Ultragenyx Pharmaceutical Inc (RARE) 2016 Q3 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Ultragenyx third-quarter 2016 financial results and corporate update. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time.

(Operator Instructions)

As a reminder, this conference is being recorded. I would like to introduce your host for today's conference, Mr. Ryan Martins, Vice President of Strategy and IR. Sir, you may begin.

Thank you. Good afternoon, and welcome to the Ultragenyx Pharmaceutical financial results and corporate update conference call for the third quarter of 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 Emil Kakkis, Chief Executive Officer and President, and Shalini Sharp, our Chief Financial Officer.

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 timing of release of additional data for our product candidates, plans to initiate additional studies for product candidates, and timing of design of these studies, plans regarding ongoing studies for existing programs, expectation of increased expenses over future quarters, our belief about adequacy of current cash resources to fund future operations, expectations regarding the adequacy of clinical data to support marketing applications and approvals of product candidates, our intent to file marketing applications and expectations regarding timing of receiving potential approval of product candidates.

These forward-looking statements represent our views only as of the date of this call and involve substantial risks and uncertainties that could cause our clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements.

Such risks and uncertainties include among others, the uncertainties inherent in the clinical drug development process, such as the regulatory approval process, including with respect to the MAA we filed seeking conditional approval from EMA with respect to Ace-ER. Whether the Phase 3 results from Ace-ER will in fact confirm the results from the prior Phase 2 study, whether the FDA will accept the planned BLA submission for KRN23, the timing of our regulatory filings and other matters that could affect sufficiency of existing cash, cash equivalents and short-term investments to fund operations and the availability of 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 quarterly report on Form 10-Q for the quarter ended September -- June 30, 2016 filed on August 19, 2016, our quarterly report on Form 10-Q for the quarter ended September 30, 2016 that will be filed soon, and our subsequent periodic reports filed with the SEC. I will now turn the call over to Emil.

Thanks, Ryan, and good afternoon, everyone; thank you for joining us. I'll start by discussing our recent progress and milestones and Shalini will go over the third-quarter financials. We have continued to move forward our programs and the third quarter of 2016.

We were pleased to announce positive data from a number of KRN23 studies at ASBMR in September, initiate our second Phase 3 study for this program, and we continue our discussions with US Food and Drug Administration about our regulatory path forward for KRN23. We're advancing our earlier-stage translation research programs well, particularly through our partnership with Takeda.

Let me start with KRN23 for XLH. In September, we presented positive data from a number of our key studies in our KRN23 program, including the ongoing Phase 2 studies in pediatrics and adult patients with X-linked hypophosphatemia, or XLH, and the ongoing Phase 2 study in patients with tumor-induced osteomalacia. The data demonstrated that KRN23 can have a sustained effect on phosphate wasting and that?s the underlying cause of the disease.

It can also reduce the bone disease and improve other functional limitations.

Adverse events were consistent with what has been previously observed with KRN23 for the treatment of XLH and TIO. With the Phase 2 XLH data in hand and following our breakthrough therapy designation for KRN23 for pediatric patients aged one and older with XLH, we have been in discussion with the FDA about accelerating our regulatory pathway for KRN23 in the US.

After meeting with FDA, we now expect that the data from the pediatric randomized active-control Phase 3 study will no longer be required to file a US Biologics License Application, or BLA. And as a result of that, we plan to submit a BLA to the FDA in the second half of 2017, significantly sooner than previously planned. The final detailed contents of the clinical study data required for the planned submission are still under discussion with the FDA. We will provide an update when we know more.

We are still moving forward with the Phase 3 study in pediatric XLH patients, which we recently initiated because it will have important value to the program. Though not necessarily required for US approval, we believe the study will be necessary to convert our possible conditional marketing authorization to a full approval in Europe based on our EMA discussions.

We also believe that it will be valuable for reimbursement to compare the impact of KRN23 on normalizing phosphate levels with what is achieved with conventional therapy and the impact this has on bone disease and physical function. As a reminder, the pediatric Phase 3 is a randomized open-label clinical trial and study will enroll approximately 60 patients and will compare the efficacy and safety of KRN23 to oral phosphate and active vitamin D.

This study will evaluate pharmacodynamic assessments including serum phosphorus, as well as changes in rickets, growth, velocity and height, walking ability, fatigue, and physical function, and patient reported outcome assessing pain, as well as safety. That's the KRN23 update at this point.

For the Ace-ER program, we have been working with the EMA on our conditional marketing authorization application for Ace-ER and GNE myopathy.

We are scheduled for an oral explanation tomorrow, November 8, to discuss the one remaining major objection related to clinical interpretation of the Phase 2 data. The oral explanation meeting is a closed meeting, and we expect that our next update of the program will be at the time of the CHMP opinion, which we currently expect by the end of the year.

