Good day, ladies and gentlemen, and welcome to the Ultragenyx Third Quarter 2018 Financial Results and Corporate Update Conference Call. [Operator Instructions]. I would now like to introduce your host for today's conference, Ms. Danielle Keatley. Ms. Keatley, you may begin..

Thank you and good afternoon, and welcome to the Ultragenyx Pharmaceutical financial results and corporate update conference call for the third quarter of 2018. We have issued a press release detailing our financial results, which you can find on our website at ultragenyx.com.

I am Danielle Keatley, Senior Director of Investor Relations and Corporate Communications. With me today are Emil Kakkis, Chief Executive Officer and President; Shalini Sharp, Chief Financial Officer.

I'd 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 2017 quarterly report on Form 10-Q that was filed on August 3.

Our quarterly report on Form 10-Q for the quarter ended September 30, 2018 that will be filed soon and our subsequent periodic reports filed with the SEC, which will all be available on our website in the Investors section.

These forward-looking statements represent our views only as of the date 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 statement.

For a further description of the risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking 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, Danielle, and good afternoon, everyone, and thank you for joining us. I'll start by providing an update on our recent commercial and development programs, and Shalini will provide an update on our third quarter financial results. First, I'd like to start with an update on the Crysvita launch which continues to go very well.

As of the end of September, we had five months of sales since launch on April 27, and we're pleased by the growing demand among both, pediatric and adult patients with XLH in the United States. At the end of the third quarter, we had received approximately 600 completed patient card [ph] forms for more than 300 unique prescribers.

Importantly, we had reached more than 300 patients on reimbursed commercial therapy by the end of the third quarter. As was the case last quarter, we continue to see approximately 60% pediatric patients and 40% adults receiving therapy. As of the end of the third quarter almost 75% of reimbursed patients were naïve to prior Crysvita treatment, i.e.

they were not previously in our clinical trials. The payer mix as of September 30 remains approximately 70% private plans with the remaining 30% comprised of government and other payers. As of the third quarter, we have payer policies covering approximately 200 million lives, nearly doubling our coverage from the end of the last quarter.

We continue to see most payer policies consistent with the Crysvita label, we're also pleased that the Centers of Medicare & Medicaid Services or CMS recently published The J-Code for Crysvita on their website, this will make our reimbursement process more efficient for Medicare and Medicaid patients for the XLH who were buying bills required improving accessibility to Crysvita for these patients.

The recent feedback we've received from the patients and doctors suggested our multi-pronged approach of patient diagnosis liaison's, ultra-care liaisons for sales, ultra-care guides for case management and medical science liaisons has proven to be an effective and efficient way to broadly reach and support doctors and their patients getting on Crysvita.

Five months in the U.S. launch, the enthusiasm for Crysvita in the expatient community continues to grow as we hear more and more stories from individual families starting their treatment on Crysvita.

We're also making progress in extending the global reach with recent filings in Canada, Brazil and Colombia, as well as reimbursed patient treatment in Argentina in response to multiple physician requests.

In the U.K., a country where our partner, KHK, leads commercialization efforts, the National Institute of Health and Care Excellence or NICE recently issued a positive recommendation for Crysvita. This positive and rapid decision is important not only for the U.K. but also for other countries where NICE reimbursement decisions can have an impact.

We'll continue to update you as we receive regulatory decisions in these important global regions. Let's shift now to tumor-induced osteomalacia or TIO program for Crysvita. At this year's American Society of Bone & Mineral Research annual meeting in Montreal, we shared positive 48 and 72-week data.

In adults with TIO, Crysvita associated was increased in serum phosphorus, in serum 1,25 dihydroxy vitamin D levels. Normalization of phosphate levels lead to improvements in osteomalacia mobility and vitality and reductions in fatigue.

Adverse events generally reflected the patients underlying disease, and there were no serious treatment-related adverse events during the study. We're continuing discussions with the FDA about the regulatory pathway for TIO with Crysvita and we'll provide an update once we have additional clarity. Next, let's turn to Mepsevii for MPS VII.

In the United States, somewhere Crysvita, the J-code from Mepsevii was recently published on the CMS website which further facilitates reimbursed for Medicare & Medicaid patients with MPS VII.

In Europe we're pleased the European Commission approved our marketing authorization application following the CHMP's positive opinion in August, and we have since launched Mepsevii in Germany.

Reimbursing Europe can take up to 24 months and our team is working diligently to assure all patients regardless of country or reimbursement status or any see [ph] this as important therapy.

We're also pleased to receive approval from Brazil's National Health Surveillance Agency last month making this the third MPS Mepsevii approval in a major geographic regions of U.S., Europe and Brazil all within the 12-month period. In 2019, we look forward to additional regulatory decisions in Colombia and Chile.

Overall, we are encouraged that we continue to then find new patients and these efforts support our estimate of 200 patients with MPS VII around the world.

Moving now to the UX007 in Long-Chain Fatty Acid Oxidation Disorders or FAOD; we've made significant progress with our registered pathway for UX007 FAOD, and the FDA recently accepted our proposals to submit a new drug application based on currently existing data. We have a pre-NDA meeting with FDA scheduled for later this year.

