Ultragenyx Pharmaceutical Inc.
Q1 2016 Earnings Call Transcript

Published: 10 May 2016

[Operator:]

Good day ladies and gentlemen and thank you for standing by. Welcome to the Ultragenyx First Quarter 2016 Financial Results and Corporate Update Call. At this time, all participants are in a listen-only mode, Later we'll conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call the call over to Ryan Martins. Sir, floor is yours.

[Ryan Martins:]

Thank you. Good afternoon and welcome to the Ultragenyx Pharmaceutical Financial Results and Corporate Update Conference Call for the first quarter 2016. We have issued a press release detailing our finance 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 also are the following members of the Ultragenyx Management Team, Emil Kakkis, Chief Executive Officer and President; Shalini Sharp, Chief Financial Officer and Sunil Agarwal, Chief Medical Officer. First, I would like to remind investors that this presentation contains forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding plans with respect to our translational research program, the expected release of data from clinical studies; the initiation of additional clinical studies and the designs of same; plans regarding ongoing studies for existing programs; the expectation of increased expenses over future quarters; our belief about adequacy of current cash resources to fund our operations; our intent to file for conditional marketing authorization and the timing of expected decisions regarding approval from regulatory authorities. These forward-looking statements represent our views only as of the date of 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, the actions of regulatory authorities, the timing of our regulatory filings and other matters that could affect the availability or commercial potential of our drug candidates. For a further description of the risks and uncertainties that could cause actual results to differ from those expressed in the forward-looking statements, as well as risks relating to our business, see our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission on Feb 26, 2016, our quarterly report on Form 10-Q for the quarter ended March 31, 2016 that will be filed soon and our subsequent periodic reports filed with the Securities and Exchange Commission. I will now turn the call over to Emil.

[Emil Kakkis:]

Thanks, Ryan and good afternoon, everyone and thank you for joining us this afternoon. I will provide a high-level overview of our recent progress. Shalini will give you an overview of our first quarter financials and Sunil will provide additional details on our clinical development progress. As we’ve noted at R&D day in December, we are working on expanding our early development program pipeline to get to five to seven programs operating within our Translational Research Group to potentially file an IND every year or every other year. It is important to engage in separate now to ensure we do not have a development gap in a couple years from now as our current programs are in or are heading to late stage development. We will potentially do a number of different types of deals allowing ourselves to be opportunistic and adapted to the situation. In general we look for programs that we can grow in value over two-year period and potentially reach a decision about heading the clinic in that timeframe. So I’d start by discussing our recent collaboration with St. Louis University why this is an important part of our long-term strategy to build a diversified company. In March, we entered into a collaboration with SLU's Center for World Health and Medicine to develop small molecule therapeutics for facioscapulohumeral muscular dystrophy of FSHD. The team at SLU has a tremendous amount of experience as many were from a local Pfizer R&D Center with experience both medicinal chemistry and an early development. The project lead from SLU was inspired to take action after his daughter was diagnosed with FSHD. We're pleased to be able to work with this talented motivated group and our broader drug development capabilities and rare disease expertise toward finding a meaningful solution for FSHD. As part of our effort to initiate more early stage programs we also sought to further strengthen our Board in the R&D area and recently appointed Lars Ekman to our Board of Directors. He has deep expertise in building early stage and clinical pipelines and we work -- look forward to working with him. Turning to our clinical program, we were pleased to have released positive interim data from the Phase 2 program of KRN23 and tumor-induced osteomalacia or TIO last month. Sunil will review this data later on today's call. All of our clinical programs including three ongoing Phase 3 studies are advancing and we plan to initiate two additional Phase 3 studies this year. We have a number of upcoming anticipated milestones. I'll go over those briefly now. KRN23 in the pediatric Phase 2 XLH study, we expect the 40-week data in 52 patients and 64-week data in the first 36 patients in the second half of 2016. We plan to file for additional marking authorization around the end of 2016. We plan to initiate a Phase 3 study in pediatric XLH patients in mid 2016. For rhGUS and MPS 7 we expect topline data from pivotal Phase 3 study in mid 2016. Moving on UX007, in the second half of the year we expect 78-week data from our Phase 2 study in Long-Chain Fatty Acid Oxidation Disorders. Based on the interim 24-week data from the Phase 2 study, we plan to initiate a Phase 3 study patients in the Long-Chain Fatty Acid Oxidation Disorders in 2017. Our Phase 2 seizure study in Glut1 Deficiency Syndrome patients continues to enroll patients and data are expected in the second half of 2016. We plan to initiate a Phase 3 movement disorder study in Glut1 deficiency syndrome patients in the second half of 2016. For Ace-ER and GNE myopathy, the CHMP opinion on the conditional marketing authorization application in Europe is expected in the second half of 2016 a decision from the European commission that is expected in the first half of 2017. We continue to enroll patients from the pivotal Phase 3 study in GNE myopathy with data anticipated 2017. That along with the milestone, I'll turn the call over to Shalini now to provide overview of our financial result.

