Ultragenyx Pharmaceutical Inc (RARE) 2021 Q4 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Fourth Quarter 2021 Financial Results and Corporate Update Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded. (Operator Instructions) I would now like to hand the conference over to your host today, Joshua Higa. Sir, please go ahead.

Good afternoon, and welcome to the Ultragenyx Pharmaceutical Financial Results and Corporate Update Conference Call for the fourth quarter and full year 2021. We have issued a press release detailing our financial results, which you can find on our website at ultragenyx.com. I am Joshua Higa, Senior Director of Investor Relations. Joining me on this call are Emil Kakkis, Chief Executive Officer and President; Camille Bedrosian, Chief Medical Officer; Erik Harris, Chief Commercial Officer; and Mardi Dier, Chief Financial Officer.

I would like to remind investors that this call will include 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, the types of statements identified as forward-looking in our annual, quarterly and periodic reports filed with the SEC, which are all available in the Investors section on our website. These forward-looking statements represent our views only as of the time of this call and involve substantial risks and uncertainties, including many that are beyond our control.

Please note that actual results could differ materially from those projected in any forward-looking statements. For a further description of the risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-look statements as well as risks related to our business, see our periodic reports filed with the SEC.

I'll now turn the call over to Emil.

Thanks, Josh, and good afternoon, everyone. We've had an exciting start to the year. We concluded a strategic rare disease deal with Regeneron to license global commercial rights outside of the U.S. for both Evkeeza and the potential for a second rare disease therapy, garetosmab. We also released with our partner, Genetics, a clinical update on the Angelman program, showing positive clinical activity and lower extremity weakness events observed.

We finished 2021 in a strong financial position exceeding expectations for the performance of our commercial products. And finally, we've made good progress with our broad late-stage pipeline, where we have initiated enrollment in 3 of 4 pivotal programs that will be ongoing this year.

Along the way and despite the challenges presented by the COVID pandemic, we also successfully completed manufacturing technology transfer to our partner, Daiichi Sankyo. I'll let Erik, Mardi and Camille provide more details on these accomplishments later on this call. I do want to spend a few minutes to discuss the deal with Regeneron on the commercialization of Evkeeza for the treatment of Homozygous Familial Hypercholesterolemia, or HoFH, outside of the U.S. The deal also includes our exclusive right to negotiate a separate ex-U.S. agreement for their investigational antibody for fibrodysplasia ossificans progressiva or FOP.

This deal establishes a strategic partnership with a leader in high-quality antibody drug discovery and development. It also enables us to both scale and leverage our global commercial capabilities in commercial, medical affairs and regulatory functions. Evkeeza is a potent approved product with a novel treatment mechanism that strengthens our portfolio with another commercial stage traditional biologic that targets the underlying cause of HoFH. This disease occurs when 2 copies of the familial hypercholesterolemia are causing genes are inherited 1 from each parent, resulting in very low or absent LDL receptors on the liver and lead to dangerously high levels of LDL-C.

Patients with HoFH are at risk for premature atherosclerotic disease and severe cardiac events. Despite all the studies and all the work that's been done in this disease over many years, true homozygous male patients still don't have a great treatment approved, an apheresis is to move from the blood each single -- every single week is very difficult to tolerate and very cumbersome. Evkeeza targets and binds to ANGPTL3, which is a protein that plays a broad role in cholesterol regulation in atherosclerosis, in patients whose LDL receptors are not present to direct appropriate liver uptake, Evkeeza instead enables an alternative pathway by which VLDL are converted into VLDL remnants that are rapidly cleared by the liver through an alternative set of receptors.

Taking advantage of this novel mechanism significantly reduces the level of LDL-cholesterol severe patients despite the lack of working LDL receptors. The clinical value of blocking ANGPTL3 is supported by data showing that natural genetic mutations also protect patients from atherosclerotic disease and treating LDL receptor deficient mice with an ANGPTL3 blocker does reduce atherosclerosis.

In Regeneron's pivotal clinical program for Evkeeza, the drug demonstrated a significant improvement over standard of care with consistent 49% reduction in LDL-C in the 24-week study in 65 patients with HoFH on top of all existing LDL lowering treatments. The study also showed treatment that reduced the LDL-C by 72% in the most severe patients with less than 2% of LDL receptor activity and that triglycerides were also reduced by 50% across study participants.

Evkeeza also has a good safety profile and has been well tolerated across all study populations. Evkeeza is approved by the FDA and EMA for patients 12 and older. Regeneron is currently marking the treatment of Evkeeza in the U.S., and we will lead its launch and commercialization in all other countries and regions, including Europe, Latin America and Asia.

We may also expand our collaboration with Regeneron to include another antibody in Phase II/III development called FOP. That license will include the same commercial rights, excluding the U.S. FOP is an ultra-rare devastating genetic ectopic bone disease that affects approximately 1,400 patients in these territories. In patients with FOP, abnormal bone formation occurs in soft tissue like muscles, leading to freezing of movement and difficulties in eating, walking and breathing and lead to premature death by patients in their 50s.

I met my first patient with FOP while training in Los Angeles and recently presented a keynote at the IFOPA meeting. So I'm familiar with this horrible disease, seeing patients frozen in terrible positions, waiting for someone to save them or to freeze completely is not a site you readily forget.

I'll now hand the call over to Erik, who will talk about the commercial team's performance last year and what his team is doing to launch Evkeeza.

Thank you, Emil, and good afternoon, everyone. I'll start my section discussing the commercialization team's performance in 2021 despite the impact of the Omicron variant. For Crysvita, within the North American territory, we continue to see steady underlying demand from both the pediatric and adult markets. In the fourth quarter, we added over 50 unique prescribers in the U.S. alone. The split of pediatric and adult patients remains approximately 50-50, while the total number of patients on therapy continues to increase. We expect this split will continue shifting towards a greater portion of adults on Crysvita as the teams are increasingly finding doctors who have adult patients with XLH or TIO in the community setting. The compliance rates remain high. In fact, 4 years into this launch, we continue to hear stories from patients about how much better they feel once they begin receiving therapy.

