Good morning. Welcome to the first session of the Bank of America Healthcare Conference. I'm Tiziana Mott. I'm one of the senior SMid biotech analysts here at the firm. It's my pleasure to have with me our first presenting company. It's Ultragenyx. Presenting for Ultragenyx this morning is CFO Howard Horn. Howard, thanks for making the trip down from San Francisco this morning.
Thank you for having me.
I'll also just mention that Josh Higa is in the audience as well from IR, in case anybody has any questions. Howard, maybe we can just do a quick general overview of the company, and we can then move to, I never thought I'd say this, but the macro factors affecting SMid biotech these days.
All right. Yeah. Starting off, Ultragenyx is what we think of as a next-generation rare disease company. We're in a unique situation where we're headed towards full-year GAAP profitability in 2027. That's driven by growth of our current four commercial programs. We also have three upcoming near-term launches that are going to transform the company. Those launches are for 111, 401, 143. We'll talk about those I know today. Each of them has a PRV associated with them. That's even before we talk about the Angelman program. There's a lot of exciting stuff coming up for us, specifically for 2025. I'll highlight five things. I'll do it quickly. Top line this year, $640 million-$670 million in total. We will have data from our OI program this year.
We are currently under review for our 111 gene therapy program with a PDUFA date of August 18. We are about to file mid-year our 401 gene therapy program. BLA will go in mid-year. We are enrolling our 102 phase III trial. That'll happen before the end of the year. We should have data next year. A lot of activity in the back half of this year.
Okay. We'll get to those catalysts in a second. I wanted to take a couple of minutes to talk about items that you might have already addressed, most of these, on previous interactions with investors and also on your recent earnings call. Maybe let's start on the most recent update, which was the executive order that was announced yesterday as it relates to most favored nation. Can you just talk about how it could potentially impact rare?
Yeah, that is actually the toughest of the new sort of things coming out of DC. Candidly, I do not know. I do not know that I know enough. And by the way, I really appreciated the note you put out yesterday. I think details are still to be revealed. I think the markets spoke yesterday by saying they did not think it was going to be a big impact for pharma and biotech. My candid answer is I do not know yet.
Can you talk about for your current business, for your commercial products, what is the payer mix?
We haven't really stated that yet. So I can't give you an answer.
Yeah. I think as time moves on, people will probably probe you a little bit about that just because of the Medicaid component. Can you just also remind us about what your ex-U.S. sales percentage is?
Yeah. Ex-U.S. sales is a growing part, Latin America in particular with CRYSVITA for us. We have a healthy growing business across all of our regions.
If something needed to be done, would you make a choice between choosing to be in a particular country versus wanting to maintain price? Or maybe I'm going too far ahead. In general, some companies have said that they have a very narrow price range for their products. Would, in the world of rare disease, that be a safe assumption to make about Ultragenyx as well?
Yeah. Unfortunately, it's too soon to think that all through. I think I pivot back to our mission as a company, which is to help rare disease patients globally. That's where we know we are today.
Okay. Can you talk about interactions with FDA? How have they been going over the last, I guess, now two months? Any changes that you've noticed?
Yeah. This is specifically related to our 111 Sanfilippo program. We do not usually comment on details of regulatory interactions, but given all the changes at the agency we did and have, and what we have shared is that the 111 process is ongoing exactly the way you would have laid it out or it has been laid out. We had our mid-cycle review on time. We know that the inspections of our manufacturing facilities and our clinical sites have been scheduled and are ongoing on time. Everything is on track. I think in a more macro statement, we have a long history of working well with the agency. I do expect that to continue.
Okay. Lastly, any impact that you're expecting from general tariffs?
Yeah, that's another interesting one. Still clearly evolving. We, like other companies, are running scenarios, analyzing, trying to learn what might be the final decisions there. Ultimately, we do have a global supply chain like others. When we look at the current landscape, I really do not think there's a material impact on any of our programs, including CRYSVITA.
Have you been public about where your manufacturing takes place?
We have manufacturing all over, but I would note that we have a U.S. factory for gene therapy that's right outside of Boston.
Okay. All right. We'll follow up as other events happen to ask those questions, perhaps again next quarter. Maybe let's move on to osteogenesis. For OI, can you just give us a quick overview of the program? People have been talking about the first interim that happened, the second one that's coming, and the potential for a third and last. For those who may not be as familiar, can you just explain to us what those mean?