During this meeting we expect to gain further clarity on the timing of our submission which we expect to take place in 2019. We will also discuss the post-marketing requirements that we would pursue for the program.

We're also progressing discussions with the EMA regarding a potential conditional marketing authorization filing for UX007 and FAOD, and we look forward to finalizing a regulatory path. We'll provide updates on these interactions with both FDA and EMA as we gain more clarity.

I'll now spend a few minutes discussing our recent decision to terminate the Glucose Transport Type 1 Deficiency Syndrome or Glut1 DS indication from the UX007 program. Last month we announced results from a Glut1 DS Phase 3 study that did not show a significant difference between UX007 and placebo.

We remain confident that the study was designed and executed well, we believe that there are Glut1 deficiency syndrome patients that do respond to UX007 but that's a consistency and prevalence of that response is not enough to pursue further development.

We are disappointed that we are not going to be able to help patients with Glut1 DS, and as we wind down the program, we're thankful for the commitment from patients, caregivers, investors and our employees have shown. It is important to reiterate our FAOD program is not affected by this Glut1 DS outcome that's moving forward as expected.

Glut1 DS is a brain disease and different from FAOD which is primarily a disease of liver muscle and heart. Furthermore, we have substantially more FAOD clinical data for many more patients and for multiple studies with drug treatment for upto 17 years that support the benefit and safety of UX007 and FAOD.

For all these reasons, we do not believe that Glut1 deficiency syndrome results impacts our FAOD program. Now let's review our gene therapy program where we continue to make good progress this quarter.

Clinical data from DTX301 and investigational adeno-associated virus vector for Ornithine Transcarbamylase Deficiency for OTC continues to support successful achievement of clinical proof-of-concept.

Top line data from our ongoing Phase 1/2 revealed a second responder patient in cohort two that also demonstrated normalization [indiscernible] at 24 weeks. The second responder since discontinued all optional pathway medications and has been clinically stable now for more than one month.

The first responder from dose cohort 1 that we could show the further increased level of ureagenesis to 170% of normal, and as it's clinically stable now for more than eight months after discontinuing alternate pathway medications.

The patient has also been clinically stable with normal ammonia [ph] after more recently liberalizing their protein-restricted diet near the 52-week time point. The remaining four patients cohorts 1/2 continue to demonstrate no clinically meaningful change in ureagenesis.

[Indiscernible] accepted all patients with only modest rise in ALT and some patients were well treated by reactive and tapering steroids regiment. All patients have remained clinically and medically stable.

Based on a data monitoring committee's review, the data from the first two cohorts and consistent with their recommendation initiated enrollment of the third dose cohort for the study at the end of September. This month the first patient cohort 3 received treatment, we look forward to sharing data from the higher dose cohort 3 in the 2019.

Moving to our preclinical pipeline; in October we announced an exclusive license with REGENXBIO to develop a gene therapy to treat CDKL5 deficiency or CDD. This is a severe debilitating excellent genetic disorder that leaves patient with seizures, severe growth motor intellectual impairments that typically begin within the first two months of life.

CDD shares many features of Rett Syndrome and historically is identified as an atypical Rett Syndrome until gene testing changed the field [ph] and enabled more accurate diagnosis.

We believe the biology of this disease makes it potentially a prime target for treatment and with an increasing disease problems as diagnosis are more actually being made by genetic testing. The license also commonly uses REGENXBIO castors [ph] which include AAV9 which has been successful in other neurological diseases.

Well, early the CDD program portfolio for translational research programs by offering a potential gene therapy that did meaningfully improve the lives of patients with this disease as new treatment options is now beginning to be better understood and diagnosed.

With that, I'll turn the call over to Shalini Sharp, one of the fiercest women in life sciences for 2018 to provide an overview of our financial results..

Thank you, Emil and good afternoon, everyone. We issued a press release earlier today that included a financial update, which I will briefly summarize.

Net loss for the third quarter of 2018 was $87.3 million or $1.74 per share, basic and diluted compared with a net loss of $79.2 million or $1.87 per share, basic and diluted, for the third quarter of 2017. For the nine months of 2018, cash used in operations was $234.7 million compared to $172 million in the same period of 2017.

This includes adjustments for significant non-cash charges including stock-based compensation expense of $59 million, $16.6 million in depreciation and amortization, and $5.9 million in non-cash foreign currency remeasurement losses in connection with the change in the company's tax structure and fluctuations of exchange rates related to intercompany transactions.

For the third quarter of 2018 we reported $11.8 million in total revenue. For Crysvita we recognized $5.4 million in profit sharing and royalty revenue from our collaboration and license agreement with Kyowa Hakko Kirin. This includes $4.4 million in collaboration revenue in the U.S.

profit share territory, and $1 million in royalty revenue in the European territory. There were nominal net product sales for Crysvita in other regions. MEPSEVII product revenue for the third quarter of 2018 was $2.1 million, and UX007 named patient revenue was $0.4 million.

Total revenue also included $3.6 million in revenue from the last stages of our research agreement with Bayer, which importantly we expect to be negligible going forward. As a reminder, we will not be providing any financial guidance in this early stage of launch related growth.

