Good afternoon, ladies and gentlemen and welcome to the Ultragenyx Second Quarter 2019 Financial Results and Corporate Update. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.

[Operator Instructions] As a reminder, this conference call is being recorded.I would now like to turn the conference over to your host, Ms. Danielle Keatley, you may now begin your conference..

Good afternoon and welcome to the Ultragenyx Pharmaceutical financial results and corporate update conference call for the second quarter 2019. We've 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 Communication.

With me today are Emil Kakkis, Chief Executive Officer and President; Shalini Sharp, Chief Financial Officer; Vlad Hogenhuis, Chief Operating Officer; and Camille Bedrosian, Chief Medical 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 quarterly report on Form 10-Q that was filed on May 7, 2019, our quarterly report on Form 10-Q that will be filed soon and our subsequent periodic reports filed with the SEC, which will 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 relating to our business, see our periodic reports filed with the SEC.I'll now turn the call over to Emil..

Good afternoon, everyone and thank you for joining us. I'll start today by providing some brief introductory remarks before turning the call over to Vlad, who will discuss the commercial performance in the second quarter of 2019. And then Shalini will update you on our second quarter financial results.

Finally, Camille will then discuss the progress across our clinical programs and I'll come back and discuss the outlook for the rest of the year.Our commercial momentum continues to grow in the second quarter of this year, with strong launch progress in both Crysvita and Mepsevii in three major territories throughout the world.

Yesterday, we submitted our New Drug Application for UX007 or triheptanoin for the treatment of long-chain fatty acid oxidation disorders.

We have relentlessly focused on advancing UX007 through the clinic and into regulatory review in order to get this therapy to patients as quickly as possible.For our gene therapy platform, we continue to move our two clinical programs forward this quarter.

One for the treatment of ornithine transcarbamylase deficiency and the other glycogen storage disease type Ia. Importantly, we recently solidified our mRNA platform by expanding our collaboration and licensing agreeing with Arcturus.

The collaboration now includes up to 12 rare disease targets and provides a greater opportunities to treat more diseases with mRNA, siRNA and DNA therapeutics. We've seen promising results from this partnership so far.

Our lead mRNA program UX053 for the treatment of Glycogen Storage Disease Type III or GST III is expected to advance to IND in 2020.In addition to our mRNA program with GST III, we have two other pre-clinical programs moving ahead towards IND filings.

These include our gene therapy program for Wilson's disease and our dual-trigger pro-drug for Creatine Transporter Deficiency.Now I'll turn the call over to Vlad to walk you through the commercial performance through the second quarter of the year..

Thank you, Emil, and good afternoon, everyone. The second quarter of 2019 was a strong quarter for Crysvita in the United States. Since our launch in April of 2018, we've received approximately 1,300 completed start forms from treating physicians.

The continued growth in the number of completed start forms this quarter is in line with the prior quarter. The split among pediatric and adult patients continue to hold steady with roughly 60% pediatric patients and 40% adult patients.Approximately 580 unique physicians have now prescribed Crysvita.

As first time prescribers gain more experience with the therapy and the reimbursement process, we're seeing these prescriber wide prescriptions for multiple patients.

We are encouraged that these numbers continue to grow with more than one-third of prescribers today writing prescriptions for more than one patient.Earlier this year, we received a specific J-Code for Crysvita. This helps simplify the buy-and-bill process, especially for Medicare and Medicaid patients.

As a result of the J-Code and increasing number of state Medicaid policy, the payer mix continues to shift. We currently have approximately 40% government and other payers and 60% private payer’s to-date. We have nearly full coverage of lives within the U.S. at this point.

Additional payers without formal policies are approving Crysvita on a case-by-case basis.With this broad coverage across all payer types, we now have approximately 960 patients on reimburse commercial therapy. Earlier this year, we implemented easy access to confirmatory genetic testing, independent genetic counseling, and pedigree analysis programs.

These initiatives have improved a process, but then finding more patients with a confirmed diagnosis and converting patients to reimburse therapy.Consequently, we had a substantial increase in number of patients who began reimburse therapy in the second quarter.We launched Crysvita in Canada earlier this year and we're seeing strong interest and uptake among patients with private insurance.

We're also pursuing public reimbursement Canada which can take up to two years.Moving to Latin America, where you see the pool for Crysvita in Brazil earlier this year where we're continuing to pursue pricing and reimbursement. We also expect regulatory decisions from the Chilean, Colombian, and the Mexican health authorities this year and next.

Reimbursement decision in all of these markets can take a few years and in the meantime, we continue to respond to named patients' request.Briefly turning to Mepsevii, this therapy is approved the United States, Europe, and Brazil and the launch continues to go well.

In order to expand availability of Mepsevii to more patients around the world, we're continuing reimbursement discussions with various government health authorities and we expect additional regulatory decisions in Mexico, Colombia, and Chile this year and next.With that, I'll turn the call to Shalini, who will provide a financial update..

Thank you, Vlad, and good afternoon, everyone. We issued a press release earlier today that included a financial update which I will briefly summarize. Total revenue for the three months ending June 30th, 2019 was $24.1 million.For the quarter ended June 30th, 2019, Ultragenyx recognized total Crysvita revenue of $20.2 million.

This includes $17.3 million in collaboration revenue in the North America profit share territory and $1.9 million in royalty revenue from our partner, Kyowa Kirin or KKC sales in the European territory. Net product revenue for Crysvita in other regions totaled $1 million.Topline worldwide revenue of Crysvita totaled approximately $73.3 million.

This represents the total sales across North America, Europe, and Latin America, a portion of which are shared with KKC.Mepsevii product revenue for the second quarter of 2019 was $3.2 million and UX007 named patient revenue was $0.6 million. We also recognized $0.1 million in revenue from our research agreement with Bayer.

As we've stated previously, we continue to expect revenues from this agreement to be minimal going forward.We are continuing to gain commercial experience of both Crysvita and Mepsevii and will not be providing financial guidance at this time.