Outside of North America, demand for Crysvita continues to gain momentum. In 2021, product revenue grew 107% to $21.4 million. While there might be variability in the ordering patterns that caused some quarter to quarter fluctuations in revenue, it's clear there is strong underlying demand for Crysvita. This is a direct result of all the work the teams have been doing to educate providers, find patients and work with regulatory and reimbursement authorities. For 2022, we expect Crysvita revenue in Ultragenyx territories to be between $250 million and $260 million. The midpoint of this range represents 32% year-over-year growth, an impressive metric 4 years into a rare disease launch.

Turning now to Dojolvi and starting with the U.S. launch metrics. In the fourth quarter of 2021, we added approximately 40 start forms, bringing the total since launch to approximately 350 start forms. As of the end of the fourth quarter, this has led to approximately 280 patients on reimbursed therapy. Approximately 160 unique health care providers have written a prescription for Dojolvi with many of them writing prescriptions for multiple patients.

Outside of the U.S., the use of Dojolvi continues through our named patient and early access programs. In Europe, Dojolvi growth was driven by significant increases in named patient requests in France and Italy. We are continuing to work with regional authorities as we look to expand access for all patients who could benefit from Dojolvi. Late last year, the Brazilian National Health Surveillance Agency approved Dojolvi for the treatment of both pediatric and adult patients with LCFAOD. The final step is to get full reimbursement approval from Brazil's Ministry of Finance, a process we have begun working through for the last few months.

I should note, this will be the last quarter that we provide specific launch metrics for Dojolvi. We believe the 2022 guidance range of $55 million to $65 million is a better representation of the confidence we have in our ability to continue finding patients and getting them on reimbursed therapy.

Now shifting gears to the opportunity we have with Evkeeza, which is approved for the treatment of HoFH, an inborn error of metabolism like most of our portfolio. These patients are typically seen by cardiovascular and lipid specialists. HoFH is also a fairly well-developed market with established diagnosis protocols, knowledgeable physicians and a relatively high estimated rate of identified patients.

Across the Ultragenyx territories, we estimate there to be between 3,000 and 5,000 patients with HoFH. This program will help further establish us as a truly global commercial organization. Initially, commercialization efforts will focus on Europe, where we estimate to be approximately 1,600 patients. As we modestly build on the current infrastructure that is supporting Mepsevii and Dojolvi, we will also work to submit dossiers and begin reimbursement discussions. This team will also be in place to respond to requests for name patient access, which could begin in 2022 given the strong interest we have seen from the KOL community.

In Latin America and Canada, our commercial and medical affairs infrastructure is already well established and ready to add Evkeeza to their portfolios. We have in place today the field teams and patient and prescriber support services needed to successfully launch Evkeeza with very little build-out required. The addition of Evkeeza to our portfolio also sets the stage for our long-term commercial efforts as we expand into the APAC region.

This is a new geography for Ultragenyx, where we recently established a Japanese entity and have hired a general manager. While Evkeeza will help Ultragenyx to advance along its mission of being a truly global rare disease company, we should note that each of these regions are unique and have complex pricing and reimbursement processes. We have begun these efforts. But as you all know, it can take some time to work through these processes and see revenue from our new therapy. Key opinion leader feedback on the program is very supportive, and the strong clinical data speak for themselves as a significant leap forward for patients with HoFH. My colleagues and I look forward to offering Evkeeza as a new and compelling treatment option for patients.

In closing, I would like to reiterate just how proud I am of the team's efforts in 2021 and I look forward to 2022, we will continue to build on that momentum.

With that, I'll turn the call over to Mardi to share the financial results.

Great. Thanks, Erik. We issued a press release earlier today that included a financial update, which I'll briefly summarize. Company revenue for the 12 months ended December 31, 2021, totaled $350.4 million. Crysvita revenue in Ultragenyx territories grew to $192.6 million, including $171.2 million from the North America profit share territory and net product sales of $21.4 million in other regions.

Total royalty revenue related to the sales of Crysvita in the European territory was $18.2 million. The Dojolvi revenue for the year was $39.6 million. As Erik mentioned, the ongoing strength of the launch is reflected in our 2022 guidance for Dojolvi, which represents approximately 50% growth at the midpoint of the guidance range. Mepsevii for 2021 was $16 million. As we have previously stated, we expect these revenues may modestly increase over time.

2021 revenues also included $85 million related to the tech transfer as part of our strategic manufacturing partnership with Daiichi Sankyo around our PCL and HEK293 gene therapy technologies. In the fourth quarter 2021, the technology transfer activities were substantially completed and total revenue recognized under this license agreement through December 31, 2021, is $174.2 million.

Our total operating expenses for the year were $733.1 million, which includes research and development expenses of $497.2 million, SG&A expenses of $220 million and cost of sales of $16 million. I should note, this also includes a onetime expense of $50 million related to the upfront payment for the Mereo license and collaboration agreement regarding setrusumab for OI.

We continue to expect our R&D spend to somewhat increase in 2022 as we support 3 pivotal gene therapy clinical studies, the UX143 Phase II/III clinical study NOI, the Angelman Phase I/II study and the Phase I/II study for our most advanced mRNA program, UX053 and GSDIII and a number of other preclinical activities as we get ready to advance the next programs into the clinic.

We also expect SG&A to modestly increase in 2022 as we continue to support the expansion and launches of our existing commercial products and the launch of Evkeeza. For the year ended December 31, 2021, net loss was $454 million or $6.70 per share. The net loss includes a $42.1 million decrease in the fair value of equity investments. Net cash used in operations for the 12 months ended December 31, 2021, was $338.7 million compared to $132.2 million for the same period in 2020. Net cash used in the 12-month period ended December 31, 2021, included the $50 million upfront payment for the closing of the Mereo agreement. This compared to the net cash used in the same period of 2020 that included approximately $155 million of operating cash received from Daiichi Sankyo related to the collaboration and license agreement.

We ended the year with approximately $1 billion in cash, cash equivalents and marketable securities. This puts us in a strong position to achieve critical milestones and expand our commercial presence over the next few years.

Now I'll turn the call over to Camille to touch on some of our clinical programs.

Thank you, Mardi, and I too wish everyone a good afternoon. In my section, I will briefly provide status updates on our 6 clinical stage programs before turning back the call to Emil. Starting with the 3 gene therapy programs, DTX401 for the treatment of glycogen storage disease type 1a or GSD1a is currently dosing patients in the randomized placebo-controlled Phase III study. DTX301 for the treatment of ornithine transcarbamylase or OTC deficiency, is in the final stage of the study startup. We anticipate the first patients will enter the 4- to 8-week baseline screening period in the first half of 2022, after which they will be dosed in the Phase III randomized placebo-controlled study.

