Ultragenyx Pharmaceutical Inc (RARE) 2016 Q1 法說會逐字稿

Good day ladies and gentlemen. Thank you for standing by. Welcome to the Ultragenyx first quarter 2016 financial results and corporate update call. At this time all participants are in a listen-only mode. Later we'll conduct a question and answer session and instructions follow at that time. (Operator Instructions). As a reminder, this call is being recorded. I would now like to turn the call over to Ryan Martins. Sir, the floor is yours.

Thank you. Good afternoon, and welcome to the Ultragenyx Pharmaceutical financial results and corporate update conference call for the first quarter 2016. We have issued a press release detailing our financial results which you can find on our website at Ultragenyx.com. I am Ryan Martins, Vice President of Strategy and Investor Relations. With me today are the following members of the Ultragenyx management team, Emil Kakkis, Chief Executive Officer and President, Shalini Sharp, Chief Financial Officer, and Sunil Agarwal, Chief Medical Officer.

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 plans with respect to our translational research program, 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 expectation of increased expenses over future quarters, our belief about adequacy of current cash resources to fund our operations, our intent to file for conditional marketing authorization, and the timing of expected decisions regarding approval from regulatory authorities. These forward-looking statements represent our views only as of the date of the 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, the actions of regulatory authorities, the timing of our regulatory filings, and other matters that could affect the availability or commercial potential of our drug 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 Annual Report on Form 10-K for the year-ended December 31st, 2015, filed with the Securities and Exchange Commission on February 26th, 2016, our quarterly report on Form 10-Q for the quarter ended March 31st, 2016 that will be filed soon, and our subsequent periodic reports filed with the Securities and Exchange Commission. I will now turn the call over to Emil.

Thanks Ryan. Good afternoon everyone. Thank you for joining us this afternoon. I'll provide a high-level overview of our recent progress. Shalini will give an overview of first quarter financials, and then Sunil will go over details on our Clinical Development progress. As we noted at R&D Day in December, we are working on expanding our early development program pipeline to get to 5 to 7 programs operating within our translational research group, to potentially file an IND every year or every other year.

It is important to gauge and separate now to ensure we do not have a development gap in a couple of years from now, because our programs are in or are heading to late stage development. We will potentially do a number of different types of deals, allowing ourselves to be opportunistic and adaptive to the situation. In general we are looking for programs that we can grow in value over a 2-year period, and potentially reach a decision about heading into the clinic in that time frame. We'll start by discussing our recent collaboration with St. Louis University, and why this is an important part of our long-term strategy to build a diversified Company.

In March we entered into a collaboration with SLU's Center for World Health and Medicine, to develop small molecule therapeutics for Facioscapulohumeral Muscular Dystrophy, or FSHD. The team at SLU has a tremendous amount of experience with many were from a local Pfizer R&D Center, with experience in both medicinal chemistry and in early development. The project lead from SLU was inspired to take action after his daughter was diagnosed with FSHD. We are pleased to be able to work with this talented and motivated group, and our prior drug development capabilities in rare disease expertise towards finding a meaningful solution for FSHD. As part of our effort to initiate more early stage programs, we also sought to further strengthen our Board in the R&D area, and recently appointed Lars Ekman to our Board of Directors. He has a deep expertise in building early stage and clinical pipelines, and we look forward to working with him.

Turning to our clinical programs, we are pleased to have released positive interim data from the Phase 2 program of KRN23 in tumor-induced osteomalacia or TIO last month. Sunil will review this data later on today's call, all of our clinical programs, including three ongoing Phase 3 studies are advancing, and we plan to initiate two additional Phase 3 studies this year. We have a number of upcoming anticipated milestones, and I'll go over those briefly now. For our KRN23 and the pediatric phase 2 XLH study, we expect the 40-week data in 52 patients, and 64-week data in the first 36 patients in the second half of 2016. We plan to file for conditional marketing authorization in the EU around the end of 2016. We plan to initiate a Phase 3 study in pediatric XLH studies in mid-2016. For rhGUS and MPS 7 we expect top line data from the pivotal Phase 3 study in mid-2016.

Moving on to UX007, in the second half of the year we expect 78-week data from our Phase 2 study in long-chain fatty acid oxidization disorders, and based on the interim 24-week data from the Phase 2 study, we plan to initiate a Phase 3 study in patients in the long-chain fatty acid oxidization defects in 2017. Our Phase 2 seizure study in Glut1 deficiency syndrome patients continues to enroll patients, and the data are expected in the second half of 2016. We plan to initiate a Phase 3 movement disorder study in Glut 1 deficiency syndrome patients in the second half of 2016.

For Ace-ER in GNE myopathy, the CHMP's opinion on the conditional marketing application in Europe is expected in the second half of 2016, and a decision from the European Commission then is expected in the first half of 2017. We continue to enroll patients in the pivotal Phase 3 study in GNE myopathy with data anticipated in 2017. After that long list of milestones, I'll turn the call over to Shalini now to provide an overview of our financial results.