Yeah. OI is a bone disease where you can break bones even rolling over in bed. It can be pretty debilitating. We are in our phase III trial now. I think what you're mentioning is we had a couple of interim analyses in that phase III trial, one of which was at the cusp of the year, interim analysis one. We're heading into interim analysis two mid-year. Then there's a final analysis if we need to go there at the end of the year. In general, whether it's at the midterm or the IA2 or the final analysis, we feel really great about the program. Regardless of what time point we get the data, I don't think that impacts the ultimate commercial opportunity. We're often asked, how do you feel about IA2? What is at the core of why you think it could work?
I think basically looking back at the phase III data, we're very encouraged by that. That's fundamentally why we're excited. If you think about IA1, that was at a time point where we had seven months of treatment at minimum for all patients. If you think about needing a few months for bone mineral density to improve and for the drug to really have an effect, there's only a couple of months of therapeutic window there where you can see a separation between the placebo arm and the active arm. If you fast forward to this mid-year time point for IA2, that's 12 months minimum for all patients. You've added at least another five months to that handful of months before, so more than 100% of time. That gives us some hope that we could hit at IA2.
What was the reasoning behind having, why not wait till the end to do the final analysis? What made the company confident that interim reads at these specific time points? This is a matter of time, right? You collect more events, and that increases the chances of the study working. Why did the interims make sense?
Our phase II data gave us a hint that it could make sense, right? IA1, the initial one, would have been an early hit, but not impossible. IA2 is sort of more consistent with maybe the data we've seen in phase II. IA3, or sorry, the final analysis would get there. Ultimately, the reason we chose to do it is kind of twofold. One is for patients, right? The earlier we can get them off of placebo, the better. Also a financial one where months do matter for net present value. Our thought was if we could get it to the market sooner, that would be better.
Let's talk about the second interim. EMIL had given some color about potential timing as it relates to data log. Can you just give us a summary of that?
Yeah, I'll go with the mid-year answer. There's not much more I can sharpen that point.
Has data log happened?
We did say at the quarterly call that data log has happened.
Yeah.
It will take some number of months to get that data ready. Then we will, whether we hit or not, we will tell the street.
I guess in terms of the study itself, if you do have to go to a third and final read, what would give the company confidence that that would be the sufficient amount of time that would be needed? Because people have been trying to debate what potential issues there could be with study design, any study design in general, but in this case for this study, what could make the second interim not have collected enough events? And then what gives you confidence that the third and final would be sufficient in terms of time?
Yeah. So fundamentally, we're looking for these two lines to separate, right? I think should we not hit at IA2, I think my hypothesis is the fundamental reasoning would be that you had some more variability in the placebo group, and they did not have enough fractures to show separation. Recall the P-value for interim analysis two is 0.01. It is a reasonably stringent threshold. What we have seen in data in the past, I do not think it is an irrational one to choose. In the final analysis, I think the P-value is 0.04 or thereabouts. That is a much better bar, if you will, to hit. I think with those additional months, the chances that those lines separate is good.
What is the market opportunity for OI?
Yeah. We think it's bigger than CRYSVITA. In particular, maybe to frame it, 60,000 patients in the world, about a quarter of those in the U.S. So 60,000 patients for OI, 50,000 for XLH, and maybe 15,000 in the U.S. versus 12,000 for XLH. What we're hearing from physicians is that they have 50% more OI patients in their clinics. These are the KOLs. That doesn't mean that there's 50% more patients. It just means that with the severity of the disease, these patients are coming into the key centers. I think that's good news for us because, one, we already know these docs from our XLH experience. Two, that makes these patients more accessible. I think together, that could mean that we have a faster ramp-up than we saw with CRYSVITA.
You talk about the total number of patients, but do you think that all of them would be needing treatment beyond what they have now? Can you just remind us of what patients have available to them now?
Yeah. Patients are often on bisphosphonates, although that's not an approved medicine here in the U.S. and for most countries around the world. Our impression is that that's not satisfactory for them. Whether they're type one, type three, type four, I think the majority of those patients, certainly all the threes and fours, and at least most of the type ones would be looking for treatment.
Yeah. When we go to the type of patients, there seems to be a heterogeneity in terms of number of fractures an OI patient can have. How did you account for that during enrollment of the study? I think a question that we've gotten is, how do you get comfortable with what the baseline fracture rate of patients is when they were enrolled into the study?