Turning to rhGUS for MPS 7, while we continue to advance the program toward marketing application filings in Q1 of 2017, we are also continuing to work on obtaining or expanding patent coverage for rhGUS. Last month we were issued patents for both composition of matter and method of treatment for rhGUS. The patents will expire in 2035.

I'd like to go to through some upcoming milestones now for KRN23. In addition to the US filing in the second half of 2017, we plan to file for conditional marketing authorization in the EU for XLH around the end of 2016.

In the first half of 2017, we expect data from the Phase 3 study in adult XLH patients. We enrolled 134 patients in the study which will evaluate change in serum phosphorus levels, pain, stiffness, physical function, and safety of monthly KRN23 compared with placebo.

Moving on to rhGUS, earlier this fall, we met with FDA and EMA to discuss our plans to submit filings based on the recent Phase 3 study results. Following these discussions, we plan to submit regulatory filings in the US and Europe in the first half of 2017.

For UX007, this year we expect the 78-week data from our Phase 2 study in long chain fatty acid oxidation disorders. We will be releasing data comparing major medical event rates approximately 18 months before starting the study and after UX007 treatment. We will also provide longer-term safety and exercise tolerance data.

We plan to initiate a randomized placebo-controlled Phase 3 study in approximately 40 patients with the movement disorder phenotype of Glut1 DS by the end of the year. In the study, movement disorder events will be recorded by a patient diary.

In the Phase 2 seizure study, the last patient visit recently occurred. The data are now being prepared for analysis and because this study is a diary-based study, we need to verify the data before we can unblind the study. As a result, we are now expecting to have the data from the study in the first quarter of 2017.

Lastly for Ace-ER, in addition to the upcoming 2016 CHMP decision that I mentioned previously, we also expect data from our fully-enrolled Phase 3 study of Ace-ER the second half of 2017.

I'll now turn the call over to Shalini to provide an overview of our financial results.

Thanks, Emil. We issued a press release earlier that included a financial update which I will briefly summarize. Total net loss for the third quarter of 2016 was $64.9 million or $1.64 per share, basic and diluted compared with $39.2 million or $1.03 per share basic and diluted for the third quarter of 2015.

For the nine months ended September 30, 2016, net loss was $174.6 million or $4.46 per share basic and diluted, compared with a net loss for the same period in 2015 of $90.4 million or $2.51 per share, basic and diluted. This reflected cash used in operations of $113.3 million in the first nine months of the year, compared to $65.5 million in the same period of 2015.

We continue to expect increases in cash used in operations for the balance of the year and into 2017. Net loss for the first nine months of 2016 included approximately $42 million in non-cash charges with stock-based compensation of $34.8 million, amortization of premiums on investment securities, depreciation and amortization and a non-cash license fee from a collaboration arrangement. We expect stock compensation expenses to continue to increase over time.

Our total operating expenses were $65.9 million for the third quarter of 2016, and $177.6 million for the first nine months of the year. Research and development costs accounted for $48.7 million, or approximately three quarters of our operating expenses during the quarter. Our 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 are increasing as programs advance toward the clinic.

OpEx continues to increase due to the initiation of additional late-stage clinical studies, manufacturing costs related to clinical supply of multiple programs, increased regulatory activity across the programs including filings for approval, early-staged 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. Our expenses will continue to increase significantly in 2017, as a result of these activities.

This quarter, the Company recognized revenue of $111,000 in named-patient sales for rhGUS. We expect named-patient sales to remain negligible for the balance of 2016, as well as into 2017. Given anticipated regulatory filings and review timelines, as well as the lengthy process of obtaining reimbursement in European countries, we expect little to no commercial revenue from these programs in 2017.

During the third quarter, we received approximately $74 million through the Takeda transaction and at-the-market offerings. We ended the third quarter with $472.6 million in cash, cash equivalents and investments on the balance sheet. Following the end of the quarter, we received approximately $51 million from the Takeda second tranche and at-the-market offerings.

A portion of these proceeds will be used to fund the initial development of the undisclosed preclinical licensed product from the Takeda collaboration. We believe that we are in a position to fund all of our current clinical programs through Phase 3 trials and to potential launches. We do not have any debt outstanding.

With that, I'll now turn the call back to Emil.

Thank you, Shalini. As you?ve heard, we've made progress in both the clinical and regulatory fronts this quarter. We're pleased to be preparing marketing application filings for KRN23 to the EMA this year, and for US approval of KRN23 in the second half of 2017, which is earlier than previously expected.

We are also moving forward with filings for rhGUS and European filing for KRN23. And having been in the business for some time, I can honestly say it is an extraordinary moment to be in position to file two more product marketing applications in the next few months, while still prosecuting a third application, all at the same time.