UX701 for the treatment of Wilson disease is currently enrolling patients in a seamless Phase I/II/III randomized placebo-controlled study. Outside of gene therapy, UX143 or setrusumab, an anti-sclerostin antibody, will begin enrollment in the first half of 2022 in the seamless Phase II/III study for pediatric and young adult patients with osteogenesis imperfecta.

GTX-102, the ASO in development with our collaborator, Genetics, for patients with Angelman syndrome continues to enroll and dose patients under the amended Phase I/II protocol in the U.K., Canada and the U.S. with no reported lower extremity weakness. Cohorts 4 and 5 in the U.K. and Canada following DSMB support have expanded, adding an additional 8 patients to this protocol. The initial assessments have shown early signs of clinical activity. We look forward to providing an update on this program in mid-2022.

UX053, our first mRNA for the treatment of glycogen storage disease type 3 is currently dosing patients in the single ascending dose arm of the Phase I/II study. Preliminary data from that arm as well as initiation of the repeat dosing phase of the study are anticipated in the second half of this year.

With this update, I will now turn back the call to Emil. Thank you.

Thank you, Camille. Before we close out, I'll provide a quick reminder of the key upcoming milestones for the company. For GTX-102 in Angelman, will provide an update in mid-2022 on Cohorts 4 and 5 in the Canada and U.K. arm of the study as well as available safety and efficacy data from the patients treated in the U.S. For our gene therapy pipeline, we'll continue enrolling the 3 late-stage clinical programs and look to provide longer term durability data from the Phase I/II studies for GSDIa and OTC at major conferences.

For UX143 in osteogenesis imperfecta, we'll begin dosing in the pivotal Phase II/III study in pediatrics in the first half of the year. In the second half of the year, we expect to provide an update on the dose strategy we have selected for the Phase III portion and initiate a supportive study in children under 5 years old.

For UX053, in the second half of the year, we expect to share a single dose data from the first part of the Phase I/II study and to initiate the repeat dosing stage.

In 2021, we made meaningful steps in building a strong financial position, bolstering our commercial portfolio, advancing our clinical programs and completing the tech transfer, our gene therapy manufacturing technology ahead of schedule. In 2022, we look forward to building on this and sharing updates with you.

With that, let's move on to your questions. Operator, please provide the Q&A instructions.

(Operator Instructions) Our first question comes from the line of Yigal Nochomovitz with Citigroup.

I just had a question with respect to your planning for the pivotal trial for Angelman. Presumably, you're going to do a randomized placebo-controlled trial. And so my question is, assuming you see a main CGI increase in line with the 2.5 that you've observed so far in the Phase II, how are you thinking about the separation from placebo given the natural history of Angelman where clinicians have actually observed slow gains in it function over time. For instance, there's a 2020 publication in The Journal of Autism and Developmental Disorders that makes this point pretty 0quite nicely.

Thank you, Yigal. I think one thing about Angelman as though there may be some small gains over time, the gains are pretty modest compared to the kind of change observed in the trial. So I have no question if we can achieve the efficacy we've seen before in our Phase III that we'll be able to distinguish that from placebo and really no concern at all. The CGI as a tool is one approach to measuring the disease, but it is a more subjective approach depending on the opinion of the investigator.

We also are certainly going to use underlying instruments that we used before, such as Bayley and others that are specific measures of particular function, which we will be studying in our Phase II study currently with genetics, which will allow us to understand the magnitude effect and understand the separation. And I have no doubt, given the fact we've seen before that we can design a study that will have appropriate endpoints and capture what was, in our view, a very profound effect on development in this disease.

Right now, we need to get our -- optimize our dosing, which we're working on and figure out this. We'll figure out the magnitude of these effects and come up with a design for the study. Whether it's CGI dependent or whether it's based on other endpoints, I would say we still have some time to figure that out at all. But I think your question or concern raised and we certainly will walk look carefully at assuring we're powering and observing a change that's meaningful.

Okay. That's super helpful. And then just to follow up on another topic regarding the Regeneron deal. Obviously, this was very interesting. As you usually see the smaller company license to the larger pharma to commercialize an asset, but obviously, the reverse happened here. So the question is, could we see more transactions following what happened with Evkeeza? Or was this more of a one-off situation that presented itself with Regeneron?

Yes. Well, I think we just are a big company in how we act and behave. So that's what's going on here. But Regeneron is a great company, but they haven't built a global commercial capability, especially in the rare space, they were appreciative of what we had and felt the best thing for their product, and they really care about these patients who want them to get good care and they said, we want you guys to handle this product because they have confidence in our ability to take care of business and do it well. So if there's anything, it's our reputation for taking care of people correctly that draw together. It is a 2-product deal.

Look, we're pretty full and busy in pipeline right now. So right now, we're not expecting to do many deals on other commercial deals. But in our view, we want to be selective. We want to pick products that we want to work on that we're proud of that we think really change care and are important in order to get us to take our precious people's time and put them to on an effort. And Evkeeza, we think is a -- will be a change in standard of care. And we think garetosmab has potential to be life-changing for FOP. So we're excited about both of those. And right now, we'll stick just keeping those going, and we won't think about what else could be. We'll wait and see if it comes.

And our next question comes from the line of Gena Wang with Barclays.

I also have one question regarding Angelman. So Emil, in the early January update, you said the sign of improvement in terms of a CGI score. So did you continue to see that trend, if you can be a little bit more quantified regarding the score improvement. In the past, you mentioned like 2 score improvement in 2 out of 5 domains. Did that meet that criteria? And then second part is mid this year, can you lay out specifically what kind of data are we expecting to see from the 12 patients, like, for example, the first 2 patients from each cohort, the loading dose -- after initial loading dose, what additional data we could see and also for the remaining 8 patient, what we could see? And will you have a definitive answer by mid this year that you will know which dose to move forward for a pivotal study?

