Ultragenyx Pharmaceutical Inc (RARE) 2015 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Ultragenyx Pharmaceutical Incorporated first quarter 2015 financial results and corporate update. (Operator Instructions). I would now like to turn the conference over to Mr. Rob Anstey. Sir, you may begin.

Good afternoon, everyone, and welcome to the Ultragenyx Pharmaceutical financial results and corporate update conference call for the first quarter of 2015. We have issued a press release detailing our financial results which you can find at our website at www.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 finance and development highlights. We'll keep our prepared comments brief in order to allow 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, plans regarding ongoing studies for existing programs, the sufficiency of cash, cash equivalents and short-term investments for projected periods of time and the intended to file for initial approval.

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 process and actions of regulatory authorities, the timing of our regulatory filings and other matters that could affect the availability or commercial potential of our product candidates.

For 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 annual report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on March 27, 201 or our quarter report on Form 10-Q for the quarter ended March 31, 2015, that will be filed soon and our subsequent periodic reports filed with the SEC.

I will now turn it over to Emil.

Thanks, Rob, and good afternoon everyone and thank you for joining us. I will provide a high level overview of our progress in Q1 2015 and Shalini will then give an overview of our first quarter of financial, finally Sunil will provide additional details on our clinical development progress.

Since the start of the year we have pressed ahead with all of our clinical and preclinical programs and made significant progress on all of them. We have completed some of our planned development milestones and also announced results from other investigator studies related to our products. We are on track now for a number of clinical and regulatory milestones this year, including the following, completing enrollment in the rhGUS Phase 3 and MPS7 with the goal of reporting data in the first half of 2016. Sixteen week data from the KRN23 Phase 2 in pediatrics (Inaudible) Q2. Initiation of randomize double-blind placebo-controlled study in adult XLH in the second half. Interim data from the ongoing Phase 2 KRN23 and tumor-induced osteomalacia.

Interim data from the Phase 2 study triheptanoin fatty acid oxidation disorders (Inaudible) 2015. We'll be planning and initiating our expanded development plan and clinical study in the movement disorder of Glut1 deficiency syndrome to supplement our study data in Glut1 deficiency seizure that is expected late in 2015. We'll be initiating a Phase 3 study of sialic acid extended-release in GNE myopathy previously known as HIBM in mid2015. And finally the filing for traditional approval in Europe for GNE myopathy in the second half of 2015. So we have a full year ahead.

In our most recent update we announced the investor study date on the use of triheptanoin to reduce the motor events of Glut1 deficiency syndrome patients by 90%. We also announced that we could expand our triheptanoin development strategy to include a randomized control study in Glut1 deficiency syndrome patients with these motor problems. The outcome of the investigator pilot studies is important for two key reasons. First, it provides a solid basis for the expansion of the triheptanoin to a broader Glut1 adult patients population as well as potentially provides an alternative regulatory path way. Second, (Inaudible) demonstrate triheptanoin may improve energy sufficiency in multiple parts of the brain including the basal ganglia that effect motor function in Glut1 deficiency patients, and is similar to the effects observed in patients with Huntington as reported earlier in Q1. Based on all these studies we now have data in both adult and pediatrics patients that suggests triheptanoin may reduce neurological energy deficit manifestation in multiple brain locations. These observations will need to be confirmed in randomized control studies which are either underway or being planned.

In addition to clinical update we have received orphan designation for triheptanoin in the U.S. for Fatty Acid Oxidation Disorders and in the EU for Glut1 deficiency syndrome in addition to the existing U.S. designation for Glut1 deficiency syndrome. Beyond orphan designations we also have issued patents for triheptanoin including an use patent in FAOD and two other composition like patents for the molecule that extend to 2025 not including up to five year of patent term extensions.