This is an incredible effort and is a strong testament of the skill and work ethic of the team here at Ultragenyx, and I would like to thank them for that effort. It has been amazing to see. With that, let's move to the questions. Operator, can you provide instructions for the Q&A portion of the call?

(Operator Instructions)

Eric Schmidt, Cowen and Company

Good afternoon, and congrats on all of the progress. Emil, it sounds like you've had some pretty productive conversations with the FDA on KRN23. Should we assume all you need to achieve in the adult study in the first half of next year is just the primary endpoint, a change in serum phosphate, and that that alone would allow you to receive a broad label?

Well, no. The FDA in the past, Eric, -- it's a good question -- the FDA in the past has required us to have a clinical endpoint, also in that study. And we had been talking about a pain endpoint, and there are also other secondary stiffness, physical function that are important in there. So, our expectation would be that phosphate alone would not be sufficient based on our discussions with FDA.

However, we have powered the study and enrolled it well enough that I feel comfortable that we have enough power to hit secondary clinical endpoints that would be sufficient. But at this point, we could not just file off of phosphate data alone.

So they are not looking at the rickets endpoint in Phase 2 pediatric study and saying that that's good enough, yet?

They might say that's good enough for the peds indication, but you were asking questions for the whole --

Yes, I was.

So, for the peds indication, the Phase 2 might be enough, but to get the adult label, they need to see some clinical results in that Phase 3 study.

And a quick follow up on Ace-ER. Are you able to disclose what the oral hearing tomorrow is about in terms of the one remaining issue?

We talked about it being about the certification of the Phase 2 data. We stated before, remember this was a randomized full-Phase 2 study, but it didn't declare a primary endpoint. We filed because we had persuasive statistical significance and it's really about the clinical interpretation of those results and that we are talking through. I can't really say any more than that. That's what we are talking about.

The main reason we're disclosing at this point is because the agendas get put out, so it's publicly known that we are going to have a discussion with them. But that's what we are talking about, and the essence is really around the fact there was a Phase 2 study. Our feeling in filing early was that the data were strong enough to warrant a conditional marketing authorization.

However, the regulatory authorities will make their decisions and we can't predict that. However, just to remind you, we pressed ahead with the Phase 3 study as well. One way or another we're moving forward but we will find out -- you will find out about the opinion when it comes out.

Great, thanks and good luck.

Thank you.

Thank you. And the next question comes from the line of Gena Wang, Jefferies. Your line is open.

Thank you for taking my questions. For the KRN23 pediatric Phase 3 trial, it seems there is no prescreening more severe patients with such a rickets score over 1.5? And also primary endpoint would be IGIC score at 40 weeks, which seems shorter than the Phase 2 trial? Are you comfortable that you will be able to capture the bone improvement with this trial design?

Yes, the patients do have to have rickets on x-ray to be enrolled in the study. Based on the data we have to date on the 40 weeks versus 64 weeks -- 40 weeks had the majority of the effect already had happened. 64 showed somewhat more, but it really appears that within nine months the effect of KRN23 really is happening, and we think that that makes the most sense, frankly. So, we're pretty comfortable with the design of the study based on who we're enrolling. They do have to have rickets and the fact that most of the effect happens by nine months.

Okay, and one quick question regarding the trihep (sic ? triheptanoin) in Glut1. Just wondering, will you consider early filing for Glut1 disorder with seizures since you will have the data in a few months, while the data from movement disorder won't happen for a few more years?

Yes, that's an important question. I think if you recall -- maybe you don?t recall -- from before, in our discussion with the FDA, the study design, the 3-to-1 randomization, et cetera, was really as a Phase 2 study and our discussion with them was that they would like to see that Phase 2 study plus the Phase 3 study in order to file. That was what the discussion is.

So I have no reason to believe that would allow us to go faster at this point than that point with the seizure data. I agree with you, seizures are important, but the design of study was really Phase 2 in structure, and I think that's probably what the difference would be. However, at Ultragenyx no matter what the situation is we're going to look at our actual data and always do the best we can from a regulatory standpoint to get our products to patients promptly.

Thank you.

Thank you. And our next question comes from the line of Joseph Schwartz, Leerink Partners. Your line is open.

Thank you very much. Your press release says that you will continue to discuss the details of the planned BLA submission with the FDA. I was wondering if you could tell us what remaining issues you and the Agency need to continue to discuss? Are there particular areas of uncertainty that still need to be resolved and how critical are they?

The main thing we would need to do is conduct a pre-BLA meeting with them, essentially, to talk through what are the elements of a filing; what label we are seeking and what we are trying to get. And I think some of that depends on discussing the data we have and the other data we will have and come up with an understanding. Because the disease has both pediatric and adult patients, there's a lot of other issues to discuss.