Thank you Emil. We issued a press release earlier that included a financial update which I will briefly summarize. Total net loss for the first quarter of 2016 was $52.8 million, or $1.35 per share, basic and diluted compared to $21.4 million, or $0.63 per share basic and diluted for the first quarter of 2015. This reflected cash use in operations of $44.9 million in the last quarter, compared to $17.7 million in the same period of 2015. We expect modest increases in cash used in operations quarter-over-quarter for the balance of the year. Net loss for the first quarter of 2016 included approximately $12.6 million in non-cash charges, with stock-based compensation of $10.2 million, amortization of premiums on investment securities and depreciation and amortization. In particular, stock compensation expenses have significantly increased over time, and we expect that this will continue.

Our total operating expenses for the first quarter of 2016 were $53.6 million. Research and development costs accounted for $40.4 million, or 75% of our operating expenses. Our three Phase 3 programs account for the greatest proportion of R&D costs. As a reminder we share KRN23 development costs 50/50 with our collaborative partner Kyowa Hakko Kirin. Costs for our multiple preclinical translational research programs, which now includes the FSHD program, will continue to increase throughout the year, as programs advance towards the clinic. After excluding the $10 million one-time license fee paid to Arcturus in the fourth quarter of 2015, operating expenses continue to increase, due to the conduct of multiple late-stage clinical studies, manufacturing costs related to clinical supply of multiple programs, increased regulatory activity across the programs, early stage investment in our US and European commercial infrastructure and patient identification efforts, general and administrative expenses to support these activities, and increases in stock-based compensation expenses.

As we have said before, our expenses will continue to increase as we invest in advancing multiple product candidates into Phase 3 clinical studies, and developing and expanding our preclinical stage portfolio. We ended the quarter $487.8 million in cash, cash equivalents and investments on the balance sheet. We believe that this is sufficient to fund all of our clinical programs through Phase 3 trials and potential launches. We do not have any debt outstanding. I will now hand it over to Sunil to provide the development update.

Thank you Shalini. I will provide an update on our clinical pipeline starting with KRN23. In April we announced positive interim data from the first 8 patients in the Phase 2 study of KRN23 for the treatment of tumor-induced osteomalacia or TIO, the data indicated that patients treated with KRN23 had improved serum phosphorus levels, and other bone metabolism measures. The mean baseline serum phosphorous levels for these 8 patients was 1.7 milligrams per deciliter, which is well below the lower limit of normal for phosphorus, which is 2.5 milligrams per deciliter. 6 of the 8 patients had serum phosphorus levels enter the normal range after beginning treatment with KRN23. One of the two patients who did not reach the normal range at the time of the interim data cut, did demonstrate an increase in serum phosphorus, and continues to titrate dose upwards. The other patient who did not reach the normal range, did not demonstrate any improvement in serum phosphorus levels, and had the highest baseline level of FGF23 of all 8 patients.

We also saw improvements in bone density in the two patients who completed 24 weeks of treatment. One of these two patients also showed early evidence of fracture resolution, and we look forward to having more bone data in the second half of this year. To date there have not been any serious adverse events in this study. Treatment emergent adverse events were observed in 7 of the 8 patients. Treatment emergent adverse events occurring in 2 or more patients were primarily musculoskeletal disorders, including pain in extremity, arthralgia and musculoskeletal pain. These are consistent with the symptoms typically seen in patients with TIO. 2 of the 8 patients had treatment-related adverse events that were possibly or probably related, including vitamin D deficiency and rash, both of which were mild. No injection site reactions were observed. Two patients reported symptoms that are suggestive of worsening pre-existing restless leg syndrome.

Overall the improvements that we have seen in serum phosphorus and other bone mineral metabolism measures in the study, are generally consistent with what has been observed in studies of KRN23 in both pediatric and adult patients with XLH. We are pleased to now have data in two diseases, which indicate potential support for the common mechanism of action of KRN23, which is binding to and inhibiting excess FGF23 activity, the key hormone that leads to phosphate wasting in these patients. Turning to XLH, Dr. Carpenter presented 40-week interim data from the first 36 patients in the Phase 2 pediatric study in an oral presentation at ENDO in April of this year. In the second half of 2016, we expect to have 40-week data from all 52 patients enrolled in the study, including the original 36, and an additional 16 with higher baseline bone disease.

In addition, we expect to have 64-week data from the first 36 patients in the study. The 64-week data will include additional rickets data, early growth velocity data, other efficacy measures, and safety intolerability information. We intend to file for conditional marketing authorization in the EU around the end of the year for patients with XLH. We also plan to start a pediatric Phase 3 study in the middle of this year. The primary end point of this study will be evaluating rickets using the RGIC scoring method. It will also include a standard of care control arm. This study is expected to be acquired for potential approval in the US, and could also serve as a confirmatory study in the EU, if additional conditional marketing authorization is granted. If conditional marketing authorization is not granted, the study could be required for approval in the EU.

We continue to evaluate KRN23 for adults with XLH. We are currently enrolling two studies, a Phase 3 randomized double blind placebo-controlled study in approximately 120 adult XLH patients, with serum phosphorus as the primary end point at week 24, and the brief pain inventory, BPI, as the key secondary end point, and a 48-week open label bone quality study in approximately 10 adult patients, to evaluate the effect of KRN23 on the underlying osteomalacia.