Very good. So thank you, Gena. For Angelman, what we said was, and we'll just reiterate is that we had improvements in clinic activity that is their CGI scores for the domains were improving, but in the lowest dose cohort, we had said that they hadn't achieved plus 2 in more than 2 domains, therefore, the patients escalate to the next dose level. In cohort 5, the older patients that DMC has met and also allowed the expansion of the Cohort 5, the additional 4 patients in that cohort. And those patients also escalated that is they were seeing improvements, but not 2 domains, 2 plus. So we're at the beginning of the titration. We wanted to get in the clinic, get started. We're seeing activity. We're not seeing any lower extremity issues right now. So we're encouraged. They'll continue to dose and titrate as we move forward with those 12 patients. So that's kind of where we're at.

We haven't put out specific scores. But we said if they had 2 domains or 2 plus, they wouldn't titrate further. That would be considered getting to the level of efficacy we saw before. So we're encouraged, but we're continuing to move forward with dosing and titration. Now what kind of data will we see? We're talking about midyear. That data would be -- a titration would be that we would see data from the first Cohort 4 and Cohort 5 that have gotten their doses and evaluated on day 128, which includes now a whole series of endpoints, not just CGIs and domains, but it would include the Bayley expressive and language scores, Dylan scores, sleep evaluations and as well as the -- what was -- behavior evaluation.

So we would have a number of endpoints that would be supporting. Those end points would come from both patients or families, the investigator or a psychologist. So there's 3 different types of evaluators. So we think we can look at the synchrony between different evaluators and how they're looking at these with different endpoints. We hope this will be a robust assessment of how the drug is doing.

So with regard to where we are, the point of this program is to kind of get dosing and titrate dose until we see sufficient efficacy that we would separate from placebo in a trial and be a substantial clinical benefit to patients. And we'll see at that point, we look at that data if we achieve that level. If we are close to our said level, we expect that we would expand the cohort and actually add more patients beginning at the new dose level that we had established and moved forward.

Now you asked how are we going to know when we got to the dose. I'm guessing by midyear, we'll have a sense for the dose, but it could be that the expansion cohort will help identify or verify that higher level. The idea is to try to tune up the efficacy and manage within what we consider a safe dosing range. That would allow us to see results later in the year regarding the dose. And it could be that we deal with a young dose and an older dose or it could be something else we do. But the idea is we're going to learn about how to dose and get an idea of what the optimal dose range is. But we're really encouraged so far that we're not seeing anything at all with the risk of a lower extremity event. And so we're encouraged, we're seeing activity, and we think we just need to work into the -- deeper in the therapeutic range as we move forward. So we're excited about potential with Angelman.

And our next question comes from the line of Tazeen Ahmad with Bank of America.

Just one point of clarification for Angelman's, Emil, can you just remind us about whether or not you will be able to redose those original 5 patients that you had on drug? If you don't know yet, is that going to be part of the discussion with the agency? What would you need if it's not been decided yet to get them comfortable with redosing? And then secondly, for Evkeeza, can you talk about where, a little bit more detail, the synergies are between the products that you currently market and what you would need to build out to market at HoFH?

Very good. Thanks, Tazeen. So for Angelman, we're obviously very interested in redosing those original 5. So are those families because they had seen so much and have that pulled away has, of course, been tough for them. And so they're anxiously waiting. Our belief is we need 2 things in order to go back to the agency. We want to collect data from the ex-U.S. program is ongoing right now to help look at the dose and administration method to help verify it and just to show that we can dose safely.

The second thing is we are doing some evaluations on hemological response and other things, which will show that there is no hemological issues at all, which I think was part of the original concern on redosing. With those 2 elements in hand, we'd expect to go to the agency in this year -- middle of the year and would seek to a plan to redose those patients to get them back on treatment. And we'd hope that also to eventually get essentially the world program, the U.S., ex U.S. programs aligned in terms of dosing and administration. So we think we want to have some of the data from these next set of patients as well as the additional evaluation of those 5 in order to get to the next step on redosing.

So on Evkeeza, rare disease launches are -- have some very common elements. There is certainly a detailed medical kind of knowledge base thing. But there is the reimbursement and country management piece, which is very common. In rare disease products like this always, in Europe, particularly have key centers that are the key opinion leader run centers or centers of excellence are defined by the government. And therefore, it really is a very easy orphan model to go out and with a small number of field people manage a limited number of centers. So we're very comfortable that the basic interworkings of supply medical fairs as well as reimbursement are things that we can use, and we'll have a very limited number of growth in people that would go to those centers.

The thing that will also happen is Evkeeza will enable us to go to more countries in Europe, which will expand our footprint a bit, which will allow us to gain revenue for more countries than we currently are. And so I think that's where the -- we will actually gain benefit from Evkeeza, which will set us up for the rest of the other programs we have with the work we will do.

So we're comfortable that we can leverage, will be some growth, but we think we'll get a lot of benefit from the team we have who can move on to working Evkeeza. Remember, Evkeeza and HoFH is still a lipid metabolism disorder. And while there may be sometimes different doctors involved, it is fundamentally a genetic metabolism disorder and our team is well capable of doing it.

The other thing I'll point out is because it's such a common really well-known disease area, it's not as hard as some rare disease areas, right? Everyone knows about LDL. Everyone knows about diagnosis of this disease. It's not like a mysterious disease, which might be more challenging. Here is -- the patients are known. They already go to places. The challenge is just find them, get them on drug and if they're at the major centers, it won't take a lot of people and we'll be fishing in how we set up and commercialize Evkeeza.

And our next question comes from the line of Cory Kasimov with JPMorgan.

Two for me as well. I guess, first, just a follow-up on the Evkeeza topic. Can you just talk a little bit more about the anticipated cadence of countries coming online here? Like do Canada and LatAm potentially contribute in '22? Or should we think about these as more of a 2023? And then to change it from Angelman, can you talk about what we might learn from the Phase II dosing update for setrusumab or UX143 in the second half of this year. Do we get like a full-on safety and efficacy update around the various doses? Or is it just more like the dose you chose and the plan for Phase III?

Okay. Very good. So on Evkeeza, there is a sequence that usually people work through and country by country. And I probably wouldn't go through that at this moment. But obviously, in Germany, you can launch more quickly, but other countries like France, Italy, have a process we have to work through. And we're going to work through the filings and timing of these things to manage the pricing process to get through it and to try to achieve consistent pricing across the region.

So I won't go through it right now. But 2022 will be spent primarily filing reimbursement and beginning the process of getting reimbursement in these countries. And ultimately, Germany at some point is the one country you can launch sooner. And of course, that would be something we would do in our plan.