And we just want to -- before we know precisely what would need to be in the filing, we want to have that pre-BLA meeting and nail it down. That's what we're going to talk about, the extent of the data we're going to include in the BLA, and what that data will provide for us from a labeling perspective, assuming it gets approved.

Okay, that's helpful, thanks. And did the FDA say there is anything in particular that they want to see in order to give you a broad label including peds?

I think from before, the adult Phase 3 is required to get the adult label and for peds then we would file -- we would be filing off of some part of the Phase 2 data we have plus some other bits of data we have from an under-five study, as you know, and some other studies that are ongoing with KRN23.

So, there are a number of smaller components. We want to make sure we are getting all of the age groups, and we were getting the right kind of label with the set of data. Because there's different cuts of data and different groups, we need to work that out with them in a pre-BLA meeting.

We did not want to disclose specifics yet until we really narrowed it down exactly. We just thought it most important to give you the update that the Phase 3 peds study wasn't required, which has the most material effect on our timeline.

Great, that's very helpful. Thanks for the added color.

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

Cory Kasimov. Hello? Cory, or one of your associates, hello?

Can you hear me now?

I can hear you.

This is Brittany. Just a follow-up on the BLA for KRN23; did you say that you would anticipate including open-label data from the ongoing Phase 3 study for peds?

No, no, what I said that was we would figure out what data we have from our Phase 2 that needs to be included with this ongoing study. We have an under-five study; we have the adult study. We need to talk through those details of what would be included in a filing. There is a lot a pieces and we need to talk that through.

When we have that clarity from a pre-BLA meeting we can then talk more about it. We're just making the point that finishing and completing the data and having the data from a pediatric Phase 3 is not required, so that changes the timeline of when all that can be put together. When we have a pre-BLA meeting, then we'll be able to nail down exactly all of the pieces and make sure that we can provide a concise and accurate update for the investors.

Got you. For the Phase 3 movement disorder study, what are some of the other endpoints you will be looking at in addition to the patient diary?

So, the diary we think has the most -- the strongest effect that we saw. But we are also going to be looking at some other neurological scales but in addition, we are going to look at cognition using a CANTAB test, which we used in the other programs.

So, cognition, some other scales; we will be looking at walking, as typical. When you see that actually get posted you will see the various endpoints that are included. It does spread beyond just those events. It?s going to look at other aspects of brain function that affect Glut1 patients.

Okay, thank you. That's helpful.

The next question comes from Chris Raymond, Raymond James. Your line is open.

Thanks, another question on trihep if you don't mind? The Glut1 DS study that we will see next quarter, I know you guys have talked about having patients with both absence seizures as well as tonic-clonic seizures that are more readily captured by diary

but I wonder if you could maybe help us understand a little bit better the trial design, how you are balancing the types of seizures between treatment and control, and how you intend to monitor, especially for absence seizures rigorously enough to see a difference?

The study basically has essentially two interspersed arms. The one arm is looking obviously diaries and observable seizures. But to be in the study there are some patients who may have absence or some patients who have both. We're measuring, in addition to the observable seizure with diary, we are measuring by EEG, seizures on everyone as well.

All the absence patients will be scored off of the EEG, so we will use quantitative EEGs to look at the number of spike events on EEGs before and after treatment, which is very comparable to what's been published already in these patients that they have a spike pattern and you can count out, essentially, the number of events per hour and look at the reduction.

So we think that will be pretty accurate.

The design, though, will look at the combination of the decreases in frequency of seizures the patient could contribute to the observable only, or they contribute to the absence. We will also look at those groups separately, observable separately and absence separately as well, allowing us essentially, three different ways to win.

You can win if overall frequency seizures occurs. Or if not, we can look at just observables, or just absence as another way for the study to come out.

And so I assume, because its 3-to-1 randomized, you've taken pains to make sure that there is an appropriate distribution between control and treatment? Is that correct between absence and more detectable seizures?

The challenge, of course with a small 3 to 1 is that the placebo group is extremely small. Stratifying with a very small 3 to 1 is actually challenging. The analysis plan will take the observables -- the overall seizure will compare to placebo, but the individual groups will look within group as a first look, because the number of placebos should be very few.

So you hit on a very difficult point. We?ve actually managed that by looking within group when you're looking at one type of seizure. This eliminates the issue of having a very small placebo group potentially skewing the results.

Okay, thank you.

Does that help you?

Yes, it does. Thanks.

Our next question comes from the line of Adam Walsh, Stifel. Your line is open.