We have provided launch metrics including patients on reimbursed therapy, growth in start forums and unique prescribers to help characterize the strength and momentum of our launch.We plan to provide this level of granularity only in the early quarters of launch and we are evaluating the appropriate time to shift to specific revenue guidance as we gain experience with the launches in multiple territories.Our total operating expenses are $136.6 million for the second quarter of 2019.

Our research and development costs were $96 million including a $15.6 million research and development expense from the Arcturus collaboration amendment. We expect our R&D cost to continue increasing over time as we advance additional product candidates from pre-clinical development into early and pivotal clinical studies.

We expect SG&A to increase over time as we support our commercial programs in multiple geographies.

We expect the split of R&D versus SG&A expense to remain fairly consistent.Net loss for the second quarter of 2019 was $99.2 million or $1.72 per share, basic and diluted, compared with net loss of $52.7 million or $1.06 per share, basic and diluted, for the second quarter of 2018.

The loss for the second quarter of 2019 includes the $15.6 million R&D expense related to the Arcturus amendment and a $9.8 million unrealized gain from the fair value adjustment on the investment in the Arcturus.Unlike the R&D expense, the change in the fair value of the investment in the Arcturus equity, pursuant to this amendment will be reflected in future periods.

Recall that the loss for the second quarter of 2018 includes a $40.3 million gain from Ultragenyx’s portion of the sale of priority review voucher received with the Crysvita FDA approval.For the first half of 2019, cash used in operations was $184.5 million -- $184.8 million, which includes the $15.6 million R&D expense from the Arcturus transaction and also includes adjustments for significant non-cash charges, such as, stock-based compensation expense of $42.4 million, $4.2 million in depreciation and amortization and $0.6 million in non-cash foreign currency remeasurement, due to exchange rate fluctuations.

This is compared to $165.6 million for the same period in 2018, which included adjustments for significant non-cash charges including stock-based compensation expense of $38.4 million, $12.2 million in depreciation and amortization and $5.8 million in non-cash foreign currency remeasurement losses resulting from the restructuring of some of our foreign subsidiaries and fluctuations in exchange rates.We ended the second quarter of 2019 with $618.3 million in cash, cash equivalents and available for sale investments, which factors in the $30 million paid in the Arcturus collaboration agreement.

We believe our cash resources should be sufficient to continue to support the initial years of launch for Crysvita and Mepsevii and allow us to continue to build and advance our clinical and translational research program pipeline.I would now like to turn the call over to Camille who will provide an update on our clinical programs..

Thank you, Shalini. And I also wish everyone a good afternoon. Starting with UX007 for long-chain fatty acid oxidation disorders or LC-FAOD, these serious disorders have unpredictable and precipitous consequences for patients that can lead to metabolic crises and frequent hospitalizations.

There is a high mortality rate despite newborn screening and current management with medium-chain triglyceride or MCT oil. Therefore we believe that new treatments are urgently needed for patients with LC-FAOD.Yesterday, the team completed a significant step toward our goal of bringing UX007 or triheptanoin therapy to patients.

We submitted our new drug application to the FDA.

The submission is supported by a comprehensive package with data from a broad range of over 150 patients, the majority of whom have been treated over a long period of time.The submission includes results from the company-sponsored Phase 2 studies, the long-term efficacy and safety extension study, which includes 20 patients previously naive to UX007, a retrospective medical review -- record review of compassionate use patients, expanded access data and the randomized controlled investigator sponsored study showing the impact of triheptanoin on cardiac function.Earlier this year the FDA granted rare pediatric disease designation and Fast-Track designation for UX007 which enables eligibility for priority review.

Now that we have submitted the application, we expect to hear back from the FDA on submission acceptance and priority review designation within 60 days.Moving to DTX301, our gene therapy program for ornithine transcarbamylase deficiency, or OTC deficiency, OTC deficiency is an X-linked urea cycle disorder that limits the body's ability to metabolize ammonia.

Patients with OTC deficiency build up excessive amounts of ammonia in their blood and can quickly deteriorate into full metabolic crisis, suffering from neurological deficits and other toxicities leading to hospitalization, coma and even death.We previously reported data from the first two dosing cohorts of the OTC study and these cohorts, we had two responders who -- have since maintained normalized urea genesis levels for 78 and 52 weeks respectively, continue to tolerate the discontinuation of their ammonia scavenger medications, liberalize their diet to include more protein and manage through infections without experiencing rises in their ammonia levels.We have not seen any infusion related adverse events or treatment related serious adverse events.

These data suggest so far that a metabolic cure is possible for OTC efficiency with this gene therapy. We are currently evaluating DTX301 at a dose of 1.0 × 10^13 GC/kg and we will provide an update on the program in the third quarter.DTX401 our gene therapy program in glycogen storage disease Type 1a or GSD1a continues to progress as well.

GSD1a is caused by a defective gene for the enzyme glucose-6-phosphatase alpha resulting in the inability to allow the liver to release glucose into circulation.

This could potentially lead to severe hypoglycemia during fasting, or during constant increased metabolic stress such as infection.We previously provided 24 week data for the three patients in the lowest dose cohort of 2.0 × 10^12 GC/kg.

At this time point all patients show durable clinical responses and maintained or increased their time to hypoglycemia in a controlled fasting setting.Importantly, all three patients have sustained their reductions in cornstarch compared to baseline with reductions of 86%, 46% and 73% at 36 weeks which demonstrates further improvement in glucose metabolism in the liver.We have moved to the second dose cohort and are evaluating DTX401 at a dose of 6.0 × 10^12 GC/kg.

We plan to provide an update on this program in the third quarter of this year as well. I will now turn the call back to Emil..

Thank you, Camille. I'll spend a few minutes discussing a number of important milestones in the coming months that will continue to drive our progress. And then we can move to the Q&A.For Crysvita, we expect to see continued strong growth and start formed reimburse patients and prescribers in our U.S.

launch and we'll continue to expand our reach with the recent Canadian launch and named patient sales regulatory decisions in Latin America.As the product launch precedes pass U.S.

alone, we expect our efforts to filing and gain approval early needs of the territories to contribute to a broadening base of Crysvita revenue for the company over the coming years.For UX007, we anticipate hearing back on the NDA submission acceptance and review designation in the next 60 days.

