Good morning, everyone. Thank you so much for joining us. I'm Salveen Richter, a Biotechnology Analyst at Goldman Sachs, and we're really pleased to have the Ultragenyx team with us, where we have Emil Kakkis, President and CEO, sitting next to me here. To start, Emil, can you provide an overview of where the business stands today, including your portfolio of commercial products, but also your key priorities and pipeline outlook as you look to kind of execute here towards a path of profitability?
Sure, Salveen. We're at an exciting inflection point in our history. We're 15 years in from formation of the company, and we're crossing the $640 million-$670 million in revenue on four products, which are Crysvita, MEPSEVII, DOJOLVI, and Evkeeza. We have a global commercial organization developing and getting us around 20% annual growth rate. It's been a very successful commercial execution. Now we've refilled the pipeline and have brought forth six programs that are in late-stage development. We have a gene therapy for MPS IIIA that's filed and under review. We have a gene therapy for DTX401, which is to be filed soon. We have an OI program, which we'll talk more about, Osteogenesis Imperfecta UX143, setrusumab, that's coming up to its second interim, and we believe a transformative drug for OI. We have an Angelman phase III study that's fully enrolling.
It's enrolling very quickly. We expect enrollment for this end of this year. In addition to that, we have an OTC gene therapy, and a Wilson gene therapy. Six late-stage programs all going, with three of them potentially being filed within this year period. I think we're in an incredible point in time where our revenue growth and our global commercial operation is set up to be able to take on now multiple products for which we have, if not all, nearly all the rights. I think that puts us in a very good position to have a transformative impact in the next three years in this company, becoming a profitable company by 2027 and soaring past the profitability threshold and beyond.
Great. Maybe we'll dig right into the pipeline here because you have setrusumab data in OI that's coming shortly. Can you frame for us your expectations and confidence into this interim, particularly in the context of prior phase II results, but also the first interim that took place?
First of all, we have high confidence that setrusumab for osteogenesis imperfecta will be a transformative therapy. Whether it is interim two or the end of the year or this year, we will have positive data in that program. The data in phase II have continued to be transformative, not just fracture reduction, but how patients feel, how they behave. We think that the idea of building more bone in these patients is really transforming their lives. We are very confident in it. The IA2 has a much better chance of hitting than IA1. In interim assessment two, we have a 0.01 threshold, but because we have at least a minimum of 12 months, it is a lot more like the 14-month assessment we did for phase II, which had a much better P-value of 0.014 compared to the six-month assessment, which had a 0.04 P-value.
Now, we had a 67% reduction in fractures at both points in time, but by going a little longer, allow the two curves, the accumulated fracture curves, right, to separate a little further. We think IA2 has a much better chance of hitting both because we've had more time for the groups, the lines to separate, and because, well, in addition, the time that you spent getting the first effect is much smaller of the total, right? Those two factors, in addition to the 0.01 threshold, rather than 0.01, give a good chance of hitting. However, we've told people if it weren't to hit, we're still confident in the drug, and if it didn't hit, it would be related to maybe variations.
Variability is one of those things that always can be confounded in rare disease studies, but we have high confidence in the product that we're going to have a great result this year, and everything we're hearing about what's happening with patients from phase II has been dramatic and transformative. We are planning filing commercial launches, and we'll just determine whether we start that sooner or later, but sometime this year.
If the study were to hit in IA3 and not IA2, why would that be the case?
It would be the final assessment. We're not going anywhere. The number one challenge in all rare disease programs for powering is the variation. We have type one, three, and four patients, range of severity, at least an annual fracture rate of one, but some of the patients have seven, eight annual fracture rate, right? There's a pretty big range. That's one factor, the range. We are stratifying by fracture rate to make them approximately the same. It may not be identical, right? That could be a variation that we'd have to deal with. There are other factors like, did all the placebo patients get a fracture? You need to have enough time to make sure everyone has had at least one fracture so that the lower bounds of the placebo group, right, come up. You think of it that way.
It is more about the variation of fracture rate in the two groups and whether there is some shift in those two. We have done the stratifying, and we also have covariables to try to manage that variation, but that is one of the ways you might not hit. The lines will have separated, but the error bars might be too big, in which case we need to go a little more time. That is the one thing that could happen, but we are setting up. We think that interim two has a good chance of succeeding, but either way, we are excited about the product. I think the community is excited too. I think they know something is coming that they did not think they could get to because most people felt you had to fix the collagen to fix the disease.
