Good morning, ladies and gentlemen and welcome to the Ultragenyx Third Quarter 2019 Financial Results and Corporate Update. [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 begin..

Thank you, and good afternoon, and welcome to the Ultragenyx Pharmaceutical financial results and corporate update conference call for the third 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; and 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 quarterly report on Form 10-Q that was filed on August 2, 2019, our quarterly report on Form 10-Q 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 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 discussing our commercial performance in the third quarter of 2019. Shalini will then summarize our financial results for the quarter.

I'll come back at the end to discuss the progress across our clinical and preclinical program and our outlook for the rest of the year.Starting with Crysvita, the growth we saw in the third quarter across all of our key metrics, including sales to the United States continue to support this is one of the top rare disease launches in the industry.

We've accomplished while maintaining a responsible price with Crysvita and by building unique commercial model which plays a great emphasis on finding patients and helping patients and physicians through the reimbursement process. Crysvita is poised to be ultimately be one of the largest rare disease products worldwide.The execution by U.S.

commercial team in the third quarter of 2019 continues to bring this important therapy to patients in need.

We have seen steady quarter-on-quarter growth driven by high level excitement and interest among patients and physicians.In the third quarter, we received approximately 170 new completed start forms bring the total number since launch to approximately 1430.

This quarter split among adult and pediatric patients began to shift towards adults with approximately 45% adults and 55% pediatric patients on reimburse therapy.

This compares to prior quarters where the split was 40% adult and 60% pediatric patients.We believe this increases is in the proportion of adult patients will continue to grow slowly over time. Approximately 617 unique physicians have now prescribed Crysvita the steady increase of 90 unique prescribers per quarter is encouraging.

We anticipate more prescribed fatigue to write second and third prescriptions of the gain experience with Crysvita.At the end of the September, the FDA approved a label expansion to Crysvita to which we believe will further support our strong ongoing launch and continue penetration in the adult and pediatric markets.

For adult patients, the label now includes improving stiffness, a meaningful measurement of muscle disease that impacts nearly all adult XLH patients.

In addition, long-term sustained and further benefit in fracture healing in adult is included.For pediatric patients for new label include clinical data demonstrating Crysvita superiority versus conventional therapy, from our head to head Phase III study in pediatric patients.

The indication has also been expanded to include infants as young as six months of age.

This is important as we received numerous requests for treatment at this earlier age, and believe in the value of treating as early as possible before progressive deformity and lots of growth has occurred.In the third quarter steady increase, approximately 170 new patients went on reimburse commercial therapy bringing the total number of such patients to approximately 1130.

Our confirmatory genetic testing initiative that we commenced earlier this year is helping us identify more patients with a confirmed diagnosis and convert those patients to reimburse therapy.In Canada, we are encouraged by the interest an uptake among patients with private insurance and our initial year launch.

More than half of Canadians have supplemental private insurance today, a number that has grown significantly in recent years. They're already a number of pediatric and adult patients who have been approved for reimbursed are now receiving Crysvita through their private insurance drug plans.

We also continue to pursue public reimburse in Canada which will take more time.Moving to Latin America there continues to be significant interest and excitement about this treatment option. In Argentina, Colombia, the number of patients on reimbursed name patient treatment continues to increase and the feedback has been very positive.

In Brazil, we're currently in the process of getting pricing and full reimbursement proved from the Ministry of Health.

The first few patients have now been treated after successfully negotiating the legal review process, and there are more patients currently navigating the process.Ultimately, we believe there was a significant [indiscernible] in Latin America with growing demand in multiple countries for the product.

Earlier today our partner Kyowa Kirin announced that the European Medicines Agency has accepted their application for the expanded use of Crysvita for adults with exhalation in Europe. This application is now being reviewed.

We're pleased with the step forward to bring this therapy to more patients in Europe.Briefly turning to Mepsevii, this therapy is approved in the United States, Europe and Brazil and the demand continues to build gradually. This is typical for enzyme replacement therapies.

We’re also continuing reimbursement discussions with various government health authorities throughout the world.With that, I'll turn the call to Shalini, who will provide a financial update..

Thank you, Emil, and good afternoon, everyone.Earlier today, we issued a press release that included a financial update which I will briefly summarize. Total Ultragenyx revenue for the three months ending September 30, 2019 was $25.8 million.

