Ultragenyx Pharmaceutical Inc (RARE) 2014 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to Ultragenyx Pharmaceutical Inc. fourth-quarter and full-year 2014 financial results and corporate event conference call.

(Operator Instructions)

As a reminder, this conference call is being recorded. I will now turn the conference over to Rob Anstey. You may begin.

Thank you. Good afternoon, everyone, and welcome to the Ultragenyx Pharmaceutical financial results and corporate update conference call for the fourth quarter and year ended 2014. We've issued a press release detailing our financial results which you can find in our website at Ultragenyx.com.

With me today are the following members of the Ultragenyx Management team -- Emil Kakkis, Chief Executive Officer and President; Shalini Sharp, Chief Financial Officer; Sunil Agarwal, Chief Medical Officer; and Tom Kassberg, Chief Business Officer. We will start today with an overview and key updates from Emil, followed by highlights of our finance, clinical development, business development and commercial progress. We will keep our prepared comments relatively brief in order to allow plenty of time for the Q&A portion of the call.

First, I would like to remind investors that this presentation contains forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the expected release of data from clinical studies, the initiation of additional clinical studies and the designs of same, and the intended effects of our product candidates. These forward-looking statements represent our views only as of the date of this call, and involve substantial risks and uncertainties that could cause our clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward looking statements.

Such risks and uncertainties include, among others, the uncertainties inherent in the clinical drug development, the actions of regulatory authorities, the timing of our regulatory filings, and other matters that could affect availability or commercial potential of our product candidates. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in the forward-looking statements, as well as risks relating to our business, see our quarterly report on Form 10-Q for the quarter ended September 30, 2014 filed with the SEcurities and Exchange Commission on November 10, 2014, and our subsequent periodic reports filed with the SEC.

With that, I'll turn it over to Emil.

Thanks, Rob. And welcome to the first Ultragenyx quarterly conference call. We will now be conducting quarterly conference calls regularly going forward. We're also planning an R&D day in New York later in the year to provide you with a more detailed update on our translational research and development programs.

For those of you who are new to Ultragenyx, I founded the Company in 2010 with the mission of building a next-generation biotech company focused on rare and ultra-rare diseases. Our plan is to leverage everything we've learned to date in this area and apply this experience to develop novel therapeutics based on clear and potent biology. In the last five years our efforts have generated a broad and diversified therapeutic portfolio of rare disease programs. And we've also succeeded in recruiting an experienced and high-quality team focused on rapidly and efficiently advancing that pipeline, including the exceptional group with me on the call today.

This last year, 2014, was a transformative year for us in many ways, beginning with our initial public offering at the end of January and our first follow-on offering mid year. We also have driven ahead on multiple programs now in Phase 2 and Phase 3 clinical developments. In 2014 a number of clinical recurring milestones were achieved for all of our programs and Sunil we will provide more details on this later in the call. We expect 2015 to deliver another lineup of key milestones across these programs, with each expected either to generate Phase 2 data or have advanced into Phase 3 development.

In early February 2015, we completed a second follow-on offering of common stock, and that provides us the flexibility to strategically invest in Company growth and drive effective execution, as well as support our effort to grow value for our patients faster through three key goals. First, we will continue to advance our pipeline of now six rare disease clinical programs. But we will also search for opportunities to accelerate these programs to reach patients faster or expand their value through the addition of new sponsored indications for development.

Second, we plan to expand the Company's early product pipeline through the addition of resource and business development and translational research. These efforts are aimed to help identify additional academic licenses or corporate partnerships and begin early translational work on new treatments. Third, we will begin to build a global commercial organization to prepare for future product launches and expand our worldwide patient identification capabilities. And we are actively recruiting a Chief Commercial Officer, which Tom will discuss in more detail later.

In line with these goals, we kicked off 2015 with a number of efforts to both accelerate and expand our current development programs. First, we announced that we are accelerating our SAE program, HIBM with the intent to file for conditional marketing authorization in Europe based on the positive Phase 2 data we have in hand. Next we announced that we've initiated a new internal development program for KRN23 in patients with Tumor-Induced Osteomalacia, or TIO. TIO is a severely debilitating bone disorder with high FGF23, the same mechanism underlying the bone disease in XLH. And, third, we announced a license agreement for Triheptanoin in Huntington's disease which is based on data published recently in neurology. This work opened the door of development for a potentially larger rare disease indication for Triheptanoin.

In terms of our Corporate and Board development, we announced that Mike Narachi was appointed to our Board of Directors. Mike is currently CEO and President of Orexigen Therapeutics and is a seasoned biotech executive with extensive commercial experience. We are pleased to have Mike join the team.

Together our financing, development and corporate products in 2014 and early 2015 places us in a strong position for the year ahead. I'll now turn the call over to Shalini to provide a brief finance update.

Thank you, Emil. I trust that you have all had a chance to review the press release we put out earlier today.

Total operating expenses for 2014 were $56.8 million. Research and development costs accounted for $46 million or 81% of our operating expenses. OpEx increased significantly from 2013 due to the initiation and conduct of multiple clinical studies, increased manufacturing costs, the addition of new clinical programs to our pipeline, and higher general and administrative costs to support our advancing development portfolio.

Total net loss was $59.8 million. Net loss attributable to common stockholders of $64.4 million defers from net loss due to $4.8 million in dividends and other charges related to outstanding preferred stock, which was converted into common stock upon the Company's IPO. The net loss figures also include significant non-cash charges, such as $5.4 million in stock compensation expense, $3.3 million for the revaluation of the convertible preferred stock warrant liability, $3.6 million on the amortization of premium on investment securities, and other changes in operating assets and liabilities.

We do anticipate our operating expenses to rise in 2015 as we enter late-stage clinical trials and prepare for commercialization in the US and other territories. However, due to our recent financing and our commitment to capital efficiency, we expect that our cash balances will be sufficient to fund our current operating plan into 2018, assuming all programs proceed. During this period we could potentially see pivotal data from all of our clinical stage programs.