Yeah. Sorry, forgive me. I'm just reminding myself of the actual numbers. The phase II had about 70% type ones. The phase III is about 50/50 percent type ones versus threes and fours. Threes and fours have typically a more severe disease and a higher fracture rate. Our theory is that there may be a higher fracture rate in the phase III. The inclusion criteria were the same between the phase II and III. Our stratification of the phase III was actually done on age and fractures, not by type. It's pretty correlated, as I was just mentioning, between number of fractures that you'd see at baseline by type.
Is there any concern that due to behavioral changes that naturally happen during a clinical trial, people are much more diligent in some cases? Is there any kind of concern that maybe their behavior pattern would be such that you do not collect enough fractures in that time period?
I smile because we've heard both sides of that, that patients sometimes are less active sometimes in a trial. In this case, some of these patients are very inactive. Even going to the clinic is more activity than they're used to, and that could risk fractures. Also, if patients are feeling better and they get more active, and we've heard of examples of this, they might receive fractures that way. Ultimately, what we've seen is these fragility fractures, which are the ones we're trying to stop or change, they really fall away. The phase II data shows that they fall away in the first few months after treatment.
Now, what about the safety profile of the drug? Can you talk us through setrusumab's profile thus far?
Yeah. I think I'd say it's a classic antibody. Antibodies are safe and pretty safe, at least. I think ultimately, that's encouraging for us because we want to use it as a chronic therapy. We want to have in-home dosing as an option too.
How would that work? Let's say that the study is positive. When you say in-home option as well, would that be right at the beginning, or would that have to evolve over time?
This is something we have experience with with CRYSVITA. And we would try to implement it as soon as we could.
Okay. Assuming that, let's say, either this coming interim or the final interim is positive, maybe let's just think about timing of the final interim. Would that happen at year-end or after?
Yeah, we've said in the fourth quarter, so before year-end.
If the results happen in the fourth quarter, would we be made known what the results are in the fourth quarter? Would there be a period like you just described about data log happening and waiting to reveal that data until you have a little bit more details?
Yeah, I think we haven't set that expectation yet. Maybe the one that is more near-term is for phase II, or sorry, for interim analysis two. Whether we hit or not, we will tell the street.
Sure.
There are two trials running in parallel here, right? There is Orbit and there is Cosmic. We will take a look at that second trial if we hit on the first. We would spend some alpha and look at it. If we do not hit on Orbit, we would wait on Cosmic and look at those together at the next time point. This summer is pretty much all we have talked about in terms of exact timing.
Okay. Can you potentially give us a range of when this could become commercial, just based on success at the second interim versus success a few months later at the final read?
Yeah, we'd be commercializing in 2026.
Under either scenario?
Ideally, yes.
Right. I think EMIL has been talking about confidence that the drug is active, which we would agree with, and that the timing of whether it stopped at the second interim or third interim is not potentially as meaningful as some investors might think. Is it because of the reason you described? Because it does not really change the time when the product would become commercial?
I think there were a series of months in between the two. I think ultimately, maybe the most common is related to the fact that we think the strength of the data and how profound it is in terms of impacting fractures does not really depend on whether it is interim analysis two or the final analysis.
You talked about the benefits that have been seen with the effect on bone mineral density. Why is that important?
Yeah. So I think that what we saw in the phase II was pretty profound. I think the question from the community was, would that translate over to reduced fractures? That's precisely what we saw, right? We saw fragility fractures waning after the first few months. That's what we're hoping to see in phase III. I think what we're trying to prevent is the fragility fractures. We're trying to prevent the pain that these patients experience, morphometric vertebral fractures, which can often change the skeleton forever. These are the things we're trying to avoid. Transformative therapy is the goal.
This is also thinking ahead, but what would a label look like? Would it be the goal for every OI patient to be eligible to take this therapy?
I think that's our hope.
How is the competitive landscape shaping?
Right now, bisphosphonates we've talked about. I think with the second trial we're running, we're hopefully going to show that we are substantially better. The space is one that we can be the leading therapy on.
Based on your experience with CRYSVITA, do you have a sense on how many of the doctors you as a company already have had touchpoints with versus ones that you would have to build out relationships with?
Yeah. We think it's about a 90% overlap between XLH docs and docs for OI. That's really good news for us. We have a very good relationship with these folks.