[Shalini Sharp:]

Thank you, Emil. We issued a press release earlier that included a financial update, which I will briefly summarize. Total net loss for the first quarter of 2016 was $52.8 million or $1.35 per share basic and diluted, compared to $21.4 million or $0.63 per share basic and diluted for the first quarter of 2015. This reflected cash used in operations of $44.9 million in the last quarter compared to $17.7 million in the same period of 2015. We expect modest increases in cash used in operations quarter-over-quarter for the balance of the year. Net loss for the first quarter 2016 included approximately $12.6 million in non-cash charges with stock-based compensation of $10.2 million, amortizations of premiums on investment securities and depreciation and amortization. In particular, stock-compensation expenses have significantly increased over time and we expect that this will continue. Our total operating expenses for the first quarter of 2016 were $53.6 million. Research and development costs accounted for $40.4 million or 75% of our operating expenses. Our three Phase 3 programs account for the greatest proportion of R&D cost. As a reminder we share KRN23 development cost 50-50 with our collaborative partners Kyowa Hakko Kirin. Costs for our multiple preclinical translational research programs, which now includes the FSHD program will continue to increase throughout the year at programs advance toward the clinic. After excluding the $10 million one-time license fee paid to our tourist in the fourth quarter of 2015, operating expenses continue to increase due to the conduct of multiple late stage clinical studies, manufacturing cost related to clinical supply of multiple programs, increased regulatory activity across the progress, early stage investment in our U.S. and European commercial infrastructure and patient identification efforts, general and administrative expenses to support these activities and increases in stock-based compensation expenses. As we have said before our expenses will continue to increase as we invest in advancing multiple product candidate into Phase 3 clinical studies and developing and expanding our pre clinical stage portfolio. We ended the quarter with $487.8 million in cash, cash equivalents and investments on the balance sheet. We believe that this is sufficient to fund all of our clinical programs through Phase 3 trials and potential launches. We do not have any date outstanding. I will now hand it over to Sunil to provide the development update.

[Sunil Agarwal:]

Thank you, Shalini. I will provide an update on our clinical pipeline starting with KRN23. In April, we announced positive interim data from the first eight patients in the Phase 2 study of KRN23 for the treatment of tumor-induced osteomalacia or TIO. The data indicated that patient treated with KRN23 had improved serum phosphorus levels and other bone metabolism measures. The main baseline serum phosphorus level of these eight patients was 1.7 milligrams per deciliter which is well below the lower of normal for phosphorus which is 2.5 milligram per deciliter. Six of the eight patients had serum phosphorus level enter the normal range after beginning treatment with KRN23. One of the two patients who did not reach the normal range at the time of the interim data cut, did demonstrate an increase in serum phosphorus and continues to titrate those upwards. The other patient who did not reached the normal range did not demonstrate any improvement hence serum phosphorus levels and have the highest baseline level of FGF23 of all eight patients. We also saw improvements in bone density in the two patients who completed 24 weeks of treatment. One of these two patients also showed early evidence of fracture resolution and we look forward to having more bone data in the second half of this year. To date they have not been any serious adverse events in the study. Treatment emergent adverse events are observed in the seven of eight patients. Treatment emergent adverse events occurring in two or more patients were primarily -- disorders including -- in muscular skeleton pain these are consistent with the symptoms typically seem patients with TIO. Two of the eight patients had treatment related adverse events that were possibly or probably related including vitamin D deficiency and rash, both of which were mild. No injections side reactions were observed. Two patients reported symptoms that are suggestive of worsening pre-existing leg syndrome. Overall the improvements that we have seen in serum phosphorus and other bone mineral metabolism measures in this study are generally consistent with what has been observed in studies of KRN23 in both paediatric and adult patients with XLH. We're pleased to now have data in two diseases, which indicate potential support for the common mechanism of action of KRN23 which is binding to and inhibiting excess FGF23 activity, the key hormone that leads to phosphate wasting in these patients. Turning to XLH, Dr. Carpenter presented 40-week interim data from the first 36 patients in the Phase 2 pediatric study in an overall presentation at ENDO in April of this year. In the second of 2016 we expect to have 40 week data from all 52 patients enrolled in the study including the original 36 and an additional 16 with higher baseline bone disease. In addition we expect to have 64-week data from the first 36 patients in the study. The 64-week data will include additional rickets data, early growth velocity data, other efficacy measures and safety and tolerability information. We intend to file for conditional marketing authorization in the EU around the end of the year for patients with XLH. We also plan to start a pediatric Phase 3 study in the middle of this year. The primary endpoint of this study will be evaluating rickets using the RGI-C scoring method and will also include a standard of care control arm. This study is expected to be required for potential approval in the U.S. and could serve as a confirmatory study in the EU if conditional marketing authorization is granted. If conditional marketing authorization is not granted the study could required for approval in EU. We continue to evaluate KRN23 for adults with XLH. We are currently enrolling two studies, the Phase 3 randomized double blind placebo control study in approximately 120 adult XLH patients, with serum phosphorus as the primary endpoint at week 24 and a brief pain inventory BPI as the key secondary end point and a 48-week open label bone quality study in approximately 10 adult patients to evaluate the effect of KRN23 on the underlying osteomalacia. Turning to UX007 or Triheptanoin, in the second half of the year, we expect final data from the 78-week Phase 2 open label study in patients with long chain fatty acid oxidation disorder of FAOD. The primary objective of the 78-week analysis is to evaluate the rates of measure medical events such as rhabdomyolysis, hypoglycemia and cardiac events on UX007 compared to the rates for 18 to 24 months prior to treatment with UX007. Based on the interim Phase 2 data reported last year, we plan to initiate a Phase 3 study in patients with long-chain FAOD in 2017 for which we continue to optimize the endpoints and overall trial design. As a reminder this trial will be a head to head comparison against MCT. In addition to the improvements we noted in exercise tolerant testing, we also noted some improvements in quality of life measures in the Phase 2 study and thus we believe having a patient reported outcome end point to compliment a functional end point will be important in the Phase 3 study. We're in the process of collecting natural history data and qualifying the use of a PRO endpoint before meeting with the regulators. We expect to provide further details on the design of the study after completing discussions with the regulatory authorities. In the second half of the year we plan to initiate a Phase 3 study in approximately 40 patients with the movement disorder type Glut1 deficiency syndrome. This study is randomized double blind placebo controlled double crossover study that plans to access the impact of UX007 on movement disorder events as recorded by a patient diary. We continue to have discussions with the FDA regarding the primary end point and collection methodology and we are working on further – the clinical meaningfulness the Glut1 DS movement disorder events prior to finalizing the study design. In addition our ongoing placebo control Phase 2 study in patients with seizure phenotypes is continue to enroll patients. And we expect data in the second half of this year. If the data are positive the If the data are positive, the seizure and movement disorder studies are intended to support an NDA filing. We are also on track with rhGUS ACE-3 study in NPS seven patients. Topline data from the pivotal blinded placebo controlled 48-week study are expected in mid-2016. In the EU, the primary endpoint is the reduction in uGAG excretion after 24 weeks of treatment. Some evidence or trend in improvement in clinical endpoints to support a favorable benefit risk ratio will also be needed. In the U.S., there was no primary endpoint as the FDA has said they will consider the totality of the data appreciating the heterogeneity of the disease. Moving to ACR, we continue to enroll patients in the randomized double-blind placebo controlled, 48-week pivotal Phase 3 study of ACR in approximately 80 patients with GNE myopathy. Data from this Phase 3 study are expected in 2017. We are also expecting a CHMP opinion on our Conditional Marketing Authorization Application for ACR in the treatment of adults with GNE myopathy by the end of 2016 and a decision from the European Commission in the first half of 2017. Lastly, we continue to advance our Translational Research Programs who presented data from the recombinant human protective protein, Cathepsin A for rh-PPCA program at the World Symposium in March. As Emil mentioned, there was a lot of ongoing activity with our preclinical pipeline and I look forward to sharing updates with you across all the programs as they progress this year. With that, I will now turn the call back to Emil.