In terms of the balance sheet, we ended 2014 with $187.5 million in cash, cash equivalents and short-term investments. In February of 2015 we raised approximately $175 million in net proceeds from an underwritten public offering of common stock. We have no debt outstanding.

I will now hand it over to Sunil to provide a development update.

Great. Thank you, Shalini. Good afternoon, everyone. I will take the next few minutes to summarize the most significant updates from late 2014 and early 2015, as well as provide a brief update on our clinical and regulatory milestones for this year.

Starting with rhGUS, significant milestones occurred in both Q4 of 2014 and Q1 of 2015. In December we announced the initiation of a single pivotal Phase 3 study in patients with MPS 7. The placebo-controlled blind-start study is currently enrolling, with a goal of 12 patients who will be treated with 4 milligrams per kilogram of rhGUS every other week.

When announcing the start of this study we also announced that we had reached agreement with both the FDA and EMA on the single pivotal study design. This positive outcome is reflective of the collaborative relationship we have with both agencies across all of our programs.

In February 2015 we announced that 36-week results on three patients from the Phase 1-2 study of rhGUS had supported our decision to proceed with the Phase 3 study. These data provided us with several important pieces of information. First, it demonstrated that 4 milligrams per kilogram every other week is the appropriate dose for Phase 3. The previously generated data on the 2 milligram per kilogram dose showed approximately a 40% average decline in urinary GAG. This decline was even greater on the 4 milligram per kilogram dose, with an average decline of approximately 60%.

Second, while the study was not powered for evaluating clinical benefit the data were encouraging. Specifically, for the two patients who had liver size evaluated at baseline, both demonstrated significant reductions in their liver size after treatment. And for the one patient who was able to perform pulmonary function tests there was a trend towards improvement, as well, after treatment. Third, we continue to observe a favorable safety and tolerability profile with our rhGUS. To date no serious adverse events or infusion-associated reactions have occurred.

Turning to SA-ER, there are two important updates. As Emil mentioned before, the most significant of these is our decision to proceed with filing for conditional approval in Europe. The conditional approval pathway is intended to address severely debilitating diseases with unmet medical needs. Drugs that are eligible for this pathway are expected to provide immediate benefit to the public that outweighs risks due to the need for additional clinical data. Based on these criteria, as well as the clinical data generated to date and the feedback from the EMA, we expect to make the conditional approval submission in the second half of 2015. The review process should take approximately12 months, meaning we would anticipate receiving a decision in the second half of 2016.

In parallel with the conditional approval submission, we plan to conduct a single pivotal Phase 3 study of SA-ER in HIBM. This Phase 3 study is intended to convert a conditional approval in Europe, if successful, into a full approval, as well as to enable approval in the US. The randomized double-blind placebo-controlled Phase 3 study incorporates feedback from the US and European regulators. It will enroll approximately 80 patients, with 40 in each arm, and evaluate the effect of 6 grams per day of SA-ER on the upper extremity composite of muscle strength over 12 months.

In the Phase 2 study, 6 grams of SA-ER was shown to preserve upper extremity muscle strength compared to a combined lower dose and placebo group over one year. The Phase 3 study will also look at patient reported outcomes of functional activity as well as lower extremity strength and function. The Phase 3 study should start around mid 2015 with data expected in the second half of 2016.

Now moving to KRN23, as Emil mentioned, in January of this year we announced a new clinical program for KRN23 targeting Tumor-Induced Osteomalacia, or TIO. TIO is characterized by typically benign tumors that produce excess levels of FGF23. These TIO patient can present with symptoms analogous to a severe XLH patient. As with XLH, excess FGF23 causes phosphate waste in the urine, which leads to Hypophosphatemia, Osteomalacia, muscle weakness, fatigue, bone pain and fractures.

TIO is less common than XLH -- We estimate between 500 and 1,000 patients in the US, about half of whom can be treated surgically, which is generally curative. However, some patients, up to 15%, may see their tumors recur after surgical resection. We expect initial Phase 2 data from this program, including preliminary radiographic data, by the end of 2015 or early 2016.

There are also a couple of updates for our XLH program with KRN23. In November 2014, we finished enrollment in our Phase 2 study in pediatric XLH patients. In fact, we over-enrolled to a total of 36 patients due to high patient and physician demand to participate. We expect to release 16-week data from that study in the first half of the year looking at phosphates and safety and tolerability. Later in 2015, or possibly in early 2016, we expect to release 40-week data from the study looking at radiographic assessments of rickets.

Just a few weeks ago at the end ENDO conference we announced disease burden survey results in adult patients with XLH. The presentation included responses from 165 patients who participated, and indicated that skeletal pain and physical impairment complications of XLH can progress into adulthood. Further, a significant number of adults were receiving oral phosphate therapy as well as pain medicine to manage their disease and the complications associated with it.

In general, these data support that XLH in adults represented significant unmet medical need. It will also inform our future development in this patient population. To that end, we expect to initiate a randomized double-blind placebo-controlled study in adult XLH patients in the second half of 2015. Finally, with respect to Triheptanoin, Phase 2 data from the two ongoing studies are expected by year end. The first is in patients with Glut1 deficiency and the other in patients with FAOD.

Clearly it has been a very busy year for us at Ultragenyx, a year we are well prepared for. We have built a critical mass of capabilities and expertise across the organization that position us well to execute on our time lines and create meaningful value for both patients and the medical community.

Next, I will hand it off to Tom to close out today's discussion.

Thanks, Sunil. I will provide a quick update on recent business development activities, as well as a snapshot of our current and expected commercial planning activities.

We recently executed a license agreement with Inserm and a related French institution for intellectual property related to the use of Triheptanoin in Huntington's disease. Most of you are probably aware of Huntington's disease, but in short it is a genetic, neuro-degenerative disorder characterized by movement disorders, behavioral and psychiatric disturbances, and dementia. Death typically occurs within a couple of decades of onset.