In the meantime, we have provided other launch metrics including patients on reimbursed therapy, growth and start forms and unique prescribers to help characterize the strength of our launch.

We plan to provide this level of granularity only in the early quarters of launch, and we will evaluate the appropriate time to shift away from these metrics and perhaps towards specific revenue guidance as we gain experience with our commercial products.

Our total operating expenses were $101.4 million for the third quarter of 2018, including research and development costs at $70 million. We expect our R&D cost to continue increasing overtime as we advance our product candidates to pre-clinical, translational and clinical development.

We expect SG&A to increase overtime as we support our commercial programs in multiple geographies. We also expect the split of R&D versus SG&A expense to remain fairly consistent.

In addition, we expect the proportion of cash to non-cash expenses to remain fairly consistent with stock compensation and other non-cash items to increase generally proportionally overtime. We ended the third quarter with $503.1 million in cash, cash equivalents and investments on the balance sheet.

We believe that our cash resources should be sufficient to support the initial years of launch for Crysvita and MEPSEVII and allow us to continue making strategic investments developing our clinical and translational research. I will now turn the call back to Emil..

Thank you, Shalini. As you can see, we're in a strong financial position to continue making strategic investments in the commercial launches of Crysvita and MEPSEVII, and in our pipeline.

Over the last two months of 2018 and into 2019, we expect a number of important milestones including; for UX007 we expect additional feedback regarding our proposal to submit a new drug application of patients with fatty acid oxidation defects from our pre-NDA meeting with the agency at the end of this year.

For DTX401, our AAV gene therapy for the treatment of GSD1a, we expect data from the three patients with the lowest dose of cohort 1 around the end of 2018. For DTX301, our AAV gene therapy for the treatment of OTC deficiency, we expect data from our third dosing cohort in mid-2019. For Crysvita, we look forward to building on the momentum of our U.S.

launch as we increase the number of reimbursed patients, broaden the prescriber base, and expand managed care coverage. And we step back and look at the big picture of Ultragenyx's since our IPO in 2014. Of the six treatment indications we were developing, four of them have been successful in development.

In the four years since IPO we've achieved two commercially approved therapies in both, U.S. and E.U., the third product heading to NDA filing, the gene therapy franchise is just beginning to show promise for changing future in metabolic diseases.

Combined with our developing early stage pipeline, we feel poised to achieve great success with the next-generation rare disease company. Now let's move to your questions. Operator, can you please provide the instructions for the Q&A portion of the call..

[Operator Instructions] And our first question comes from Gena Wang from Barclays..

The first one just regarding the Crysvita U.S. and Europe revenue; just based on the royalty, our rough calculation was about $13.3 million in the U.S. sales and then around $11 million in Europe.

Is that similar -- right calculation from your point of view? And also related question is, the average reimbursement process for this quarter; are there any improvement compared to the last quarter in terms of the timeline?.

I'll answer the second part first and I'll let Shalini answer the first part. Since the last quarter, we certainly have more policies in place now covering 200 million lives; and so as policies get issued and as progress happens we are seeing improvement in the ability to get patients on drugs overtime.

We haven't provided any more details but we are seeing steady improvement in the process that takes. We are continuing to support through our hub, all the steps that are required based on those policies that have been published. So I do think it's going well, there are always things to work on in the early stage of the launch.

Shalini, why don't you answer the question about the revenue?.

KHK actually did report their earnings a little bit before we did and they reported JPY2.7 billion in total revenue when they categorized it as collaboration revenue under international.

They don't provide a further breakdown by geography, what we have provided is that in North America we had $4.4 million in Crysvita revenue and the European royalty will be $1 million.

So the proportion that you're estimating is an estimate but it's in the right ballpark, they are just not specific numbers that we're giving out that can tie exactly apples-to-apples with what KHK are giving out..

Regarding the launching FAOD; just wondering for the pre-NDA meeting will you also [indiscernible] one data to the FDA? And when will you share the FDA feedback with us?.

We will certainly -- in APAC it's for product when you file, you certainly will include that data and will provide any data there is interest in that data.

We think there is safety data certainly in any drug that you'd want to include in their discussion, and we don't think any of the Glut1 safety data has any bearing, it's very similar to what we've seen with FAOD.

We will provide an update on our pre-NDA meeting once we have -- when we have clarity as to what is required to get the filing in, and what are -- what we think our timing will be for that filing.

And we expect to do that before the end of the year, and we won't provide any more clarity yet on what exactly is happening but we're moving along, it will happen before the end of the year..

And our next question comes from Cory Kasimov from JPMorgan..

I guess my first one is just a follow-up on the FAOD topic.

Now that the FDA has accepted your proposal to submit an NDA for 007 based on the existing data, I guess I'm curious what additional details are -- like forthcoming from your pre-NDA meeting? I'm just trying to understand if there is anything left unresolved or if there is any risk to the filing strategy? Was this just to hammer out the post-approval commitments and things like that? And then I have one follow-up..

All pre-NDA meetings have a very important technical step to precisely define what the list of data is before providing what form.