[Emil Kakkis:]

Thank you, Sunil. As you heard, we continue to move our preclinical and clinical programs forward and are building out our teams to support our growing business across all functions. With the five program expected in 2016 and other ongoing clinical studies, we look forward to keeping you updated on our progress throughout the year. With that, I'll end my comments and we can move to your question. And the operator, please provide the instructions for the Q&A portion of the call.

[Operator:]

Yes. At this time ladies and gentlemen, we'd like to open the floor to your questions. [Operator Instructions] And it looks like our first question in queue will come from the line of [Mark] with Cowen. Please go ahead. Your line is now open. Mark Hi yes thanks for taking my question. Seems that the next data update is going to be the rhGUS Phase 3, so I understand on what GAG data assume in the topline and that clearly read through the ex-US opportunity. But how exactly do you plan to disclose data and inform us what are the expectations that we should have in terms of being able to read into the likelihood of U.S. approval? And then also, do you expect that that data will be sufficient along with the Phase 2 hydrops data to support hydrops application as well or will that need another Phase 3 trial? Emil Kakkis Thanks for the question, so on the first question what data is expected, we're doing clinical endpoint data and I'll ask Sunil to provide a little more detail on that and then you can follow-up with the hydrops question and what we would need to that although, I don't think it's been defined yet. Go ahead. Sunil Agarwal Sure thanks Emil and thanks for the question. So to remind folks it is a very heterogeneous disease and the Phase 2 trial is 12 patients and because it's heterogeneous, we designed the study in a way that maximizes power to see an effect in multiple different ways. Of course uGAG is the primary endpoint and as I mentioned, for the EU that is the acceptable primary that we'll do need to show some secondary benefits. And based on the Phase 1, 2 data we've seen substantial reduction in uGAG in the 50% to 60% range at the dose we're using in Phase 3. With respect to the clinical endpoints, we are doing two different things, we have an individualized respondent index, which each patient defines what his or her primary symptom is and we follow that all the way through. For example, if it's visual problems or preliminary problems that's the primary individual responder index. The second thing we do is the multi-domain responder index looking at the totality of the different disease -- symptoms in each individual patient. So we are looking a multiple different ways so that we best understand the potential benefit of this drug to these patients. Now to your point also in a press release it's going to be very hard to cover all of this. So I wouldn't expect to have detailed descriptions of all of this information. I think rightly so, it will be high level and our goal is to present that data as quickly as possible at a medical conference. To answer your last question then I'll turn to Emil if he wants to add anything to this, about hydrops and what our plan is there, to your point, the under five study will include some hydrops patients. We do not believe we would need a separate hydrops Phase 3 study based on the rarity of the disease and also based on what we hope we can provide these patients of benefit. We think that maybe sufficient but again we don't have data yet and we'll have to wait and see what that looks like and have discussions with the agency. But I do feel confidence that a separate Phase 3 hydrops, I do not think we'll be required based on the totality of what we know so far. Emil anything to add? Emil Kakkis No I think that's fine. I would just say we would -- when we put out a press release, we put out some information about what we're seeing clinically, but I think what Sunil is saying is correct, the detailed work will come out at a conference. If I understand the investor's interest in what does this \mean for U.S. approval and we'll try to provide that guidance with the result as best we can. Mark Okay. Thanks. And then one quick question just on the KRN23 program. Now that you've shown 10% concept outside of escalation with TIO, now there are plans to move farther to some of the other FGF23 driven hypophosphatemia? Emil Kakkis Hi it's a good question, we picked TIO because we're getting a lot of use. There are a lot of potential indications. Sunil do you want to follow-up with that, the other indications beyond TIO? Sunil Agarwal Yeah sure, so it is a good question. And one of the things we do across our entire pipeline is always think about lifecycle management and new opportunities. Of course Triheptanoin is one really great example of that, but I think KRN23 is another with TIO. So we do continue to look at new opportunities. At this point we do not any specific plans to start a new study or a new indication if you will. But that evaluation is ongoing every day. Mark Okay. Thank you very much.