Huntington's is fairly prevalent as far as rare diseases go, with up to 30,000 symptomatic patients in the US and an even greater number in Europe. Our decision to pursue the license was driven in part by data from a pilot study in 10 patients with Huntington's conducted by an investigator in France. The results of the study showed an improvement in brain energy metabolism in response to visual stimulation after one month of treatment with Triheptanoin. Triheptanoin also appeared to impact the motor score subset of the Unified Huntington's Disease Rating Scale. These data were recently published in the Journal of Neurology.

In conjunction with the license agreement, we are also providing financial support and drug product or a 100-patient randomized, controlled investigator study in early-stage Huntington's disease being run at two centers in Europe. The study will compare Triheptanoin to placebo for up to a year, looking at its impact on brain energy metabolism, UHDRS scores and caudate atrophy, as well as safety and tolerability.

Turning to commercial planning, as Emil noted before, we are actively recruiting for a Chief Commercial Officer who will lead the global expansion of all our sales and marketing activities. In the meantime, we've begun to build out the marketing and commercial planning team that the CCO will manage. This small team will include market access, commercial operations and marketing personnel.

In addition to commercial hiring, we are also increasing our patient ID effort, casting a wider net among physicians to canvas all possible centers for patients with the diseases we are targeting. We are working with external specialists and some contract field representatives around the US in this effort. Will also be complementing our activities with general diagnosis campaigns. These can come in the form of free genetic sequencing, which insurance rarely covers, and will not only improve our patient identification results but will also help us to understand the true prevalence of our target indications.

Lastly, we are beginning to increase our commercial planning and patient ID efforts outside of the US. We expect to hire our first employees in Europe this year. We will also start to turn our attention to Latin America, which represents a major market opportunity for rare disease treatments. These ex US efforts support our goal of commercializing our pipeline in all major markets and certain developing markets, including Latin America. But even prior to a potential launch, our activities in Europe will support potential named patient sales programs. While we don't expect a material level of named patient sales in 2015, we do plan to introduce such programs for rhGUS and SA-ER this year.

Overall, our increased focus on commercial planning and patient identification is indicative of the maturation of Ultragenyx and its pipeline. We are rapidly moving towards the market the number of potential product candidates. And we have initiated our commercial readiness activities to successful support a series of launches.

I will now turn it back to Emil.

Thank you, Tom.

2014 was a great year for Ultragenyx, making our debut on NASDAQ and now driving ahead on four products and six clinical programs. With funds raised we are well-positioned to be able to drive our development forward leading data readouts in multiple programs in 2015. We expect to expand our capability this year to help fill the early pipeline and prepare for commercialization. And we are steadfast in our commitment to look for ways to deliver our treatments faster for patients with rare and ultra-rare diseases.

Thank you all for attending today and for your interest in Ultragenyx. And with that we can start the Q&A session. And can the operator provide the instructions please?

(Operator Instructions)

Eric Schmidt, Cowen and Company.

Thanks for the call and thanks for taking my question. Maybe first on KRN23 and XLH, you've got a lot going on with the 16-week data coming out later this spring and the 40-week data towards year end, and then starting up the adult trial. The question is, when is the right time to sit down and have a discussion with the FDA about a specific approval path, either in children or adults or the combination of the two?

Thanks, Eric. It's a good question. I think we're constantly talking with the Agency through a number of steps in the program. But I will let Sunil maybe answer specifically about the regulatory process going forward.

Great, thank you, Emil. And Emil is spot on in that. Our discussions have started from the beginning and they continue as we go. I will mention a couple of things that I hope help.

With respect to the adult plans moving forward, we are right now in active discussions with them, with the FDA and EMA, on the next study, which will be, as we said, a placebo-controlled randomized study which should start in the second half of this year. So, those discussions are going well with the agencies.

With respect to pediatrics, we've already had several discussions with them, including what an improvable type of end point could be in pediatrics. And they have made it clear that rickets reduction is an improvable end point in future trials. And, as you know, our week 40 data will come out at the end of this year or early next year, and that will be our first evaluation on rickets. And our goal is to see a reduction in that pediatric population on rickets.

So, bottom line, the discussions are going well and they're ongoing.

Maybe a second, just is moving over to SA-ER and HIBM as the indication, what exactly or what specifically type of scientific advice did you get from the EMA to encourage a filing? And maybe you could characterize your confidence in potential approval based on that filing.

Sure, Eric. We had a very good discussion. I think we got pretty clear guidance from them. I will let Sunil describe some of the details.

Yes. Again, thank you, Emil. I think it's always good to start with our data, and that's our Phase 2 study which was a rigorous Phase 2 randomized, double-blind, placebo-controlled study. And bottom line, that data showed that patients receiving 6 grams per day of SA-ER had a statistically significant and clinical meaningful improvement in upper extremity composite muscle strength.

And these data were supported by PRO data. These data were supported by lower extremity muscle strength and function, and also some other data including dose response and the fact that when placebo patients were switched over to 6 grams they saw benefit. So we started with that.

And then after finishing with that we had discussions with the EMA. And based on the EMA guidelines, based on our discussions with the EMA, and looking at the totality of our data, we are confident in our plans. And, again, that includes filing for conditional approval in the second half of this year.

To add one other piece, Eric, was that in discussing, I think what they did say, and we noted before, is that if we were to apply with this set of data that we would have to restrict our label to upper extremity strength stabilization, which I think is maybe a strong indicator of what they are thinking -- that we have sufficient proof for the upper extremity but maybe not the lower extremity. And they did indicate they wanted to see some lower extremity in a confirmatory study, and that was some of the discussion we had with them.

So, I think if you take what Sunil said regarding the data, is that input on what the label might look like, I think that gives us clear enough guidance, and also guidance on the confirmatory study, that we feel we have a reasonable path forward. But I would say very clearly we're not going to handicap, probably, approval at this point. Lots of things can happen. But we feel like it's a solid study.

If you look at what rare diseases got approved on in the past, it's a 45-patient, randomized, controlled study, so it's a solid, rigorous test in a very rare disease. So, we think there's a reasonable chance and that's why we felt it was fair after our discussion with them to move forward.