Moving from triheptanoin to rhGUS our enzyme replacement therapy for MPS7. Our Phase 3 program is on track and steady enrollment progressing. Phase 3 blind start study data are expected in the first half of 2016. In addition to Phase 3, we planned to initiate a study in younger patients less than five years. This study is especially important due to the loss of many MPS7 patients the first year of life due to hydrops or total body swelling and its associated complications. Early treatment is also likely to benefit the effect on the bones and other tissues as observed in (Inaudible) and in other MPS enzyme replacement therapies apply to very young patients. We estimate there are approximately 20 hydrop (Inaudible) babies born with MPS7 each year in the developed world. If treatment with rhGUS is able to help some of these hydrop babies improve, this could be important in changing the course of this disease. One, four month old hydrop patients has been rhGUS infusion on a (Inaudible) basis since the fourth quarter of 2014. But subsequently more data will be needed to know the true potential impact of rhGUS in these early hydropic babies.

Lastly, we have had a number of personnel and corporate updates. We announced recently that Dan Welch is appointed to our Board of Directors. Dan is currently an Executive Partner at Sofinnova Ventures and was previously Chairman and CEO of InterMune until it was acquired by Roche in October 2014. We're excited to have Dan on the team at this busy and exiting time in the Company's development.

We also continue to build out our senior management team. The most recent addition is Dennis Wong our new Chief Technical Operations Officer. Dennis will lead our manufacturing, process development and related activities and be a member of the senior leadership team. He has extensive experience in technical operations with both biologic and small molecules at InterMune, Allergan and a number of successful companies. In addition to Dennis we have identified and recruited a Chief Commercial Officer who will lead the development of International sales and marketing organization as we prepared for launch. We look forward to announcing that hiring in the next couple of months. These latest additions to the senior team will help us in executing our development plan and our commercialization plans globally.

I will now turn the call over to Shalini to provide the financial overview.

Thank you, Emil, and good afternoon to everyone. I hope that you all have had a chance to review the press release we put out earlier. Our first quarter 2015 results included total operating expenses of $21.5 million. Research and development costs accounted for $17.4 million or 81% of our operating expenses. Not surprisingly SA-ER and rhGUS our Phase 3 program accounted for the greatest proportion of R&D cost in the first quarter of 2015, as well as the largest increases in expenditure relative to the first quarter of 2014. expenses also increased for both triheptanoin programs and both KRN23 programs. As a reminder we share KRN23 development costs 50/50 with our collaborative partner Kyowa Hakko Kirin. Costs for a preclinical translational research programs also increased over the prior year.

OpEx increased significantly from the first quarter in 2014 due to the expansion and overall advancement of our clinical development pipeline including the conduct of multiple clinical studies, higher manufacture cost and related supported general and administrative expenses. Total net loss for the first quarter of 2015 was $21.4 million and cash used in operating activities totaled $19.7 million. Net loss for the quarter included approximately $3.6 million in noncash charges such as stock-based compensation, amortization of premiums on investment securities and depreciation and amortization.

As programs advance in to late stage clinical trials and we expand our translational research and global commercial capabilities, we anticipate our expenditures will increase in future quarters. We ended the first quarter with $342.6 million in cash and cash equivalent and short-term investments on the balance sheet, which included the $175 million in net proceeds raised from under written public offering of common stock in February. We continue to expect that we have sufficient funding for our currently planned operations in to 2018 assuming that all programs proceed successful. During this period we could see pivotal data from ever single clinical stage program. As a reminder we do not have any debt outstanding.

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

Great. Thank you, Shalini. I will now give an update on our clinical pipeline starting with triheptanoin. As Emil mentioned the results from the investigator sponsored trial in Glut1 patients with the movement disorder phenotype were presented at ANN last month the single-arm open-label pilot study enroll patients will non-epileptic paroxysmal motor manifestations. This means that these manifestations are not seizure but are sudden transient, involuntary movements that can be debilitating. Paroxysmal motor events were measured by a patients diary over three separate two month phases of the study; a baseline face, a treatment face, and a withdraw phase.

During the baseline period six patients reported an average of 31 paroxysmal events. During the triheptanoin and treatment phase, this rate declined by 90%, to an average of three events and was statistically significant. After triheptanoin was discontinued the rate of paroxysmal manifestations increased significantly to an average of 24 events which was also statistically significant. In addition, improvements were noted in the clinical global impression scale and in brain energy metabolism during visual stimulation. Triheptanoin was well tolerated in all patients. However two patients were considered non-compliant for reasons unrelated to safety and were exclude from the analysis. Based on these results, we plan to initiate a random sized double-blind placebo-controlled study of triheptanoin in the Glut1 movement disorder phenotype.

