product filing on an average every year if you average it over two or three years. We think that's when we can do it. We don't wanna keep growing R&D indefinitely. We're growing to this size. We're at a peak right now because we have four programs in pivotal, which is not normal. What our expectation is that over the next couple of years, we'll start to plateau, and we will try to hold line there around that level of R&D spend. Our expectation then the revenue continue to grow, and we'll get operating leverage and go profitable. That is our plan.
Our plan, though, when you go profitable, is to go profitable with a lot of products, new products launching, which we would expect in the next three or four years, which would put us in position to cross profitability, but not each profit, but to really fly far above it. I think there's always a debate how much you wanna spend versus how much you wanna manage profitability. The key is when you spend, to spend well and to spend smartly and effectively, and that's what we focus a lot on. Right now, we think the level of spend we're at is around the range we wanna be in the long run. As long as we continue to grow our revenue as we can, we'll have to be a profitable company.
The picture we see in the long range plan shows a whole series of products generating revenue for us in a very robust, diversified pipeline across mode and therapeutic indication, which I think will make us, you know, one of the leading companies in the field of rare diseases.
Thanks so much, Emil.
Thank you. Our next question comes from Dae Gon Ha with Stifel.
Great. Good afternoon. Thanks for taking our questions, and sorry about the earlier hiccup. Two questions from me, one on GTX-102. Emil, I wanted to ask you about sort of the confidence and the strength in the GTX-102 IP. It looks like there is a little bit of an overlap on the sequence targets that Roche, Ionis and GeneTx are all kinda going after. Wanted to get your take on that. Secondly, following up on the previous question, going back to acquisition, you kinda prioritize a readily commercializable product. I guess going forward, what kind of directionality would be enticing to you? Is it more commercializable products or something like GeneTx where you can take basically the entire ownership of a program? Thanks so much.
Okay. With regard to the GTX-102 IP, there is a distinct region within the IP that Texas A&M has, the genetics license that we licensed part of our deal, that is distinctive and separate from where Ionis and Roche operate, distinctive and separate toward the five prime end of the sense message. The description we use involves that sequence, plus we also are targeting not necessarily just introns, but conserved sequences and other aspects of what we do that are unique and different, which are important in achieving potency. Because the five prime end is a lot more potent at terminating the transcription of the antisense RNA as well as destroying existing messages. That's why we think that five prime end that is uniquely patented is powerful and important. That is where the five prime end and the long antisense message come from.
That's why we think there's a separation, a distinct one. It's why we did the deal originally, because there's no way I would have planned to go head-to-head with Roche and Biogen, Ionis on a neurologic disease, except for the fact that the group had an edge, and they wanted to work with us, and it looked like an opportunity we should take. On the question of commercial versus pipeline, I think it's a fundamental question for you 'cause I've had people say, "Why don't you buy a billion-dollar product that's commercial?" Well, yes, but how much do you have to pay for a billion-dollar product that's already commercial? Obviously, I don't think buying a product you know is a billion-dollar product, already commercial, is a good deal 'cause I don't think there's any gain. There's an arbitrage there.
There's no way to make money as a company. We can't do that with the premium I'm paying for it, the rest. When we buy a later-stage commercial product, they may be smaller niche products that are great for us, where we can extract value with our unique distribution system and team across the globe. That is what Regeneron wanted, and we're able to use that skill to gain value from something with the $30 million upfront. Now, Angelman, we can't make or build a company on the smaller products. We need to have some larger return products. Those are gonna have to be earlier-stage programs, where then we have to take our developmental insight and skill to pick, design, drive, and execute in a reasonable timeframe to take something of uncertain value and turn it into something of value.
I think you would agree that a $20 million investment on a multi-billion-dollar opportunity that has now turned into something of great value is the kind of investment we should be in as a biotech. Adding a late-stage commercial product that leverages our operating revenue and takes advantage of our rare disease skills commercially is also a good deal. If you see a late-stage deal, it's more likely to be smaller niche and perfect fit for us. If it's earlier stage, we might do some things that are higher risk, higher return, but where we can add value and grow the value through our particular skills. Hopefully, that gives you kind of a feel for our view.
Yep, it does. Thank you very much.
Thank you. Our next question comes from Yigal Nochomovitz from Citigroup.
Hi. Thank you so much for taking the follow-up. Just two clinical ones, Emil. On the gene therapy programs, I don't think I've ever asked you this before, but could you just clarify as to why for 401 and 301, you're doing a 1-to-1 randomization, but for Wilson's, you opted for a 2-to-1 randomization? Thank you.
Yes. Well, in the DTX-301 and DTX-401, originally, we were gonna do a 2:1 in a 40-patient study, and I specifically decided we ought to go 1:1 to improve the power of the study and because I thought a 40-patient study was on the smaller side. The powering of the study is dependent on the size of the placebo arm, and since we're looking at patients who are on control treatments, we need to make sure we have an adequate power. By increasing and making it 1:1, we're able to look at the existing treatment than the others. Now, for the Wilson program, if you notice, the total size of the program was much larger, right? There's 27 people in the first part, six treated, three placebo in each dose group. That's 27, right?
Plus, there will be 60, 70 in the phase III part of the study. Because the study is much larger, we can afford to do the 2-to-1 randomization, still have enough power remaining by a large enough placebo group. Because it has really good biomarker, essentially urinary copper excretion, these are things we can measure with great reliability. We think the 2-to-1 works for that. It's nicer to patients, and we think the larger size of study, which is enabled by our better PCL manufacturing platform, puts us in position to be able to do a study that will cost less to make, but it will treat more patients.
Okay. Yeah. That's very logical. Thanks. Then just one on Angelman's. Apologies if this has already been asked, but just with respect to, you know, feeling comfortable moving into a phase III for Angelman's, could you be a little more specific in terms of the point improvement you'd like to see in CGI-AS, and across a minimum number of domains? If you could provide a little quantitative commentary on sort of what point improvement you need to see and in how many domains you're aiming for to feel good about taking to phase III. Thank you.
Well, we had described before that for the purpose of dose titration, we were looking at least two domains of plus two or better. Plus two meaning much improved or very much improved. In the prior program, we had three patients that were much improved or plus two, and two patients that were very much improved. That gives you kind of a sense of what we might see. I would look at those as a trajectory, amount of improvement over a period of time. The actual true differential in efficacy might depend on how long we decide to monitor and treat them. I think that level of change suggests to us that the not long antisense message must be knocked down and that UBE3A expression must be induced. Once you've induced it maximally, doing it more doesn't matter.
You just need to give patients time to develop and improve their skills. We are looking. If we were running a study with CGI-AS, we'd wanna see a +2 or better in our design for our phase III. That's what we'd wanna see. We wouldn't wanna go with a program that was gonna give you a +1. We'd wanna make sure we get our titration dosing such that we're looking at a much improved kinda score, and I think patients deserve to have us do the work and make that right. I think it's within our grasp. We know it can be achieved, and we're close to where we need to be. I think it's achievable to get to that level of efficacy with this program.
Great. Thanks so much.
Thank you. I'm showing no further questions at this time. I'd now like to turn the conference back to Joshua Higa.
Thank you. This concludes today's call. If there are additional questions, please contact us by phone or at ir@ultragenyx.com. Thank you.
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