And we have different types of data in our package, we have clinical studies or sponsored studies, we have emergency I&D patients, 56 patients, emergency I&D or around the world that were in heart failure or other critical problems that we treated, and there are some of that data, there is historical data as well from the [indiscernible] patients.

We just need to get clarity what form and what exactly structure they want all that, and to really understand what -- how much it's going to take to put that together.

So those are some of the details because there is so much data of different source types that we need to get straight but that is the main issue is really around all the clinical data that we have to get straightened out with them.

We'll also talk a little bit about what are the steps regarding studies that we will have to conduct because part of our proposal included the work we will do to help support the benefit, the risk of the product once it's approved, that was an integral part of how we proposed what we would do.

And I think inconsistent with what Dr.Gottlieb [ph], the commissioner has put forth is -- ability to file or approve early but with high quality data from the post-marketing setting is important.

So we'll try to nail down that part as well, that may not hold up the timing of the filing but we may need, for example, have a fully completed protocol agreement on various terms, potentially have started a study or something like that.

Our view [ph] right now is that we will be filing in 2019 and question whether it's earlier or later is the question we have to work through..

And then my second question is on the gene therapy side of things; I guess what would you consider a success for the first three patients treated the low dose with DTX401 in terms of an efficacy bar? I mean just help us set the stage a little bit ahead of that data we'll see towards the end of this year?.

The main thing we're looking for is whether we're delaying their time to hypoglycemia during the challenge -- a fasting challenge, and so we put them on a fasting challenge in the heart where we monitor the glucose, and we look and see how long their body can support their glucose level; so it will be a measure of time, how many hours.

Most of the kids are in the order of three hours or something like that, three or four hours if they go hyperglycemic, that's just to show how dangerous it is; going to sleep with them is dangerous.

So we'll be looking at that as that time delay and obviously, we see some significant delay in some patients; I certainly consider that a success that we can actually deliver the enzyme and change our glucose metabolism pathway.

We'll certainly be looking at other metabolic parameters but I would say the time to hyperglycemia under a fasting challenge is kind of the main clinical thing what we're looking at..

And our next question comes from Chris Raymond from Piper Jaffray..

Just a question on Crysvita in Latin America. So obviously, that geography; you guys have a different economic structure with KHK and I know you've hired ahead of LATAM and you've talked about full approval there as time goes on.

But can you just maybe give us a sense of the catalyst flow and the updates we should be looking for; is it country-by-country are you going to give us the news as it happens or maybe hold it for the earnings calls? Just for modeling purposes, can you maybe outline that? Thanks..

I would say Latin American is really important to us in this product and we own that product in that area, and we own the transfer prices, and the royalty.

We've hired one of the best in the business I believe, Eduardo is long experienced in raising [ph] launches, and he's pulling in a Top Tier team of Latin American leaders to do this, and we have general managers in several territories and we've filed already as we've just noted during -- in our conference call today.

And both Colombia and Brazil, and we are also receiving patient request from Argentina as well; so we are already working in parallel across all countries. Now many companies in these states [ph] have not filed, in Brazil, for example; so early as we have.

And we have because things are changed down there and they really want people to file, not to sit using name-patient sales in the legal process in Brazil.

As if we're complying with the local authorities what their goals are and building the quality teams, so what you're going to expect to see from us is at some point we'll have updates on name-patient treatment from a fulfilling doctor request, we'll talk about Colombia approval -- sorry, Brazil approval, Columbia approval, and we'll talk more about the metrics of what's happening in South America.

We haven't set all that down so completely as we have in the U.S. but we'd expect to put forth the sufficient color for you to understand how launch is going in South America..

And maybe just a follow-up; I know it's still early days on the launch but can you maybe describe any sort of cases of Crysvita discontinuations if there have been any and further nature?.

I'm actually not familiar with any discontinuations at this point.

We've had I think very good success getting people on therapy, and we've only been hearing actually -- I have card [ph] on my door right now, getting cards from people who are sending us notes of thanks about how this has become a generational product for them, how their mother and them, and their kids are now getting on treatment, and how that's changing things.

We haven't actually heard much about discontinuations, it's early in the launch, I'd expect there would be some but if you look historically at our clinical trials, we had no pediatric patient who went-off drug, and among adults it was small handful, just a few that came-off the drug during the trial.

So, I actually feel that the -- adherence has been quite good..

And our next question comes from Joseph Swartz [ph] from Leerink Partners..

My first question is on DTX301; I was wondering if you could just appraise for us the data that you've generated so far and what patterns do you think that you're seeing? The FDA has also said that Phase 1, 2, 3 pivotal trial designs are possible; do you think that the data that you have so far is pointing in that positive enough direction that you can foresee the profile emerging that's pretty clear to you at this point or are you thinking about another trial after this based on what you've seen? Just wondering if you can summarize for us the data to-date and if it's generating the target product profile that you hope to see..

I think one thing that's important from what you're commenting on is that the FDA has taken a very proactive stand towards the regulatory process in gene therapy products which we think there as well for a whole gene therapy franchise.