We anticipate having discussions with the FDA on study design details in the second half of 2015. The Glut1 movement disorder study expands our overall strategy in this potential indication. The expansion is especially important given the materially high unmet medical need in the movement disorder phenotype of Glut1 deficiency. We believe an limited number of patients are on the autogenic diet to treat movement disorders, and the data suggests it may not be very effective in treating this specific manifestation.

In addition to the Glut1 movement disorder plan study, a Phase 2 placebo control study ongoing in patients who present primarily with tonic-clonic and/or Absence seizure associated with the disease. Interim data from this study evaluating the effect of triheptanoin on seizures are expected by the end of 2015.

In addition to Glut1, we continue to treat patients with triheptanoin in the open-label Phase 2 study in fatty acid oxidation disorders or FAOD. The FAOD trial is intended to be a learning study. We are evaluating a range of endpoints covering the muscular skeletal, liver and heart manifestations of the disease. The ultimate goal is to identify meaningful signals of activity on one or more of these broad manifestations that will enable us to develop and operationalize a pivotal Phase 3 study. This study completed enrollment of 29 patients in late 2014 and we expect interim data in the second half of 2015. The interim data will look at the acute effects of a disease after six month of treatment with triheptanoin. After the six month interim analysis, we will continue to treat and follow patients for an additional 12 months for a total of 18 months on triheptanoin.

Turning to the KRN23 development program. We are conducting a randomized open-label dose finding Phase 2 study in 36 pediatrics XLH patients. Patients are divided in to three cohorts of escalating starting dose levels of KRN23 with either monthly or biweekly dosing regimen. During the initial 16 week dose titration period doses can be titrated on a monthly basis until a patients has reached a target serum phosphate level, which is a key biochemical mark of this debilitating bone disease. After the initial 16 week period, patients can continue to be titrated on a monthly basis to an individually optimized dose level as needed. In the second quarter of this year we man to report the results from the initial 16 week period. These results shall include safety, (Inaudible) dynamic endpoints including serum phosphate, TmP/GFR which is a measurement of how much phosphate is reabsorb by the kidney and vitamin D. Our goal is to evaluate the safety in serum phosphate levels compared with those observe in the Phase 1/2 XLH study in adults. Later this year or in early 2016 we plan to release additional data from the study after 40 weeks of treatment which will include a radiographic evaluation of rickets which is a key clinical endpoint of this disease.

In addition to the pediatrics XLH program, we are on track with our adult XLH program. Where we plan to initiate a randomized double-blind placebo-controlled study in the second half of 2015. We also recently initiated an extension study for adult XLH patients who had previously competed a study conducted by our partner KHK. This long-term open-label extension study will enroll approximately 25 patients. This study will generate additional long-term safety and efficacy data in the adult patients population, and it also enables us to continue to provide treatment to the first patients who participated in a clinical study of KRN23, many of whom have been requesting to get back on therapy since the original studies were competed With regard to our recently initiated program evaluating KRN23 in tumor-induced osteomalacia or TIO, we remain on track to have initial data available in late 2015 or early 2016.

Turning to our rhGUS development program, we continue to enroll patients in our Phase 3 in MPS7. We anticipate results in the first half of 2016, and as Emil mentioned, we expect to kick off a study of rhGUS in the younger MPS7 patients around the middle of this year. We'll provide additional details about that study design when it is initiated.

Lastly with respect to SA-ER in HIV in patients, we continue to move forward. We are planning to file for conditional approval in Europe in the second half of this year and we would anticipate a decision by the EMA within approximately one year from the date of file. We are also on schedule to start our global Phase 3 study. This study will enroll approximately 80 patients and evaluate the compos set of upper extremity muscle strength at the primarily endpoint with key secondary endpoint including the lower extremities. It is intended to convert an conditional approval in Europe to a full approval as well as to support approval in the U.S.

In summary we are encouraged by the progress we have made across all programs, and I look forward to providing further updates as we reach our next key milestone. Next I will hand it back to Emil to close out the presentation.