We'll continue to work with the FDA throughout the process and ultimately believe this therapy could offer a meaningful treatment option for patients with long-chain fatty acid oxidation defects.Moving to the gene therapy programs, our two programs in Glycogen Storage Disease type 1a and ornithine transcarbamylase deficiency continue to progress and we will provide an update on both clinical programs in the third quarter.Finally for the preclinical pipeline, we're continuing to advance three of our preclinical programs and several data packages and we are on-track to submit three INDs in 2020.To summarize briefly our launch with our first two approved therapies continues to grow UX007 is not far behind.

We have fulfilled -- we have refilled our pipeline with two clinical stage gene therapy programs and three promising preclinical stage program and all nearing IND. We have been successful and rapidly developing multiple rare disease therapies for patients who do not have a good treatment option are well poised to continue to deliver.

There are few companies, there are very few companies who have completed four successful clinical programs in the last five years since IPO, and also filed three BLAs or NDAs in this timeframe.Our ability to develop, obtain approval and commercialize globally puts us in a unique category in terms of skills and efficiencies as a rare disease company.

The catalyst we had on gene therapy, new product filings, regulatory progress and commercialization will make for a productive year.Let's move to your questions. Operator, can you please provide the instructions for the Q&A portion of the call..

[Operator Instructions] Your first question comes from the line of Tazeen Ahmad from Bank of America. Your line is now open..

Hi, good afternoon. Thanks for taking my questions. Emil just wanted to ask you about the readouts for 301 and 401 in the higher dose cohorts.

So if the -- data for both are positive, what would be the next steps that you would take?.

Well, both protocols for 301 and 401 define that if we reached the dose that we're going to continue, we would then add another cohort three patients at that dose. And then with that information we'd be ready to plan Phase 3.We are also looking at other things we might do in enhancing the treatment and we will talk more about as we move ahead.

But we would first want to confirm, whatever we find in that dose cohort with another few patients, -- before we'd want to proceed to FDA and talk about a Phase 3 program for both studies -- both program..

And is it your intention that if the data look positive for both to move both forward? Or there are any constraints in terms of how much these would cost, which you have to choose one over the other?.

At this point, we are planning, our plan include putting both products in the Phase 3 and that's we're planning from a CMC perspective, as well as the clinical development perspective..

Okay. Thanks..

Your second question comes from the line of Maury Raycroft from Jefferies. Your line is now open..

Hi, everyone. Congrats on the progress and thanks for taking my questions.

My comment was -- my question was just on the named-patient requests in Latin America that you've received so far, and if you can provide any details on how the named-patient pricing will work and the revenue contribution from this region over the next few quarters?.

I think it’s important, I think we've already been receiving and putting some revenue from named-patient request that we have been responding to. I'll let Vlad provide perhaps a little more detail on what's going on in South America..

Thank you, Emil. So we're getting named-patients request in a number of countries, Argentina, Colombia and Brazil. We are processing these requests and submitting them with the appropriate documentation to Developmental Health Care Authorities. And once were invoiced, we actually recognize the revenue.In Brazil, to give you a little bit of color.

The patients have to go through the legal system to get an injunction for the product. And that process is going its course, and we're looking forward to helping all of patients in Latin America with named-patient request..

Got it. Okay. And then, just a question on the gene therapy program, so with the guidance for 3Q -- we've noticed that there are two titles at the SSEIN conference.

Just wondering, if you can provide any more specifics on whether the data would be top line around that conference?.

We haven't planned, what would be precisely shown at the conference yet, but certainly it is possible. But we haven't yet prescribed what will be in the conferences. I think the abstract include existing data..

Got it. Okay. Thank you very much..

Your next question comes from the line of Gena Wang from Barclays. Your line is now open..

Thank you for taking my questions. Maybe just follow Maury’s question, regarding Latin America.

How soon do you think that we will get the meaningful revenue contribution, the commercial patients -- the reimbursement process?.

Well, each country, as Vlad noted, was different. In Argentina, unlike in the past, they have a new law that allows for named-patient reimbursement. So we actually start getting Argentina first. We've gotten some from Colombia. In Brazil, things have changed, and we have filed and gotten approval there.

And what Vlad just talked about a moment ago was, in that process patients have to request through the legal process, their constitutional right to get treated.

And there are a number of patients seeking that, that process takes time once some patients get through that process, then it may go faster than.But Brazil has that step and that can take some time, but there are a substantial number of patients seeking treatment in Brazil.

And there -- I was down there myself for four conferences and meetings with investigators and there is a lot of interest in Brazil in this treatment and anticipation of being able to put their patients on itself. We're excited to see this process move ahead.

Vlad, maybe you can also tell us, tell them about the reimbursement in Brazil and the timeline for that..

Sure, so as you don't know, we got regulatory approval in March in Brazil. We are now proceeding to getting pricing and reimbursement approval. We expect that by the end of 4Q of this year. Once that's complete we will start to process of reimbursement and that can take between two and five years in Brazil.

And we're preparing for submitting that dose, but in meantime as Emil said we're getting lots of interest from patients who want to evaluate our Crysvita slide for XLH. And we're taking all of these request and supporting them appropriately up to getting reimbursed by the Ministry of Health, which we hope to see accelerate soon..

Okay. Thank you. And regarding the U.S. revenue just based on my rough calculation and the U.S.

is roughly the revenue is about $52 million and just wanted to see if they're in-line with your numbers for Crysvita? And also for the 40% of the adult patient, just wondering how much -- how many of these patients like the percentage that through the new patient resources versus existing family tree of the pediatric patients?.

Right. Several questions there. I would just answer the second part, I don't think we could know for sure what keen to family trees and we wouldn't be able to provide that detail on the link between patients. We definitely know there is some families are getting on treatment where mom and kids are going on treatment together.

But we are, I couldn't give you that information at this point, I thought perhaps Shalini is closest to the finance numbers could put forth what we've put out on the revenue..