Turning to UX007 or triheptanoin, in the second half of the year we expect final data from the 78-week Phase 2 open label study in patients with long-chain fatty acid oxidization disorder, FAOD. The primary objective of the 78-week analysis is to evaluate the rates of major medical events, such as rhabdomyolysis, hypoglycemia, and cardiac events on UX007, compared to the rates for the 18 to 24 months prior to treatment with UX007. Based on the interim Phase 2 data reported last year, we plan to initiate a Phase 3 study in patients with long-chain FAOD in 2017. For which we continue to optimize the end points and overall trial design. As a reminder this trial will be a head-to-head comparison against MCT.

In addition to the improvements we noted in exercise-tolerance testing, we also noted some improvements in quality of life measures in the Phase 2 study, and thus we believe having a patient reported outcome end point to complement a functional end point will be important in the Phase 3 study. We are in the process of collecting natural history data and qualifying the use of a PRO end point before meeting with the regulators. We expect to provide further details on the design of this study after completing discussions with the regulatory authorities.

In the second half of the year we plan to initiate a Phase 3 study in approximately 40 patients with the movement disorder phenotype of Glut1 deficiency syndrome. This study is a randomized double blind placebo controlled double crossover study, that plans to assess the impact of UX007 on movement disorder events as recorded by a patient diary. We continue to have discussions with the FDA regarding the primary end point and collection methodology, and we are working on further substantiating the clinical meaningfulness of Glut1 DS movement disorder events prior to finalizing the study design. In addition, our ongoing placebo-controlled Phase 2 study in patients with a seizure phenotype is continuing to enroll patients.

And we expect data in the second half of this year. If the data are positive, the seizure and movement disorder studies are intended to support an NDA filing. We are also on track with rhGUS Phase 3 study in MPS7 patients. Top line data from the pivotal blinded placebo controlled 48-week study are expected in mid-2016. In the EU, the primary end point is the reduction in UGAG secretion after 24 weeks of treatment. Some evidence or trend in improvement in clinical end points to support a favorable benefit risk ratio will also be needed. In the US there is no primary end point, as the FDA has said they will consider the totality of the data appreciating the heterogeneity of the disease.

Moving to Ace-ER, we continue to enroll patients in the randomized double blind placebo controlled 48-week, pivotal Phase 3 study of Ace-ER in approximately 80 patients with GNE myopathy. Data from this Phase 3 study are expected in 2017. We are also expecting a CHMP opinion on our conditional marketing authorization application for Ace-ER in the treatment of adults with GNE myopathy by the end of 2016, and a decision from the European Commission in the first half of 2017.

Lastly we continue to advance our translational research programs. We presented data from the Recombinant Human protective protein, Cathepsin A, or rhPPCA program at the World Symposium in March. As Emil mentioned, there's a lot of ongoing activity with our pre-clinical pipeline, and I look forward to sharing updates with you across all of the programs as they progress this year. With that, I will now turn the call back to Emil.

Thank you Sunil. As you heard we continue to move our pre-clinical and clinical programs forward, and are building out our team support or growing business across all functions. With five Phase 3 programs expected in 2016 and other ongoing clinical studies, we look forward to keeping you updated on our progress throughout the year. With that, I will end my comments, and we can move to your questions. Can the operator please provide the instructions for the Q&A portion of the call?

Yes sir. (Operator Instructions). One moment for questioners to queue. It looks like our first question in queue will come from the line of Marc Frahm from Cowen. Please go ahead, your line is now open.

Hi there. Thanks for taking my questions. Seems like the next data update is going to be the rhGUS Phase 3. I understand that we'll get Gag data, I assume in the top line, and that clearly reads through to the X-US opportunity. How exactly do you plan to disclose data, and kind of inform us, and what are the expectations we should have, in terms of being able to read into the likelihood of the US approval? And then also do you expect that data will be sufficient along with the Phase 2 hydrops data to support a hydrops application as well, or will that need another Phase 3 trial?

Thanks for the question. In the first question, what data are expected, we are doing clinical end point data, and I'll ask Sunil to kind of provide a little more detail on that. And then you can follow up with the hydrops question, and what we would need for that, although I don't think it's been defined yet. Go ahead.

Sure. Thanks Emil. And thanks for the question. So to remind folks, it is a very heterogeneous disease and the Phase 2 trial is 12 patients. Because it's heterogeneous we designed the study in a way that maximizes power to see an effect in multiple different ways. Of course U-GAG is the primary end point, and as I mentioned, for the EU that is the acceptable primary, though we do need to show some secondary benefits. And based on the Phase 1/2 data we have seen some substantial reduction in U-GAG in the 50% to 60% range at the dose that we are using in Phase 3.