With regard to Canada and LatAm, this still requires filing and approval, so it's obviously not going to be a big revenue generator in this year. And Canada and LatAm is also right now also launching Dojolvi. And in LatAm, Crysvita is still in the beginning of its growth. So they have plenty to do there, but Evkeeza will fall in after that. But this year will be more about driving Europe. And again, we'll get the filings and for the rest of world for Evkeeza.

Now for the next one, was it both UX143 and Angelman, was it both or just UX143?

No, just 143.

Okay. I kept hearing Angelman all the time, maybe I am kind hearing it now. So the UX143, look, it's a pretty simple story. We're -- they already proved that 20-mg per kilo works quite well, right? We know that already. We're now going to young kids, so we're going to test a higher dose and that dose and kind of compare. And the purpose is really fine-tuning it. It's not like we don't know. We know the dose is, probably 20. The question is, do we need to go higher for the little kids. That's all.

And so what we're going to do is try to figure out is maybe the 5-year-old needs 40 and old ones are in 20 and maybe somewhere in between. So we're going to kind of look for how do we assess drug distribution, pharmacodynamic effect at different ages and doses and just create a dosing algorithm. I think it would less as zero-dose as a dosing algorithm to how to optimize per age. And based on P1NP, which in our hands, showed, at least in the hands of the study, have showed a really good correlation. So that's kind of what we're expecting.

We put out a significant amount of data to say, here's what we're doing in our dosing algorithm. We'll talk at high level about dosing. We probably would not provide great detailed data because it's the middle of a blinded study. And so we'll have some restrictions on how much detail we can provide. But it should be enough to say drug is working. We figure out how we're going to dose and then we're heading into Phase III. And I think that would be an important update for the program.

And our next question comes from the line of Chris Raymond with Piper Sandler.

I've also got a couple of non-Angelman's questions, if that's okay. Maybe just the first one. Speaking of the Regeneron deal, I think you've highlighted Emil before the second drug in that potential -- potentially a second drug is garetosmab. Just Regeneron, I guess, ran into some issues with -- when they were developing some fatal SAEs at the end of, I guess, it was 2020. And they kind of went silent on it, but just digging into this, it's not clear, I guess, that these deaths were treatment-related, but there still seems to be a safety signal. Maybe just curious if you could maybe expand on what you see with that molecule, Emil, in terms of the path forward?

And then just maybe a follow-up on Cory's question on setrusumab. I think I've heard you say in the past, you framed this as maybe an opportunity that when you compare to XLH that the demand might even be greater for treatment. Can you just, high level, maybe expand on that a little bit in terms of the market opportunity that you see? And just kind of thinking about that as a setting up as a big catalyst in the next year or end of this year, I guess?

Sure. On garetosmab, obviously, I need to defer to Regeneron and details of their program, both. What I can say is we evaluated it and the depth they had in their study some very advanced patients who have scores were very advanced. And we look at all that, our conclusion is the drug is not the cause of those that they are just very sick people in the advanced disease, and that is why we're comfortable with what is going on. The drug may have events. We are not going to talk through them all, but what I can say to you is its effect on disease is so profound, disease so horrible, that we feel confident the drug should get approved. And right now, Regeneron is doing their work and developing a development strategy, and I would refer to them on that development strategy. But we're confident there's a good product in there from our look at things.

For setrusumab, the OI patient population that can be treated as both type 1 as well type 3s and type 4s. Now if you look at the types, type 1 have fractures and there can be a variable degree. Some people have occasional fractures, some have more than occasion, more significant. So some fraction of those patients are really having more issues. Type 3 to type 4 are physically more devastated patients, and their bodies are disintegrating. Those patients are far more advanced and impaired than, let's say, a child with XLH, right? These are kids end up in wheelchairs significantly compared kids, right? They are devastated, not just crooked leg. We're talking about bent bodies, right? So there's no doubt that type 3 and 4 are horrible. And even with bisphosphonates whatever is being done with them now, is nowhere close to adequate treatment.

So we think there's a very high unmet need in the -- I'm sorry, in the OI population. And we've been looking the last few years for something better. And what we've been impressed with is that they're among anabolic agents, anti-sclerostin is very potent and has biology sufficient to basically normalize the strength of bones in models. And the drug in their study showed dramatic improvement in bone density, in the lumbar spine, which is one of the places the type 3 and 4 patients disintegrate. Their spines essentially collapse and disintegrate. This drug had 8% to 10% bone mineral density improvement in just 1 year, which is more than double any other anabolic agent in the lumbar spine. So we think that post-improving lumber spine, for example, for young patients would be profound, and the strength then achieved could change their future from one of constantly broken bones and declining function to want to stabilize and improve growth and function. So we're -- we believe, given that severity of unmet need, they'll be a big driver.

But on top of that, when you talk to KOLs, especially the larger KOLs, they generally are 50% to 100% more OI patients than XLH patients in their clinic. And so the 60,000 prevalence population for OIs could be higher than that. We think there's about 50,000 escalation that same population. But it could vary. Well, there's more OI than XLH by a significant amount. And that's why if you add that on with a high unmet need, we think it's a population needing our help, needing a new drug and we're in good position to get there with this one.

And our next question comes from the line of Yaron Werber with Cowen.

This is Brendan on for Yaron. Just one quick one on Crysvita. I understand the rest of world embarking can be a bit choppy. But obviously, it was a pretty impressive quarter-over-quarter jump in North America. Just want to see maybe what drove that in Q4 and how we should think about it in context and maybe moving forward this year? And then just a quick one on the GSDIII readout in the second half. What kind of data could we maybe expect and from how many patients are you expecting by then? I wasn't sure if you said we get repeat dosing data or if it will just be the salvations?

Thank you, Bren. I'll let Erik handle the Crysvita quarter-on-quarter number question and then Camille can handle GSDIII patient briefly?

So I think we had -- the -- we had a strong fourth quarter surge following some low which was driven by the Delta barriers, where there was a lot of lower activity in the midyear with patient volumes going into offices. So we saw a surge at the latter part of the year as we rebounded coming out of that Delta variant.

Great. Thanks for the question about UX053, our GSDIII program. Yes, we will have data on our open-label single ascending dose portion of the study in the second half of 2022. Approximately 8 to 10 patients of data as the name suggests, the doses will be escalated after -- by cohort, by cohort. And so we'll have information, first and foremost, on the safety as well as some additional pharmacodynamic and initial clinical activity data from that portion of the study. The repeat dosing portion of the study will be blinded -- randomized and blinded. So we won't have data until that portion has been completed, but we'll certainly give you an update on where that portion stands in the second half of the year as well.