What we're actually doing is changing minds about the fact that their collagen may be mutated, but it's not the biggest problem. The biggest problem is how their bone reacts to the mutated collagen. It reacts by not making enough bone. If we simply counteract that maladaptive response, we can actually strengthen their bones a lot, have kids stop fracturing, have kids' bones start growing, looks like, and change their lives. There is a fundamental change of understanding in OI that this is bringing forth. For us, it came when we first were doing nonclinical work where we found the shocking reality that if you normalize bone density in the brittle mouse, the bone strength was normal, right? That is sort of heresy. How could that be? I was sitting there looking at that data saying, "Wait a minute, guys.
This is like that's not what everyone thinks. As we've learned from our own history, those are the moments where you discover something no one else understands. That was the time when we went out to get the setrusumab asset. We had another one we were working on. Once we knew it was all about anabolism, just making more bone, setrusumab was further along. It had great results. It put us in place. We're excited about being able to deliver another great bone treatment. Crysvita has been amazing to watch. Being able to do it again does not happen too often, right?
How does the breakdown versus overlaid with the classification play out in your trial right now, and maybe help us understand the powering assumptions here as well?
Sure. In the phase II study, there were seven type threes and fours and 17 type ones. It was more type one. The reason was the doctors felt that their type threes and four patients are more severe, and they were afraid to take them off whatever they're using because they did not fully believe. When they saw the results, they realized, "Oh, this could be really good." What happened during phase III enrollment is that we had a lot more type threes and fours come in, and we ended up with maybe half the patients around there had threes and fours, which is good because those patients have severe bone mineral density deficiency, right? They're very low. They'll respond well to the drug. In many ways, commercially, type threes and fours are the most addressable, right?
The ones that would nearly all want to get treated. That enrichment or type threes and fours does create some variation, right, because they have more severe fracture rate frequencies, but they also have more potential benefit. Understanding how that affects powering is complex, right? I believe we're well-powered in any situation because the treatment effect size is pretty large, that the bone mineral density improvements are huge. If you're between five and 12, it was 29% in one year. 29%, right? Whereas most of the like Ramon and the osteoporosis drugs are talking about 10% would have been good, right? This is almost three times the size. That effect is so large that I think it'll overcome any aspect. It should overcome any aspect of variation.
Beyond a successful trial here, let's say it is successful, can you just discuss the clinical bar that you believe you need to hit or the threshold you need to hit for it to be successful commercially, and what physician feedback is on kind of overall aspects that they want to see to use this drug?
A number of physicians have been cited by various analysts. I would expect that more than 40% reduction in fracture would be seen as a positive. I think people think this fascinates as being 20%. Some thought it is higher, but if you are above 40%, I think that is probably a meaningful number. We think it should be above 50%, but somewhere in there. What I would say to you, though, Salveen, is I think if the number is 50, 52, 60, 65, the truth is those are all good numbers. The more important thing is how patients feel. Remember, with Crysvita, launch went really well, but it was not because the RSS score changed. Pete's parents did not know what the RSS score means, right? That is how we figured the endpoint, right? They understand what fractures mean, but the data was happening.
You make bones healthier, kids feel better. We are seeing that in our phase II study. Kids want to get up and go out, and parents see that, right? They see their kid coming alive who was not wanting to move, not wanting to do anything. When your bone is healthier with fractures and not without fractures, when your bone feels healthier, you are more active. I think that is what is going to be the commercial driver, actually. We are measuring that in the study in the phase II endpoints, but I think you have to reduce the fractures. That is important. I am not saying it is not, but I am also saying how kids feel will be one of the bigger drivers of adoption. The same was true with adults. Remember, the adults do not have rickets in the XLH. It is how they feel was getting better.
It took a little while, but once they started realizing that they were compromising how they felt, and when they get treated, they could feel really good, get back to work, start going out. It changed. That's why the scripts now are 60% adults. When people ask us, "What about OI?" I said, "It's going to be the same thing in OI." At first, it's going to be all the kids, but then the adults are going to see their kids getting better, and some of them are going to say, "You know, I want to change my life too." We expect it to shift. Because most of OI patients, I think they're more readily diagnosed and because many of them are at the centers, the actual launch will probably be easier.
Centers that we have studied have 50%-100% more OI patients than XLH in their clinics. That means the commercial launch will be relatively easier for that reason, a more concentrated population.
How much do the—or how important are the secondary endpoints with regard to informing the commercial uptake here?
I think they're important for us because they're the formal way of assessing things. The POSNA-PODCI we also used in our XLH pediatric study reacted very well. It showed what was happening with their health. It actually predicted how kids were feeling. It has sports, physical functioning, like how active am I, how many stuff you're doing. It also has sort of pain, bodily function kind of assessments too. It's a little bit of how I feel, but also how much I can do. The POSNA-PODCI for children is that we have the SF-36, which will also look at those kind of domains, which will be the quality of life measures. I think those things will have an impact in how people think about the product.