With respect to the clinical end points, we are doing two different things, we have an individualized responder index, which each patient defines what his or her primary symptom is, and we follow that all of the way through. For example, if it's visual problems, or pulmonary problems, that's the primary individual responder index. The second thing we do is the multidomain responder index, looking at the totality of the different disease symptoms in each individual patient. So we are looking at it multiple different ways, so that we best understand the potential benefit of this drug to these patients. To your point also, in a press release it's going to be very hard to cover all of this, so I wouldn't expect to have detailed descriptions of all of this information. I think rightly so it will be high-level, and our goal is to present that data as quickly as possible at a medical conference.

So answer your last question, and then I'll turn it over to Emil, if he wants to add anything to this, about hydrops and what our plan is there, to your point the under 5 study will include some hydrops patients. We do not believe we would need a separate hydrops Phase 3 study based on the rarity of the disease, and also based on what we hope we can provide these patients with benefit. We think that may be sufficient. But again we don't have data yet, and we'll have to wait and see what that looks like, and have discussions with the Agency. But I do feel confident that a separate Phase 3 hydrops I do not think will be required, based on the totality of what we know so far. Emil, anything to add?

No, I think that's fine. I would just say when we put out the presses, we put out some information about what we're seeing clinically, but I think what Sunil is saying is correct. The detailed work will come out of the conversation. I understand the investors' interest and what does this mean for US approval, we'll try to provide that guidance with the results as best we can.

Thanks. And then one quick question just on the KRN23 program. Now that you have shown proof of concept outside of exhalation with TIO, are there plans to move farther afield to some of the other FGF23-driven hyperphosphatemias?

I think it's a good question, we picked TIO because we are getting a lot of compassionate use, or a lot of central indication (indiscernible). Sunil, do you want to follow up with other indications beyond TIO?

Sure. It is a good question. One thing we do across our entire pipeline is always think about life cycle management and new opportunities. Of course triheptanoin is one really great example of that, but I think KRN23 is another of TIO. We do continue to look at new opportunities. At this point we do not have any specific plans to start a new study or a new indication, if you will. But that evaluation is ongoing every day.

Okay. Thank you very much.

Thank you, sir. Our next question will come from the line of Cory Kasimov of JPMorgan.

Hey guys, this is Brittany on for Cory. Thank you for taking my questions. Or the recently announced collaboration on FSHD, can you provide any insight on the target or mechanism being evaluated? Secondly for the Phase 3 movement disorder study, I understand that you are still finalizing the study design, but can you comment on any secondary end points you would be considering?

Great, Brittany, thank you. I'll deal with the FSHD and Sunil can handle the Glut1 movement disorder. The FSHD program, they have talked about their program in other settings, is involving controlling the [DUC] 4 gene expression as the gene that gets overexpressed inappropriately in the muscle, leading to [muscolysis]. Their strategy is to use small molecule inhibitors that are able to control or alter expression of DUC 4. These are small molecule drugs inhibiting the expression of that gene. So they have some target molecules that they already have identified, and they are basically honing the specificity of those. That's what we're going to be supporting with them over the next couple of years. Sunil, why don't you deal with Glut1 movement?

Sure. Thanks, Emil. Thanks for the question. With respect to the movement disorder study, as I said before, we're still finalizing the study design and working with this agency on the end point selection, and what that looks like. But the things that we'll include are, our goal is to include of course looking at the movement disorder episodes themselves, looking at the frequency, looking at the quality of those events. In other words, how long do they last? Because that also is something -- you may reduce the frequency and the duration of the events. That's something that Dr. [Fanny Moshel] saw in her single arm open label study, that led us to do the new study. In addition if you remember her study, she looked at PRO end points, like clinical global impression of change, and these patients showed benefit there as well. So you should expect some PRO type of work additionally into this study. Again, the exact details of the study design are still being worked out, but it will be a combination of movement disorder episodes, the severity of those episodes, and PRO end points as the key ones.

Okay. Great. Thanks so much.

Thank you. Our next question will come from Gena Wang with Jefferies. Please go ahead. Your line is open.

Thank you. So maybe my first question just to follow up the previous question about the new collaboration with St. Louis University for FSHD, based on Dr. Francis hydrops publication, is it a fair assumption that BET inhibitor could be a drug candidate?

Yes, that's the area they're working on is the BET inhibitors. There's a lot of different ones and different choices for specificity. That's the area they have talked about and patented, and they have shown some good data that suggests to us that they can get some high affinity specific compounds. That's what we're working with them on.

Okay. Thank you. And then maybe like two related questions on TIO studies. So you saw initial fracture resolution in one patient. Since prevention of new fractures are also considered clinically meaningful, before the next step of bone healing of existing fractures, just wondering if you could provide any color on new fractures for these patients?

Sure. I'll give it to Sunil. But it's very early yet. We only have two patients that finished 24 weeks. Sunil, why don't you finish the rest of that question?

Sure, thanks Emil. Emil is correct. We have had 2 patients that have had 24 weeks of data at the time of the data cut. That's when we started looking at these types of events. So to remind folks, on the [Dexis] Cam, which looks at bone mineral density, we did see numerical improvement. Again, it's a small sample size but we saw some numerical improvement on 2 patients. On the bone scans looking at fractures, one patient actually had some fracture resolution with no new fractures. The other patient did not have any new fractures, but the fractures that existed at baseline were still there.