Crysvita sales in North America, Europe and Latin America, which are shared with our partner Kyowa Kirin or KKC were approximately $81 million for the third quarter and approximately $211 million year-to-date.Total Crysvita revenue recognized by Ultragenyx for the three months ending September 30 2019 was $22.6 million.

This includes $19.5 million in collaboration revenue in the North American profit share territory, $2 million in royalty revenue on KKC sales in the European territory, and $1.1 million in net product revenue in other regions.In the United States a significant order was placed on the last day of the quarter, which will not be recognized as revenue until the fourth quarter due to shipping terms.

Depending on ordering patterns they're expected to be fluctuations that are on quarter-to-quarter revenue recognition from time-to-time.

In Latin America, full reimbursement takes place on a country-by-country basis and can take some time, which can be further complicated by economic and political instability.Mepsevii steady product revenue for the third quarter of 2019 was $2.4 million.

Due to the rarity of MPS VII, we expect revenues for this product to be somewhat irregular from quarter-to-quarter, and to build very gradually, as Emil mentioned is typical for enzyme replacement therapies. UX007 named patient revenue in the third quarter was $0.7 million.

We also recognize $0.1 million in revenue this quarter from our research agreement with Bayer.As we have stated previously, we continue to expect revenues from this Bayer agreement to be minimal going forward. Our total operating expenses were $143.8 million for the third quarter of 2019.

For the past several quarters up to 20% of our operating expenses, excluding business development transactions like genetics and Arcturus, has consisted of noncash items.Our research and development costs were $100.1 million, which includes a $20 million expense from the genetics upfront payment.

We expect our R&D costs to continue increasing over time as we continue advancing product candidates from early preclinical development into early and pivotal clinical studies.Our SG&A costs in Q3 were $41 million. We expect SG&A to increase over time as we support our commercial program simultaneously launching across multiple geographies.

Over time, however, we expect our revenues to grow significantly and to offset more and more of our operating expenses.Net loss for the third quarter of 2019 was $113 million or $1.96 per share basic and diluted compared with a net loss of $87.3 million or $1.74 per share basic and diluted for the third quarter of 2018.

The loss for the third quarter of 2019 includes a $20 million R&D expense for the genetics upfront payment and a $2.2 million unrealized gain from the fair value adjustment on the investment in Arcturus equity.For the first nine months of 2019 cash used in operations was $273.3 million.

This includes $20 million for the genetics upfront payment in the third quarter of 2019 $15.6 million for the amended Arcturus license rights in the second quarter of 2019.

As well as adjustments for significant noncash charges, including stock-based compensation expense of $62.3 million.We ended the third quarter of 2019 with $527.1 million in cash, cash equivalents and available for sale investments, which is a net of the $20 million paid for the genetics collaboration this past quarter, as well as $30 million paid to Arcturus for the amendment to that agreement in Q2 of 2019.

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 back over to Emil..

Thank you, Shalini.I'll not provide update on our clinical and preclinical programs then return to the upcoming catalysts.

I'll start with UX007 for long-chain fatty acid oxidation disorders, a group of diseases with high mortality rate even despite newborn screening and current treatment MCT oil.Last month the FDA accepted our new drug application for UX007 will work with the agency as a valid filing over the next several months.

The FDA has set up a PDUFA date of July 30, 2020 at this point they have indicated that they do not plan to hold advisory committee meeting to discuss the application.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 and patients with OTC deficiency build up excessive amounts of ammonia in their blood and can quickly deteriorate into a full metabolic crisis setting them neurologic deficits and other toxicities, leading to hospitalizations, coma and even death.We previously reported data for the first two cohorts for the OTC study, we've had two responders who have normalized ureagenesis for 78 to 52 weeks and have maintained normalized ammonia after discontinuing ammonia scavenger medications and liberalizing the diet.

They continue to do well off all therapy.In our view, these two patients demonstrate a metabolic cure is achievable with DTX301. We have since dosed all three patients for the third cohort of one E13, GC/kg without seeing any safety concerns.

We will provide this in cohort around the end of the year.We are also planning to study additional cohort at one E13, GC/kg using prophylactic steroids, as opposed to reactive steroids based upon our own nonclinical data and data from others that prophylactic steroids could further enhance expression over and above that observed with increased dose alone.