Sure. Thanks for the question, Gena. And as you may have noticed Kyowa Kirin does not break down the revenue by territory. So that's not disclosed by them specifically. But what we disclose is at this for this quarter our share of the collaboration revenue and the profit share territory in North America is $17.2 million.

The royalty revenue in Europe, which is an up to 10% royalty rate is $1.9 million. So those are all the publicly disclosed numbers that we can discuss at this time.

Okay. Thank you..

Your next question comes from the line of Joon Lee from SunTrust Robinson. Your line is now open..

Hey, thank you for taking this question. And this is Fang on for Joon. Quick question, on the 301 and Emil, remember you mentioned at one of the conference that, there is some gender differences may constitute a variability of the response.

Maybe can you just elaborate on that, what are the evidence you have seen? Is it mainly from animals or it comes from pre-clinical evidence as well? Would do you see any evidence from other clinical studies, which supporting their gender differences in terms of response to gene therapy? And I have a follow-up..

Yes. Thank you. So we observed is one possible explanation for our different response to different patients in the early cohorts could be a gender, and we have not proven that.

There is -- examples in literature in animal models of differences in the gender efficiency particularly with females being more resistant.And there is some evidence that relates to female hormones and their effect on immunity that may be enhancing immunity.

We don't have evidences as that truthful was happening in our patients that was one possibility. We believe though that with increasing the dose, we are able to overcome in a immunity and be able to provide the response, we're looking for in female patients too.

We're certainly looking at all possible angles on how to manage that.The other clinical programs, many of those programs have been excellent that have released and therefore you're not seeing a male, female difference, but it is something that's been known before and something that I think will have to be considered in gene therapy..

Great. That's very helpful. And the second question is on 401.

And I think you also mentioned that one patient, if there is a reduction in starch consumption and then patient going to produce more insulin, and insulin in-turn going to suppress transient expression as some degree.And just maybe help us understand that, how insulin going to suppress transgene expression? I think you mentioned about the normal promoter what you used for the -- for your transgene, that's why there is probably a feedback loop where it contribute to that.

Maybe you can help us understand that will be more -- could be helpful. Thanks..

Sure. So we believe that the control of glucose 6-phosphate needs to respond to normal physiologic signal, like insulin or glucagon, the things that control glucose in your body.

And so the design is that concluded our three kilometers of the promoter region, which includes elements that respond to both insulin, glucagon as well as to steroids or stress responses as well.All of those will give the patient, the potential to increase transgene expression under the condition that would normally increase glucose-6-phosphatase.

We think that would provide an optimal phenotype rather than fourth expression of that enzyme. We know that insulin will suppress the promoter, we've shown that in-vitro. But all we need to do in a patient on the starch is need to wane their starch and let their insulin levels come down and let the expression of the gene to come back to normal.

And that process has received in the first three patients. And as they reduced their starch, they've clearly been able to maintain their glucose.And as you heard now, one is at 86% reduction, one is in the 70% reduction.

Really all three are down into a relatively small amount of starch, because the second patient had a lower reduction, actually started at a lower number to begin with. So actually all that are relatively low amount of starch now.

So I think what that shows, as long as we keep ramping back, their starch, they come internal and manage their glucose with the new transgene provided.So we're confident as we look forward this program that's waning on the starch maybe part of how we get them to switch their metabolism away from starch, insulin dependent system to one that is based on the new enzyme we provided through the gene therapy..

Okay. That's very helpful. Thank you so much..

Your next question comes from the line of Arlinda Lee from Canaccord. Your line is now open..

Hi, guys, thanks for taking my question. I'm also curious about the upcoming data set with 301 and 401. I'm curious, Emil, you talked about potentially looking at different dosing schemes.

I'm kind of wondering what you're looking to do with those dosing schemes? And then as well for the 401, what kind of -- I mean all these patients in the first cohort seem to have had an effect. Curious as to what do you think the threshold for expanding that particular cohort would be? Thank you..

Sure. So, in 301, we talked about dose is one lever and we've gotten now to the E13 level. And we'll put out our data when we get enough data on the patients, to -- to make a conclusion. Our expectation is if that level should be enough.

What we've talked about possibly adding prophylactic steroids as another lever in order to enhance the efficacy, we see and perhaps improve that if necessary. So that's an option we have that dose is not the only lever in terms of what we might do.

And we'll see what the results look like and make a decision.What I do want to do in our program is to get more experimental and actually study what we need to study in order to get the right answer.

Could these decisions are affecting patients their whole life, and we need to make them in the right way with comparative treatment approaches.For the 401 question, we've -- the three patients have gotten pretty close to complete metabolic control.

And that included other findings that were discussed at the Analyst Day in detail, which we haven't reiterated now.We're looking to see if we can continue that as the next dose level and try to understand as that level of efficacy what is achievable or is there a higher level achievable, but it is actually pretty good at the first cohort level, and some of that question was that that enough.

And I think it could be enough.

But I also think it -- it moves up to explore the second dose level to ensure that if it were different or better we know.I do think it takes time to see the result, because of the need to wean the start and see how they respond to that, but the potential is that the 6e12 dose will be sufficient or high enough to achieve a maximum effect, and we'll be able to proceed from there and we'll put out that data this quarter, third quarter..

Thank you..

Your next question comes from the line of Joseph Schwartz of SVB Leerink. Your line is now open..

Hi. I'm Judi [ph] dialing in for Joe. Thanks for taking our question. I was wondering if I could ask a question on DTX301. Specifically how does the third dose being tested in humans compared to doses tested in pre-clinical models such as mice.

And what percent of the --what percent of normal gene expression was achieved in mice, and to different OTC deficient patients need different levels of correction based on mutation. And I have a follow up..

Very good. The mouse dosing is a little difficult to translate because mice are much more easily treated with AAV vectors. So the dosing in mice is 110th of 140th per kilo dose we're using in humans just to be clear, so the exact way to translate the doses is hard, but the e13 should be a range translate the mouse that should be a fully therapeutic.

But what I would say to you that in the mouse, it's easily achievable to reach 100% to liver cured, but in humans non-human primates, the number is significantly less even at higher doses.The cheaper we have to get in this program is to get to what we think is about 80% of normal ureagenesis, which is really maybe a doubling of the amount of ureagenesis they have.