And our next question comes from the line of Maury Raycroft with Jefferies.

Congrats on the progress. I was going to ask one on Angelman. Wondering what the cadence of enrollment could look like in the United States. How many patients do you plan on enrolling in the U.S. at 2 mgs? And will you have the ability to adapt dosing or expand the study in the U.S. during the 4-month time frame? I guess, could there be a U.S. dosing update before your midyear data update?

Very good. The patients are essentially -- I think they're essentially enrolled or close to enrolled. So we're enrolled, the 4 patients that were planned for 2 mg. So that's already there. And then we're planning to -- we're letting them go and get started and with an agreement with FDA dose to get started. I think our plan was to take enough data from our ex-U.S., to come back to the agency and look through what we can do to update the U.S. program. I would expect that somewhere towards the middle of the year, I don't know that by the update, we would have changed the FDA protocol for the U.S. yet. But we're planning to try to get as much data from the current set of patients.

So that we go back to the agency with a very crisp single package and get their agreement. So once we have the other safety information in that, we'd hope to go back and align the U.S. protocol with the ex-U.S. We have to deal with the patients who are on 2 mg. By that point, they'll probably have their doses completed, but we would probably expect to enroll them in as participants in the next -- in the cohort of the expanded protocol that we're doing. So we can't tell you exactly, but we're going to try to get to that certainly midyear.

Got it. That's helpful. And then I just had a quick question on the FOP option with Regeneron. I guess for Evkeeza, I'm wondering if there are near-term obligations with launches that may factor into negotiations related to the exclusive FOP option?

Well, the 2 things are not really tied to each other. There are certainly in our agreement with -- on Evkeeza, we'll have aspects of performance that we need to execute on, and that's all agreed to. But the option doesn't depend on those, it just is what our requirement is. The option will depend on at the point in time, we will provide information that they have what our development plan is and we'll have the ability to opt in and then start to share some of the development costs for garetosmab. So -- but the 2 things are not related to each other -- and at this point.

And our next question comes from the line of Dae Gon Ha with Stifel.

I'll also stay away from Angelman tonight. One just on Evkeeza, it seems to be more commercially driven, but I was wondering, Emil, if I could get your take on ANGPTL3 targeting gene editing approach and whether or not you consider that before you went with Evkeeza? And then secondly, on setrusumab, I guess can you remind us in terms of how you're thinking powering wise that you're going after fracture versus the bone density that was measured in the ASTEROID study?

Okay. So on the commercial side, there's obviously other ways to talk out of ANGPTL3, but the antibodies in hand is very safe, works well. And gene netting knockout strategies have just submitted the very first few patients, which is very exciting, but to me is going to take years to get through. The goal of people have in trying to do this is certainly not treating HoFH and gene editing. But right now, we're watching the gene editing field. We're a company that likes to take advantage of platforms, but have to develop them ourselves. So in our view, what we needed was not another early-stage program to experiment with, but a product that we could sell that worked.

Down the road, if your point is, well, could something replace this Evkeeza for ANGPTL3 maybe. But is it really in the next few years or is it 10 years, how long, could be a while. And honestly, very few people are going to spend all the money on gene editing to treat that few number. So if they're trying to do the bigger market, at some point, maybe that will happen. But right now, we feel comfortable as a program we can sell now that works. Works well. It's pretty convenient. It doesn't have any unknown genetic issues that are yet to be figured out. And so we're comfortable there is a good place for it in our portfolio at this point in time. But we're watching gene editing just like all of you, and they'll have ups and then down.

For UX143, bone mineral density by the FDA is generally not considered sufficiently clinical in their mind. There have been situations where didn't correlate well, although I think with anabolic agents, it correlates better with outcomes. So their requirement was to have clinically observed fractures to be the primary endpoint. What we know from the data in ASTEROID is that there were trends to fraction improvement in the study was not very big and didn't have enough time. But our view of it was that the bone mineral density improvements and the trend and fractures that we're seeing in the higher dose patients would be readily -- it would be clinically important, and we feel comfortable that will work.

Second thing, remember that ASTEROID said it was adults. Adult bones don't respond like kid bones. And that's why I remember with XLH, we got out of adult went to Peds. Peds would drive the powerful efficacy story. Same thing is going to be true for UX143. Kids bones respond much greater, much faster and will remodel faster and build bone faster. And so I'm very confident that in that group, that we can improve fractures even more readily than you would in adults. So that's why we're pretty comfortable. That was true by the way in short, everything we did in kids work faster and more powerful. In fact, people said it should take 2 years to see bone change, remember in XLH, but in kids, we actually got 80% of the benefit in 9 months only, right? That was unexpected to some. But as a pediatrician, I like kids because they get better. That's why I went into pediatric medicine originally as opposed to gray hair guys.

And our next question comes from the line of Salveen Richter with Goldman Sachs.

This is Elizabeth on for Salveen. For your 2022 Crysvita guidance, just wondering if you could comment on the breakdown you expect may come from North America versus the other rest of world geographies?

Well, generally, we don't make that breakdown from the sole purpose of allowing Erik the room to do what he has to do to get the sales there. But Erik, I don't know if you want to comment. I don't think we've made the breakdown in the past.

I'll comment just a bit and then just from the numbers and you can jump in. Yes, so I mean, we put in the press release that the North America territories were $171 million last year and other product sales, although we didn't break that down, but it's mostly Crysvita coming from Latin America was about $21 million. So that gives you the point -- the magnitude of difference within that guidance. So we continue to see very strong growth of Crysvita in Latin America. But generally, the biggest growth in the largest numbers clearly come from North America. Erik, I don't know if you want to add anything more?

Exactly what I was going to say.

Sorry, just that then.

Well said. So Elizabeth, there's your answer.

And our next question comes from the line of Joseph Schwartz with SVB Securities.

At the past conference, I guess I'll preface this by saying my first question is on Angelman and my second is not. But at the FAST conference late last year, Dr. Dindot emphasized the value of preclinical models for Angelman. And so I was wondering if, particularly the pig model. And I was wondering if you've studied GTX-102 in the pig model, and if so, what did you see with respect to the therapeutic index and dose response of GTX-102? And then is any of that value and working out to be in line with what you're observing in patients now.