[Operator:]

Thank you. Sir. Our next question will come from the line of Corey Kasimov with JPMorgan. Please go ahead, your questions please. Brittany Hey guys. This is Brittany on for Corey, thanks for taking my question. So on the recently announced collaboration in FSHD. Could you provide any inside on the target or mechanisms being evaluated and then secondly for the Phase 3 movement disorder study. Understand you're still finalizing the study design, but can you comment on any secondary endpoints you would considering. Emil Kakkis Great. Brittany, thank you. I'll deal with the FSHD and then Sunil can handle the Glut1 movement disorder. FSHD program and they've talked about their program in other settings is involving controlling duct for gene expression as the gene gets over expressed appropriately in the muscle and leading to muscle lice. And their strategy is to small muscle inhibitors that are able to control or alter expression of ducts for and so these are small molecule drugs inhibiting the expression of that gene. So they often target molecules that they already have identified and they're basically knowing the elasticity of those but we're going to be supporting with them over the next couple of years. So Sunil why don't you deal with Glut1 movement? Sunil Agarwal Sure thanks Emil and thanks for the question. So with respect to the movement disorder study as I said before, we're still finalizing the study design and working with the agency on the endpoint selection and what that looks like, but the things that will include, our goal is to include of course looking at movement disorder episodes themselves, looking at the frequency, looking at the quality of those events, in other words how long do they last. Because that also was something you may reduce the frequency and the duration of the events and that's something that Dr. Fanny Mochel signed her single arm open labeled study that lead us to do the new study. In addition if we remember HER study she looked at PRO endpoints like clinical, global impression of change and she saw benefit -- these patients showed benefit there as well. So you should expect some PRO type of work additionally into this study. Again the exact details of the study design are still being worked out but it will be a combination of movement disorder episodes, the severity of those episodes and PRO endpoints as the key ones. Brittany Okay. Great. Thanks so much.

[Operator:]

Thank you. Our next question will come from the Gena Wang with Jefferies. Please go ahead your line is open. Gena Wang Thank you. So maybe my first question just follow-up to previous question about the new collaboration with St. Louis University for FAHD. Based on Dr. Francis [drop] publication is it fair assumption that BT inhibitor could be a drug candidate? Emil Kakkis Yeah, sure I think they're working in is the BT inhibitors and there is a lot different ones and lot of difference choices and elasticity and that is the area they have talked about have patented and we think its shown some good data that suggest us that they can get some high affinity and specific compounds and that's what we're working with them on. Gena Wang Okay. Thank you and then may be like the two related questions on TIO study. So, you saw initial factoring solution in one patient since preventing of the new factors are also consider clinically meaningful, before the next step of the bone healing of existing factors just wondering if you could provide any color on new factors for these patients? Emil Kakkis Sure, question -- I’ll give it to Sunil, but it's very early. We only had two patients for that finished 24 weeks. So Sunil I want you to finish the progress of that question. Sunil Agarwal Sure, thanks Emil, so yes Emil is correct. We've had two patients in that the 24 weeks of data at the time of the data cut and that’s when we started looking at these types of event so to remind folks on the DXA scan which looks at bone mineral density, we did see numerical improvement and again it was sample size, but we saw some numerical improvement in two of two patients. On the bone scans looking at fractures, one patient actually has some fracture resolution with no new factures. The other patient did not have any new fractures but the fractures that existed at baseline were still there. Gena Wang Okay. Thank you. And if I may just one last question, could you comment on the restless legs syndrome with KRN23? It seems that this was seem in both TIO patients and XLH patient? Thank you. Emil Kakkis Yes, I'll let Sunil handle that particular one. Sunil Agarwal Sure thanks Emil. So with the RLS or restless leg syndrome, you're correct in the adult early study we did see some restless leg syndrome cases. So, let me explain what we've seen in TIO study. So, two patients with the history of RLS had some exacerbations while on the study. Both patients continue -- have continued in the study actually one patient may have an issue with it and we’ll see, but one patient is continuing. Now from a biology perspective, there is data supporting the phosphate changes can increase RLS. We’ve not had any patients significantly complaining of this. It does appear to be a complication of a previous history and we’re continuing to collect data on this matter. So, we will continue to follow this. In the pediatric study, we’ve not seen any RLS cases that I’m aware of in the current Phase 2 study again in the TIO side we had two exacerbations. Gena Wang Thank you.