We believe prophylactic steroids use could further enhance the consistency of expression for the OTC program and we are encouraged by the potential to treat this disease we expect initiate this cohort with steroids in the first half of 2020.Switching the DTX401 our team therapy program and glycogen storage disease Type 1a or GSD1a.

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 lead to severe and sometimes life threatening hypoglycemia.

Today, patients go to sleep thinking that they could die that night if they don't wake up to their alarm and take their cornstarch.Well the cornstarch can keep glucose levels up and improve survival. It does not directly address the disease and its long-term complications.

So our cornstarch therapy has saved lives and improved health it is not a normal life by any measure. We encourage that all six patients of two cohorts have shown meaningful clinical responsive therapy at the 2.0 × 10^12 GC/kg dose levels.

This includes improvements of glucose control, shown by time to hypoglycemia and reduction in cornstarch requirements.All three of the patients the first dose cohorts are now off cornstarch or greatly reduced cornstarch therapy.

And second dose cohort of patients are showing a more meaningful reduction in glycogen storage as measured by the liver fat fraction and improves the metabolism measured by lactate levels.These data indicate the cohort two doses are showing greater transient expression and continue start for productions and the stronger effects in the pathophysiology of the disease.

As a result we have moved to enrolling the confirmatory expansion cohort of three patients at 6.0 × 10^12 GC/kg dose, and we expect that data from this cohort in the first half of 2020.

Once we establish the dosing regimen, we will initiate a Phase III study at the predetermined dose.I'll also touch on our new agreement with GeneTx Biotherapeutics to advance an antisense oligonucleotide for the treatment of Angelman syndrome a truly devastating disease.

Angelman is a larger rare disease indication with approximately 22,000 patients in United States and there are no approved treatment options today.

The disease mechanisms are well understood and ASO is a well validated class and is a good approach for to Angelman syndrome that targets the disease mechanism directly.We recently made an upfront payment of 20 million which includes an inclusive option to acquire GeneTx.

We can access this option at any time prior to 30 days after the IND for GTX-102 goes into effect, or you can also extend the option exercise at a later time frame. GTX-102 has received orphan drug destination and rare pediatric disease designation.

GeneTx is on track to file the IND and we’ll continue to write update on this program as advanced to the clinic.A few minutes now discussing a number important milestones for the coming months that will continue to drive our progress then we can move to the Q&A. For Crysvita, we expect - see continued strong performance in North America.

We believe the recent label expansion will further support these efforts.

We will also continue to expand our reach with the Canadian launch and the in-patient sales and regulatory decisions in Latin America.With plan to submit a supplemental biological license application to FDA for Crysvita for the treatment of TIO in the first half of 2020 and we are on track with the submission.

While this population is smaller than XLH, it is an urgently ill population with sometimes very severe disease that we believe will adapt to proceed [indiscernible] therapy based on our data to-date.For UX007 we’ll continue to work with FDA as they review our NDA working towards our PDUFA date of July 31, 2020.

We're encouraged by the constructive discussion to date on the Phase II data package.

We just look forward to an opportunity to treat many more FAOD patients much more quickly with this early filings pending approval.Moving to the gene therapy programs, our two programs in GSD1a and OTC continue to progress we will provide an update an OTC program around the end of the year and will have data from the confirmatory GSD1a cohort and the first half of 2020, which has already begun dosing.Finally for the preclinical pipeline, we continue to advance four preclinical programs including our gene therapy program for worst disease and the collaborative GeneTx ASO program for Angelman syndromes.To summarize briefly, the execution by our commercial team third quarter continues to rise except of this Crysvita to launch.

We have two additional programs nearing potential commercialization with US007 NDA under review and Crysvita the supplement BOA plan for TIO in first half along with Mepsevii for MPS VII that sets us up to potentially have three commercial therapies creating four diseases in 2020.Our gene therapy programs are advancing through the clinic toward Phase III studies and we have a robust preclinical pipeline as well.

We continue to deliver on our goal of bringing therapy to patient rare disease without the treatment options and we have a number of cornstarch and gene therapy new product lines and commercialization as we finish up the year ahead into early 2020.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 Gena Wang from Barclays. Please proceed..

Thank you for taking my question. My first question is regarding launching FAOD and it seems PDUFA date is all set.