Yes. Well, Dr. Dindot, of course, at Texas A&M would talk about animal models, being the ag school it is. But -- and the pig was more recently developed. So we have -- we don't actually have the teaching from the data of the pig. They're developing the pig, they got it done now, but now we're in the clinic. So we haven't gone back to the pig. So I couldn't really answer those details. I think the pig is interesting because it acts like Angelman patients, humans has -- it doesn't have a stranger anxiety. It will come up to stranger where most pigs are reluctant to come up to strangers. So there's these subtle behavioral patterns, which are retained, which are interesting. But we haven't done the work yet, but I do think it could be helpful in other work in terms of developing additional improvements to the molecule or other types of approaches. But the truth is that fundamentally pig or whatever or monkey, you got to deal with human patients to figure out what's happening.

And so the biomarker story could also be maybe developed in the pig, but honestly, by the time we figure out a biomarker is validated, we'll have already completed the clinical program. So the truth is that right now, our history in future is dependent on what we do in the clinical program. And the models will help us expand the options maybe we have for the future, but I don't think you're going to find the path forward in the clinic.

Okay. And then given your seamless Wilson disease study, we'll have a couple of decision or data points. I was wondering if you can give us a sense of when we might hear something first about the effect and the dose that will be taken into the pivotal portion of the study.

Sure. We will have an interim assessment of the program. But because it's a blinded program, we won't be able to disclose all the data that we have. But our expectation of the study didn't start -- it's just starting now. So the time line to get that interim is not going to be this year now because of where we are in time. But our expectation is to be able to know what the dosing response looks like that the drug is working that there is an impact on the markers of importance and that we are choosing a dose and proceeding. So that's the kind of level of granularity probably we'll provide. And we'll have to be careful about it because we just don't want to have anything that damages the objectivity of the Phase III study. But it should be enough to tell you the drug, here is the dose and we're proceeding to Phase III.

And our next question comes from the line of Joon Lee with Truist Securities.

For the Angelman data by midyear, is your goal to have all Canada and U.K. patients on 14-milligram dose before you top line the data? Do you have sufficient time to get all those patients to 40 milligrams? Or do you have the ability to skip a few doses between the studying dose and the maximum 40-milligram dose. And what is your definition of midyear?

Very interesting. We'll start with the last, the midyear is Q2 or Q3, it's broad enough to really be annoying to all of you. So that's why we pick it that way. But the truth is we have to get through a number of steps and get the study executed. The study has a protocol where they escalate after 2 doses, and then they can escalate every 3 months during the maintenance phase further. However, getting to 14 will take a number of months if we were to get there.

So your question is can we just jump doses, not in normal clinical protocol to jump doses. So we are going to look at the data we have as we get to midyear. And our expectation instead of jumping dose, Joon, is to see where we're at and initiate an expansion cohort, right, which will allow us to start dosing at a higher level now, a dose level, let's say, that's cleared by the data so far. But started at that dose level and now load with 4 doses at that higher level. So to get what you're getting at Joon, by doing that, it will allow us to jump efficacy a little further if we're not at our -- where we want to be by the time we're at midyear, and that will allow us to jump the dose a bit higher and continue ahead.

We have to work through the safety window and establish the therapeutic window. I think what we've seen so far, there is a therapeutic window. We just need to figure out what will take to get the dose that gives us the kind of efficacy we think would be meaningful for patients. So rather than jumping, those patients will continue. We'll add an expansion cohort which will jump up another level and then titrate from there, and that will hopefully give us that dose, this dose, somewhere between all of that information, we'd expect to have clarity later in the year by what we're going to run in Phase III.

Got it. And then quickly, are there any more planned meeting for the Data Safety Monitoring Board or is it no prespecified, pre-planned?

Well, yes, the 2 prespecified were related to the further enrollment or expansion of the enrollment. That's how those have happened, but they will meet on a regular rhythm, cadence because they need to continuously evaluate safety that's ongoing. Of course, if a lower extremity then happen, they would be notified immediately and have an ad hoc meeting, but there is a regular cadence that they are going to be doing. But there's no special triggers yet except a safety event. And otherwise, it's a regular cadence of meeting as the data goes forward.

And our next question comes from the line of Jeff Hung with Morgan Stanley.

For Evkeeza, what considerations beyond the indication were there for the partnerships such as you mentioned geographic expansion to APAC and further into Europe. And then how important is the potential for the expansion?

So with regard to considerations, I think the importance for Regeneron was that we commercialize in all the territories that we support patients in all the countries that are in the trial as well. Because there are some patients down in South Africa and other places. So we are going to support, of course, any patient in any country. And there's a requirement that we certainly commercialize in a broad array of countries that we'll be working on. Because Asia is there, we wanted to go into this, Evkeeza phoresis, the tool to actually go and have Japanese patient data in the program and the Japanese KOL involved with very, very positive on the study and where he wants to help us get it approved in Japan quickly. So we have a package that's already potentially filed in Japan that should get us going into Japan earlier. And so that will be part of our immediate expansion of the filing.

So beyond that, I don't think it's worth going into more detail. With regard to the making, taking the option, it's really about us looking at where the development program is going and understanding the current data set they have. And at that point, which is set by time, we'll sit down and have a discussion with them about going forward. And at this point, I think it's a drug that's doing something very profound and important for these patients. And I would say that, that effect is so profound that most patients would -- I would think would want to get treated with it. So we're highly encouraged and we would expect to move forward at this point in time.

And then as a follow-up to the question on Latin America, what are the key factors for further growth in Latin America this year?

Well, Latin America is always -- the story has always been, we have a great team, by the way. We have like some of the best people in Latin America and that team that have done this well for a lot of rare disease programs. The challenge has always been the politics and COVID regard to reimbursement. In Brazil, I think one of the important pieces that we've gotten through the reverse or process now setting at the final step. So once that happens, then there'll be a set agreed price and there will be the ability to expand in Brazil further. In other countries, we're certainly working -- we're working on filings and working on the in-patient sales and we'll begin adding where we can, working through the reimbursement. But we are seeing traction now on growth in Latin America. I don't know if there's anything else, Erik, you might want to add to the Latin America growth story at this point?