For the specific case of OTC and for DTX301, we have two patients that appear to be cured in the sense that they have normal ureagenesis gone-off their meds, do not appear to be have any problem controlling ammonia. And so we're encouraged by the fact, first-off that we're able to cure some patients with OTC.

It is only two patients and we haven't cured all the patients in our view, in terms of our development with the drive toward dosing that would get us majority of patients with that kind of response. So we think the response we're getting in those two is an adequate level of response, we just need to see that it's more prevalent across patients.

We have planned at this point to do a Phase 3 that we're not expecting to be able to file-off of this Phase 1/2 study. I do think that there is some additional experience required, we haven't approached that.

I think approach that approach of going faster, I do think the FDA is speaking to situations of patients who are dying without any other treatment; that where this might be appropriate acceleration.

Right now we haven't planned it, I think the plus side we have for us is that there are approved biomarkers that have been used in the recycle disorders that have been for multiple product approvals, so that gives us some regulatory guidance but we do expect to do a Phase 3 to gain more experience and would hope that this third cohort will give us the answers that we need to move on and toward Phase 3 trial..

So then moving to UX007 again; do you think that you have the data for -- that the FDA -- sorry, the FAOD patient community wants to see? Can you just give us your own impression of how strong the data that you've generated so far is given that you'll be potentially filing early here, and this is a community that has access to MCTO [ph] already?.

Yes, but of course all the patients that we're enrolling that are having trouble with their disease are already on MCT, while essentially all of them.

So the disease that we're seeing is despite MCT and the fact, the beginning development of 007 began because MCT was not doing what it needs, in fact, there is good annual data showing that MCT sometimes makes patients worse [indiscernible] actually did approve them.

We are -- at this point, since the time we published our 201 -- or presented our 201 data showing an improvement, both in [indiscernible], as well as in outcomes, we've had now several dozen requests for emergency or urgent therapy from around the world from doctors and awareness of the product of patients, of heart failure patients significant muscle disease, both U.S.

and Europe and elsewhere. So I think there is a recognition in the field that this is something that's new and different that can be used in these patients that are not responding well.

So we feel very comfortable with the quality of what we're seeing is important, and I think what you think about the symptoms we're talking about, in the FAODs tolerance piece in terms of good walking are other physical things were important but the strongest data is really the one that really drives both, the FAOD, as well as community is the number hospitalization days in the hospital.

And to go from 5.5 so days in the hospital for the median patient in the 201 FAOD study to around 1.5 or 77% reduction median days in the hospital is a big deal if you're a parent, not [indiscernible] the hospital is a big deal, and these are all controlled -- each patient controlled what was happening to them.

So we feel that's a very accurate number as to what was really going on to patient at FAOD, so we think that's the data that certainly was compelling for FDA and the challenge had been was -- the drug itself the whole cause; we believe it is the cause and we have multiple evidence to support that and I think the agency just let us proceed and we think if we go out there and patients and doctors see this data too, I think based on the response we're getting from name-patient-treatment, as well as emergency care treatment, there is recognition that the value the profile brings..

And our next question comes from Maurice Raycroft from Jefferies..

Just a follow-up from Gena's question earlier; where you'd expect the Crysvita E.U. and U.S. total sales proportions as calculated into 2Q and 3Q to remain consistent going forward? And if you can comment on whether the 60 to 40 pediatric and in all proportions should also remain consistent in the U.S. and the E.U. as well..

Let me answer the last question and I'll let Shalini answer the first question. The second question is the product was just a marketing authorization in Europe for pediatrics only; so they are actually non-coding adults, they launched really in Germany and then will be launching in other countries as the year progresses. In the U.S.

and we're launching with a broader label pediatric and adults; so I'd expect the two markets to behave somewhat differently. Shalini, perhaps you can pass on the revenues ratios..

Sure. Well, typically speaking if you were to look at some analog products you would expect to see a higher level of revenue in North America relative to Europe. So I can say that much in terms of any other forecasts by geography, we obviously haven't provided that at this point.

I can remind you the way the economics work or that in North America there's a profit share with KHK, between KHK and Ultragenyx. And so on the revenue line, you would subtract the transfer price that we pay to KHK and then divide it by two, and that's our top line; and then we would also incur half of the operating expenses.

In Europe we recently received a royalty of upto 10%, so the economics to Ultragenyx are also different and hard to compare apples-to-apples across those two geographies..

And just a quick one on TIO; I'm just wondering if you could remind what the population looks like out there -- and the number of patients? And then why you're aiming to get from conversations with the FDA for next steps for that opportunity?.

The TIO patient population is definitely a trickier one to know because it is relatively smaller but not all TIO patients would be candidates for treatment because if they can excise their tumors and they would be treated, we think among the addressable populations around 50o to 1,000 patients in the U.S.

or I would say that's an estimate and we certainly can't have perfect knowledge of that particular population. We think it's a significant opportunity and based on the data we think this is an important new treatment for those particular patients and that's why we're pursuing it.

We believe the data we have are comparable, the adult bone quality data, the Phase 3 study that we did for XLH. TIO is definitely more variable than XLH and that is a factor which we'll have to work through with the authorities, just not the same amount of FGF-23 [ph] between patients and how they respond.