So they may have let's say 3% to 5% of normal to be these type of patients and we need to get them into more like the 8% to 10% range. So we don't have to get them 100% to achieve a level of enzyme sufficient to give them normal ureagenesis.

In the first two patients that did reach around 120% of normal ureagenesis, that doesn't mean their enzyme will hold 120%, it means their ability to convert urea is now 120% normal.

But that means their level is probably in the 10% or 15% of normal range in the cells that have the gene and they are able to convert enough ammonia to give them what is equivalent to normal ureagenesis or sufficiently normal ureagenesis.So to be clear, we're looking at a relatively small increase.

But in the mouse it's -- at these dose levels, it's easy to get to 100%. But we know in animal primates, in humans are different and more resistant to AAV. And that is what everyone in the gene therapy space is working to overcome the human’s ability to resist this vector as compared to what mice were a pretty easy going with regard to AAV..

Okay, great. Thank you for the clarification. And my next question has to do with UX007. I was wondering if you could provide some color on your commercialization strategies, assuming the drug is approved. Given that your field force is currently working with physicians and patients with the different treatment base, with Crysvita and Mepsevii..

Yeah. So the type of doctors that treat Crysvita are some -- are different, there are some endocrinologists that actually that do handle metabolic disorders too, it depends on the institution.We're very familiar with the launch of products into the metabolic, generic [indiscernible] have involved in multiple five or six launches.

There is around 150, 200 centers that are where these patients are concentrated and managed and a relatively smaller team can actually manage that.And the commercial team will be looking at the options, whether it's how leverage existing team. We already have a metabolic in that MSL team and so forth.

But I think there is some time for us to figure out the best way to launch. But we wouldn't want to impair the Crysvita launch.At the same time, we want to make sure we re-sourcing this launch.

But because it's a relatively smaller number of targets compared to the number of targets we're dealing with in Crysvita, we don't think we'll need anywhere near as large a team as we are with Crysvita, given the size of the product and the number of doctors we have to see..

Okay, great. Thank you very much..

Your next question comes from the line of Vincent Chen from Bernstein. Your line is now open..

Thank you very much for taking the question. Another one, revisiting the gene therapy programs, and especially DTX301, you previously alluded that you've been going back to result and trying to assess what's driving some of the heterogeneity in the results.

I was wondering what the latest thinking on that is and what are some of the leading hypothesis?And then as a corollary related to some of the earlier questions and commentary, if the updated data in the third quarter continues to show a lot of heterogeneity, what would be the range of potential steps in addressing this? I know you've alluded to increasing the dose in prophylactic steroids, but help me understand the range, might you consider something to suppress B cells or other elements of the immune system.

What are the range of levers that you could reach for appending your analysis of the drivers of their ability?.

Very good, so with regard to the first question, I don't think we have any new hypotheses on what's going on. I think innate immunity, which could be gender dependent is, clearly one of the factors that is the source of variation in all gene-therapy programs.And it still remains to be one of the possibilities.

Most of the time people been able to overcome that with dose, and I hope that E13 would be the dose that does that. And we'll provide that data later this quarter.One of the things we've been considering from the beginning, when you think about any immunity is how to suppress it.

And prophylactic steroids have been shown to improve the transduction by AAV.We've seen it in non-human primate studies.

We've done, I think is also from other companies' products that have hired it both ways, with and without prophylactic steroids that, there is clearly a significant impact on the productivity of expression, using prophylactic steroids.So, I think it's a natural thing to add-on.

And a very simple thing to add-on, if it can enhance the expression a couple of fold, it’s needed.

And even if we are achieving normal levels if, adding steroids gave you another twofold boost, just a few weeks of steroids.It's worth doing whether even if you're hitting 100% normal, because these long-term benefit of enhancing their gene therapy, the prevalence of cells are expressing, I think is important.

So we are looking at that as, something we might do here in the Phase 2 program, to tell us whether that might be an added benefit, relatively simply. We're currently not looking at other types of targeted drugs'I think there is a lot out there. It takes you into a much more difficult area. And I don't think it's necessary.

Our focus a little bit less on adaptive immunity. You mentioned B-cells. And a lot more on innate immunity, as being the kind of the core corpus because we're not seeing Trans Gene directed antibodies or immuno responses. We're seeing the question of getting the expression initially.

If you're seeing antibodies to the Trans Gene, then you might want to think about things that affect that part of immunity. So right now focus on suppressing innate immunity, enhancing through dose. And we might look at prophylactic steroids as an easy option to potentially boost compression..

Great. Thank you very much..

Thanks. Next question comes from the line of Laura Chico from Wedbush Sec. Your line is now open..

Hello. Good afternoon. And thanks for taking the questions.

I was wondering if we could go back to XLH for a moment and your earlier comments around the genetic testing.I'm just curious, if you've had any sense as to whether that 12,000 figure you put out there in terms of the population, perhaps how that might shift with the implementation of genetic testing? And then, I have a quick follow-up for you..

Well, we haven't put out results for our genetic testing program so far, but I think among clinically diagnosed explanatories we're seeing very high frequency of confirmed exhalation.

So, we feel comfortable that the clinical diagnostic prevalence numbers are accurate and we wouldn't think the genetic testing would alter those numbers at this point time..

Okay, got it. And then I guess kind of related to XLH, wondering now as you've had a few more quarters kind of under your belt here, can you comment at all perhaps on persistency and compliance rates as more patients have titrated up. And are there any differences that you're observing across the pediatric versus adult patients? Thanks..

We haven't yet put out formal persist compliance rates and we don't -- I don't actually have them, but what I can say is that pediatric patients who were in the trial had essentially all stayed on drugs and we haven't lost anyone so -- I'm aware of.So, certainly in some of the population was just an excellent; among the adults there were a few from the trials who may not have continued, but it's been relatively good and our confidence so far as it persists to compliance has been very good.

And it's not -- we don't think a source of problems in the program at this point..

Thanks very much..