[Operator:]

Thank you, Ma’am. Our next question in queue comes from the line of Adam Walsh with Stifel. Please go ahead. Your line is open. Adam Walsh Hi, guys thanks for taking my questions. My first question is on Triheptanoin and the Phase 2 seizure disorder for Glut1 deficiency syndrome and Glut 1, I understand it’s a continuing of disease where the seizure phenotype typically is observed in the younger patients and the movement disorder phenotype is seen in the older patients. In you Phase 2 seizure study, I notice that in clinical trials, but the enrollment criteria is for patients ages 1 to 100 years old and I’m just curious to know why there was no upper boundary for the entry criteria the seizures are usually seen in younger patients and then I have a follow up. Emil Kakkis Very good question, I don’t think we have any 100 year old. I'll let Sunil answer this one, but we were focusing on anyone who had seizures but Sunil may be you can provide some more color our approach to seizures in that study? Sunil Agarwal Sure, so with respect to that issue while the majority of seizure events happen earlier in life, that doesn’t mean you won’t have seizures later in life. So there are a adult patients with the seizure phenotype. It could be a mixed phenotype where they have seizures plus movement disorder episodes. So our goal was to capture patients with seizure episodes so hence the wide age range, but you can have a wide age range on your criteria, but what you get can be different and what I mean is to your point, the majority of patients are on the younger side, which is what would be expected but we didn’t want to limit older patients from coming in who may have a significant seizure phenotype. Adam Walsh Okay. Fair enough and then on the screening criteria for seizure count, is that a high bar I guess I’m just trying to get a little bit at the screen failure rate in the Phase 2? Emil Kakkis Sunil, maybe he is talking about the entry criteria and procedures? Adam Walsh Yes and I can repeat them for you, if you don’t have in front of you. Emil Kakkis Well it’s two months or yes two months. I don’t think it is particularly high, Sunil maybe you can comment on the criteria, this is general seizure and there is also high seizure. Sunil Agarwal Right. So Emil is correct, it isn’t technically a high bar, but again I think this relates to your previous question, you could put criteria in a study and what you get is something different. So in another words while the bar is not high, the amount of seizures that we’re seeing in these patients coming in with are pretty high. It’s similar that I will give you one different example rheumatoid arthritis studies where you ask for either four swollen and four tender joints and everybody always has in the 20s, so it just gets at the concept of yes the bar is lower, but what we see is a pretty significant seizure episodes in this patient population that's enrolling in the trial. Adam Walsh Okay. Great. Thank you very much.

[Operator:]

Thank you, sir. Our next question in queue will come from Joseph Schwartz with Leerink. Please go ahead. Your line is open. Joseph Schwartz Thanks a lot. I was wondering a couple of things on KRN23 namely how are you thinking about establishing the optimal dosing for KRN23 over the longer term. It looks like you get some benefits just entering the lower range of normal, but the PK serum phosphorus continues to increase over time and I don’t know if we could extrapolate that or what your thoughts are on the desire to avoid hypophosphatemia? Emil Kakkis Thanks Joe. It's a good question. I think we have a pretty good handle now on how it’s going into the studies regarding management of the dose and then Sunil I think you probably can speak to that looking into that. Sunil Agarwal Sure thanks Emil and again thanks for the question. So an X-linked hypophosphatemia as I’m sure you know our dosing is weight based first and foremost because you do have a very different age range and weight range of these patients and we wanted to customize it because you do want to control phosphorus, calcium as tightly as you can because we do not want to run into safety issues. So it is weight based dosing. We do start on the lower hand and we are ramping the dosing up. We also titrate according to serum phosphorus levels. To your point we've not seen any patient in the XLH program have a hypophosphatemia event which is good. We also have seen to your point patients would benefit who actually didn’t get into the normal range. So we do think you need to customize the dose because each patient can respond differently and we think they are weight based approach with titration make sense. Now in the long term we may as we get more and more data from population PK from safety, from efficacy, we may be able to collapse dosing and a fixed dosing, but that isn’t now. We will run the studies that we're providing them and in the post-marketing section we'll continue to provide or continue to evaluate if the dosing can be improved. But we think the current dosing pattern makes sense and so far the data is supporting that. Joseph Schwartz Okay. Thank you.