Thank, Sunil. We continue to execute in the first quarter of this year, and raise substantial funds to support that effort. And we continue to track excellent people in filling out our critical roles to drive our programs. This will be a busy year for us with key milestones expected from all six of our development programs in the planning for commercialization finally beginning. We are routinely focused on developing much needed therapies for patients with rare disease and through that effort creating value for shareholders.

With that, I'll end my comments. And thanks for listening. We can now move on for the Q&A session. Operator, can you please provide the instructions.

Thank you. (Operator Instructions). And our first question comes from the line of Salveen Richter of Sun Trust. Your line is now open.

Thanks for taking my questions. Just curious in terms of the KRN23 studies will you be able to file on the pediatrics study or do you have to conduct a Phase 3? And then just remind us if the adult trial you are starting whether that is registrational and then just a couple of following up post that.

Thanks, Salveen. I think we are always looking for ways to try to accelerate the development plan, but we have stated the peds program was Phase 2 and the adult program we have been talking with authorities. I'll let Sunil provide some more detail on the two studies.

Sure. Thanks again for the questions. As Emil mentioned the Phase 2 study is in pediatrics. And as you know that is ongoing and we look forward to providing you data from that study in the second quarter of this year and again the 40 week (Inaudible) data late this year early this year. And it is Phase 2 as Emil mentioned. On the adult side we have completed our Phase 1/2 program. And to remind people all patients of adults had improvements in serum phosphorus after KRN23. We are planning our next study which is a randomized double-blind placebo-controlled trial. As we get further along with our discussions with the agency will provide updates as they become available.

I think to answer the peds study was not intended to be pivotal registrational. I think the only way we could potentially go faster would be if we had results that it was dramatic and something that could move forward. But I wouldn't want to -- what we said to everyone is that we would expect to have to do a randomize control study based on our feedback from regulatory FDA in any case. Obviously we look for ways to go faster if there was an opportunity. The adult study could potentially be registrational, the Phase 3 randomized control it is a randomized control study with placebo. And we are going to provide some more details on that. But potentially registrational. The right strategy could include Phase 3 peds and Phase 3 adults, could be a Phase 3 peds with the current peds. And I understand the question, Salveen, which you are trying to get out what's the real-time line for filing, and what I would say is we are working all the angles to try to maximize our speed through the process, but it will depend somewhat on the data we see as we can or can't do.

And then just a follow-up, in terms of is there going to be any build out here in certainty territories ahead of name patient sales in HIBM and MPS 7? And then how is the one MPS 7 patient with NIHF progressing? And then one question for Sunil, when you look at R&D expense should we expect the higher manufacturing cost in Q1 to follow through for the rest of the year. Thank you.

On named patients sales we are initiating the process in Europe and Turkey for named patients sales in rhGUS for MPS 7 as well, we will be later doing that for UXO1 or SARI. So generally firms can be done initially with consultants and don't require the same level of commercial infrastructure, but we do have other needs in Europe which relate patient identification as well. So we are planning to start building personnel on the ground to help with patient identification as well as to help to begin managing. But the programs for named patient are being initiated with the use of specialized consultants who we have worked with before. Tom, I don't know if there is anything else to add on that.

I think you covered it, Emil. 2015 is really more of planning year and focusing on patients ID efforts expanding that and then beginning the planning for personnel where we will have direct presence, et cetera, focused on Europe given that is where were filing the MA this year. So 2016 will really be more of the ramp up year we're probably putting more people on the ground and forming more specific plans for go to market.

Obviously hiring a Chief Commercial Officer was a critical step and we have been working on that for a number of months and we have identified someone and we expect to have them on board soon.

And Salveen, to answer your question regarding manufacturing, we do expect to be at a higher run rate for manufacture and cost going forward because we have the two programs that are in Phase 3, so that is a larger number of patients we need to manufacture for. There are things like validation runs and other CMC activities required in connection with potential approval and then obviously manufacturing in the commercial setting as well so I would expect that to continue at a higher run rate.

Our next question comes from the line of Marc Frahm of Cowen and Company. Your line is now open.