Okay. Thank you. And if I may, just one last question; Could you comment on the restless leg syndrome with KRN23? It seems that this was seen in both TIO patients and XLH patients? Thank you.

Yes, I'll let be Sunil handle that particular one.

Sure. Thanks Emil. With RLS or restless leg syndrome you're correct, in the adult early study we did see some restless leg syndrome cases. Let me explain what we've seen in TIO studies, so 2 patients with a history of RLS had some exacerbations while on the study. Both patients have continued in the study. Actually, one patient may have an issue with it, and we'll see. But one patient is continuing. Now from a biology perspective, there is data supporting that phosphate changes can increase RLS. We have not had any patients significantly complaining of this. It does appear to be a complication of a previous history of. And we're continuing to collect data on this matter. So we will continue to follow this. In the pediatric study, we have not seen any RLS case that I'm aware of in the current phase 2 study, and again in the TIO study we had two exacerbations.

Thank you.

Thank you, ma'am. Our next question in queue comes from the line of Adam Walsh with Stifel. Please go ahead. Your line is open.

Hi guys. Thanks for taking my questions. My first question is on triheptanoin in the Phase 2 seizure disorder for Glut1 deficiency syndrome. On Glut1 I understand it's a continuum of disease where the seizure phenotype is observed in the younger patients, and the movement disorder phenotype is seen in the older patients. In your Phase 2 seizure study I noticed in ClinicalTrials.gov that the enrollment criteria is for patients ages 1 to 100 years old, and I'm just curious to know why there was no upper boundary for the entry criteria if the seizures are usually seen in younger patients? And then I have a follow-up.

Very good question. I don't think we have any 100-year-olds. I'll let Sunil answer this one but we were focusing on anyone who had seizures. But Sunil, maybe you can provide some more color on our approach to seizures in that study?

Sure. So with respect to that issue, while the majority of seizure events happen earlier in life, that doesn't mean you won't have seizures later in life. So there are adult patients with the seizure phenotype. It could be a mixed phenotype, where they have seizures plus movement disorder episodes. So our goal was to capture patients with seizure episodes, so hence the wide age range. But you could have a wide age range on your criteria, but what you get can be different. What I mean is to your point, the majority of patients are on the younger side, which is what would be expected but we didn't want to limit older patients from coming in, who may have a significant seizure phenotype.

Okay. Fair enough. And then on the screening criteria for seizure count, is that a high bar? I guess I'm just trying to get a little bit at the screen failure rate in the Phase 2?

Sunil, maybe, talking about the entry criterium for seizures.

Yes, and I can repeat them for you if you don't have them in front of you.

Well, it's a two a month. I don't think it's particularly high. Sunil, maybe you can comment on the criteria. Because there's generalized seizures and also [inaudible] seizures.

Right, Emil is correct it. It isn't technically a high bar. Again, I think this relates to your previous question. You can put criteria in a study and what you get is something different. While the bar is not high, the amount of seizures that we're seeing these patients coming in with are pretty high. One different example is rheumatoid arthritis studies where you ask for either 4 swollen or 4 tender joints, and everybody always has in the 20s. So it just gets at the concept of yes, the bar is lower, but what we see is pretty significant seizure episodes in this patient population that's enrolling in the trial.

Okay. Great. Thank you very much.

Thank you, sir. Our next question in queue will come from Joseph Schwartz with Leerink. Please go ahead, your line is open.

Thanks a lot. I was wondering a couple of things on KRN23, namely how are you thinking about establishing the optimal dosing for KRN23 over the longer term? It looks like you get some benefits just entering the lower range of normal, but the PK serum phosphorus continues to increase over time, and I don't know if we could extrapolate that, or what your thoughts are on the desire to avoid hyperphosphatemia?

Thanks, Joe. That's a good question. I think we have a pretty good handle now on how it's going in the studies regarding management of the dose. And Sunil, I think you can probably speak to that, looking at experience.

Sure. Thanks Emil. Thanks for the question. So as in hyperphosphatemia, as I'm sure you know, our dosing is weight-based first and foremost, because you do have a very different age range and weight range of these patients, and we wanted to customize it because we want to control phosphorus calcium as tightly as you can, because we do not want to run into safety issues. So it is weight-based dosing. We do start on the lower end, and we are ramping the dosing up. We also titrate according to the serum phosphorus levels, to your point we have not seen any patient in the XLH program have a hyperphosphatemia event which is good. We have also seen to your point, patients with benefit who actually didn't get into the normal range. We do think that you need to customize the dose, because each patient can respond differently. We think a weight based approach with titration makes sense. Now in the long-term, as we get more and more data from population PK, from safety, from efficacy, we may be able to collapse dosing in a fixed dosing. But that isn't now. We'll run the studies the way we're running them. And in the post marketing section, we'll continue to provide or continue to evaluate if the dosing can be improved. But we think the current dosing pattern makes sense, and so far the data is supporting that.

Okay. Thank you.

Thank you. Next question in queue will come from Chris Raymond with Raymond James. Please go ahead.