Then in terms of the investment that would need to be made for the commercial launch of this product, is it going to be meaningful?
Yeah. It is very rare. I was a former athlete. It is very rare that you get to run this play the second time around, but with all the hindsight and knowledge from the first time around. We feel like that is a privilege. We do still have some of our CRYSVITA sales force and some of our patient find organization in place. The build on that is sort of modest. There is not a lot to be invested there.
Okay. Can you talk about your partner, Mereo? The type of interactions that you have, maybe just describe them to us and let us know the nature of the relationship. Mereo has European rights. Maybe can you talk about why they were the right partner for this particular program?
Yeah. They are a terrific partner. The relationship works as follows: we run global clinical and global regulatory. They run commercial in Europe, and they pay to us a mid-teens fixed royalty. We would run commercial everywhere else around the globe and pay them a tiered mid-teens royalty plus some milestones.
How do you overall think about the European market opportunity versus the U.S. opportunity number of patients-wise?
It is certainly smaller. I think it's a good market. We've characterized it as one that we have a base of operations there ourselves. I think it will be, of our markets, maybe not as fast-growing as the U.S. and Latin America, but certainly an important contributor.
Do you think that setrusumab could be the biggest product for the company over the next several years?
For sure.
Okay. With that in mind, let's move on to another indication, another program that has got a lot of attention, and that's for Angelman. Can you just remind us on where you are on development there?
Yeah. We are enrolling our phase III now, and we have said that we expect to complete that enrollment this year and have data next.
How are you expecting enrollment to go? Because you are competing with another company in this case.
Yeah. We have sites open globally, so North America, Asia, Europe. To date, we're on our plan. We feel really good about it. We haven't heard about a lot of competition for enrollment. It's not as though people are waiting for other trials. It's been going to plan.
Are these enrollment centers concentrated?
No. They're all around.
Can you just talk to us about geographically where your sites are located?
Yeah. U.S., Canada, multiple places in Europe, Japan.
Is the profile of the Angelman patient any different geography-wise?
I don't think so.
Okay. Now, can you talk to the endpoint that you've chosen for phase III? Because at the time, that Bayley- 4 cognition was something that people were trying to understand a little bit better.
Yeah. As you know, we had maybe five to choose from. We thought of cognition, or I think of it as sort of a predicate to some other developmental areas. Also, we saw good movement on it with the Bayley score in our phase II. For those reasons, we chose it as our primary.
What would be—I guess, what would be the concern of using that versus any of the others that you looked at? The flip side is, what gave you confidence that that is the right one to look at?
Yeah. We had choices, as I mentioned. In fact, we have a key secondary endpoint called the MDRI, which takes five of these things and puts them together, which I guess we'll talk about in a minute, perhaps. Ultimately, as I've mentioned, cognition rose to the top because we did see significant movement in it. The agency preferred that we choose one.
Is there any subjectivity involved in these endpoints?
To some degree. When you think about natural history and you think about the possibility of a placebo effect, you do not see much more than maybe a point of movement in that regard. We are showing the minimal difference that we think is important is five points. We are showing increasing trajectory well beyond that.
You talked a second ago about this MDRI scale. Can you talk about the components that go into it and how do doctors think about that versus Bayley?
Yeah. This is a very heterogeneous disease, right? Some patients will have issues with sleep or behavior or cognition or gross motor. I think I hit them all, but we have five of them in there. The idea is that the MDRI lets you see all of that together at once and to see where you're making gains and to not have to just choose one of them. What we've heard is that it's a simplifying way to take all this complex data and all the heterogeneity and look at it in one place. From physicians and from patients, they've said it's been a very helpful tool to deal with all of that information.
What is your expectation for when the study would read out?
We have said back half of next year, I think, because it's a 48-week study and if we were rolling in the back half of this year.
What would be good data for that study?
I think that we keep showing that we've improved on these five domains.
So simply just being static on your primary as well as looking at MDRIs?
Yeah. I think we don't need MDRI to hit to win here, but I think that'll be a helpful extra piece of information because ultimately, your primary matters. When you're prescribing, I think they want to see the totality of the data. I think that's where MDRI helps with that story for patients and docs.
How big is this opportunity relative to OI?
It is about the same size in terms of patients. Josh, remind me of the total number we've talked about. Yeah, about 60.