Okay, thanks for the color, Emil and Sunil. And maybe just a quick one for Shalini. Are you willing to give any more specific net operating expense guidance in 2015?

Thanks, Eric. We're not providing annual OpEx guidance at this point, but what I can tell you is that we do have sufficient cash to fund our operations into 2018 with all of the current pipeline programs proceeding. And during that period we could see pivotal data from all of those clinical stage pipeline programs.

We do expect OpEx to be higher both in R&D and G&A in 2015 compared with 2014. And this is due to, obviously, the progression into late-stage clinical trials and regulatory filings, investment in the commercial infrastructure, and planned investments in the translational research capability in early-stage pipeline. And then, again, I think 2016 would be higher than 2015 for similar reasons.

Thanks and congrats on all the progress.

Cory Kasimov of JPMorgan.

This is actually Brittany on for Cory. Thanks for taking the questions. With triheptanoin data coming later this year, can you just review what are the key endpoints we should be watching out for, and what would determine a positive Phase 2 outcome for each indication? Thank you.

Thanks, Brittany. We have obviously two programs, the FAOD, as well as the Glut1. And, so, there's potential data in both. Plus I'd point out some other ISTs coming. Maybe Sunil could talk about the two programs for which our sponsor studies are going.

Great, thank you, Emil. Let me start first with the Glut1 program. As you know we have a Phase 2 study ongoing and we expect interim data by the end of this year. And that data will include, of course, safety and tolerability, but on the efficacy side looking at seizure control.

I think it's important to note one thing we have done in that study that's, in some sense, a second look at seizure control or efficacy. We are enrolling patients with generalized tonic clonic seizures.

But we made an amendment recently in that study design to also include patients who only have absence seizures. And that decision was based on a recent publication by Doctor Pascal who showed that patients receiving triheptanoin demonstrated reductions in their absence seizures by EEG.

So we will look at both phenotypes. We'll of course look at safety and tolerability and other parameters. And again that interim data will be at the end of this year.

With respect to FAOD, that Phase 2 study is ongoing. It enrolled 29 patients, so it completed enrollment. And we expect the 24-week open-label data, which is the primary analysis, by the end of this year.

This study I would categorize as more of a learning study. As you know, this is our first study, prospective study, in FAOD, and it's a very heterogeneous disorder. We have multiple endpoints we are evaluating, such as exercise tolerance, such as muscle strength and function, such as looking at hypoglycemia events. So, appreciating that it is heterogeneous, appreciating that it's a learning study, we will look for signals in one or more of the endpoints, and if we see that we will then determine the best path forward.

Thank you.

Salveen Richter of SunTrust.

Good afternoon. Thanks for taking the question. This is [Luka Bakravin] for Salveen. Just drilling back a little bit more on SA-ER and HIBM, and then the conversations you've had with the EMA, are there any updates in your thoughts about submission time lines and how those fit in with the ramp up of the commercial activities that you have out there?

Thank you. This is Emil. We have said that we are filing in the second half. And part of the reason for that is we have to get various aspects of the manufacturing lined up for filings, as we didn't expect to file in the timeframe, and just getting all the other pieces of an NDA. We haven't filed an NDA at Ultragenyx. We have filed many NDAs before in the team working with me. But it does take some time.

So we haven't really provided any greater specificity on that time line. But we're saying second half. What we talked about in the named patient sales is the fact that there are a lot of patients in Europe that don't walk at all that have upper extremity issues where we feel that they couldn't participate in our Phase 3 which will require them to walk.

Therefore, there's an opportunity maybe to treat some of those patients in between the filing for conditional approval. There is an opportunity to treat some of those patients with named patient sales. They wouldn't qualify for the Phase 3 study and therefore we think that would be appropriate for named patient sales.

And, so, those activities will be going on in parallel. And we would start pursuing named patient sales in the second half. In the study start we would expect to have begun already.

Great, thank you.

Chris Raymond, Robert Baird & Company.

Thanks. Another question on KRN23. I know you talked a little bit about the TIO trial and patient numbers, et cetera. But just noticing on clinical trials that it looks like the study that you have registered is a 48-week study, if I'm not correct. So, can you maybe talk about how you look at this treatment? Is this something that you think would be a chronic, longer duration treatment? Or what is your sense of how that will play out?

Thanks, Chris. TIO patients, generally the ones we're talking about treating with KRN23, are ones that have unresectable tumors. Therefore, they are chronic because you can't get rid of their source FGF 23, so we expect their source to continue to produce the hormone and therefore our need to block it will continue. Unless, for example, the source can suddenly be found and they get excised, then that might change the situation for a patient.

So, we look at it as a chronic program. And our choice of it had to do with the fact that we felt it looked like very severe XLH. Maybe Sunil could talk about the biology of TIO just briefly and why we think that's important.

Right. Thank you, Emil. And I think that is important because it is about following the biology. These patients, if you can remove the tumor, their symptoms resolve very quickly.

But as I said before, in about half of these patients the tumor can either not be found or, if it can be found, it's so disseminated or in a location that's so sensitive it cannot be removed. And those are the patients, those 50%, are the ones we would be targeting. And in those patients they have significant excess FGF 23 production, and their symptoms are extremely severe, in many cases.

So, as Emil mentioned, it would be chronic treatment. As I mentioned earlier we are initiating our study and we would expect results from that study, including radiographic data, by the end of this year or early next year.

Great. And at the risk of asking you to repeat something, I think I heard at the end of your prepared comments mention of named patient sales. Could you maybe give a little bit more color on that in terms of -- I think I heard you say not in 2015 but maybe a little bit more color on which specific products you're talking about?

This is Emil. We are planning to initiate the process of doing named patient sales. Personally we have done this before so we're initiating the process. But maybe I'll let Tom fulfill the details on what we think is going to happen on named patient sales and timing.