[Operator:]

Thank you. Next question in queue will come from Chris Raymond with Raymond James. Please go ahead. Chris Raymond Thanks, just maybe a detailed question on the Phase 3 movement disorder study in Glut1, I’m just curious in the few addresses already I apologize, but I think last quarter you were talking about a movement disorders as recorded by patients diary and I don’t think you're talking about that now. So is that something that perhaps FDA is maybe pushing back on or is there some other measure that you’re thinking about in terms of I know you talked a little bit about measures, but does the patient diary may be not going to happen and is there something that's perhaps more accurate is being considered? Emil Kakkis Thanks Chris. Yes I think we were talking about just verifying the clinical uses of the diary capturing, but we’re not really changing the diary. I don’t know Sunil you have something more to say to that, but we’re keeping the diary it’s just a question of verifying these clinical means of what were they seeing. Sunil Agarwal Yes this is Sunil. Emil that's correct. So sorry if I misspoke before, but the answer is our plan is to use movement disorders captured by a diary as the key way to understand the potential benefit to these patients. After the end of Phase 2 meeting, the FDA has -- we've had more discussions with them to understand and characterize the clinical meaningfulness of movement disorder episodes in and of themselves or working through that. But our plan hasn't changed at this time, which is to use -- to look at movement disorder via a patient diary mechanism. Chris Raymond Great. Thank you.

[Operator:]

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

[Arlinda Lee:]

Hi guys, thanks for taking my question. A couple of them, first, we had a chance to speak with Dr. Carpenter recently and he mentioned that there was increasing, I guess awareness of XLH and I was wondering maybe kind of related to that expanding to other phosphate raising diseases. Could you maybe characterize what your interactions with patients and I guess investigators reaching out to you on KRN23 and like and then I have a question on 007. Emil Kakkis Okay, thanks Arlinda. Well, the data is certainly coming out has been positive and we're getting more and more calls out program and more and more investigators you want to be in the XLH studies. So that’s definitely happening. And to TIO data is also getting tracking attention TIO patients who are interested in getting treated. So we are getting more incoming inquiries from both of those areas. I don't know what translates in anything fundamentally different. I think we're still planning the same XLH studies and TIO program as it is right now. But the incoming interest just helps us in identifying new sites if we need new sites or in managing potential need particularly with TIO and some of those patients can be quite severe. And we want to make sure that our program is providing access while collecting data which is the nature of that program in other words to help prevent patients who can't get access who are in severe condition might benefit from having that opportunity. So we're doing that instead of capacity use. So we're using the program to help support access for TIO patients while we do collect data and the excitement of XLH is positive. I think people are looking at the ability to change bones is something that would be really important in the still early requesting more data, but I think there is -- people are encouraged by the data we've seen so far. Arlinda Lee Okay. Great. And then I guess on 007 you guys are now saying that the Phase 3 LC-FAOD trial starting in 2017, could you maybe characterize the end of Phase 2 FDA discussions that maybe what the main sticking points or with that your discussions with KOL what's clinically meaningful? Thank you very much. Emil Kakkis Sure Arlinda. So we have not had an end of Phase 2 meeting yet. What we announced was that we had data to suggest the PRO improvement and Sunil just talked about that a PRO improvement as well as the improvement XLH tolerance and in order to use the PRO in Phase 3 you really have to do some legwork and that's what you know the fact we have to do more legwork in the PRO. And we've done that work understanding how the population, what the condition of their disease is what the PRO looks like for them and about some tools, some information to qualify the PRO then we're ready to go talk to the agencies. We know that anytime we're doing announcements you have to provide substantiation for why the instruments detecting an important effect in how it detects the whole effect of a disease. So that’s the work we're doing upfront since PRO and we hadn’t done it before and we were I think surprised by the amount of effect that we're seeing in the PRO, which makes it maybe potentially important capturing the benefit of 007 and LC-FAOD. Arlinda Lee Great. Thank you very much.

[Operator:]

Thank you, Ma’am. Our next question in queue comes from Heather Behanna with Wedbush Securities. Please go ahead. Your line is now open. Edwin Hello this Edwin, I’m calling in for Heather, thank you for taking my question. In regards to ACR and GNE biopsy have you guys received the 120 day list of questions back from CHMP yet? Emil Kakkis Yes. We received those questions and we're working through them perhaps Sunil can talk a little bit more about the process. But there's always questions and we have to write a lot of answers. Sunil would you want to talk a little more about our progress there. Sunil Agarwal Sure Emil, you've already covered it well. We have received the questions and the process is ongoing and preceding as expected. Again the timeline in the process as we expect a opinion by the CHMP by the end of this year and we expect a final decision by the European Commission in the first half of 2017 and that’s where we are in the process. Edwin Okay. Great. Thank you.