Thanks for taking my question and great news on KRN23 in the pediatric indication, the early filing. That's terrific. Emil, my question is kind of high level for you? It looks as though, in the next year, year and a half, you are going to be a commercial Company with potentially multiple products on the market and, obviously, in the political season we hear -- and really the general backdrop of investors -- we hear tremendous concern about drug pricing, and

when it comes to orphan drugs, obviously, the price tags need to be high to get a return on investment. But alternatively, people get concerned if there is an access problem around those drugs. As you -- as we?ve come through the political season, and the talk about drug pricing has really heated up, can you just speak a little bit, as you move toward commercial, whether or not your views at all have changed on drug pricing one way or the other and how you think about it? Thank you.

Sure, happy to do that. It has been a hot topic and we have been very thoughtful about this. We have been talking about this for a long time, by the way, since we were a Series A Company. We think very carefully about pricing. And think about a number of factors -- the seriousness of the disease, the real benefit, treatment modality and the size of market.

We also like to make clear to investors that price alone doesn't determine the revenue. It's penetration in the market, and we have seen a number of rare diseases that have priced very high. But then penetrate maybe only half of what they should have in the US, and maybe 10% in Europe. And we think that's not a good model for maximizing revenue.

We want to be smart about how we price, so we can actually maximize the revenue curve for the program and also manage the access. If we are getting substandard access and creating crises, we're not doing the right thing for our patients and that's not the right thing we want to be doing.

We do believe though that by managing pricing in an intelligent way, and basing it on value and also understanding the needs of how the drug will be used, that we can optimize revenue and be better for patients as well. We won't really make the pricing decisions until we know what our product label will look like and the complete dataset.

We are ready to do the best way to optimize patient access and global revenue potential. I think we have been talking about the for a long time. I'm not concerned about it. We make first-ever drugs for patients that have no treatments at all and we want to develop drugs that are important changes for the care of those patients.

I think in that setting, patients will get treated and we will be smart about how to price to make it so we can penetrate not just the US, but the global markets and maximize the revenue while maximizing access for patients.

So what if you don't guess right, initially? What if there is an access problem? How would you kind of address that?

Yes, it depends on the territory. First of all, obtaining adequate access, we think, is an important part of the equation of what you do. So, in the US we will clearly, and I have already stated in the past, we will have patient support programs to help assure that patients who can't get on treatment for one reason or another get access to therapy.

In other countries, we'll work through with the local ministries, strategies to help provide access to drugs in a way that allows us to maintain a global price band, while also providing access opportunities for patients. As a Company, we don't want to see a bunch of patients not getting treated because of financial reasons. At the same time we have to maximize revenue. We are going to be very thoughtful in putting those programs together, but our goal is to maximize global access and revenue potential.

Excellent. Thank you.

Thank you. Our next question comes from Arlinda Lee, Canaccord. Your line is open.

Thanks for taking the questions. I guess on triheptanoin, can you maybe walk us through expectations for what we you are hoping to see in the future control data? And I guess given the different kinds of qualitative seizures and improvement, how does that exactly get measured, or how would you grade those things? And taking that to the next step, what might a Phase 3 look like?

Okay. Arlinda, are you talking about the seizure study, the Phase 3 seizure study or the Phase 3 movement study?

The seizure.

Seizure. Our view on the seizure study was that we primarily going to use in that study to help support the indication of seizure, assuming it's positive, and that we would use the Glut1 as the primary study to drive the approval. We might look at doing some other studies with triheptanoin as an add-on therapy to ketogenic diet.

We have been doing some ISDs in that regard, and it requires some thoughtful management in order to do that, but that might be some additional data we'd collect, but not a controlled study. Our plan at this point from a regulatory strategy standpoint is a Glut1 movement disorder, randomized controlled 40-patient study.

And this study, the seizure study, and those two together, being the primary efficacy datasets for filing and supported by some other ISDs or potentially a combination study as well, which we think might be important since there's quite a few Glut1 patients who are on ketogenic diet. Does that help you?

It?s helpful. I guess maybe a follow-up to that is, what do you think you might require or not require in terms of a head-to-head study versus a ketogenic diet?

I don't think we're really required to do head-to-head study and here's the problem -- you can't really blind a head-to-head study. You can't blind it because you can't blind the ketogenic diet and the use of it. So, you can't really do a blinded study and therefore doing diary of seizures in a non-blinded control study, it has potentially some value but we think it's complicated.

We did this study, which is placebo-controlled, which we think is easier to do. But the 3-to-1 randomization is to try to reduce the question of the placebo exposure to patients. I don't think doing ketogenic head-to-head is worth doing. I think they are very different therapies and would be used differently.

I think if we are demonstrating an effect -- if we demonstrate an effective management of seizures -- I think doctors will have several tools in the toolbox to use, and some patients might not want to try the ketogenic diet or might try trihep first to see how it works for them and if it doesn't do what they need, they can go to ketogenic diet. Similarly, people that try the ketogenic may not want to stay on it and they come off it and try trihep.