No, I think just as similar as we did in North America and particularly in the U.S., with growth, we continue to expand to find more patients as we reached out further into the community setting. Something similar will occur in Brazil, especially as we attain full reimbursement, and we can go into full commercialization promotional activities.

And our next question comes from the line of Liisa Bayko with Evercore ISI.

Just one quick financial question. And most of my questions have been answered, but maybe just one then quick one on Angelman. So can you just guide us -- give us some parameters of thinking about -- for spend this year? I was just in your R&D number up a bit. Is that a good run rate to think about? Or maybe you can just walk us through the shape for the year, especially of R&D.

Sure. There's -- obviously, there is some increase in spend as Mardi has put out. Mardi kind of described it a little bit more. There have been some onetime items, too, in the mix. So Mardi, why don't you give some sense?

Yes. We highlighted that $50 million upfront for the Mereo collaboration that's in there. But right now, with our development pipeline and late-stage programs and our work in gene therapy, et cetera, we do think we'll have some growth in R&D going into 2022, mostly on the R&D line, I would say other than the focus on Evkeeza as we build out the reimbursement in multiple countries in Europe, will stay pretty much the same. But we would expect to see continued growth in R&D for the next year, for sure.

Okay. And then just on to Angelman's. Are there any like biomarkers or things like that, that you're looking at to help guide you and that would be sort of indicative of kind of telling with respect to the other metrics you're looking at?

Sure. Well, first of all, the soluble biomarkers like UBE3A, we presented it as a fact -- the -- what people thought were UBE3A in spinal fluid was probably blood contamination because there's UBE3A in blood cells. And so it turned out that trace amount of UBE3 found in the spinal fluid may MLB due to a little bit of blood in the tap, which means that they're probably detect UBE3 in the spinal fluid is not going to be a kind of biomarker. But what I'd read directly is to look at the neurophysiology and that's the Delta power EEGs. The EEG is now not dependent on patients thinking or whatever they're doing it, looking at neurologic function and what we showed and there was an updated path that you guys should look at.

More detailed data on the EEGs of the patients in the trial looking at epileptiform and Delta Power assessments, showing changes in neurophysiology in those patients that were meaningful. So I think it shows you that this is not just subjective either patients are better. These are neurophysiological evidence. And I would look at that neurophysiology as being probably the best biomarker type information would tell you something fundamental is happening and these very abnormal brains are starting to respond differently to stimuli than they did before.

And our next question comes from the line of Joel Beatty with Baird.

First one is on SKUs outside of the U.S. After approval, how fast could the ramp-up in sales fee compared to what might otherwise be typical for a rare disease drug. And then the second question is for Wilson's disease in the Stage 1 part of the trial, how much potential is there at that time to learn about any efficacy on neuro endpoints?

Okay. So the first question on outside the U.S. was about Evkeeza or something else?

Yes, Evkeeza.

So it's a little hard for us to guide for sales outside yet. I mean I think it's -- this year is going to be about reimbursement in Europe, getting it set and going. And the other countries are going to be somewhat behind them, so I wouldn't be able to tell you much about how the growth is going to be. But I would expect that an ex-U.S. launch, it's going to take a couple of years of filings and approvals and reimbursement work to get dramatically going. But this year is all about Europe, and that's what the team will be focusing on.

With regard to Wilson, there are some neuro-cognitive Wilson's scales that are in the program. However, remember, a lot of the patients may not have abnormality at the beginning. So you were talking about the people that do have score abnormalities. Trying to determine their difference would be hard to do on dosing. So we're going to focus the dosing on the biomarkers of copper control, and there's really good data to say that copper control, its various forms should give us the right answer on dosing.

And basically, I would say to you that if all things equal, if the highest dose gives us the highest ceruloplasmin levels, which it likely would and assuming that it's safe -- same safety as the e13 does, and I would think the highest dose is going to end up most likely to be the dose. And so there shouldn't be that much mystery because we're pretty clear that in this range that the dose in the low e13 range, the 2e13 should be better than 1e13, and we would expect assuming safety is excellent that, that would end up becoming the dose.

But because it's a new treatment first in man, we have to work through the process, right? And that's why there's 3 doses. It could variable once you get enough copper detoxification occurring that going higher doesn't necessarily get you more detoxifying, which we'll see. But the ceruloplasmin part of the story is about copper distribution. And we know from the animals, that's a little harder to achieve. And therefore, I personally want to focus on the fact that we are actually restoring some level of copper distribution, which to me would be the real reason why you do gene therapy that you're not just getting rid of toxic copper, you're actually restoring copper homeostasis, and that would be the real benefit of gene therapy over everything else.

And our next question comes from the line of Laura Chico with Wedbush.

I just have one on Angelman. Assuming the best case scenario and you're advancing towards pivotal studies, I'm wondering if you could talk about kind of on the execution side, what would be a feasible number of recruitment sites in the U.S.?

That's a very interesting clinical question, Laura. That's a question we talk about a lot, frankly because usual tendencies run with huge number of sites, but I would say most great studies run with a smaller number of really good sites, and that would be our focus. There are a lot of Angelman patients, there are a lot of centers that have a lot of patients. If the drug data from our Phase II study are as promising as we hope they will be, then I think the ability to enroll a study will be there. And we just need sites who can manage intrathecal administration and the support services required for that to be able to treat patients in a fairly large study.

But we haven't set a number, but I'm assuming the trial is going to be more than 100 patients just based on the size of the population, probably less than 200, but somewhere in there. And therefore, we're going to -- it's going to be an international study, not just U.S. And our hope would be there would be only a 6-month study where we look at loading and show the difference of a clinical effect over a loading period. So I can't tell you the exact number on a number of sites. I don't think I'd venture that guess at this moment in time.

But if there's any issue or question you're asking about like are there going to be competition for patients and sites? Well, there are other programs in Angelman, and I think there could be competition for patients. But I also point out, there's a lot of Angelman patients, right? So we think there'll be enough patients to get our studies enrolled even in the context of other programs ongoing. But more important with now is showing what our drug can do in the safe in Phase II, then everything else will come if that is successful.

And this does conclude today's question-and-answer session. And I would like to turn the conference back over to Joshua Higa for any further remarks.

Thank you. This concludes today's call. If there are any additional questions, please contact us by phone or at ir@ultragenyx.com. Thanks for joining us today.

This concludes today's conference call. Thank you for participating. You may now disconnect.