Thanks for taking my question Going back to the Glut1 movement disorder patient group, do you have a since of how many patients there are that have just the movement disorder and not seizure phenotype as well. And then to what degree do the movement disorders that are seen in seizure patients overlap with the phenotype that is in purely the movement disorder patients?

Thanks, Mark. We don't have a precise number on how many patients have movement disorder. When you look at the phenotype and the publications that exist on Glut1 it is pretty clear that the seizure problem tend to be a early younger child problem and then it starts to wane and the movement disorder problems tends to be something you see as a teenagers and adults to varying degrees. There are children that have movement issues as well, but it appears to be more of a problem -- phenotype is more the primary problem for later patients and seizure tends to diminish, so it is sort of an evolution of the disease. And clearly it must mean the cortex of little kids are just really fragile and energy independent and they get more seizures and latter on it is the deep part of the brain that is deficient that drives the motor dysfunction. I think that is the general feedback. We don't have solid numbers but you see the motor problem or defientcy problem even in children who may not be having this tonic motor events. If they do the (Inaudible) they may have a difference in their [gate] and how they behave.

I think this deficiency problem is effecting the whole brain throughout their lives. It is just the major manifestations shifts from being seizure to the motor dysfunction. One of the challenges with Glut1 and on the patient numbers is that based on surveys of different type of seizures it is pretty clear there is a lot of Glut1 who are not diagnoses. So while we think there are 3,000 to 8,000 Glut1 patients in the U.S. we don't have good handle yet on how many are actually diagnosed or not. And we have initiated a very expansive patient identification program providing pre sequencing opportunities for doctors who have patients with refractory seizures with unknown etiology and we will also expand that to motor dysfunction to try to enhance the diagnosis of patients. There are clearly some new diagnoses coming from that program so we think it is something that needs to happen to help get a better handle on how many patients there are.

I believe some of the secondary endpoints on the ongoing seizure study do look at these kind of movement disorders how much read-through do you think there is from those data points into what you might see in the phase you're going to start.

That study basically is trying to cover all the phenotype but we only select for patients who have seizure not motor dysfunction. So we kind of think that because we are selecting for seizure patients there may be a lot of patients who don't have a lot of movement problems. I don't know if you want to say anymore Sunil about the study.

Emil commented on it very well and it is a good question. I think it is not extremely well described in the literature. The classical phenotype is one Emil described and that early in life the majority of systems are seizure based and later in life they become movement disorder based. So there is a significant overlap longitudinal as well. However there are data supporting there is an Aclassical phenotype like there is in most disease states where the major manifestation is just movements disorders. But I would consider the trial separate, in that the phase 2 is a seizure disorder primary study. Now our movement disorder study will enroll patients specifically with a movement disorder phenotype and that will be a randomized double-blind placebo-controlled study and we look forward to talking with the FDA in the second half of this year on that study design.

More simply Mark to put the question, in that seizure study I'm not sure you would get good read-through to the movement because there is just not enough patients who would necessarily have the movement disorder to be able to tell. If it was, it would just (Inaudible) and it wouldn't be a lot of the patients, so that might be harder to make a conclusion from that.

Okay, great.

Our next question comes from the line of Cory Kasimov of JPMorgan.

Hi, guys. This is [Britney] on for Cory. Thanks for taking the question. Just curious following the positive data from the ISP in triheptanoin and movement disorders what read-through if any does this have to the FAOD indication. Thank you.

That's an interesting question. I think in general the triheptanoin program is based on energy substrate replacement, so if we are able to do it in the brain in Glut1 does it read-through to treating the muscle and other tissues. I think it might. I think that it does show that the compound has activity and the activity is real. So we're encouraged by it. The one difference though I would y is that the muscle manifestation in FAOD or the liver hypoglycemia are a little different and they are epithetic but they are harder to predict when they are happening and often they result from injury or current illness like flu or excessive exercise or something else. SO they can be basically dependent on an inducing event which makes it trickier to understand how to study FAOD in that regard. So what we're hoping in enrolling that study is to focus on people who have ongoing chronic issues we can measure either skeletal muscle problems, heart problems or liver or hypoglycemia problems and try to verify whether those chronic problems can be changed. But I would agree with you that if you are able to do energy replacement and show that in a particular setting then I think it helps support the general thesis that (Inaudible) replacement and restoration of energy function is a general issue that effects both FAOD and Glut1. And the two studies and the data are probably supporting each other although the tissue targets are different between them.