We will look at this as two ways to manage the disease, and if we can do some work to collect how they work together, then we would be able to provide some guidance if that turns out to be beneficial, how a combination might work. I would look at this as the way seizures are managed today, doctors have a series of drugs and approaches, and they are mixing and matching those approaches.

If the seizure effect is significant with triheptanoin, I certainly would expect it, since it's much easier to apply to patients, that it would be utilized frequently in that setting. But we don't know the relative efficacy in the various types of seizures and that is data that will have to come out. But I don't expect us to do a head-to-head study at this point.

Okay, thank you very much.

The next question comes from the line of Kennen MacKay, Credit Suisse. Your line is open.

Thanks for taking the questions. This is Slanix Alex on for Kennen. Congrats on the progress. A quick question regarding KRN23 and the eventual labeling. While the breakthrough designation does -- is for patients who are ages one-year and older, at ASBMR there was a lot of physician feedback advocating for treating patients, basically from birth and

I was wondering how might that be incorporated into any discussions you might have with the FDA during your pre-BLA meeting and what the feasibility of that might be?

Yes, we haven't had a real discussion about from birth at this point. A lot of physicians have not really treated patients, even with current therapy, until they're age 2 when they become -- or at the time of being weight-bearing. The one-year cutoff has to do with when kids start to walk and that's when they put stress on their bones and that?s when the rickets become more of an issue. We think from an efficacy standpoint that makes sense.

Going down to birth, honestly, I don't think that's a big leap, but I think we would have to complete more data in our under-five study and our peds Phase 3 would have more data in the younger population. Then it will make sense to step further. From a labeling perspective, we don't know precisely if there's going to be a one-and-up label or not.

I would say in a lot of the rare disease programs we have done, when we've done under-five patients somewhere in the program, we've not had an age limit at all. The question is whether 1-year-old is enough to bridge to a newborn or not, but that's something I think we will have to figure out during review.

Okay, thanks. And a question on triheptanoin. To help us set expectations for the upcoming FAOD dataset, I wanted to ask if you had previously guided to or can maybe comment on whether the trial has been powered for statistical significance, or whether even the trend towards benefit might even be enough to make an assessment regarding moving the program to Phase 3?

That's a good question, and that we couldn't know for sure if it was adequately powered. I could say from before, we have the retrospective study we did. You know, there was a 20-patient study we published. And that did show a statistically-significant reduction in the number of days in the hospital but did cover a longer period of time.

So, this study is covering only 18 months, which means a lot fewer events. So we didn't really know if we were powered or not. We couldn't be certain because we wouldn't know how many patients, how many days in the hospital or how many hospitalizations people would have who enrolled in the study. So, it's really not necessarily powered.

What I can say is that what we did say previously when we had the six-month data is there was a trend toward a reduction in events, but you don't need statistical significance actually to make an inference on how the study looks. We will look at the data and the reduction and understand if there is a reduction, how big is it and from that, we can try to power a Phase 3 study if we were going to do one, off of the event-based data.

Right now we've been talking about the exercise tolerance and patient reported outcome-type study. The event study, potentially, ends up being larger and longer. However, an event-based study also would also be very powerful from a standpoint of reimbursement if we were just talking about cost because obviously, if we can show a reduction in days in the hospital, that's a very clear driver for value in a program, and driver for patient value. We are going to look at the data, statistically significant or not and we will interpret the values and prediction regarding what the reduction in events is and how meaningful is it and make a call then on what's the right move forward for the program.

Okay, great. Thanks. And just a follow-up ? one more question on the upcoming dataset. Given that the patients are going to have aged pre- versus post-triheptanoin treatment over that 18-month span on both ends and given that the number of the events tend to decrease as these patients age just from more of a natural history perspective, how might that confound the results?

It is true that over time patients can have a reduction in events. However, I don't think that the 18 months is a big aging factor time frame. If you look at our original retrospective paper, that was one of the potential critiques that we had patients on who had been on standard of care for about five years or more and

s

ome of them were on trihep for five years.

The question would be, could be just getting old be the factor? We did a cut of data just two years before, two years after where the aging would be less important, and you still saw the same treatment effect. And I would say if you look on a case-by-case basis, there's definitely patients who crossed over on trihep and are not having as many events.

So we think that aging could be a factor, but the design and the time frame here I don't think would be an important factor in a reduction, if we observe one.

Got it. Understood, great. Thanks for taking the questions. Again, congrats on the progress.

Thank you.

Thank you. Our next question comes from Heather Behanna, Wedbush Securities. Your line is open.