Sure. There are two products primarily we are thinking about for named patient sales. And they're in the sequence of rhGUS, is the first product that we're proceeding with and trying to identify patients that might be through physician requests that come from a compassionate username patient sales basis from territories in Europe where named patient sales are possible. And then we work with those physicians to try to facilitate gaining access to the product preapproval.

And there's certain pathways available, particular countries that this pathway exists. Turkey, France, Italy and Spain are the ones that primarily are supportive of named patient sales opportunities.

We are working with some identified patients and physicians that have initially expressed interest in gaining access to rhGUS, and working through the systems of distribution and dossier submission and support that is needed to help with that. So, it's a modest effort. Obviously MPS 7, in terms of prevalence there is a small number of patients that we're talking about.

And then we are beginning, as a second effort with UX001, Sunil and Emil have talked about our filing strategy. We are also looking at opportunity there and we've already received some requests and interest for access through named patient sales to the product. And, so, we are working through further identification of patients and physicians, and then thinking through the various operational aspects of that.

And just to clarify, you also need to think about pricing. So, part of what we are doing this year currently is looking at the type of pricing that we think would be appropriate for named patient sales in Europe.

Great, thanks.

Adam Walsh of Canaccord Genuity.

Hi, guys. Thanks a lot for taking my questions. My first question is on -- it's great that you guys are sponsoring an investigator trial in Huntington's disease. Do you have any indication about the timing in terms of when we might see data from that particular trial?

At this point we don't. Being investigator sponsored, we are certainly funding the study and supporting Dr. Mochel in that. And she has been a very productive investigator and she's done a lot of work. So, I actually think she's someone who can execute.

But right now we're not willing to put out exact time lines. But it will be important to get a handle on when. I think the protocol is done and I think they are in the setup mode.

Did you mention on the call that's a 100-patient trial?

Yes, a 100-patient randomized, controlled study.

Okay terrific. And then with everything going on -- this is more of a strategic question -- with everything going on in terms of the new expansion into TIO for KRN23, the Huntington's disease, the possibility of getting early approval for SA-ER, do you feel like you're right-sized from an HR perspective or from a management perspective to handle and possibly even further expand the pipeline?

I think that's a good point. We've grown a lot actually in the last year. We are scaling up a lot right now. I would say from a development standpoint, Sunil has come in and hired a number of senior people in the development area -- clinical operations and the clinical affairs and the other functions, drug safety, et cetera So, we have actually really ramped up a lot and have filled out the team on that side.

I would say our work right now is on the commercial side. We are hiring and we have some basic pieces of commercial, but I think we are well short of what it would take to launch a product, so we need to definitely pull that in. That's why we've been recruiting a Chief Commercial Officer.

But we are taking our time. We've been doing that for a few months. It's critical to me that those key people be someone that can mesh well with a really high-performing team, someone who can run at our speed and drive as we do.

What I will also say to you is that the Company is made up of very motivated and hard-working people. They absolutely drive and get stuff done. So, even though we don't have as many as many companies, I think we're actually very productive as a company. And part of that has to with how we put things together and how we delegate people to do the work.

But there's no question, you're right. If we're going to be commercializing two products and doing all the work we are doing, we need to scale up further. And I think it's particularly in the commercial side. So, there's more to do. But at this point I would say, given how many people we have hired and how many great people we have hired, I think we're in a really good spot to execute on our plans, so I feel very comfortable we can do it.

Okay, that's really helpful. And then, if I might, just one quick follow up to that. Is your focus right now primarily on execution with the current portfolio or are you still looking to in license additional products and develop them further?

Job one is executing the portfolio because if we simply execute on this program, there's so much coming out it alone it would be enough to drive value. However, from my own experiences, from everyone's experiences here, you can't keep your eye only on that. You do have to keep looking and being active at finding other opportunities.

I would say since IPO we've been getting an even higher rate of deal flow and opportunities brought to us. But we are going to be very selective. So anything we bring on has to be something we strongly believe in, that's going to add value and be worth expanding.

Our focus is primarily on earlier stage assets right now. But we are seeing some clinical stage and even commercial stage assets that we look at but we will be really careful about our choices.

I think right now, we execute on six programs, I think you would agree that that is a tremendous amount of value creation. But I want to be ready not for just these six but the next stage for the Company over the next two to three year period, and that means getting some new things in now.

Okay, that's great. Thanks a lot.

Ryan Martins, Jefferies.

This is actually Chris on for Ryan. I just had a couple questions. One follow up on the endpoints for KRN23. Obviously you discussed rickets reduction would be an improvable end point for pediatrics. But what, in your view, would be an improvable end point for an adult population?

That's one of the discussions Sunil has been talking about. I will let him fulfill some details on that.

Sure, thank you, Emil. Yes, Emil's exactly right. This is what we are working with the FDA on now, and the EMEA on now, so we don't have a definitive answer yet.

But I will say we're actually having really positive discussions with both agencies. They appreciate the significant unmet medical need, not only in pediatrics but in adults, and have clearly said that to us in our face-to-face meetings. So, to be determined, and we will have more information when we start this study in the second half of this year.

Okay. And then just another question I had on triheptanoin. Obviously an academic group is going to be publishing a randomized, controlled trial comparing it to median change triglyceride oil. And I noticed in the abstract it seemed like they were having some problems with compliance. And I was just curious what steps you've taken to overcome any of those potential issues in your trials?

Yes, it's an important area. We've talked about GI upset with trihep going in as an oil as one of the potential issues. There are a number of ways to manage dosing to help that, which we have in our current program.

We are not really in charge of that program so we can't really say what they are doing exactly in all aspects of it. It's a program that wasn't actually initiated with our product at that point. What they're doing is more of a physiological study and not much more we can say. But maybe, Sunil, you can tell them a little about what we're doing in our program to manage this.

Right. Thanks, Emil. You're right, GI tolerability is a potential issue with triheptanoin. But we found, with our experience with our investigators, that this actually can be managed with how you administer it.