Our next question comes from the line of Adam Walsh of Canaccord Genuity. Your line is now open.

Hi guys, Thanks a lot for take my question. I understand that the Phase 2 triheptanoin -- can you hear me?

Yes.

I understand that the Phase 2 triheptanoin for long-chain fatty acid oxidation disorders is a learning study and you're are looking at a wide variety of endpoints, but can you just give us a sense at this point of what you think are the most important endpoints ahead of the data? And then as a follow up to that once you get the data how do you anticipate the dialogue around the pivotal endpoints playing out with the regulatory agency. Thank you.

You want us to predict the future with the agency. I'll let Sunil handle the question about what we're looking at and what we think it is important. But we have tried to portray study as including (Inaudible), liver, hypoglycemia patients and potentially heart patients, through we didn't have many heart failure patients there. We are treating a lot of heart patients as emergency IND it turns out but it more about the skeletal muscle and the liver hypoglycemia. Sunil, maybe you can talk about those.

Yes. That's right. There is different phenotype within there and the primary patient population of enroll really the muscular skeleton patient population, and again there were 29 patients enroll then we'll have data by the end of the year. And the type of endpoints we look at to see potential benefit of musculoskeletal size or things like a cycle ergometry, so cycle testing, bicycle testing, the other thing would be like six minute walk test. You'd also be looking at energy efficiency or expenditures in other words if you walk to a certain amount of exercise what is your heart rate with respect to that exercise and 12 million walk test. With respect hypoglycemia or liver, of course you look at glucose. On the cardiac side as Emil mentioned and didn't enroll lot of those patients so we really wouldn't expect to see how enough patients to really look on that area. But again I wouldn't focus on the musculoskeletal type of endpoints like the 12 minute walk test and cycle testing and get out to the six months time point we will have the longer term 18 month point. And Emil you want to add anything.

Yes. So I think -- you think that like any other studies, but we study (Inaudible) doing the 12MWT and cycle ergometry, both are gong to test exercise and their ability to bicycle or walk distance and why these patients sanitary, they don't move around as much, because they are afraid to, because of their muscle. So we think that it would be a solid way to do it. We're also looking at speed and time and one of the criteria again that we have a very speed time even without having a lot of key muscle events and so we are really feel kind of symptom muscle rapture which mean local muscle sale, energy efficiency resulting in rapture and that will give another read on are we providing muscle rapture by fixing their energy metabolism, which is something that has been what's considered absorbed in the prior work that is done at Baylor, so I think would another angle to look at here.

We are also monitoring events for daily life events in diary, which are harder to do in up level study but we will collect those. But if we had a handicap, but I think the interims and those measurements are going to be really critical. And then secondarily without biochemical impact exercise stress testing and addition to that set maybe going on daily lives of patient. And as Sunil mentioned that skeleton Musculoskeletal, it's the private dominancy phenotype we have and the liver hypoglycemia patients are the smaller cohort and what's been happening on the heart failure size we haven't enroll them in the study. I think there's maybe a very small number, but we haven't getting emergency request for use (Inaudible) in heart failure patent and we will be probably putting up some of that information later in the year from investigator initiate emergency need treatments for patients with heart failure.

That's great. Thanks a lot for taking my question.

Our next question comes from the line of Chris Raymond of Robert Baird & Company. Your line is now open.

Thanks. Just a couple of question on rhGUS. Just a couple of question on rhGUS, just kind of struck by comments on these patients with NIHF the infant trial, I think I heard you mentioned that the estimated incidence is about 20-year, wondering you could maybe put some brackets around what that might do to the overall sort of prevalence estimate I think you guys have always said 200 patients, what should you be thinking if this trial is successful?