Thanks. Just a quick follow-up on the Glut1 study, the seizure study. Just as far as the timing of the data, I was just curious if there was any delay between screening and randomization? Or is it just the amount of data and the diaries and the amount of time it?s taking to process those data that will account for the delay toll early next year?

In the design when a patient is screened, they go through a multi-week period where they get a baseline and then they get randomized and there is eight weeks, and then they go on extension. The main reason is we have the last patient, as we said already, is we are simply -- because patient diaries come from patients, that as you are doing a process of verifying all of the data, any questions that come up have to go back to the patients themselves, not just to the doctor, by the doctor.

It just takes more time to get through that process to make sure we got everything right. You don't want to unblind the study unless you've got everything tight. So we want to make sure we get it all tight before we unblind the study. Especially one that we consider important for seizure labeling potentially, if we are filing at some point in the future with a positive movement study.

Thanks. The next question comes from Liisa Bayko, JMP Securities. Your line is open.

Hello, congratulations on the progress of KRN23, and my question was related to that. I know you said you would be filing in the second half of 2017? I'm curious what additional work you need to do ahead of filing, rather than filing perhaps a little bit sooner? What's remaining to be done on that? Thank you.

By limiting to Phase 3 peds, it means we don't have to wait to enroll that and treat for a full nine months, et cetera, that's what took the time. The adult Phase 3 now is fully enrolled and we expect a result in the first half. We will also have a data draw 52 patients through week 54; we will have more data on the under-five study.

There's a bunch of different things ongoing at the same time. That's we need to talk to the FDA about in the pre-BLA is understanding the package, and understanding what label we would get for various packages. So, setting the time line precisely requires an understanding of what the packages will provide.

Obviously, our best goal here would be to launch with a complete label and a good label, and we would want to do that with making sure that we have the right data in the package helps. The time line is based on the need to request and conduct a pre-BLA meeting.

The completion of some of the data that is ongoing, and then the time for preparing a filing, which takes some time, as you know, in getting it in. That's where the timing comes right now. We're going to have more precise understanding of what data is in, and what label we are going for, and after we have a pre-BLA meeting. We did not want to provide, Liisa, the fine details until we have it nailed down with FDA.

Okay, that makes sense. Thanks for the question.

Very good.

Thank you. Our next question comes from the line of Yigal Nochomovitz from CitiGroup.

Emil, If I could ask a previous question a little bit more specifically? With regard to KRN23, if it turns out the adult study doesn't end up hitting its endpoints, does that mean the FDA's going to think twice about allowing you to file in pediatric, or are these populations just different and at that would not impact the timing for filing pediatric? Thanks.

Yes, I think the indications are somewhat separate. I don't think having, not having adult Phase 3 would mean we couldn't file for peds. I think having adult Phase 3 would allow us, though to file for a broader label. That's kind of the main reason for it. The data we have for peds has already achieved breakthrough therapy destinations so that gives you some sense of their view of it.

The question we are having is how much data we have to put in to get the best, appropriate and best label. A failed Phase 3, I don't think would prevent us from filing for peds, but I think our study design is sound. I think we have a pretty ? it?s heavily enrolled.

I think we feel pretty comfortable with the Phase 3 study but just to be specific, I don't think it's required for a peds filing. We just think it's better to have it potentially. So we're looking at those options, and we will talk to the FDA in a pre-BLA meeting in more detail.

Okay. And Shalini, if I could ask quickly on the cash management; it looks like you've gone down about 50% or 60% of the ATM filing that you had done earlier in the year? Could you just comment on the timing of that with respect to, obviously, a growing set of clinical catalysts for the pipeline and at the need to do that now versus down the road, especially given a good cash balance already? Thanks.

Sure. We are, obviously, pretty well capitalized right now, and as we said, we believe we have sufficient funding already to move all of our late-stage programs through filings and launches. The total size of the ATM instrument is pretty modest, relative to our market cap and trading volume.

The total filing was $150 million in gross proceeds and we've raised net proceeds of approximately $59.7 million. Going forward, we may continue to use the ATM opportunistically from time to time in a pretty measured way. But there is no guarantee that we would use it at all, and basically our approach will be pretty opportunistic and the total size again is quite modest.

As you know, the markets have been very volatile, and so the stock price has been declining, even at times when we have had positive news. So, we have been opportunistically raising small amounts of capital to increase our flexibility.

Great, thanks a lot.

Thank you. And our next question comes from the line of Edward Nash, SunTrust.

This is Mike on for Edward. Thank you for taking the questions. A couple of questions regarding the rhGUS program for MPS 7? You recently [meeting with] FDA and EMA, just want to get some kind of feedback from the FDA, especially on the functional measurements.

What you want is feedback from the FDA on the clinical data that we are going to submit?

Yes, please.