Thanks. Just maybe a detail question on the Phase 3 movement disorder study in Glut1. I'm just kind of curious, and if you addressed this already, I apologize. But I think last quarter you were talking about movement disorders as recorded by patient diary. And I don't think you're talking about that now. So is that something that perhaps the FDA is maybe pushing back on, or is there some sort of other measure that you're thinking about in terms of, I know you talked a little bit about measures but is the patient diary maybe not going to happen? Is there something that's perhaps more accurate that's being considered?

Thanks, Chris. What we're talking about is just verifying the clinical meaningfulness of the sense the diary is capturing. But we're not really changing the diary. I don't know if you have more to say to that, Sunil. We're keeping the diary it is just a question of verifying the clinical means and what they are saying.

Yes, this is Sunil. Emil, that's correct. Sorry if I misspoke before. But the answer is, our plan is to use movement disorders captured by a diary as the key way to understand the potential benefit to these patients. After the end of Phase 2 meeting, the FDA has, we have had more discussions with them to understand and characterize the clinical meaningfulness of movement disorder episodes in and of themselves, we are working through that. But our plan hasn't changed at this time, which is to use, to look at movement disorders via a patient diary mechanism.

Great. Thanks.

Thank you. Our next question in queue is Arlinda Lee with Canaccord. Please go ahead. Your line is now open.

Hi, guys. Thanks for taking my questions.

Sure.

A couple of them. First, we had a chance to speak with Dr. Carpenter recently, and he mentioned that there was increasing, I guess, awareness of XLH, and I was wondering, and kind of related to that expanding to other phosphate-wasting diseases, could you maybe characterize what your interaction with patients and I guess investigators reaching out to you on KRN23 has been like? And then I have a question on 007.

Okay. Thanks, Arlinda. Well, the data that's certainly been coming out has been positive, and we're getting more and more calls about the program, and more and more investigators who want to be in the XLH studies. So that's definitely happening. And the TIO data is also getting, attracting the attention of patients who are interested in getting treated. So we are getting more incoming inquiries from both of those areas. I don't know if it translates into anything fundamentally different. I think we're still planning the same XLH studies in the TIO program as it is right now, but the incoming interest just helps us in identifying new sites if we need new sites, or in managing potential need, particularly with TIOs and some of those patients can be quite severe, and we want to make sure that our program is providing access as well as collecting data, which is the nature of that program. In other words, to help prevent patients who can't get access who are in severe condition and might benefit from having that opportunity. We're doing that instead of compassionate use. So we're using the program to help support access for TIO patients while we do collect data. And the excitement of XLH is positive. I think people are looking at the ability to change bones, as something that would be really important. And it's still early yet. We're still collecting more data. But I think people are encouraged by the data we've seen so far.

Okay. Great. And then I guess on the 007, you guys are now saying that the Phase 3 LC-FAOD trial is starting in 2017. Could you maybe characterize the end of Phase 2 FDA discussions, and maybe what the main sticking points are with that, and your discussions with KOLs on what is clinically meaningful? Thank you very much.

Sure, Arlinda. We haven't had a meeting yet. What we have announced is that we had data that suggested a PRO improvement, and Sunil just talked about that, a PRO improvement as well as the improvement in exercise tolerance. In order to use a PRO in Phase 3, you really to do some legwork. And that's what Sunil discussed, is the fact that we have to do more legwork in the PRO. When we have done that work, understanding what the population, what the condition of their disease is, what the PRO looks like for them, and develop some tools, some information to qualify the PRO. Then we're ready to go talk to the Agency. We know that any time we're doing those kind of instruments, you have to provide substantiation for why the instrument is detecting an important effect, and how it detects the whole effect of a disease. So that's the work we're doing upfront nor that PRO. We hadn't done it before. I think we were surprised by the amount of effect that we were seeing in the PRO, which makes it maybe potentially important in capturing the benefit of UX007 in LC-FAOD.

Great. Thank you very much.

Thank you, ma'am. Next question in queue comes from Heather Behanna with Wedbush Securities. Go ahead. Your line is now open.

Hello. This is Edwin [Delfin]. I'm calling in for Heather. Thank you for taking my question. In regards to ACR and GNE myopathy, have you guys received the 120-day list of questions back from CHMP yet?

Yes, we have received those questions and are working through them. Sunil can talk a little bit more about the process. But as you know, there are always questions and we have to write a lot of answers. Sunil, do you want to talk a little more about our progress there?

Sure. Emil, you have already covered it well. We have received the questions, and the process is ongoing and proceeding as expected. Again, the timeline in the process is we expect an opinion by CHMP by the of this year, and we expect a final decision by the European Commission in the first half of 2017. And that's where we are in the process.

Okay. Great. Thank you.

Thank you. Our next question comes from Kennen MacKay with Credit Suisse. Please go ahead. Your line is open.

Hi. Good afternoon. This is [Phinneas Alex] calling in for Kennen. Thanks for taking the question and congratulations on all of the progress to date. A quick question regarding KRN23, and I apologize in advance if this has already been covered. Could you tell us a little bit about your regulatory interactions to date with the European regulatory bodies regarding KRN23 and that submission? And also who will be leading that submission process? Is it Ultragenyx, or is that going to be headed by KHK?