For an example, one of our investigators told us, and this actually was Dr. Fanny Model who is doing the Huntington's study, who's very well versed in how you dose trihep, she was saying that, for example, if you give it in somewhat of a shot type of administration you have significant GI tolerability. But what she found out, if you actually slowly give it over a period with a meal then it is much more tolerated.

So, we do think it's manageable. We have updated all of our programs so that it can be manageable. And it has been throughout our studies to date.

Okay great. Congrats on the quarter and thanks for taking the questions.

Carol Werther of CRT Capital Group.

Thanks for taking my question. I know you don't want to give specific guidance for this year in terms of exactly what your burn is going to be, but can you give us an idea of how many people you're planning to add as you approach commercialization?

Thanks, Carol. This is Emil. Many. I will leave that to Shalini.

Sure, Carol. You will see when we file our 10-K that we went from 59 people to [107] (corrected by company after the call) people over the course of 2014. And I think you could see a similar trajectory of growth over 2015, if that's helpful to you.

That's helpful, thank you.

(Operator Instructions)

I'm showing no further questions at this time.

Great, thanks. With no additional questions this concludes the call. A replay of the call will be available shortly. If there are any additional questions feel free to contact us at 844-758-7273. That's 844-758-7273. Or by email at ir@ultragenyx.com. Thanks, everyone, for joining us.

Thanks, everyone.

Ladies and gentlemen, thank you for participating in today's conference. That does conclude today's program. You may now disconnect. Have a great day, everyone.

(Operator Instructions)

Eric Schmidt, Cowen and Company.

Thanks for the call and thanks for taking my question. Maybe first on KRN23 and XLH, you've got a lot going on with the 16-week data coming out later this spring and the 40-week data towards year end, and then starting up the adult trial. The question is, when is the right time to sit down and have a discussion with the FDA about a specific approval path, either in children or adults or the combination of the two?

Thanks, Eric. It's a good question. I think we're constantly talking with the Agency through a number of steps in the program. But I will let Sunil maybe answer specifically about the regulatory process going forward.

Great, thank you, Emil. And Emil is spot on in that. Our discussions have started from the beginning and they continue as we go. I will mention a couple of things that I hope help.

With respect to the adult plans moving forward, we are right now in active discussions with them, with the FDA and EMA, on the next study, which will be, as we said, a placebo-controlled randomized study which should start in the second half of this year. So, those discussions are going well with the agencies.

With respect to pediatrics, we've already had several discussions with them, including what an improvable type of end point could be in pediatrics. And they have made it clear that rickets reduction is an improvable end point in future trials. And, as you know, our week 40 data will come out at the end of this year or early next year, and that will be our first evaluation on rickets. And our goal is to see a reduction in that pediatric population on rickets.

So, bottom line, the discussions are going well and they're ongoing.

Maybe a second, just is moving over to SA-ER and HIBM as the indication, what exactly or what specifically type of scientific advice did you get from the EMA to encourage a filing? And maybe you could characterize your confidence in potential approval based on that filing.

Sure, Eric. We had a very good discussion. I think we got pretty clear guidance from them. I will let Sunil describe some of the details.

Yes. Again, thank you, Emil. I think it's always good to start with our data, and that's our Phase 2 study which was a rigorous Phase 2 randomized, double-blind, placebo-controlled study. And bottom line, that data showed that patients receiving 6 grams per day of SA-ER had a statistically significant and clinical meaningful improvement in upper extremity composite muscle strength.

And these data were supported by PRO data. These data were supported by lower extremity muscle strength and function, and also some other data including dose response and the fact that when placebo patients were switched over to 6 grams they saw benefit. So we started with that.

And then after finishing with that we had discussions with the EMA. And based on the EMA guidelines, based on our discussions with the EMA, and looking at the totality of our data, we are confident in our plans. And, again, that includes filing for conditional approval in the second half of this year.

To add one other piece, Eric, was that in discussing, I think what they did say, and we noted before, is that if we were to apply with this set of data that we would have to restrict our label to upper extremity strength stabilization, which I think is maybe a strong indicator of what they are thinking -- that we have sufficient proof for the upper extremity but maybe not the lower extremity. And they did indicate they wanted to see some lower extremity in a confirmatory study, and that was some of the discussion we had with them.

So, I think if you take what Sunil said regarding the data, is that input on what the label might look like, I think that gives us clear enough guidance, and also guidance on the confirmatory study, that we feel we have a reasonable path forward. But I would say very clearly we're not going to handicap, probably, approval at this point. Lots of things can happen. But we feel like it's a solid study.

If you look at what rare diseases got approved on in the past, it's a 45-patient, randomized, controlled study, so it's a solid, rigorous test in a very rare disease. So, we think there's a reasonable chance and that's why we felt it was fair after our discussion with them to move forward.

Okay, thanks for the color, Emil and Sunil. And maybe just a quick one for Shalini. Are you willing to give any more specific net operating expense guidance in 2015?

Thanks, Eric. We're not providing annual OpEx guidance at this point, but what I can tell you is that we do have sufficient cash to fund our operations into 2018 with all of the current pipeline programs proceeding. And during that period we could see pivotal data from all of those clinical stage pipeline programs.

We do expect OpEx to be higher both in R&D and G&A in 2015 compared with 2014. And this is due to, obviously, the progression into late-stage clinical trials and regulatory filings, investment in the commercial infrastructure, and planned investments in the translational research capability in early-stage pipeline. And then, again, I think 2016 would be higher than 2015 for similar reasons.

Thanks and congrats on all the progress.

Cory Kasimov of JPMorgan.

This is actually Brittany on for Cory. Thanks for taking the questions. With triheptanoin data coming later this year, can you just review what are the key endpoints we should be watching out for, and what would determine a positive Phase 2 outcome for each indication? Thank you.

Thanks, Brittany. We have obviously two programs, the FAOD, as well as the Glut1. And, so, there's potential data in both. Plus I'd point out some other ISTs coming. Maybe Sunil could talk about the two programs for which our sponsor studies are going.