They're not going to look at the score and say, "Oh, that SF-36, not as much as I was hoping for." It's just merely our way of knowing that it will affect patients. I think those things will help contribute to a successful launch.
You're also running the phase III Cosmic trial looking at the drug versus bisphosphonates. Help us understand what you post your interim analysis here, what you're trying to better elucidate that can help with your messaging here as you market this drug.
To explain Orbit, as a placebo-controlled trial, it allows us to do symptoms and feelings, right? Because it's placebo-controlled. The Cosmic study is a randomized trial, but not blinded because we couldn't blind the bisphosphonates. The symptoms and feelings we'll measure, but they're harder to interpret, right, objectively. The main purpose of this is to really demonstrate in a head-to-head format that the fractures affecting the bone and other aspects of objective bone response is dramatically better with setrusumab than bisphosphonates. The idea is when we go out and launch, we want to be able to say, "Bisphosphonates are obsolete, and you should be using setrusumab now." I think to get people to use it, what will be more expensive treatment, you have to make the case why this is valuable. I think when we launched Crysvita, we didn't have the head-to-head study.
We did the peds head-to-head study that came a couple of years after the result. I think that impacted our ability to drive adoption. There are still kids not using Crysvita right now. It should be, right? We did well, but it could have been better. With the head-to-head study, we'll be able to go both in U.S. and ex-U.S., which are HTA-controlled. We'll be able to show that these cheap generic off-label drugs are just obsolete. They're not the right answer. The head-to-head study will allow us to do that. It'll also do something very special because we're doing younger kids. Two to four-year-olds are in there. We get to look at little kids' skeletons and what happens to them. Do their skeletons grow? Do their deformities improve? Do they still keep walking, or do they stop walking?
Because all threes and fours, most of them end up in wheelchairs around them. My hope was by the time we get to launch, we could show how a two-year-old is now a four-year-old and a five-year-old and show they're not going to the wheelchair is my hope, right? That we can look at how their bone structure forms are altered. I think that could be one of the transformative messages that comes out. We will be able to look at their X-rays and be able to show people, "Here's what they look like." We've done that in XLH too. We've looked at bowing and other deformities, and it's quite dramatic to watch it.
I think if we can show that the bone effect in these young kids is dramatic too, I think we can help transform the whole field into realizing this is the way for all patients with OI.
Two follow-ups here. One is, discuss your expectations for Cosmic's effect size because you are enrolling fewer patients, and also you have a younger patient population versus Orbit. Secondly, if Orbit hits on the interim, but the Cosmic study does not, how does it impact your regulatory and commercial efforts, if any?
Our expectation of the trial is complex. I think many people assume if it is 69 patients versus 159, it is much fewer. It is also much less variation. It is two- to seven-year-olds. They are all little children. They are all going to have the high bone mineral density response, right? We will not have teenagers and adults in there. Less variation improves power. Secondly, their benefit effect is uniformly high, 29%, not lower. They have a more consistent higher effect size. That will improve power. The third thing is the young patients have a higher fracture rate normally than older kids, mainly because they are not being as controlled in what they do. The higher fracture rate, particularly because the skeleton is growing, the deficiency of bone production is probably more of a problem. The higher fracture rate, bigger bone mineral density response, and less variation probably helps us.
The final thing, it's a one-to-one randomized trial. Though it's 69, right, let's just say about 35 control patients. The other study is about 50-something control, right? So 35 - 50. Because it's two-to-one randomization in Orbit, the size of the placebo group is not as small as you would think, right? Comparatively, it's not half. It's actually two-thirds in size. I actually think it is reasonably powered. I think there's a lot of people who are saying, "Hey, but it's head-to-head against a drug. That's harder." I would say less variation, more potent response. Those will outdo N. I'm confident it will do well. We know patients are doing well, but I feel confident that the little kids will always beat the older kids. It's always true.
You spoke to the efforts here. Right now, in these doctors' clinics off of the Crysvita commercial effort, do you need to change your footprint here on the sales side or just overall infrastructure in the context of what you currently have?
When we finished with Crysvita and transitioned commercial responsibilities to Kirin, we did retain a field team, and we were supporting until just this year. We have a 16-person team, and we have other members of the Crysvita team inside the company. There is a certain part of the infrastructure there, but we'd expect to do probably a 40-50 person field force. We expect to have eventually perhaps 30-something people in the field doing patient find. It will be a little bigger than the initial Crysvita team because now we've learned a little bit more, and we have a sense of what it would take. We have also, I think, high expectations for how OI is going to do, how setrusumab can do when we launch. There will be some build-out, which will happen.