So we're going to continue to talk with them about a path forward and we think we have strong efficacy data that's just comparable to what you see with XLH but in a different disease indication.

So we'll be prosecuting that with them a little further, there is still a little further discussions to go through and nail down what's the right path for TIO..

Potential update in first half of '19 for that or….

Yes, I would expect us to have somewhere between now and then, have update on TIO pathway, it's ongoing..

And our next question comes from Adam Walsh from Stifel..

So also around Crysvita, have you identified any key factors in market uptake for adult patients? What have you learned so far from the initial launch; are there any barriers for doctors to prescribe Crysvita? Thank you..

I think what we were seeing in fact is that there are a lot of doctors who will write prescriptions for Crysvita, it's 40% of the total are for adults. So I think that's telling you there are doctors interested.

We do think that some of the adult patients who let's say were diagnosed clinically 30 years ago may not have had genetic testing or other testing requirements, and some of the policy plans that have been published have required testing either genetic of FGF23 testing, and so we are having to support implement that, there are patients who can get the testing but it is a step in the process and we have to work on with adults.

The trials patient conversion certainly has gone well, we haven't seen any issue with converting them in general. For the others, for most adults, the policies have generally been not that different than for Ps [ph] are to the label.

There are a few policies where there may -- a very small number of live coverage that may have a step at it like they have had to been on oral phosphate in the past. But most of the adults have been on oral phosphate in the past, and so we don't expect that to be a practical limitation this time.

So I guess overall, I would say we're not seeing any systemic barriers to getting adults on therapy and our biggest challenge will always be finding those adults who have been lost to follow-up or among other doctors which we advised would be important, ultimately, penetrating that market with patients.

What I can say is that adults there are taking the drug are feeling very good and the doctors are giving good feedback which we're hearing about..

And our next question comes from Liisa Bayko from JMP Securities..

Just wanted to ask about MEPSEVII; Emil, if you could just comment on your ability to find new patients and nurse them.

It looks like there's just a smaller amount of growth this quarter, I'm curious about any recent trends; and I know with the smaller populations it can become a lumpy but I'm curious about how it's going and what you're learning? Thank you..

Liisa, we are continuing to find patients in the broader community but in a disease like any of the rare MPS disorders that I've worked on, it's a one-by-one process, we find one here, one there and they keep showing up. We are adding them, the U.S. has been less active, we found some patients, we have a lot of them on treatment now.

We are working on Europe and certainly we haven't done as much work in Europe and South America where there are probably more opportunities to find new patients than we've had in the past and that's definitely been one of our focus points. We just got our U.S., our European approval, so that will help us.

And with the Brazil approval that also help us get the Brazilian patients on therapy.

We're finding some patients in places like Turkey as well, and other places that have a high frequency of other [indiscernible] diseases that can support treatment patients, those countries do take some time to get going but we are actively working through that with our Turkish group.

So we expect to continue to find them, I don't have any particular color to say is it faster or slower, I think we're finding them and we -- it is a type of steady growth that you see and you know, all of the rare MPS enzyme therapy programs..

And our next question comes from [indiscernible] from Goldman Sachs..

Just want to dig into the gene therapy programs a little bit more.

So with regard to the OTC program and the data that we've seen to-date, do you think if you get an improvement here that this is a question of increasing the dose or really optimizing the manufacturing of the construct? And then secondly, when you look at that data in the OTC, at least the two initial cohorts that we've seen in OTC; can you help us understand the relative dosing and then frame the rethrough to the first cohort and GSD1?.

Our view on what's happening, why some patients respond -- somebody should respond extremely well. We would suggest that we see a pattern like that it is a lot more likely related to individual factors rather than a construct issue. If it's really a construct issue then we wouldn't have seen normalization in a couple of patients.

I think they get to normalization in a couple patients where just -- the construct works well, and that the product can deliver. I think what the challenge will be there is differences in the immunology and efficiency of virus delivery, and the number of companies have been in the maybe 13 [ph] levels to get good normalization levels.

I would say the fact that we've got normalization of function in the liver at 2E12 6E12 [ph], it actually bodes well for the pricing, it's actually reasonably potent.

So we actually don't think there is any issue with the manufacturing the construct, the issue in manufacturing certainly be little brought up certain aspects of chemistry but we test every lot for it's efficiency of infecting cells, so we know that they are effective in doing that and the critical part of assuring that the manufacturing is going well for each product line.

So we think it is primarily a dose but dose -- it's dose and what we're doing is overcoming individual factors for how people handle these virus and how they inactivate them and protect themselves from them; and that is the thing we think we're having to get past.

I think if you look at other companies in the space, they're all showing substantial variability in different patients. And why some patients respond much better than others is, I think now less likely the manufacturing than it is and then dodging us biological protective schemes that the body is built to fight viruses.

So we need to figure out how to overcome that with the OTC. And you'd asked the second question which was on GST1 and the dosing executions on that program.

We do believe that the requirement for OTC is higher than GSD1 in terms of mean to get to more like 10% of normal whereas in GSD1, the data would suggest that 3% of normal is efficient and to normalize the liver function.