[Operator:]

Thank you. Our next question comes from Kennen MacKay with Credit Suisse. Please go ahead. Your line is open. Unidentified Analyst Hi, good afternoon this is [indiscernible] calling in for Kennen thanks for taking the questions and congrats on the progress to date. A quick question regarding KNR23 and I apologize in advance if this has already been covered. Could you tell us a little bit about your regulatory interactions to date with the European Regulatory Bodies regarding KNR23 and that’s a mission and also who will be leading that submission process is it Ultragenyx or is that going to be headed by KHK. Emil Kakkis Thanks for the question. I’ll let Sunil answer that question. Sunil Agarwal Sure, so let me just answer the last part first, with respect to leading the submission process, KHK is definitely important partner and we’ve been working together throughout the whole thing, but respect to being the point person leading it, we are leading that process for the Europe and for the U.S. for all filing opportunities. Going back to your question on how the relationships are going and I’ll extend this to the FDA as well. Its going very well. Our relationships have been very positive so far with all of the data we presented both the FDA and the EMA. With respect to the EMA we’ve already had some preliminary discussions before data and with some initial data on a potential conditional marketing authorization pathway and based on those discussions is why we are going to filing later this year. Unidentified Analyst Great, thanks and if I could ask one more question regarding KRN23 is a TIO data that was presented earlier this year, just wanted to get a sense of how the ENS patient specifically did versus the overall population in terms of the PK, PD parameters that were presented? Emil Kakkis Sunil, do you want to answer that one? Sunil Agarwal Sure, I can speak to that and again there were eight patients so I would always caution with the small sample size making conclusions of vary under TIO be at ENS and with respect to the ENS patient, we had one patient with ENS of the eight and that patient did show a response pharmacodynamically and that’s one of the first two patients that hit week 24, so also shown some potential bone benefit as well. So we’re not seeing anything different but I caution its one patient. Unidentified Analyst Do you think that as the trial progresses, that inclusion of an ENS population could confound the results in any way? Sunil Agarwal So this is my opinion on this. Again it goes back to the biology and the biology of this and the biology of XLH is driven by excess FGF23 production. So we have an antibody that’s targeting that biology show to that point. We believe it should provide benefit across this excess FGF23 TIO super family if you will, but again we'll get data and then confirm that hypothesis is true. Unidentified Analyst Okay. Great. Thanks for taking the questions.

[Operator:]

Thank you. Our next question in our queue comes from Carol Werther with H.C. Wainwright. Please go ahead. Your line is now open. Carol Werther Thank you. I just wanted to ask about how the commercialization is going over in Europe and if you can give me any numbers on how many sales reps you're planning on hiring? Thanks. Emil Kakkis Thanks Carol. We’re obviously still waiting for an opinion which would happen later in the year perhaps Shalini if you want to take on this questions. Shalini Sharp Sure, thank you Emil. We are initially focusing on just a small number of key hires and these resources are focused primarily on Germany where reimbursement takes place upon approval, if we do get the approval. And also in France where they have name patient programs and the force is always on patient diagnosis programs, which are relevant both pre commercial and afterwards. We're building out commercial in a very stage measured way until we know whether or not we'll have an approved therapy in Europe, but generally speaking relative to a larger market indication our indications would require a much more limited commercial infrastructure. We’ve not provided any specific guidance in terms of the size of our field forces that's anticipated in Europe or the U.S., but again we would expect those requirements to be much more limited relative to larger market indications. Carol Werther Okay. Thanks and are there any plans for rest of world? Emil Kakkis Sure, the U.S. filing remember is dependent on completing the Phase 3 study. Carol Werther Right. Emil Kakkis From a strategy standpoint, if when we get a positive -- if we get a positive opinion in Europe or an approval in Europe, then we could used that approval to go to South America and prosecute on an applications, but you need one major market, like Europe before you really go to South America. And other territories would depend -- usually depend on one major market approval before their authorities look at applications. So either Europe or if not then it will depend on the Phase 3 results and announce that filing. Carol Werther Okay. Great. Thank you.

[Operator:]

Thank you. Our next question will come from Edward Nash with SunTrust. Please go ahead. Your line is open. Mike Guo Hi guys, thanks for taking questions actually this is Mike Guo for Edwards. Just one quick question regarding your XLH data, so forth 64-week data from 36 patients you are going to release later this year, does it include data for the height growth velocity. Could you help me understand this endpoint and your expectation regarding the data and also could you help us understand, at what level the data could be configured clinically meaningful? Thank you. Emil Kakkis Thanks for your question. I will have Sunil answer that based on what we know today about growth. Sunil Agarwal Sure. And you broke up a little bit, so let me try to answer it, if at any point you want it please let me know. So you’re exactly right. So later this year we will have the first 36 patients the week 64 growth data, the main reason just to remind folks, while we didn't look at it at week 40, we just thought that would be too earlier a time point to see potential growth velocity changes. To also remind folks these patients are coming in less than the 50th percentile of their growth. Some are severely stunted, some are somewhat stunted. We will look at their growth velocities pre starting here in 23 comparing it for 64 weeks post care in 23. With respect to what's clinically meaningful as a paediatric care physician and talking to the experts who have taking care of these patients any improvement in growth velocity is considered meaningful for these patients and biologically if you’re improving their growth velocity, implicitly you’re helping their biology of their disease, you must be improving their bone quality, their help, so that their velocity is getting better. So if you look at what we are doing on the bones with the rickets so far, if you look at what we’re doing on the PROs, we are encouraged by that data that we do hope to see improvements in growth velocity, but again we have not seen the data yet and it will be to be determined. But the most important thing is we believe any improvement in growth velocity in this patient population to remind you, these are patients that were more or less optimized on standard of care before switching from that to KRN23. So these are the patients that were the best centers getting the standard of care quote unquote “optimized” and now switching over. So this would be seeing a benefit with that context in mind. Mike Guo Okay. Thanks for taking the questions.