Just wondering I mean what is your thoughts on pricing? And the second question is regarding the GSDIa, I think last time when we discussed you know 35 gram of cornstarch fasting challenging test seems to interfere with sensitive glucose metabolism.

Just wondering if you can share with us the latest thoughts or optimize the test design so that it will be able to capture through clinical benefit?.

Yes, very good. Well, we'll start with the FDA prize. We certainly haven't priced the product yet but I would let Shalini maybe discuss what know about the pricing list what's out there at this point in time..

Sure, yes, so as Emil, we haven't made a final decision on pricing for that product yet. But you probably know that the sell-side models tend to range on the lower side for this product estimating somewhere between $50,000 to $100,000 per patient per year.

Most likely, because this is a small molecule therapy and so because of that the street has expected lower in terms of rare disease pricing. And we don't think that's an unreasonable assumption, but we don't have a final decision on pricing..

Very good, and Gena I will answer the question on GSDIa. So the challenge we were seeing in the GSDI program is that the patients had time - hypoglycemia improvement and we're having cornstarch reduction.

But the amount of time improvement and the test was not necessary calling with their ability to reduce their cornstarch, which didn't quite make sense.

And when we began realizing what’s was happening is that the way this test is being done 35 grams of starch were given it was causing a glucose surge and specially the cohort two patients, which drove down their glucose through the insulin response.While some of those patients were able to go with very low cornstarch reduction week, but during the tests were actually driven down.

So we've modified and then the protocol ready to reduce that to 10 grams or less of starch. So we should see - not see that kind of hyperammonemic response.

We think that will help demonstrate the difference between what the patients are doing on their own without cornstarch compared to what they could do now when they have an enzyme in the liver that's releasing glucose.So we think that small fix should help improve what we're seeing.

And we looked at the data in totality in that cohort two we felt good about the fact that we're having a very meaningful effect in GSDIa and we proceed to head with that dose and cohort we will see that data soon..

Your next question comes from the line of Chris Raymond from Piper Jaffray. Please proceed..

Thanks first on commercial question on Crysvita so, I think I heard you, Shalini you mentioned that there was a large order on the last day of the quarter, which I think you guys maybe playing to as driver of some quarter-on-quarter choppiness if you will.

But just doing some math on the patient numbers, the 1130 patients on reimburse therapy that's - if we just do the math from the prior two quarters that does represent a decent slowdown in patients, I think it's 18% quarter-on-quarter whereas the last two quarters were 37%.

So - just can you talk a little bit about that dynamic, are we seeing a slowdown or is that also something that's subject to some choppiness?And I have a follow-up. Thanks..

Well, I think the 170 new start forms we think is fairly consistent with what the plan has been seeing. There may be some degree of flowing, but I think this is sort of expect as launch continues but we don't think there has been anything said and I think there is a little bit of timing issues.

But at this point, we feel good about how it's progressing and are not concerned about like a significant change.But we see what you're seeing there, but I think you saw all the numbers like a linear graph you would look at it as kind of being a steady progression..

And then a related question, I'm sorry if you already address this Emil but adding, expanding the label to include kids as young as six.

What does that do to the prevalent patient pulls how much does that increase that?.

So the label increase is to allow instead of one year and up to allow six months and up..

Six months -.

Yes, so it's really it's not a large change in the population. But our kids that are, let's say eight, nine, 10 months that want to get our treatment as parents want them on treatment.

So we do think it would be great for those patients to go straight on Crysvita, rather than starting on phosphate, potentially get injured from that drug and then get Crysvita. So, four to six months, the phosphate isn't really low enough, we don't think there's a need to go for six.

So, we think the six months edition will allow us to treat kids in an optimal way..

Your next question comes from the line of Yaron Werber from Cowen. Please proceed..

And maybe I have a couple of questions. Maybe one Emil for you with respect to the very slight shift that you're seeing now, but it looks like the number of adults so the percentage of adults is increasing.

Is it any sense as to what's driving that or is that just a natural cadence as you're going to find more and more prevalent patients and that sort of the newly diagnosed.And then secondly, if you’re going to help us understand an Angelman with GeneTx what would be the endpoints that you're going to be looking for.

It's going to be obviously a safety study initially, but what about the efficacy parameters? Thank you..