And I believe that because the enzyme required is a hydrolase, the type of enzyme that can really turnover molecules pretty quickly, we believe. So we have expectations that you would need as much GSD1 enzyme; so low dose in this program and the OTC program were both based on regulatory discussions.

Our proposal originally was to go more towards the middle dose of 5 or 6E12, the starting place. The rent authorities [ph] for these new indications felt that it was important to start lower and to assure there was no safety issues.

We've gotten past that with OTC, GD1 is in the same plan, but I would expect that the low dose is more of a safety dose, I'm not sure what to expect for GSD1 at this point, but because of threshold lower potential that we could see something but I would suggest that it's not likely we would stop at that dose, we'd want to make sure we've gotten enough of it factor across enough of liver to change the lives of GSD1 patients if we're doing a one shot therapy.

So we're looking forward to the first cohort data but it is a load often -- it was driven off of safety considerations rather than an efficacy targets..

And our next question comes from Ritu [ph] from Cowen..

My questions are actually follow-on. Emil, when you think about 401, and fasting challenge, where is the bar? Is it having to go from three hours to eight or nine to get overnight; what is the meaningful delta on that fasting challenge? First question, I've got a follow-up..

I would look at this as two things; one is it's a linear assessment of the rate of enzyme release, you could look at it like an enzyme assay, it's releasing sugar at a certain rate, is that rate fast enough to maintain the body; so whether it's clinically meaningful or not we can still look and see are we seeing some effect that we could measure.

We talk about from a clinical standpoint what's the bar or threshold; our view is that for parents of patients for clinically -- if the patient can survive -- safely survive the night without eating or without needing to be feed or cornstarch [ph], but that would be a clinically meaningful result and I believe potentially approvable because that is one of the biggest dangers and every year with relatively well-controlled children there are examples of kids that died during the night because something happened and they missed a dose, they didn't wake up, the tube disconnected if they're on tube feeding, and that is -- so that's not a trivial, I'm feel a little bit better a little longer, it's actually a factor that affects our mortality.

So we think that if we can help kids get through the night, a reasonable night's sleep of time then that that would be a clinically meaningful result..

And in your preclinical data, you've given what you said about the FDA having guided to the low dose; does your preclinical data suggest cohort 1, the limits reading out could be subcritical and not really move the needle?.

Well, to the extent that you can translate mouse, dogs and humans; except the lower end of the dose but there potentially is some effect. But in the mouse we were getting at the -- the dose are higher, we're getting more complete treatment of the liver of cell.

I think it suggests that there could be some effect at this level but it's certainly not the optimal dose but highly dependent on how you translate mouse or dog dose to humans; honestly, the range of people give is 10 to 40 fold dosing from mouse to human, so it's a big range.

We think there is potential for some effect in the first cohort, however, as I said I think that the likelihood is we would have to go higher to get the kind of effect you want where you're treating more of the liver and getting a type of effect for a single dose, one shot lifelong therapy..

And my follow-up goes to the immunological variability that you've mentioned; Emil knowing you've thought about this extensively.

So when you think about the risk factors that make for an ideal gene therapy patient and a patient who has a robust response, what are the things that could be most important in clinical trials going forward?.

Obviously, we are screening for neutralizing antibodies and producer [ph] antibodies, and it's pretty clear even small amounts of antibodies have -- and some programs lead to issues and it could be some of those low level antibodies, even very low levels are having an effect and that part of the reason for high dosing has to do with kind of overcoming that.

But it turns out there are other immunological systems in play, including potentially complement, including potentially toll-receptors and other things that are getting triggered during the gene therapy process.

And those different -- those what I would call intrinsic immune systems rather than adaptive immune systems are definitely different between people that may cause some people to respond to the certain dose, others not. We think that it's going to be very hard to let's say take a patient and do 20 tests on them, profile them decide.

But I also say to you, you have to treat everyone, you want to treat everyone; so whatever those issues are you need to overcome them, so you need to find the dose that overcomes that and allows us to feed.

So I think we want to make sure that we're achieving a dose level that overcomes more like the individual variations to achieve the majority of patients having the type of effect that is clinically meaningful.

So as what our goal is, and we'll continue to follow the science and try to improve this but I don't think there is anyone that has this perfect handle on this particular issue, I think everyone is trying to navigate through the uncertainties of how people are going to respond and we're just one of the other players in that space..

Our next question comes from Vincent Chen from Bernstein..

Could you plan a bit more color on your thoughts as to why some patients respond better to DTX301? So I imagine there is quite a range of patient differences that could affect efficacy, right; so there is how well a patient can fight-off the virus in the bloodstream, keep it away from the cells, how much receptors the patient has that the virus can bind to, how well the receptor internalizes, gets the news etcetera, what the patient's baseline OTC function is and so forth.

You alluded earlier to -- it seems like it's something about how well patients fought [ph] the virus.

What have you seen in the data that points in this direction? And I guess, would this be something you think -- you should be able to readily overcome with simply a higher dose that overwhelms any defenses?.

Vincent, you answered most of that question yourself but there are a lot of things going on.