Chris, thank you. I think it's important question for the overall model for what you'd expect to this program. Our view is that there are number of patients that fully have hydrops and die with the first year, among patients that survives, in our survey about 40% of them hydrops in the new born period, so luckily some patients that survey, as well as the number that die. But we don't have a perfect number and we mentioned the approximately 20 but that's based on surveys of people have look at them in hydrops and determine how many well receives with proms we don't if really all the patients have been actually evaluated for (Inaudible) all of these are MPS7.

And so the true number there, its little hard to know there maybe more than that number but we don't really know but some of them maybe surviving. So we're still trying to triangulate but what I can say is in general direction is that there probably the significant number of patients that are dying with hydrops and so if we were able to improve their survive and change of their disease than we would expect that they would an increase number of MPS7 patients beyond our expected population of 200, just dark part of that, I can't give you numbers to plug into a model exactly and so that's why we're learning into that one part of the story but we don't want to position exactly what that number is going to play out because 20 is 10% of the work problems right and it becomes cumulatively potential important. First thing we got to treat to patients that show that we can actually keep them alive, make them better. As we noted in our release we have been treating on kids since fourth quarter of last year, that continue on therapy I would say its May, so it's been a number of months. We are getting other request for treatment currently. So it suggest me that the 20 per year number probably not off since we've add fair number of request for treatment. So I think it's an important part of the equation and I think if we are able to successfully treat these patients and it will have an impact on the overall market in long run.

Fair enough. Okay. And then just follow-up on the pivotal trial and I know with FDA there is no primary endpoint in sort of the direction that you portray, look totality of the data. Just curious if there was scenario that would you see where the totality of the data may include fewer than 12 patients?

I actually yes, I think it's very possible, because the reason being that the 12 patients are (Inaudible) right. It gives me a wide range to edges and types. So it could be that they look at let's say six patients that can do the pulmonary function testing and the other six can't. And those 6 have a really nice effect in pulmonary function. Well, I think it could look at something less than every single patient. So I don't' when they said, they're looking each patients individually, they weren't saying that every single patient have to have some parameter.

What they're saying, they want to get install in, in any patient there's something getting better or now, I would not to say the same thing and I think it's very possible that could be a fraction of the patients with the very important effect let's in (Inaudible) or in walk test or something like that that would give some confidence that the drug is working. But I can't actually get to know for sure what they're call (Inaudible) I can't say that - they look in the data at the expanded excess patient we've been treating and noted a number of improvements that one typical endpoint type improvements that we're compelling to the (Inaudible) and they felt like they didn't want to lose the ability to capture those additional unplanned efficacy changes in these patients and thought with this number of small fall that they can just look at each patient in their total result and maybe capture some benefit they might now have been planned and get a better feel for it. I'm thought them for being understand the difficult of (Inaudible) and giving some flexibility to the process. But I would not take away from that every single patient have to have efficacy. That's not certainly the expectations. What we're looking for is to gain offence the drug overall that's having a positive benefit risk profile. And they're going to look at that looking at a variety clinical things for each patient.

Great, thanks.

Our next question comes from the line of Ryan Martins of Jefferies. Your line is now open.

Hey, guys. Thanks for taking my question. I guess I just two high level questions. The first one was around patient identification, given your extensive margin experiencing in this orphan disease space where do you think you're patient identification efforts for any of your clinical programs might yield the biggest surprise in terms of what is currently sound about that (Inaudible) versus what you might find out later?

I think there's a number of places where that is possible and I think particular in HIBM and/or GNE Myopathy is the modern term or and with Glut1 Deficiency Syndrome. Both those diseases appear to have a lot of undiagnosed patients because the diagnostic pathway is not easy to do and sequencing which is the most definitive way to make diagnosis is often not readily available. So we think for GNE myopathy we are supporting a sequencing of programs with sequencing of patients with lymph, girdle or other types of muscular diseases are maybe similar but don't have definitive methods of diagnosis in which case that have in publications already suggesting that maybe a few percent of lymph girdles or other types of myopathy patients that are not defined may in fact have GNE myopathy. Our original 2000 number that we put out was based on a bottoms up analysis of clinics for actual identified patients and so there is a pool of patients that maybe misdiagnosis and other girdles and some other sources. We are looking at this because they are having some publications suggesting that the carrier frequency is higher than would be predicted based on current prevalence and but right now what we are doing is several things, one of them is driving individual clinic by clinic patient diagnosis, we have included free sequencing program for patients with biopathy of undetermined type possible GNE to help drive awareness as well as diagnosis.