So in terms of the shift, remember that we expect that 9000 patients were adult and 3000 kids.

But the main difference is that kids are coming to clinic frequently and therefore they see their doctor frequently and therefore the doctor can offer Crysvita on a more frequent basis.If you look at what we've done a little over a year launch with pediatrics we've actually, we're already treating 25% of the U.S.

pediatric population in the first year or so, which I think is a pretty incredible degree of penetration of a marketplace to have 25% of all expected kids in United States to be on therapy.So it's natural to expect now as we reach out and send our PDL teams out looking for adults that have been lost to follow-up and outline clinics.

We're going to start to find those people and bring them into the fold, and they'll finally come to their clinic and get offered treatment.I think the improved label will actually help a lot because the muscle stiffness is a common problem and oral phosphate doesn't really do anything for it.

And so, being able to have a distinctive feature that we achieve with Crysvita, I think will bring some patients in who maybe thought they didn't need treatment but weren't really fully appreciating how much they had.So, we expect to see a continued shift toward adults this time.

I think it just means we're finding more of the adults and we're also penetrating while the kids have come to clinic but we do think in the end will the majority or nearly all at pediatric patients will should get on therapy and that a significant fraction of adults perhaps half or more that might should be treated.

So we think this is a natural progression.Now on the second question you asked with GeneTx and the endpoints, well we're beginning the program and to be clear GeneTx is really running the program and we have our own core team that sort of mirrored and supporting them and helping do things.

We haven't made all the decisions on the clinical endpoint program at this point, I don't think we would talk about them. There is certainly a number of endpoints such as Ovid has used in their program.And we certainly look at a lot of these. So I look at the Phase II beginning program and the first look and exploratory study.

And then as time goes on, we'll help hone in or what we think that’s already approval endpoints we want to put a note program but I wouldn't want to commit to them at this point in time..

Your next question comes from the line of Maury Raycroft from Jefferies. Please proceed..

I guess I wanted to ask guidance question just if you can provide any more clarity on what you're looking forward to get more comfort with launch dynamics to provide more guidance on Crysvita?.

Well, I think maybe I should let Shalini talk about guidance and plans?.

Sure well, Maury so far, we have provided a lot of granularity in terms of other metrics to give you a good sense of how the market is evolving over time. And, as the quarters go by, we are learning more and more about the trajectory of the product. So I think we'll get more comfortable with giving guidance.

That is, it's our aim to provide you guidance. At some point we just haven't committed to exactly when that is.I think we like to make sure we're very clear about the trajectory of the launch and what different quarters look like and what the dynamics look like. And then we'll feel more comfortable giving you a better number..

And just as a follow-up for 401, just wondering if you can recap what the gene regulatory regions are in the gene therapy contract.

And if, you're planning on exploring those in the expansion cohort or potentially in the Phase III, exploring those and potentially leveraging those in some way?.

Well we know Maury that the promoter we're using as a three kilo base region of the GSD 6PAs is promoter. It includes elements that respond to steroids, TRE elements that increase expression substantially. It also has elements that for insulin might suppress it, glucon might induce it.

And in fact, it really is designed to coordinate and integrate your body's needs to provide glucose which we think is a unique feature of our 401 program.And we can see that happening that the steroids at week six induced hypoglycemic response, which is what will happen to normal people.

But most GSD1a patients do not respond to steroids normally because they can't release glucose. They actually get - they go the other way they get hypoglycemic.We study the regulation in-vitro as well and in liver cell lines and we – know a lot about it and we think that it is going to be important.

One thing, it does give us the opportunity to use steroids to induce the gene expression if we wanted to. It's something that certainly is a tool we have in our toolbox if we wanted to do that at some point in time.

But at this point, we want to let patients get stabilized, get off their cornstarch, completely, let their body come into a normal regulation.Well they're not all insomnic and high starch all the time and they can get into a normal cycle of being between in glucose. And I think that will allow the gene expression to build even further.

We would expect and that might help them. So once they get off their starch to get stabilized, we'll see how they're doing. But we do have the opportunity to use steroids for example to induce expression if we want to..

Your next question comes from the line of Cory Kasimov from JPMorgan. Please proceed..

And this is Matthew on for Cory.