Your next question comes from the line of Yigal Nochomovitz from Citigroup. Your line is now open..

Hi, Emil and Shalini. Thanks for taking the question. I just want to make sure I understand properly some of the trends quarter-over-quarter from 2Q to 3Q. So, there was a 30% -- approximately 30% increase in patients reimbursed in the U.S.

But you saw a much higher 45% increase in collaboration and profit share in North America.And as far as you understand there was no price growth and you just mentioned earlier that there was this there was a consistent 60/40 split on the patient mix for pediatrics adults. So, I'm just trying to get an understanding of what the discrepancy is.

Is it related to the maybe a skewing in the cadence of patients in the quarter or not accounting for the growth in the Canadian patients or potentially a shift in the payer mix if we could just provide some insight into how that lines up? Thanks..

Sure, we can do that. I do think one of the things that did change is that the -- we were getting more patients reimbursed compared to how many start -- comparison to the rat e of start form generation, we definitely closed the gap on the reimbursed patients. So that definitely was a difference in the quarter.

I don't have enough feel for the numbers or maybe Shalini you can provide some input on the question of these differences..

Yes -- no, it's a great question and I think half the story is probably the increase in the reimbursed patients versus the start form that proportion that's reimbursed is higher than in prior quarters.And secondly you're absolutely right about Canada actually that the start form data that we provide you with U.S.-only whereas obviously the North American profit share revenue includes Canada as well.

So those are the two key explanations..

And we do have patients on reimburse therapy in Canada who have private insurance. And that's continuing to grow..

Okay. So the profit the profit share calculation, I know you haven't gotten into the details on that, but that's constant. It's not as though you're getting a better higher margin at a -- both higher….

No..

…on revenue. Right. Okay..

That’s right..

Yeah..

Right. Okay. And then the other question I had, you mentioned the prophylactic steroids -- and we noticed on clinic trials, at least for 301, you have at least publicly disclosed experimental cohort with the prophylactic regimen of prednisone.

And we were just wondering, whether that same plan exists for 401 because we hadn't seen that particular detail posted for 401 yet. Thanks..

Well, we are considering the weather use of steroids could enhance the expression at any dose level, based on data we've seen in animals, as well as other peoples in the clinic. So we're considering the 401.

For 401, the use of steroids has some complexities, because of how it affects their glucose metabolism.So we're working through that discussion, we could potentially add it, we haven't made that final decision.

For 301, we felt it was worth just doing it to verify, if we got a bump with steroids for something so simple, it would be worth capturing it to help the prevalence and enhance the overall expression we see..

Got it. All right. Thank you very much..

And your next question comes from the line of Jeff Hung from Morgan Stanley. Your line is now open..

Thanks for taking the questions.

If I can dig a little bit more on the pricing approval in Brazil, can you talk about the steps that remain outstanding ahead of the formal reimbursement dossier?.

Sure. I'll start with and Vlad finish. So to be clear, in Brazil, things have changed over time. The Brazilian government wants -- in order to do named patient or legal process reimbursements; they want to see the drug approved.

This is partly why we filed immediately rather than doing that process in the pre-approval setting.So we filed to get approved, which allows you, enables you to do the named-patient response, where the patient requests therapy and there's this legal process to get access. That process starts; perhaps, two or three cases get taken through.

And then the other cases will get adjudicated more promptly than the first few. So we're in the middle of that process right now and have quite a few Brazilian patients who were queued up and in that process.And I'll let Vlad talk a little bit about the other process. There are several steps and the exact amount of time is unknown.

And, of course, in addition to the normal process, we are going to look to negotiate an access program if we can to go faster than the usual process. But maybe Vlad can tell you what the -- just reminded me briefly again what that process was, the formal commercial reimbursement process..

So after approval, we are submitting a pricing approval process, so we submit that report and we expect to hear back from the Brazilian Ministry of Health around November, December. Once that is completed, we expect the price to be close to the U.S. price.

We will be submitting a reimbursement dossier in 1Q 2020 and the typical time for that to get responded can vary anywhere between five to two years, closer to five.There are opportunities that -- to do actually a public private partnership. We will be exploring those in 1Q after we receive the pricing approval.

But I'd like to add though, is that we have a very experienced team in Brazil who has done many named patient programs for other companies.

So they're well versed in getting these requests from the physicians, compiling all the information required by the Ministry of Health and ensuring that patients follow the appropriate paths through the legal systems, so they're well experienced and we're now kind of waiting for these patients to get through the legal system up to the Ministry of Health, where we will see the first named patient sales materializing..

Great. Thanks. And then, Shalini, you mentioned in the initial part of the launches, you've been providing medical support and guidance.

Can you remind us how you're thinking about an appropriate time to change to guidance? Is it a timing thing after a certain number of quarters? Or are you waiting for a certain amount of sales in a given quarter? Thanks..

Yes. That's a good question. We have studied the analogous products and other rare disease launches in recent years and there is a wide range of practice around when to provide guidance.

And because we have sales, not only in North America, but also in other territories we're in various stages of launch, depending on which product in which territory.And to top that, with Crysvita we also have a collaboration with Kyowa Kirin, so we have to align with them on when they would like to provide guidance.

So those are all the kinds of things we'll be considering. So once we have a further level of maturity for these products in more than one market and agreement with our partner, then we'll be able to provide guidance to you..

Great. Thank you..

Your next question comes from the line of Chris Raymond from Piper Jaffray. Your line is now open..

Hi. This is Nicole Gabreski on for Chris. Thanks for taking the question. So just on gene therapy manufacturing for HEK293 and HeLa set up.

I was just wondering within your centers of excellence, are these two manufacturing platform is being used within the same facilities? And if so, could you just give us a bit of color as to the safety precautions that you take to limit the risk of adenovirus contamination from the Kyowa platform?.

Thank you for the question. Currently, the 293 cell based contract manufacturing, we're doing is in different places from where we're doing the HeLa cell manufacturing, so they're not really in the same locations. That said you still have to control the process certainly.