In terms of the investment you would have to make for Angelman, would that be something that you would need to do from scratch, or would you be able to leverage what you already have?
That would be new.
How big are you thinking an investment you would need for that would be?
I haven't gotten there yet. In rare diseases, we can typically be very efficient.
Okay. Between these two products, this could potentially, as I said, as you said a second ago, OI could be the company's biggest product. If Angelman is also successful, how are you thinking about the need for future investment in R&D as well as how to manage expenses for general SG&A launches?
Yeah. I guess I started off by talking about our pathway to profitability. We're committed to that full-year profitability, GAAP profitability in 2027. We don't need any—we don't need all of these three near-term launches to work to have that be our case. I think what that will tell us, though, is the slope of our EPS and therefore how much we would have to reinvest. We have multiple IND-ready assets internally. We're excited to bring those forward when we can. Also, the company was built sort of bringing things in from the outside. That's part of our DNA. We would love to be able to do that too. I think ultimately, the amount of investment we would put after this generation of programs will depend on sort of the slope of their success.
Yeah. I guess one difference between OI and Angelman might be that you might have OI to yourself, but with Angelman, you might have competition. Do you think that the Angelman market, just based on the numbers you gave us just now, is big enough to support two players?
It's certainly big enough to support one really good one. Whether it can support more, I think really is going to depend on what the data looks like. Could it support two? Sure. I think how that dynamic will play out will be really told by the data.
Okay. Maybe let's move on to Wilson disease. Can you talk to us about where that's in development currently?
Yeah. So we're enrolling a fourth cohort for Wilson. And we expect to have that enrolled before the end of the year, but it's in phase II in development.
Same question as I've been asking, how big is this indication?
It's also about 50,000 patients globally, maybe a quarter of those in the U.S.
What is the current protocol in terms of standard of care for these patients?
It's chelators and zinc. Our aspiration is to be able to have the majority of patients come off.
How successful are chelators and zinc with these patients?
I think not so successful. I think when you look at the livers of patients who are deemed to be under control, there's still some trouble there.
We've talked about this question about tech transfer in the past, but just can you just remind us for this particular program, what is the plan for that?
Yeah. This one is in our manufacturing plant in Bedford already. I think the tech transfer story was around 401, where we had that externally initially and then took a little bit of a time delay. Now that it is in our plant, I think that is a much better situation.
I guess for anything that would come out of that facility going forward, it would be pretty much leveraging off of what you've already done.
That's the plan.
In terms of tech transfer?
Yeah.
Okay. One question that I've gotten is, what kind of cogs to expect on these types of products?
Yeah. We have not been super specific about that. I think the advantage of having our own plant and the methodology that we use in the plant means that we can reduce these cogs much lower than you probably expect. I think there is a healthy margin to be had.
Okay. In terms of pricing, EMIL has always talked about responsibly pricing products, and that's part of the makeup of Ultragenyx as a company. Some have asked me about when you have a product where current standard of care can involve things that are clearly inferior but also much cheaper. Does that, in your mind, raise the bar of what needs to be shown in order for a product to be commercially successful just in general, not related to any of these particular programs?
Yeah. Maybe you're thinking of like 401, where you have very cheap alternatives with cornstarch. I think ultimately, using that one as an example, I think the value proposition there is that that disease has such urgency and it has its life-and-death implications that patients would see the value in the gene therapy, the one-time gene therapy. It's been described to me that having that disease is like living potentially with a gun to your head that could go off if you miss a dose of your cornstarch slurry. While it is inexpensive, I think it is a challenging way to exist. Our hope is that the value of the gene therapy would bring, priced responsibly, would be well better than what it's currently being served by.
Okay. The last product I wanted to talk to you about really quickly is the market opportunity for Sanfilippo syndrome. Can you just tell us what your market data shows on that and what the competitive landscape is?
Sure. 3,000 to 5,000 patients globally, about a quarter of those in the U.S. No approved therapies today. Our thought is that with that being a very lethal disease, the price point could be in the $2 million-$4 million range.
How are you thinking about competitive landscape as it relates to potentially Denali?
We're tracking it, but we know we're ahead, and we're excited to get this thing to the market ideally before the end of the year.
Okay. Perfect. With that, we're out of time. Thanks for joining us this morning. Thanks, everybody, for sitting in.
Thank you. Great to start the day with you.