So for the 401 study and to follow-up on Gena’s question, how should we be thinking about the comparability between data sets from the current versus amended cornstarch challenge in the context of thinking about the go forward dose for this program?.

Well we will - in terms of testing the - confirmed the cohort we initiated, we'll have a new start in testing regimen from baseline. So you'll have baselines for them. But I would say to for the other ones, we'll test them from what they were – for the cornstarch and then we'll have a repeat that will not have a cornstarch.

You look head-to-head what I would say to you is rather than comparing for the first two quarters rather comparing baseline to end game, what I would say to you, it doesn't matter what their baseline is.The question is, can they stay off? Can they stay in normal sugar levels for the entire night? If they can do that with the new regimen, then that's the answer.

The answer is they can do that now and they couldn't do it before. So you don't necessarily have to compare baseline to get the answer this clinically meaningful. If we keep all six patients from going hypoglycemic once they're off starch and they're not getting the high starch in the test, that's your answer, it's working..

And just quickly on the 301 program given the data around year end and the prophylactic steroids cohort is expected after.

How should we be thinking about timelines to Phase III study?.

Well because we are playing do the steroids arm for that.

That would bring it out a little further for OTC because assuming GSD1 goes straight through, then that would be faster and OTC would have a little bit more to do before going to Phase III, but we would expect though at least on the first half year to have a sense for what the Phase II plan is.

I mean what the Phase III plan is for OTC and timeline going forward.I think if we can show that we're actually curing the majority of patients – metabolic curing the majority of patients with a steroid regimen. And I think at least you'll have an answer that there is a product there and it can move forward.

But it would be a little after the GSD1 program, which is potentially moving faster at this point in time..

Your next question comes from the line of Laura Chico from Wedbush. Please proceed..

I guess one first on UX007, I think you've spoken of this opportunity representing about 2000 to 3000 U.S. based patients.

I'm curious if you will actually have perhaps a number on the number of identified patients prior to launch just to get a better estimate of perhaps the addressable treatment market.And then a separate question on DTX301, I think I just missed it, but when might we get the data from the prophylactic steroid cohort.

And then how does that factor into your plans for advancement? Thank you..

Okay so for launching fatty acid defects in the United States now and all 50 States, they are newborn screen and we know there is around a 100 to 150 range diagnosed every year. So the patient identification program will be different.

Now the challenge that patient, let's say over age 10 may have been missed and we will have to work on finding those patients.But we should have maybe for 10 years of patient should have been diagnosed, which I think will be an important [indiscernible] launching especially since every year when you get a new group of patients diagnosed to have the drug available that will be covered by insurance rather than something you're paying out of pocket and would have information about I would suggest its superior at preventing major hospitalizations.I think would be good drivers for adoption.

We won't be able to tell you exactly the addressable population, but because of newborn screening we could probably predict for you approximately based on estimates of lifespan what the prevalent population should be.

But we have been developing our techniques around patient diagnosis and a team that's been doing it.And so we feel very good about our ability to find these patients. Most of them will be in their clinics and about 160 centers.

So it's a little bit more focused to group than might be with let's say adult XLH, which is more like a few thousand.So we think we could do it with a relatively focused team and because we've been supporting compassionate use early access and have a number of patients on long-term therapy at a number of centers around the U.S.

a high awareness for the product already. And so we feel that – well given the opportunity to move up quickly if we move ahead.So the last thing you asked was 301 prophylactic steroids. So, what we said is we're going to get the E13 dose data around the end of the year for – with reactive steroids.

And then we'll be initiating the prophylactic steroids amendments already been filed a few months ago.So it's already out there in play.

So we should be able to proceed and we're working with our patient diagnosis team obviously to line up OTC patients so that we would start enrolling that patient to the first part of the year.I had expect the data to take some time to get through, to get it updated really be confident that we're changing course or improving the efficiency.

And we'll be able to compare with or without prophylactic steroids and to tell us whether that's helping or not. I'd expect around midyear we would have a feel for it, but we haven't set a precise timeline yet when we'll know the exact results. It depends on enrolment..

Your next question comes from the line of Salveen Richter from Goldman Sachs. Please proceed..

This is Andrea on for Salveen. My first one. just as a follow-up to the upcoming DTX301 cohort 3.