I think what all of these reactions including the 2000 liter HeLa cell system is run and disposal bioreactor disposal system. And so we feel comfortable about the controls of that and have not seen a problem with the question..

Okay and then just as a follow-up, you've mentioned that the high cost of GMP plasma production is one reason to use the HeLa system over HEK's. But has there been any thought to bringing plasma to production in-house to reduce costs.

And if so, what were your reasons for against this?.

We certainly could become a plasma manufacturer. It just, it adds another level of complexity, supply chain and some people have done that and certainly something that could be done for 293, and we currently have made the decision to build our own plant and we could include plasma production.

I think the issue with plasma, is just one cost factor, but the reproducibility factor is another and it include end the scale running 2000-liter transaction is not really possible, most people are using smaller reactor sizes and cooling reactors.

But with HeLa, we can really run a reproducible growth of cells up to 2000 liters and they're probably going to create a much more robust commercial manufacturing process.The barrier akin was used for vaccine manufacturing.

And we said 2000-liter, but you could make it dedicated if it undergoes 10,000-liter, and no one is doing plasma transaction of 10,000-liter.

So we think the HeLa system is what we think of -- it's sort of the next generation, where you're going to create truly commercial AAV manufacturing, with the kind of cost structure and reproducibility required for a truly commercial AAV program. We are still using 393.

It can be done in these rare indications and it's certainly can be faster upfront, but long-run, we strongly believe in the HeLa producer cell lines to approach as a better approach to long-term commercial AAV manufacturer..

Great. Thanks..

Your next question comes from the line of Yaron Werber from Cowen. Your line is now open..

Great. Thanks for taking my question. So, maybe about two on gene therapy. Maybe just a follow-up for Shalini. So a quick question relating to.

So help us to consider the plan in terms of 301, is the – after this initial three patients, is the thought next to give steroids and then figure out sort of what the next step and you will expand into a few more patients.

I'm trying to get a sense at what point do you also make a decision whether you want to try a higher dose? And I have a follow-up as well..

Well what we're planning to do, we're still continuing the current protocol doing with three. If we see two out of three, that achieve substantial responses that will continue, then do the second group of three at that dose without steroids.

The protocol is to add another whole arm of the study and say let's do that same thing, but now add steroids to the arm as the comparator arm. To do it, no matter what we see in the two arms. The idea is if we get a really good response, could we get an even better response with steroids.

So that's the argument.We could certainly go higher it's not an option off the table, however, if we get to where we need to be in the range. If you can add something as simple as temporary steroid usage to enhance it further and potentially a couple of fold improvement is possible.

We think that's a really simple thing, that's a better answer than simply increasing the dose to get what we want.So right now, if you look a lot of gene therapy programs, that won't doing this one linear thing and making tweaks inline, no one is doing comparative experiments and we think this is a good situation, where we should do a comparative experiment and look with a group of patients without steroids how they do and then add the steroids and make a good decision on Phase 3.So hopefully that gives you an idea.

We're going to use the three without steroids that we've done, we'll look at their results and we will add another three assuming a two or three-responders. And then steroid arm will be another arm that will add regardless of how that's proceeding, to tell us whatever effect we're getting can we enhance it further by a simple addition of steroids..

Okay. Got it. And shifting to 401 depending on obviously what you see in the next dose cohort but the prior dose cohort was probably pretty good. It sounds like you will expand and then we'll figure out what we're going to do with the steroid element.

But in terms of a potential registrational path to starting Phase 3 next year, what do you think a Phase 3 trial design may look like based on what you know now, in terms of endpoints?.

Well, our general view right now is that for these metabolic disorders, the FDA's preference will be to have control studies. And since they're metabolic, we believe it's a metabolic endpoints would make them more tractable, and for example, doing a pure clinical endpoint.

So for 401 we've been looking at time of hypoglycemia but we're also working whether hypoglycemia or cornstarch removal and maintenance of glucose stability, but it's going to be around the glucose control issue whether it's during the time to have a glycemia or some aspect of glucose control, which we think is tractable and relevant for FDA.

We haven't yet discussed it with the FDA.We think of a program that will likely be, for example, maybe 30 patients -- 20 treated, 10 placebo kind of a study. As an idea however this needs FDA discussion before we complete that plan. But that's the kind of thing we were thinking about in our current planning.

And we are planning for both program to be in Phase 3 next year, that is our plan, but we just want to make sure that we share what we do in Phase II, we've made the best choices..

Okay. That's great.

And any update on potential KHK timing to filing for a label expansion by age in Europe into the adult segment for XLH?.

Well I know that they are planning to put together the filing. Vlad, do you have any update that they've put forth publicly, because I don't know if they've disclosed that publicly..

I don't know if they've disclosed that publicly..

Well, historically we know they've been putting it together, they have all the information required. And so I think it's in their court to make the filing. But if they haven't disclosed it yet, we have to let them disclose what they're doing in Europe..

Okay. And then maybe last question is for Shalini. So when we calculate the KHK sales that they reported this morning was around $70 million and you're reporting $73.5 roughly.

So is the delta Latin America which KHK is not reporting and now potentially Canada or is there something else that we're not seeing?.

Yeah, no, it's a good question, in the way they report, in the way we report are very different as hard to reconcile the two. But the couple of differences are that we book sales in Latin America as you noted.

And also if you read the footnotes of their disclosure is, they do not include any early access or named-patient sales in their total revenue figure..

Okay. Terrific. Thank you..

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

Hey, guys, thanks for taking my questions. I have two brief ones here. The assay you used to measure the increase in your ureagenesis in the 301 OTC gene therapy trial. I believe, as measured by a label sodium acetate assay.

Can you speak to the historical variability observed with that assay and how you're accounting for any potential assay variability in the trial? That's first.

And then for the second one on UX007 based on your filing package in most recent FDA interactions, can you comment on your current level of confidence for the NDA acceptance and ultimate approval of the drug? Now that the filing has been made, any color there would be helpful. Thank you..

Very good. So, on the assay for ureagenesis question, the assay was developed by a consortium for urea cycle disorder, it's an NIH funded consortium, they've been doing that work for a number of years, and feel it's the best method to assay ureagenesis. Usually patients, when repeatedly measure, are within 10% of where they were around in that range.