We reviewed the data with them, and their conclusion was the data were sufficient to submit a filing. However, they were not really able at this time -- it?s a review question -- whether they believe we've shown enough efficacy or not. But they felt there was enough data to provide a filing, and we worked to talk about how to present that data for their most optimal review.

And at this point, once we file, then they'll look at the clinical data overall and as a review question. I think it was important to be able to get to a filing as a first step so we can talk through the efficacy. We think the year-end [gag] data will show profound and effect, it is just that the FDA has not yet accepted that as primary endpoint, as we have talked before.

So, there will look at each patient on a case-by-case basis and make that call. But they want to do that in the filing during review, rather than in a pre-BLA meeting. So, we won't have that insight yet, but, personally, I think being able to file puts us in the position to advocate for these patients, and we think we've done as sound a job as you can in a very small population of patients.

So, we think we're in a reasonable place to move forward with the Agency, and continue discussions after a filing.

Got it. Thanks. Is there additional work you need to do before filing? For example extend [C] or [CP] database?

There is no additional work we have to do. We're just getting, putting together the filings. You may have noticed that we are already doing a KRN23 filing for Europe in December. In addition, we're prosecuting this [other] one, so we are doing a lot of major filing work right now. The filing is in March, partly to help manage the flow of major filings globally.

Got it. Last question for me is about, as we know Ultra [offering] indication, just want to get your thoughts as to patient identification program? Like how many patients have you identified so far, if you can share? Thank you.

I think it's important. We have a global patient identification program, although we haven't gone very deep into South America yet. We're starting to build our effort with our basic commercial group just coming together in Europe. And in the US, we have expanded our patient diagnosis liaisons with particular people focusing on diagnosis.

We're currently driving that ahead and we see patients one by one in this kind of indication showing up. We haven't yet put out the current numbers, and at some point, we get close to launch, well talk about where we are with regard to the patient ID program.

We are now really disclosing that at this point in time. But it's an important effort for us, not just for MPS 7 but for all of our programs but we put a lot of effort into it now in not just US but both Europe and South America as well.

Okay, thank you.

Thank you. Our next question comes from the line of Carol Werther, H.C. Wainwright. Your line is open.

Thank you. Thank you for taking the question. Just to clarify, with KRN23, if the adult data is positive, it'll be included in the submission and, therefore, might be in the label, even though the breakthrough designation is for peds?

That is our discussion with the Agency is that the adult data, would that be of sufficient for getting a label. We think that should be; it's a Phase 3 study. It may not be part of the breakthrough, but the adult would tagalong with the peds Phase 2 data in that regard. We haven't really settled now what we are doing for the filing.

As I said, we have to talk to them at the pre-BLA meeting. But, the ability to file with peds Phase 2 and plus the adult Phase 3 is certainly one of the options that we could go forward with, and that's what we have to discuss is what's the fastest way forward to get the broadest labels, right Carol? That's the point. We need to understand how that is and what to do.

So one option would be to file with both of those and some other under-five data and potentially get us there. But until we have the pre-BLA meeting, we can't really give you a precise picture of what the outcome will be. We don't want to commit to something that we don't have firm discussions with the Agency of. So we're only giving the update that pediatric Phase 3 would not be required before we could file for peds.

I think that is an important change. At this point we'll have to get a little more deep into the discussion to verify what we can file, when, and what our proposal would be for the label.

And then just lastly, I wanted to ask a business development question about, basically, you're still looking for other products to in-license and/or are you on schedule with your planned INDs? Thanks.

We're always looking for products, but we have galactosialidosis will probably be our next IND when that happens, and we're pretty full up in our clinical development right now with nearly 30 clinical studies ongoing and half a dozen or more various [SPE] studies. We are in a very busy place on the clinical side right now, and the IND,

once we clear some of these filings, I think we can think about the INDs and some other programs. There is the Takeda programs we are working on, as well as some other things in early stage.

We don't really like to talk about earlier-stage stuff that's heading to IND, because we don't want to make promises to either investors or to patients about what's going to happen.

But we are committed to getting to the IND every year, every other year pace, so that we can reach a steady-state of four to six clinical-stage programs and, hopefully, hit filings every year, every other year for approval as a steady-state. That is our target.

Thanks so much, and congrats on the progress.

Sure, thank you.

At this time I am showing no further questions. I would like to turn the call back over to Mr. Ryan Martins, Vice President of Strategy and IR, for closing remarks.

Thanks, Amanda. This concludes our call. A replay of the call will be available shortly. If there are any additional questions, contact us at 844-758-7273 or IR@Ultragenyx.com. Thanks, everyone.

Ladies and gentlemen, thank you for your participating in today's conference. This concludes the program. You may now disconnect. Have a great day.