Can you help frame for us what the expectations are there and if a positive response in two of the three patients is still the bar to advance the program or if that decision is more dependent on the outcome of this additional cohort that's using prophylactic steroids?.

Well, I think we've said that two out of three patients showing response would tell us that the dose is probably right The steroids we'd hope would increase that to be more consistent, particularly - if there is a difference between males and females, which we believe may be true, but we're not a 100% certain at this point.

So the idea of the steroids we believe not necessarily increase the peak, but increase the consistency of response.Our expectation is we would probably do the steroid arm anyways. We will have made the product available to do it. But our goal was to get at least two out of three to say that we're progressing the program there are responders.

So we think that's a reasonable target to at least tell us that the drug is effective enough.

And then if we can get – just an effect with steroids, that would help tell us what those combination would give us confidence that we don't need to go higher that we have a high enough dose.And I have remind you that we had complete responders where about shows at 2e12 and 6e12. So E13 is kind of substantially more.

And so the hope is the steroids would allow those patients that seem more resistant to respond to it in a similar way to the response we've already had. So summarize, we're looking for two out of three responders, but we would likely do the steroid cohort regardless because we already have the drug in hand..

Got it makes sense. And then just secondly on Crysvita as the launch has continued and you've kind of monitored this.

Do you have updated metrics on how many physicians are repeat prescribers and what, if any of the gating factors to this type of repeat behavior?.

Well, a lot we have - actually it was 670 unique prescribers, but first let's be amazed at that number to start with. Because it is an amazing number. I've been in the rare disease business forever. Never had 670 individual prescribers for anything globally even. So it's a lot.

That is partly the reach that we've achieved is that PDL team and finding all these docs and feeding them to the reps, and that process really allowed us to do that.About two-thirds of the docs have done basically one script and about one-third have done more than one script.

And what we see is that fraction that have done more than one script is holding steady. So as we add new prescribers, some of the one prescriber groups depending the two prescriber were more group and we see that progression. So that's that two-thirds, one third ratio.

It's been pretty consistent for the last few quarters.So what we see is people try it out with a patient, they get the feedback and most of the time the feedback is quite profound and then people start adding prescription. So I think that base will bode - the base of prescriber will help bode well for continued growth of the product.

But it does take one test a response and then people start adding secondary patients.I think the other thing is many doctors are testing out the reimbursement situation because they don't want to get caught in a quagmire if there's any trouble.

Our ultra care team is extremely good and I certainly, when I talk with PIs, a number of them know their ultra care team member by name, which means they have building relationships and ideas that would take that half of the factors as we can in terms of dealing what has to be dealt with and already get things done for patients.But we think that the really important part, the other thing is we commit to patients get treated one way or another and we put them on fast start.

And - if there's any hang up, we also commit to getting them free drug, so the doctors feel like we're never going to pull a rug out under their patient and they feel confident we're going to stand behind them.And if they offer this to patients they're going to get treated. And that's how we make it work.

And I think we need to keep doing that people get comfortable. That's not just words but we mean it..

Your next question comes from the line of Adam Walsh from Stifel. Please proceed..

A couple of quick ones here. The first one is, as we look across Latin America for Crysvita, you had mentioned that for both Argentina and Colombia, you've seen name patients' sales go up. And in Brazil you're in the process of reimbursement through the Ministry of Health there.

And I'm just curious where or when would we expect some kind of inflection point out of Latin America in your major countries there when it comes to approvals, reimbursement and patient access. And then I have one follow-up? Thanks..

Sure. So obviously in Latin America, Brazil is the largest factor and the government there - the current regime has been changing things and creating uncertainties for how they're going to proceed. We have a fairly large queue of patients going through the litigation process. And as I said, we've had a first couple approved.

We'd expect that process to start get going, but it has taken longer than we would have normally expected.So I would say the Brazil process of getting reimbursement through the litigation processes, what's going to essentially start driving the Brazilian launch.

The actual form of process can take some time and for most companies their most of the revenue they're getting from Brazil coming from the basic litigation process.For Argentina, we are actually going to file as well in Argentina because to get the name patient program to accelerate further, there is a belief that we need to file.

And so we've agreed to do that and file there and actually try to drive the formal reimbursement.