And if you look even in our study, we have some patients that are pretty stable within a range.We've had on occasion people who have not been, but we are doing -- collecting more data now to help define that variation, but it appears over repeated period of time, reasonably consistent.So, we feel as long as is it has done in the prescribed way and that is one of the sources for variation, the patient is happy, fasted and cannot sneak food in while they're doing that test, for example.So, as long as they do it in the prescribed way, it can't be consistent and we feel the variation should be less than 10%.

Therefore, the amount of change we're seeing in the patients that we're calling responders as well past what you would observe just through variation, to answer that part.The second question you asked was an 007 level's confidence.

Well, we've had great and detailed discussion with FDA both the pre-NDA previously an ongoing dialog on assuring that we're providing the information, so we have a high confidence that the filing will be accepted and reviewed.We feel that between the time they accepted, the filing for review, let's get to review; we added additional 20 patients worth of data.

Another third quarter of naive patients treated that had an 80% reduction in the median number of days in the hospital from 10 days to two, consistent with the prior data that we had in our Phase 2 study, as well as in the retrospective study.So, we feel actually they are getting more data now than they actually had when we made the decision.

In addition to that we've added expanded access information we've been collecting, which we think is strongly support of.

So, our confidence is high that it is packages and sufficient size of the 150 patients exposed, some of them for more than 10 years of continuous exposure, combined with the magnitude and the seriousness of the type of data we're talking about.These aren't small changes in hospitalization rates; these are very large changes and very substantive clinically meaningful types of changes.

Combined that with the safety profile of a drug that is simply a GI oral drug, there's some GI upset issues, but no observed toxicities at downside.

I think the benefit of risk is pretty strong and we feel -- we feel confident, we can get through this review and get approved.As said the FDA had questions they raised, and we'll have to work through those questions in the process with them and they're good questions and we want to make sure we're getting the right answers..

Great. Thanks Emil..

Your next question comes from the line of Cory Kasimov from JPMorgan. Your line is now open..

Hi. This is Nina [ph] on for Cory. Thanks for taking the question. Just want to ask two quick questions.

So one kind of a higher level question, just about, you talked about the Medicare and Medicaid exposure in the U.S., and just wanted to hear a little bit about your thoughts on the recent pricing proposals and how that might impact the business going forward? And then I have a quick one – quick follow-up..

Very good. Well, we don't look at the Medicare -- Medicare exposure as risk.

We look at is benefit now that they are approving, creating policies and are hearing the stories of our patients and are responding with support for policies to treat patients.So far we think, the fact that a bigger percentage is going to just to show you that there is that much interest in support for this drug, because of its profound impact that we've been seeing in terms of rickets and other aspects of the disease.So we're confident that, I think the question on pricing and reimbursement questions that are going on in -- similarly a lot of proposals on the table, we have a Government Affairs Group and we follow it closely.

I think the issue that we’ve asked, people ask about is whether reference pricing to Europe would cause us problem.And I would say for that particular issue we have been very thoughtful about how we work together with our Kirin on pricing strategy and we feel that the pricing from Europe to U.S.

is actually not differentiated and should not have an impact on us. We think in a significant way unlike maybe some other situation. So, we feel like we are in good shape from that standpoint.I think fundamentally from all pricing conditions, rare diseases and these kind of very rare disease is very profound effect of drug.

I just think it's kind of thing that people always going to want to get done and I think there is a lot of larger market situations where there is really huge amounts of money and issues at hand that I think are important, but we believe the rare disease space is special and that there will be -- whatever happens, people and parents want their kids get treated.

So that's going to happen..

Okay, great.

And then just one quick follow-up, are there any updates on the filing plants for TIO for Crysvita?.

We haven't yet provided TIO guidance, we are working with the FDA on that. Our hope and expectation is that we could be able to file, but we want to confirm all the details at this point.

But when we get those details confirmed, then we'll update the Street on TIO, but we continue our discussions and we expect that we will be able to file but the details are yet to come..

Okay, great. Thank you..

Your next question comes from the line of Salveen Richter from Goldman Sachs. Your line is now open..

Hi, thanks for taking the question. This is Ross on – I know you said you're planning to file the IND for Wilson's in 2020. Just as we kind of think about what a clinical program and Wilson's disease can look like.

Could you just help us understand what a clinical trial would be like here and what endpoints would be of interest?.

Yeah. Thank you. So Wilson disease fortunately for us is a disease that has had other therapeutic approved, which gives us a lot more knowledge about the clinical regulatory path.

And particularly Wilson has the use of prism copper as a metabolic biochemical marker, that is except, and was – and is the primary endpoint in the Alexion [ph] copper, the new chelator program, this is currently in trial, and has been used in other indications.

We feel, then there is a strong basis for using metabolic copper or free copper levels which are abnormal and which you go down when you use our gene therapy in animals.

We think also loading a throughput on copper is important, but we think the freeze in copper is clearly the thing that's going to move people.And that said, I think with the gene therapy we're also have to look at what else we are doing for patients who weren't have to look at both liver injury, liver disease, situations as well as CNS, in the study to help support the benefit of the product in the long-run.

And so our study, while it might primarily focus on the prism in copper and very supporting their biomarkers.

We would expect to also study the neurologic in liver phenotype which are important part of what we look for and benefit.We haven't said what our plan is, our hope is to design something that is more forward-thinking in terms of becoming adaptive and working including a randomized control group initially.

And our hope would be to be able to move faster through dose cohort and adaptively design a program that goes into pivotal, to that, they will require discussion with the FDA an agreement and we do not have that yet.

But we think that the signals from the FDA have been that they are looking at ways to provide smoother, more contiguous development programs. And we think this Wilson is a very good choice for that plan because there is clinical history and established endpoints from the past..

Great. Thank you..

I am showing no further questions at this time, I would now like to turn the conference back to Mr. Danielle Keatley. You may proceed..

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

Ladies and gentlemen, this concludes today conference. Thank you for joining and have a wonderful day. You may now all disconnect..