[Operator:]

Thank you. Our next question will come from Yigal Nochomovitz. Please go ahead with Citigroup. Yigal Nochomovitz Yes hi thanks for taking the questions. I’m just trying to get a better understanding of how you define the phosphate rising endpoint for the TIO studies as well as for XLH. I guess my understanding is that the patient’s final endpoint has to be higher, the average of the phosphate levels, the baseline of week 24 has to be above the lower limit of normal. So I’m just trying to understand why that definition was prescribed for the endpoint rather just entering and staying in the normal range and then how does that translate into what you’ve reported for six of the eight patients entering the normal range in the TIO study and how that might be connected to hitting the endpoint? Thanks. Emil Kakkis Thanks. One thing I would point out is it’s just a first Phase 2 study, so endpoint definition is not really all that critical but Sunil maybe you can talk a little about how the phosphate was set for the TIO study? Sunil Agarwal Sure and Emil you’re exactly right. I think endpoint definitions in your first study looking at it can be somewhat problematic, but what we do know is in the TIO study to remind folks again when we did the data cut, you had patients at very different points in time. Two were at week 24 and one was basically at week four and the rest were in the middle. So yes very different amount of frost data to look at. So I really can make a statement, an average statement because it's not a fair statement to make. But what I can remind folks is which was very encouraging in that of the eight patients, six very quickly at the starting here in 23 had phosphorus levels entered the normal range and they started well below the normal range again the average was 1.7. Now remember one patient did not show an increase and one was improving but again was early in the treatment course. So, with respect to your question about endpoint definition, there are many different ways of doing it. I wouldn’t say there is a right way or wrong way as much as we are seeing a pharmacodynamic profile that’s encouraging. We’re seeing some preliminary bone data that’s encouraging and we'll have more data later this year to hopefully substantiate those early findings. Emil Kakkis In the study the first time treating patients they started kind of a lower dose and they're titrating up during the period. So, because it's a titration process going on, the idea was to figure out where they go to at the end of the 24 week period if they were titrating a whole time for them was them clear how long it will take titrate them. Yigal Nochomovitz Okay, I guess I was just thinking that if you had a patient that was -- that started out really, really low and had a really strong response and got into the normal range, that your end point if it was really the average of the baseline of week 24 may not capture that very substantial rise in phosphate, that’s what I’m trying to get at, is that fair or am I missing something about how you are defining? Emil Kakkis I guess I’m not quite sure what your concern is. If you're talking about the mean change, but we're saying is the patients need to get into the low normal range was the way the endpoint was defined fraction of patients that get into the normal range which right now is six although the release there was another person Sunil just mention. Sunil Agarwal And this is Sunil may be Yigal, you got this could help and I think I understand your question. It is not the average of the baseline, you don’t include the baseline when you look at the effects size. If you're looking at the proportion that get into the normal range over time course, but you exclude baseline from that time analysis to your point specifically. Yigal Nochomovitz All right. I got it, all right. Somehow I thought that it was defined differently, sorry about that. Okay. And then the other question is so we talk to some experts on TIO and XLH and a couple people were saying that they would expect over the long run to see parathyroid hormone and serum calcium improve as well, although I guess you haven’t seen that yet. Is that -- do you expect to see that as part of the clinical profile with longer time on therapy? Sunil Agarwal This is Sunil again, we have eight patients of limited data. So I don’t want to overstate the data, but what I can tell you is just a pharmacodynamic profile is consistent with XLH. We’re not seeing any rises thus far in serum calcium. That’s a concern. We’re not seeing any increases in parathyroid hormone, that's a concern. But I just caution on the small data cut and early data cut here. But so far again the data are encouraging without any safety concerns from other endpoints like you just mentioned. Emil Kakkis Yes I would add one thing the effect -- they are talking about parathyroid and calcium to some degree side effects of oral phosphate and Vitamin D3 therapy? That is where you're getting into trouble with calcium and second parathyroid by dumping phosphate. And so those are problems that occur because of the current standard of care and what Sunil mentioned was that our XLH stage today we've seen no changes in PTH, no aberrations of PTH and Vitamin D or calcium or hyper or urinary calcium as well. So we think what KRN23 is doing is locking the action of FGF23, but allows to the bone mineral metabolism system to regulate itself as it does normally, but when you do oral phosphate therapy, you're controlling everything and often it’s difficult to control well and you end up with those secondary problems. Yigal Nochomovitz Okay. Thanks for the answers. I appreciate it.

[Operator:]

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

[Ryan Martins:]

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

[Operator:]

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