At the time, once we get filed, between filing and the approval period, will be some build-out from where we are now. I think it's going to be a measured amount. I think it won't be a full year ahead. It'll be managed so the burn effect will be managed well. We'll probably work on our patient diagnosis team a little bit later because the field team we have now, 16, are out there already, can start talking about disease state and simply identify where all the docs and all the patients are, get them lined up so that when we're ready to put a field team fully in place, they'll have a starting landscape from which to work. That's kind of what we're thinking right now.
The other support functions will have to grow this patient services hub, which had grown into nearly 30 people at one point. Now that's down to eight. We'll have to start growing again. We have a terrific leader that runs that patient services group, Paul Elson. What's great is we have the whole band still there. They're all excited about the chance to do it again, right? You just rarely get that chance. It'd be like Alexion and having Soliris and something as big as Soliris again, right? We think this one will be bigger and better. We're all ready to get going.
With regard to the actual launch strategy with physicians, how much education do you think is required here? When you initially launch, is there a specific subset of patients or physicians that you're targeting right off the bat?
We're going to focus on the key opinion leader centers because they do have a lot of patients. A lot of them have 100 patients in their clinics. It is the place to focus. They can write the most scripts. It is an IV infusion. It will require administration. We will try to shift as much to home as we can, home infusion, using the same specialty pharmacy model we used before. The type threes and type fours will be probably the most urgent treated and severe type ones. There may be some type ones that may take more time, but I think the type threes and fours are going to be what people want to get on drug like immediately. Our expectation is with Orbit and Cosmic together that we'll have a label that goes down to something like that.
It'll allow us to treat those young ones. If you think about the potential benefit, those kids need to get on drug immediately. I would think that a doctor would know that. Because a kid's skeleton a year delayed is a year lost, right? Your two-year-old, three-year-old, you want to get those kids treated quickly. We're setting up for that fact that a lot of peds kids will probably want to get on drug, and we need to set them up for infusions, ports, home infusion. We have a lot of people that have been doing that before. We support home infusions right now for them at Sevi.
You touched on the Angelman Syndrome program here. You plan to complete enrollment this year. Maybe walk us through where the progress is going and what post-alignment with the FDA on the Bayley- 4 cognition primary endpoint here. How do you think the data you've had to date is going to translate to success in this trial?
Sure. The Aspire study, the phase III study, we expect to enroll 120 patients. The sites are up. They're enrolling well. We're on track to—we're highly confident to finish enrollment before the end of the year. We're on track to do so. We're excited about how that's going. The other studies have not started enrolling yet. We have not seen any competition in the field enrollment. With regard to the study design and the endpoints, the Bayley cognition is a primary endpoint, but I would look at the breadth of endpoints. I mean, secondary is just kind of telling the story. The FDA has a history of wanting to pick one, right? Anyone who's been in the field long enough knows kids are defined by more than one score, right? That's just not a whole kid. We have to meet the regulatory system.
The truth, what's going to happen is not going to be—parents aren't going to say, "What's the primary? What's the secondary?" Right? No parent asks you that. You go, "How's my kid going to do?" In our view, the MDRI, the Multi-Means Response Index, is a way better tool for parents to figure out what's going on. You have five domains: communication, behavior, sleep, growth motor. Those are the ones that will tell you the bigger picture. The MDRI is in there and will be, I think, something very powerful because parents can see what's going on. They can see how many domains are hitting the threshold, etc. We have to manage the way trials are done for FDA and the EMA, but at the same time, I'm looking at all the endpoints as contributing. Cognition, we feel, was a good one.
We feel good about its effect size. Based on the breadth of the Bayley cognition scores at baseline, we feel that the results we had should be replicated. The size response, remember, at six months or a year, six months continues to gain ground at a year, and honestly, beyond that. In my view, while the one-year point is a snapshot in time for proof, what really is the question for parents is how are the kids keeping—how are they doing afterward? Do they keep gaining ground? Do they keep gaining ground? The kid we talked about earlier that had a few words, remember that was a big excitement. They could speak words. That kid has a vocabulary of like four or five dozen words now, right? Went from nine to 12, and then it's now 40, 50, something like that.
Kids doing extremely well. I'm excited about the trajectory of where they're going. We have to meet the regulatory world, the box that we're put in. What parents want to see is beyond what happens in a year, right? All that tells them what's going. What's exciting to me is that they continue to gain ground, right? That means that we've managed to keep their UBE3A expression high enough to continue to allow their neurons to learn and for them to gain functions that they couldn't have gained before. To me, that's the big story. We've got the trial enrolled. We are also setting up the Aurora trial. The Aurora trial will—the main trial, Aspire, is four- 17-year-old, exactly what we had in phase II, alt deletion. We believe in keeping it very tight and trying to manage variation.