Thanks for the question. I'll let Sunil answer that question.

Sure. So let me just answer the last part first. With respect to leading the submission process, KHK is definitely an important partner, and we have been working together throughout the whole thing. But with respect to being the point person leading it, we are leading that process for the Europe and for the US, for all filing opportunities. Going back to your question of how the relationships are going, and I'll extend this to the FDA as well, it's going very well. Our relationships have been very positive so far, with all of the data we presented to both the FDA and the EMA, with respect to the EMA we have already had some preliminary discussions before data, and with some initial data on a potential conditional marketing authorization pathway. And based on those discussions is why we're going to be filing later this year.

Great, thanks. If I could just ask one more question regarding KRN23's TIO data that was presented earlier this year, I just wanted to get a sense of how the ENS patient specifically did versus the overall population, in terms of the PK/PD parameters that were presented?

Sunil, do you want to answer that one?

Sure, I can speak to that. Again, there were 8 patients, so I would always caution with a small sample size, making general conclusions of a variant of TIO be it ENS. With respect to the ENS patient we had one patient with ENS of the 8. That patient did show a response pharmacodynamically. That's one of the first two patients that hit week 24, so also showing some potential bone benefit as well. So we're not seeing anything different but I caution it's one patient.

Do you think that as the trial progresses, that the inclusion of an ENS population could confound the results in any way?

So this is my opinion on this, again it goes back to the biology, and the biology of this and the biology of XLH is driven by excess FGF23 production. So we have an antibody that's targeting that biology to that point. So we should it should provide benefit across this XS FGF23 TIO super family, if you will. Again we'll get data and then confirm if that hypothesis is true.

Great. Thanks for taking the questions.

Our next question comes from Carol Werther with H.C. Wainwright. Please go ahead. Your line is now open.

Thank you. I just wanted to ask about how the commercialization is going over in Europe, and if you can give me any numbers on how many sales reps you're planning on hiring? Thanks.

Thanks, Carol. We're obviously still waiting for an opinion, which would happen later in the year. Perhaps, Shalini, if you want to take on this question?

Sure. Thank you, Emil. We are initially focusing on just a small number of key hires, and these resources are focused primarily on Germany, where reimbursement takes place upon approval, if we do get the approval. And also in France, where they have named patient programs, and of course as always on patient diagnosis programs, which are relevant both pre-commercial and afterwards. We are building off of commercial in a very staged, measured way, until we know whether or not we'll have an approved therapy in Europe. But generally speaking, relative to a larger market indication, our indications would require much more limited commercial infrastructure. We have not provided any specific guidance, in terms of the size of our field forces that's anticipated in Europe or the US. But again, we would expect those requirements to be much more limited relative to larger market indications.

Okay. Thanks. And are there any plans for the rest of the world filings?

The US filing, remember, is dependent upon completing the Phase 3 study.

Right.

From a strategy standpoint, when we get a positive, if we get a positive opinion in Europe or approval in Europe, we could use that approval to go to South America, and prosecute for an application. But you need one major market somewhere in Europe before you really can go to South America. And other territories it would usually depend on one major market approval before their authorities look at applications. So either Europe or, if not, then it will depend on the Phase 3 results and that final.

Okay. Great. Thank you.

Thank you. Our next question will come from Edward Nash with SunTrust. Please go ahead. Your line is open.

Hi, guys. Thanks for taking the question. Actually, this is Mike Wolfe for Edward. Just one quick question regarding your XLH data. So for the 64-week data from 36 patients you're going to release later this year, you're also going to include data for the height growth velocity. Could you help me understand--[inaudible-audio difficulties]these end points, and your expectations regarding the data, and also could you help us understand at what level the data could be considered clinically meaningful? Thank you.

Thanks for your question. I will have Sunil answer that, based on what we know today about growth.

Sure. You broke up a little bit, so let me try to answer, and if I didn't hit every point you wanted, please let me know. So you're exactly right, so later this year we'll have the first 36 patients, the week 64 growth data. The main reason, just to remind folks, why we didn't look at it at week 40, we just thought that would be too early a time point to see potential growth velocity changes. To also remind folks, these changes are also coming in less the 50th percentile of their growth. Some are severely stunted. Some are somewhat stunted. We will look at their growth velocities pre-starting KRN23, comparing it for 64 weeks post-KRN23. With respect to what's clinically meaningful, as a pediatric ER physician, and talking to the experts who have taken care of these patients, any improvement in growth velocity is considered meaningful for these patients. Biologically, if you're improving their growth velocity, implicitly you are helping the biology of their disease, you must be improving their bone quality, their health, so that their velocity is getting better. So if you look at what we're doing on the bones with the rickets so far, if you're looking at what we're doing on the PROs, we are encouraged by that data that we do hope to see improvements in growth velocity, but again, we have not seen the data yet, and it will be to be determined. But the most important thing, we believe any improvement in growth velocity in this patient population to remind you, these are patients that were more or less optimized on standard of care, before switching from that to KRN23, so these are the patients that were at the best centers getting the standard of care quote unquote optimized, and now switching over. So that would be seeing that benefit with that context in mind.