And thirdly, we are supporting these sequencing programs that are doing massive sequencing of other muscle disorders where there is no definitive diagnosis in which case we expect to see from those three methods some input into what the true GNE myopathy prevalence is like. In Glut 1 we are doing the same thing what our patient ID program which involves the (Inaudible) that's run like a commercial launch and has individuals that are in the field they are basically doing disease awareness contacting for example physicians that have or high prescribers for seizure meds and letting them be aware of the Glut 1 in existence and the existence of free sequencing program and that program then allows them to send the kid off and get their patient diagnosed and that is going very well getting a lot of request for the sequencing, and I hope that will be to discover what the real pool is. We are also going now to expanding with current data into motor clinics a different type of clinic. The neurology patients, neurologists tend to be specialized at (Inaudible) certain things other things. We are going to motor specialist now to try to find out how many patients with episodic movement disorder problem are actually Glut1 patient.

We are finding that (Inaudible) are not very familiar with Glut1. I think most of them when they learnt 15, 20 years ago considered it a very (Inaudible) and narrow unusual thing not realizing its actually a lot more common cause of seizures or movements problems that they expected. So, we are kind of raising awareness through that sequencing program, and I expect that may find additional patience but I think that the 3 day 1000 number we've been talking about was really based on genetic screening of survey as the patient with seizures alone I tell those numbers where they have really come from. So we're really doing there as more about not really creating more upside to the market, but simply making sure we're actually getting the patients we are think or they are diagnosed in this case.

Yes, okay. And then I guess just another kind of high level question. What is exciting in the pipeline for you operationally is it RHPPCA or is it something maybe you haven't talked about?

You mean the early stage work?

Yeah, preclinical.

You mean the early stage work. It's something that's right up our alley in terms of it sits very well and the kind of knowledge we have and its moving along very well you know and we are in the manufacturing stage, getting the product made at scale so we can do toxin type of programs and I think it's going along well. We have a couple of other programs that are earlier stage we haven't announced in our - look we are also doing a lot of this while I'm looking at a lot of possible products well. What I would say in general that our philosophy on preclinical or early stage work is that we don't want to talk about it until we've made the call to file an IND that we are heading to an IND. We made the transition and we are investing and talks are going (Inaudible) becomes more material than anything. It becomes an event more worthy of discussion.

So, right now we've only talk about PPCA because we are comfortable that one is one that will move forward and the other ones are still, we're going to keep under wraps until we are ready to make the call that we are moving forward. We do plan to have an R&D day later this year so then advertisement for that and we would help to talk about a new program at that point of time or at least tell you where are and the others, so that will set the date up soon.

Okay, great. Thanks for taking my questions.

Our final question comes from the line of Heather Behanna of Wedbush Securities. Your line is now open.

Hi, thanks most of my questions have been answered. I think just a quick one from Shalini if things for the color entering the manufacturing expense moving forward, and just when we think about SG&A and potential launch in Europe. You know should we think about a gradual build overtime or is there going to be step up potentially as we reach like mid 2016?

That's a good question, Heather. So I think as Tom alluded to earlier we are starting to ramp up our presence in Europe with regard to patient identification activities, and then starting next year we would anticipate building out our infrastructure there further including, establishing additional entities in Europe and also are starting to put more boots on the grounds in terms of commercial and other functional areas infrastructure. It should be gradual overtime and we also consider other territories not just Europe, so there will certainly be an increase but it should be gradual, it shouldn't be sort of an overnight change in the operating expenses.

Perfect. Thank you.

You're welcome.

That concludes today's question and answer session. I would now like to turn the call back to Mr. Rob Anstey for any further remarks.

Thanks Damon, with no additional questions that concludes the call. A replay of the call will be available shortly on our website. If there are any additional questions, feel free to contact us at 844-758-7273 or at ir@ultragenyx.com. Thanks everyone for joining us.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day.