Great, thank you, Emil. Let me start first with the Glut1 program. As you know we have a Phase 2 study ongoing and we expect interim data by the end of this year. And that data will include, of course, safety and tolerability, but on the efficacy side looking at seizure control.

I think it's important to note one thing we have done in that study that's, in some sense, a second look at seizure control or efficacy. We are enrolling patients with generalized tonic clonic seizures.

But we made an amendment recently in that study design to also include patients who only have absence seizures. And that decision was based on a recent publication by Doctor Pascal who showed that patients receiving triheptanoin demonstrated reductions in their absence seizures by EEG.

So we will look at both phenotypes. We'll of course look at safety and tolerability and other parameters. And again that interim data will be at the end of this year.

With respect to FAOD, that Phase 2 study is ongoing. It enrolled 29 patients, so it completed enrollment. And we expect the 24-week open-label data, which is the primary analysis, by the end of this year.

This study I would categorize as more of a learning study. As you know, this is our first study, prospective study, in FAOD, and it's a very heterogeneous disorder. We have multiple endpoints we are evaluating, such as exercise tolerance, such as muscle strength and function, such as looking at hypoglycemia events. So, appreciating that it is heterogeneous, appreciating that it's a learning study, we will look for signals in one or more of the endpoints, and if we see that we will then determine the best path forward.

Thank you.

Salveen Richter of SunTrust.

Good afternoon. Thanks for taking the question. This is [Luka Bakravin] for Salveen. Just drilling back a little bit more on SA-ER and HIBM, and then the conversations you've had with the EMA, are there any updates in your thoughts about submission time lines and how those fit in with the ramp up of the commercial activities that you have out there?

Thank you. This is Emil. We have said that we are filing in the second half. And part of the reason for that is we have to get various aspects of the manufacturing lined up for filings, as we didn't expect to file in the timeframe, and just getting all the other pieces of an NDA. We haven't filed an NDA at Ultragenyx. We have filed many NDAs before in the team working with me. But it does take some time.

So we haven't really provided any greater specificity on that time line. But we're saying second half. What we talked about in the named patient sales is the fact that there are a lot of patients in Europe that don't walk at all that have upper extremity issues where we feel that they couldn't participate in our Phase 3 which will require them to walk.

Therefore, there's an opportunity maybe to treat some of those patients in between the filing for conditional approval. There is an opportunity to treat some of those patients with named patient sales. They wouldn't qualify for the Phase 3 study and therefore we think that would be appropriate for named patient sales.

And, so, those activities will be going on in parallel. And we would start pursuing named patient sales in the second half. In the study start we would expect to have begun already.

Great, thank you.

Chris Raymond, Robert Baird & Company.

Thanks. Another question on KRN23. I know you talked a little bit about the TIO trial and patient numbers, et cetera. But just noticing on clinical trials that it looks like the study that you have registered is a 48-week study, if I'm not correct. So, can you maybe talk about how you look at this treatment? Is this something that you think would be a chronic, longer duration treatment? Or what is your sense of how that will play out?

Thanks, Chris. TIO patients, generally the ones we're talking about treating with KRN23, are ones that have unresectable tumors. Therefore, they are chronic because you can't get rid of their source FGF 23, so we expect their source to continue to produce the hormone and therefore our need to block it will continue. Unless, for example, the source can suddenly be found and they get excised, then that might change the situation for a patient.

So, we look at it as a chronic program. And our choice of it had to do with the fact that we felt it looked like very severe XLH. Maybe Sunil could talk about the biology of TIO just briefly and why we think that's important.

Right. Thank you, Emil. And I think that is important because it is about following the biology. These patients, if you can remove the tumor, their symptoms resolve very quickly.

But as I said before, in about half of these patients the tumor can either not be found or, if it can be found, it's so disseminated or in a location that's so sensitive it cannot be removed. And those are the patients, those 50%, are the ones we would be targeting. And in those patients they have significant excess FGF 23 production, and their symptoms are extremely severe, in many cases.

So, as Emil mentioned, it would be chronic treatment. As I mentioned earlier we are initiating our study and we would expect results from that study, including radiographic data, by the end of this year or early next year.

Great. And at the risk of asking you to repeat something, I think I heard at the end of your prepared comments mention of named patient sales. Could you maybe give a little bit more color on that in terms of -- I think I heard you say not in 2015 but maybe a little bit more color on which specific products you're talking about?

This is Emil. We are planning to initiate the process of doing named patient sales. Personally we have done this before so we're initiating the process. But maybe I'll let Tom fulfill the details on what we think is going to happen on named patient sales and timing.

Sure. There are two products primarily we are thinking about for named patient sales. And they're in the sequence of rhGUS, is the first product that we're proceeding with and trying to identify patients that might be through physician requests that come from a compassionate username patient sales basis from territories in Europe where named patient sales are possible. And then we work with those physicians to try to facilitate gaining access to the product preapproval.

And there's certain pathways available, particular countries that this pathway exists. Turkey, France, Italy and Spain are the ones that primarily are supportive of named patient sales opportunities.

We are working with some identified patients and physicians that have initially expressed interest in gaining access to rhGUS, and working through the systems of distribution and dossier submission and support that is needed to help with that. So, it's a modest effort. Obviously MPS 7, in terms of prevalence there is a small number of patients that we're talking about.

And then we are beginning, as a second effort with UX001, Sunil and Emil have talked about our filing strategy. We are also looking at opportunity there and we've already received some requests and interest for access through named patient sales to the product. And, so, we are working through further identification of patients and physicians, and then thinking through the various operational aspects of that.

And just to clarify, you also need to think about pricing. So, part of what we are doing this year currently is looking at the type of pricing that we think would be appropriate for named patient sales in Europe.

Great, thanks.

Adam Walsh of Canaccord Genuity.

Hi, guys. Thanks a lot for taking my questions. My first question is on -- it's great that you guys are sponsoring an investigator trial in Huntington's disease. Do you have any indication about the timing in terms of when we might see data from that particular trial?