If you look at some of the data, as some of the patients get -- for example, a mild hepatitis and some don't at the dose level; so some of them may have systems that are already preventing the virus from having an effect on the liver where others are not, or some of them are having a reaction at the liver level which others are not, so that already tells you there is some variation response.

The question maybe more fundamental is, can we explain what we're seeing so far. We don't have a clear perfect explanation for it, we do know that two of the patients were male that responded to the three that responded.

Is that a factor none of the females responded; that is something for us to consider, we're looking at that issue, we don't have any proof if that is true. There are examples though of some difference between females and males with regard to the physiology and biochemistry which we'd have to look at. But we'll see what the Cohort 3 tells us.

Whatever it is, say it's a male or female variation, whatever the mechanisms are it's pretty clear with a high enough dose you can overcome them but you have to deal with what are the safety implications of that higher dose as well. And so that is what we're navigating right now.

We think E13 based on safety data so far should be -- we think it would still be at the safe range and we hope that we are coming. At what point we would stop dosing higher would be a question, we could go to a higher cohort but our hope is that E13 is sufficient to get them to draw patients to be short.

We also need to look at what about second dosing or other factors for people who have pre-existing immunity, those are factors we want to look at -- to look for -- let's say a second version of the caps that we could use for those patients or for redosing, which is another factor I would say and how you -- how the commercial states -- the commercial market plays out.

So I think we just -- we need to get to a point where we have the majority of patients responding with an important effect, and we'll need to figure out then what to do with others to maximize the potential product..

And our next question comes from [indiscernible] from Citi..

In some of our dot-diligence [ph], we've heard that given that the Crysvita vials are actually overfilled a little with some of the extra drug material, they were able to treat some of the babies in the XLH families that were under one-year age which I thought was very interesting.

So I was curious if you could comment at all on your plans to expand the label to the under one-year old population..

So we're looking at the under one; obviously, as a terms of a segment it is not a very big segment. I think there is not even clarity whether you need to treat someone under one but I would bet it probably would help, particularly because the growth is happening at that age and having drugs there.

With regard to vials, the vials of this size always have to have a certain amount of refill. I think the encouraging thing is people want to treat every one of the family, that is the part thought was great as they already understand the benefit and would put babies on it.

So I don't think it was -- I think from a commercial potential, I don't think that that's going to affect us but I do -- we do have expectations to deal with the under one population.

And honestly, we should have gotten under one from the beginning but lately, the agencies have become more restrictive on ages range but -- so we'll probably try to find some mom that's having the baby, and actually [indiscernible] are given, you have them with babies, so they will get it from birth that way in our clinical trial.

Sorry to be a little facetious [ph] but that appears to be what's necessary. We'll try to treat all the patients we can but I think the under one is something we'll have to look at, we don't have a plan yet..

And then, do you have any plans to do any kind of prefilled syringe because some of the other feedback we've heard is that with the 10, 20 and 30, it may be helpful for the kids to have to be able to use the higher concentration but the insurance won't approve the highest 30 mix per ml [ph] for the weight of the child.

So do you -- maybe a prefilled syringe with 30 mix per ml [ph], for example, is something I was wondering about..

Yes, I think that's an interesting point. I think we expect at some point that the prefilled syringe would come forward and we've talked -- had discussions with our partner about putting a prefilled syringe that might use the 30 mg concentration at different volumes inside the prefilled syringes.

You just can't fill a vial with very little drug and try to pull it, so in order to do small volumes of 30 mg, we would need to use prefilled syringes as the strategy. So we're looking at that, I think that is something we've heard as well on our way to manage it but we don't think that's having a major impact on the market.

At this point, I think people are utilizing whichever version they can but we try to provide much flexibility to reduce wastage but we'll continue to look at it what's the best product presentation to optimize the market and prefilled syringes might be one thing to add overtime..

And our next question comes from Edward Nash [ph] from SunTrust..

I have a question related to 401, and -- can you comment on is there any sub-region in the liver that is more important to target than the other region? And then second to that, is a distribution or maybe age vector in the liver overlap with the region that is more important? Just wanted to get your thoughts on that..

Well, there is a metabolic region which is around the portal area, which is probably where we recycle while G's one important [ph].

The thing I'll point out to you and it's confusing some investors is that, the data you see in mice is not really the same as monkey and humans; so the mouse distribution, the human and non-human primate distribution is different.

What we have shown with AAV is that it's getting the male block site where it's preferred, that is where it goes to in the base of the non-human primate or higher -- closer to humans. So we feel comfortable that the OTC particularly going to that side as well as for the other.

I think that the liver and the question of zones; the question will have to practically speaking empirically test out as we move forward but based on the non-human primate data, our record is going to the sites of cells that are most important and we feel comfortable that's not an issue..

I'm not showing any further questions at this time. I would now like to turn the call back over to Ms. Keatley for any further closing remarks..

Thank you very much. This concludes our call today, and a replay will be available soon. If there are any additional questions, please feel free to contact us by phone or at ir@ ultragenyx.com. Thanks for joining us..

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program, and you may all disconnect. Everyone have a wonderful day..