What we're doing for Aurora is to now expand the indication. It won't be a randomized controlled trial or placebo-controlled trial. We'll have that one randomized trial to prove cause and effect relationship. We use the other trial to show we can safely treat and can we improve similarly to what we see in the other trial, which we think will support the labeling for the rest. That will include missense patients, UPD, ICD patients. It will include adults, and it will include younger peds. The idea is to fill out the story. This is a strategy I think is the right thing because I don't think you should do two-year-olds in placebo-controlled studies. You can avoid it. We're doing it in OI, but I would tell you it's tough.
I think for every possible genetic variation, doing randomized controlled studies over and over again is a lot of burden. I think if we can demonstrate that this effect we're seeing is real in the most severe population, I think you can say it's real and be comfortable that we're doing something important. The combination of the two studies we hope will open the door to the full label for Angelman patients.
You also have a gene therapy portfolio where you have an upcoming PDUFA for your Sanfilippo drug later this summer, and you're planning to file in GSD1a shortly. Can you, based on kind of your internal viewpoint, how big do you think these opportunities truly are for you with regard to attainable market share?
I think for Sanfilippo IIIA, it is a severe disease. It is kids losing their brains and dying a horrible death, right? This is serious. In my view, it's closer to being like SMA, another type of genetic disease. The sense there's a window of time. It's urgent. You need to treat now. You can't wait six months or a year. You got to treat right now. That urgency, I think, is high for parents. I think that will translate into a better launch. There are fewer MPS IIIA than SMA, but we do believe that it will launch well and do well because we are a sense of talking to doctors and others that there's real demand if you want to get treated, and they know the urgency. We think the MPS IIIA will do well for its size.
I think it will hopefully open the door to the possibility that there are some mid-size gene therapies that actually can be commercially viable. Right now, there's been sort of huge wins and total busts in the gene therapy space. This will be somewhere in the middle. These will be good wins. I think my hope is to encourage people to realize there's a place here for some of these diseases. The GSD1a program, so in MPS IIIA, there's maybe 300 or 400 patients in the U.S., but every year, maybe about 40 new patients a year. You can kind of guesstimate 40 patients a year. What does that steady state look like? We haven't put out a price point. We said the range is somewhere between $2 million and $4 million kind of range for a disease of that severity and that type.
For GSD1a, it's more like 8,000 patients, maybe 1,500, 1,600 in the U.S. They don't die usually. They only die some because they missed their alarm or something, but they have a larger prevalent population. That one has the potential to be larger. It's also urgent. Every day of their lives, they're worried every few hours about taking oral contraception, right? They're living on a treadmill, as I say. They have a gun to their head, worrying if they don't do something today, something's going to happen to me, right? It's hard to appreciate that level of stress, right? There is a lot of stress. We think the urgency is there, and there's a lot of very great interest in getting that treatment too. We think that one could do well too.
I think we haven't put out specific numbers of pricing for that one program, but I think both together will actually be a reasonable opportunity. Our ability to kind of show there is a place for gene therapy in some of these metabolic disorders and why they will get adopted, you have to pick the ones where the urgency is high. That is what is defining success. It is not the reimbursement system, right? It is not all these other—it is not replacing costly treatments. Everyone thought that would be a reason. That is not why people want to get treated. They want to get treated. I am either going to lose my life or I am going to—I have fear of it. Those are the urgency that gets people to do something.
Emil, a last question here. You recently reiterated your 2025 revenue guidance, implying about 14%-20% year-over-year growth. Can you discuss the assumptions that are baked into this guidance, including any potential launches, but also just speak to the path to profitability? Because it does seem with these launches coming up and potential approvals that you should be able to reach sustainable profitability.
Yeah. So our numbers this year are by and large related to the four existing products, not the launches. The amount of revenue assumed for the Sanfilippo program is relatively small. We have hopes to do better because we think the demand is there. To path to profitability, 85% of the revenue approximately is based on our existing four products, not the new products. Only 15% relates to two gene therapies and then the OI program launching in that window. Most of it is in hand. I think our ability to get there is pretty well assured. Whether we soar past it will depend on how fast OI gets launched and how well the other two gene therapies do. I think we have got a lot of levers to get there, and our profitability is not heavily dependent on the new products.
It's really mostly related to the existing.
Got it. Perfect.
Good.
With that, thank you so much, Emil.
Thank you for having us.