At this point we don't. Being investigator sponsored, we are certainly funding the study and supporting Dr. Mochel in that. And she has been a very productive investigator and she's done a lot of work. So, I actually think she's someone who can execute.

But right now we're not willing to put out exact time lines. But it will be important to get a handle on when. I think the protocol is done and I think they are in the setup mode.

Did you mention on the call that's a 100-patient trial?

Yes, a 100-patient randomized, controlled study.

Okay terrific. And then with everything going on -- this is more of a strategic question -- with everything going on in terms of the new expansion into TIO for KRN23, the Huntington's disease, the possibility of getting early approval for SA-ER, do you feel like you're right-sized from an HR perspective or from a management perspective to handle and possibly even further expand the pipeline?

I think that's a good point. We've grown a lot actually in the last year. We are scaling up a lot right now. I would say from a development standpoint, Sunil has come in and hired a number of senior people in the development area -- clinical operations and the clinical affairs and the other functions, drug safety, et cetera So, we have actually really ramped up a lot and have filled out the team on that side.

I would say our work right now is on the commercial side. We are hiring and we have some basic pieces of commercial, but I think we are well short of what it would take to launch a product, so we need to definitely pull that in. That's why we've been recruiting a Chief Commercial Officer.

But we are taking our time. We've been doing that for a few months. It's critical to me that those key people be someone that can mesh well with a really high-performing team, someone who can run at our speed and drive as we do.

What I will also say to you is that the Company is made up of very motivated and hard-working people. They absolutely drive and get stuff done. So, even though we don't have as many as many companies, I think we're actually very productive as a company. And part of that has to with how we put things together and how we delegate people to do the work.

But there's no question, you're right. If we're going to be commercializing two products and doing all the work we are doing, we need to scale up further. And I think it's particularly in the commercial side. So, there's more to do. But at this point I would say, given how many people we have hired and how many great people we have hired, I think we're in a really good spot to execute on our plans, so I feel very comfortable we can do it.

Okay, that's really helpful. And then, if I might, just one quick follow up to that. Is your focus right now primarily on execution with the current portfolio or are you still looking to in license additional products and develop them further?

Job one is executing the portfolio because if we simply execute on this program, there's so much coming out it alone it would be enough to drive value. However, from my own experiences, from everyone's experiences here, you can't keep your eye only on that. You do have to keep looking and being active at finding other opportunities.

I would say since IPO we've been getting an even higher rate of deal flow and opportunities brought to us. But we are going to be very selective. So anything we bring on has to be something we strongly believe in, that's going to add value and be worth expanding.

Our focus is primarily on earlier stage assets right now. But we are seeing some clinical stage and even commercial stage assets that we look at but we will be really careful about our choices.

I think right now, we execute on six programs, I think you would agree that that is a tremendous amount of value creation. But I want to be ready not for just these six but the next stage for the Company over the next two to three year period, and that means getting some new things in now.

Okay, that's great. Thanks a lot.

Ryan Martins, Jefferies.

This is actually Chris on for Ryan. I just had a couple questions. One follow up on the endpoints for KRN23. Obviously you discussed rickets reduction would be an improvable end point for pediatrics. But what, in your view, would be an improvable end point for an adult population?

That's one of the discussions Sunil has been talking about. I will let him fulfill some details on that.

Sure, thank you, Emil. Yes, Emil's exactly right. This is what we are working with the FDA on now, and the EMEA on now, so we don't have a definitive answer yet.

But I will say we're actually having really positive discussions with both agencies. They appreciate the significant unmet medical need, not only in pediatrics but in adults, and have clearly said that to us in our face-to-face meetings. So, to be determined, and we will have more information when we start this study in the second half of this year.

Okay. And then just another question I had on triheptanoin. Obviously an academic group is going to be publishing a randomized, controlled trial comparing it to median change triglyceride oil. And I noticed in the abstract it seemed like they were having some problems with compliance. And I was just curious what steps you've taken to overcome any of those potential issues in your trials?

Yes, it's an important area. We've talked about GI upset with trihep going in as an oil as one of the potential issues. There are a number of ways to manage dosing to help that, which we have in our current program.

We are not really in charge of that program so we can't really say what they are doing exactly in all aspects of it. It's a program that wasn't actually initiated with our product at that point. What they're doing is more of a physiological study and not much more we can say. But maybe, Sunil, you can tell them a little about what we're doing in our program to manage this.

Right. Thanks, Emil. You're right, GI tolerability is a potential issue with triheptanoin. But we found, with our experience with our investigators, that this actually can be managed with how you administer it.

For an example, one of our investigators told us, and this actually was Dr. Fanny Model who is doing the Huntington's study, who's very well versed in how you dose trihep, she was saying that, for example, if you give it in somewhat of a shot type of administration you have significant GI tolerability. But what she found out, if you actually slowly give it over a period with a meal then it is much more tolerated.

So, we do think it's manageable. We have updated all of our programs so that it can be manageable. And it has been throughout our studies to date.

Okay great. Congrats on the quarter and thanks for taking the questions.

Carol Werther of CRT Capital Group.

Thanks for taking my question. I know you don't want to give specific guidance for this year in terms of exactly what your burn is going to be, but can you give us an idea of how many people you're planning to add as you approach commercialization?

Thanks, Carol. This is Emil. Many. I will leave that to Shalini.

Sure, Carol. You will see when we file our 10-K that we went from 59 people to 170 people over the course of 2014. And I think you could see a similar trajectory of growth over 2015, if that's helpful to you.

That's helpful, thank you.

(Operator Instructions)

I'm showing no further questions at this time.

Great, thanks. With no additional questions this concludes the call. A replay of the call will be available shortly. If there are any additional questions feel free to contact us at 844-758-7273. That's 844-758-7273. Or by email at ir@ultragenyx.com. Thanks, everyone, for joining us.

Thanks, everyone.

Ladies and gentlemen, thank you for participating in today's conference. That does conclude today's program. You may now disconnect. Have a great day, everyone.