Okay. Thanks for taking the question.

Thank you. Our next question will come from Yigal Nochomovitz with Citigroup. Please go ahead.

Yes, Hi, thanks for taking the questions. I'm just trying to get a better understanding of how you have defined the phosphate rising end point for the TIO studies as well as for XLH. I guess my understanding is that the patient's final end point has to be higher, the average of their phosphate level, the baseline at week 24, has to be above the lower limit of normal. So I'm just trying to understand why that definition was prescribed for the end point relative versus just entering and staying in the normal range, and then how does that translate into what you have reported for 6 of the 8 patients entering the normal range in the TIO study, and how that might be connected to hitting the end point? Thanks.

Yes, thanks. One thing I would point out is that this is just a first Phase 2 study, so end point definition is not really all that critical. But Sunil, maybe you can talk a little bit about how the phosphate was set for the TIO study?

Sure. And Emil, you're exactly right, I think end point definitions in your first study, looking at it can be somewhat problematic. But what we do know is that in the TIO study, to remind folks again, when we did the data cut you had patients at very different points in time. Two were at week 24. One was basically at week 4, and the rest were in the middle. So you have very different amounts of serum phos data to look at, so I really can't make a statement on average statement, because that is not a fair statement to make. But what I can remind folks is, which was very encouraging, in that of the 8 patients, 6 very quickly after starting KRN23, had phosphorus levels enter the normal range, and they started well below the normal range. Again, the average was 1.7. Now remember, one patient did not show an increase. And one was improving, but again it was early in the treatment course. So with respect to your question about end point definition, there are many different ways of doing it. I wouldn't say there's a right way or a wrong way, as much as we're seeing a pharmacodynamic profile that's encouraging. We're seeing some preliminary bone data that's encouraging. And we'll have more data later this year to hopefully substantiate those early findings.

Okay, I guess just following up --

It is in the study of the first time treating TIO patients, they started at kind of a lower dose and titrating up during the period. So because there's a titration process going on, the idea was to figure out where they got to at the end of the 24-week period, if they were titrating the whole time, for example. It wasn't clear how long it would take to titrate them.

Okay. I guess I was just thinking that if you had a patient that started out really, really low and had a really strong response, and got into the normal range, that your end point, if it was really the average of the baseline at week 24, may not capture that very substantial rise in phosphate. That's what I'm trying to get at. I mean, is that fair or am I missing something about how you're defining?

I guess I'm not quite sure what your concern is. We're talking about the mean change? Or we are saying is the patients need to get into the low normal range, is the way the end point was defined 3, the fraction of patients that get into the low normal range, which right now is 6, although after the release there was a second, another person that Sunil just mentioned.

This is Sunil. And maybe this could help, and I think I understand your question. It is not the average of the baseline. In other words you don't include the baseline when you look at the effect size. You are looking at the proportion that get into the normal range over a time course, but you exclude baseline from that time analysis to your point specifically.

Oh, all right. Got it. All right. Somehow I thought that it was defined differently. Sorry about that. Okay. And then the other question is, so we talked to some experts on TIO and XLH, and a couple of people were saying that they would expect over the long run to see parathyroid hormone and serum calcium improve as well, although I guess you haven't seen that yet. Do you expect to see that as part of the clinical profile with longer time on therapy?

Sunil?

This is Sunil. Again, we have 8 patients of limited data. So I don't want to overstate the data. But what I can tell you is just the pharmacodynamic profile is consistent with XLH. We are not seeing any rises thus far in serum calcium that's a concern. We're not seeing any increases in parathyroid hormone that is a concern. But I just caution on the small data cut, and early data cut here. But so far the data are encouraging without any safety concerns from other end points like you just mentioned.

I would add one thing, is that the effects that they're talking about with parathyroid and calcium, are to some degree side effects of oral phosphate and vitamin D3 therapy, [inaudible] therapy. That is where you're getting into trouble with calcium. And secondary hypoparathyroidism, by dumping phosphate, those are problems that occur because the current standard of care, is what Sunil mentioned in our XLH studies to date we have seen no changes in PTH, aberrations of PTH and vitamin D or calcium, or urinary calcium as well. So we think what KRN23 is doing is blocking the action of FGF23, but allowing the rest of the bone mineral metabolism system to regulate itself as it does normally. When you do oral phosphate therapy, you are controlling everything, and often it is difficult to control well and you end up with a secondary problem.

Okay. Thanks for the answers. Appreciate it.

Thank you, sir. And at this time I'm showing no additional questions in the queue. I would like to turn the program back over to Ryan for any additional or closing remarks.

Thanks. This is all the time we have for your questions on today's call. We conclude the call now with no additional questions. A replay of the call will be available shortly. If there are any additional questions, please contact us at 844-758-7273 or IR@ultragenyx.com. Thank you all for joining us.

Thank you presenters. And thank you to all of our participants for joining. This does conclude today's conference. You may now disconnect, and have a wonderful day.