I think it's going to take a little bit of time to get going, but we are getting revenue and we have a great team down there and just things in Latin America can be complicated both political and economically, but we feel comfortable.There is a strong drive for the product and people are lining up and queuing up in the litigation process and those cases are coming through.

And we believe they will start generating revenue, but I don't know if it will be exactly in inflection point.I think we'd start seeing some steady growth in the revenue from Latin America over time. We realize Latin American is a huge part of the value for Crysvita for us.

So we are not underestimating or underinvesting what's required to produce reasonable product revenue from Crysvita in Latin America..

And one quick follow-up here on UX007 for a long chain fatty acid oxidation disorder, the FDA indicated that there won't be AdCom to you, but also indicate it's clear that there's not a priority review. I'm just curious you might've thought there would be a priority review given the unmet need and kind of the dire circumstance of the condition.

And then on the other hand, you might've thought there would be an AdCom given the kind of unconventional nature of the clinical trial program that underlies the NDA. So just any commentary there would be great. Thank you..

Sure. We've had a good part of the year, we discussed with the FDA and I think we kind of understand the perspective.

We requested to file our Phase 2 data that was not randomized controlled data, just remember, and our goal was to shortcut the timeline and the investment expense of doing Phase 3 and potentially taking four or five years and does the millions of dollars, which our goal was to file earlier because we don't have randomized controlled study that does change perspective, whether we've proven it's better than MCT or not, but we think the data do show it's superior, and I think there is a procedural question in their mind and we've got standard review for that reason.But they agree that it's important.

They have been very distractive and understanding it. And so it's a little bit more of a technical issue.

From the advisory committee standpoint, I don't think they have any debate that the drug is there and is useful and therefore there wasn't really a reason driving their advisory committee.And so I look at this as sort of a procedural step in how they approach a drug filed off Phase 2 like this and in the presence of an existing product, MCT like oil.

We're encouraged by it. Frankly, I think it tells us, I think we can get through to approval. We're not predicting it, but I think the FDA has been I think very collaborative and discussing application with us and we feel comfortable we can move forward and have a great chance of getting approved and being able to watch this for SVOD patient..

Your next question comes from the line of Joseph Schwartz from SVB Leerink. Please proceed..

Thanks very much. Actually, I'll continue on the last thread there, given you and others investigators have generated a lot of data for UX007 on different end points amongst different patients in different settings.

What do you most want to see end up on the label and what are the most probable scenarios that could play out based on your interactions with the FDA today?.

Well, one thing I'd point out to you Joseph that is different, I think from let's say, oncology drugs that you may be looking at time. In rare disease drugs, the best label that says that UX007 is indicated to treat long-chain fatty acid oxidation defects patients period that's all you want on the label. You really don't want a lot of fine crafting.

You want that there and the steady is the steady in the day we presented.Other assets they labels don't necessarily have so much impact as long as the disease indicates as there are limitations in that indication statement. That's what we're most comfortable with.

And I would point out to you that whether it's superior or not is one of the questions without around my study. But I think there've been a number of rare disease drugs approved with even non-inferiority labels that are actually done fine.I think the physician community is very aware of the product.

We get dozens of requests for emergency use, and we've been supplying it. So there's a lot of experience out there as well.

So our goal with the FDA is to find a reasonable place, how to label it and how to support that label with real world data, disease monitoring program data to help support the value of UX007 and we're confident that UX007 does improve the outcomes for patient in this significant way.

But we didn't - we filed off Phase 2, we didn't have a randomized control study and I think that's the one distinct difference..

And then in your discussions with payers, what have they been most focused on in order to be confident that UX007 presents an advantage versus MCT oil?.

Well, we've shown both payers and doctors the results of the study and most are impressed and compel because it is normally with rare disease.

And I've been in a lot of program, it's generally really hard to get, for example, a 77% reduction in the median number of days in the hospital or 5.5 days to 1.5 over an 18-month period.And then to follow it for another 18 months and have it the median go to zero, right? It goes even lower after three years.

These, you don't see that kind of data that has that direct pharmacogenomic impact on patients and the numbers are large and those statistics significance.

So, we've had very good response to that both from doctors and payers, frankly, and we feel pretty comfortable that there's a good case for why this drug should be used to help prevent costly and disastrous catastrophic hospitalizations..

Your next question comes from the line of Liisa Bayko from JMP. Please proceed..

This is John on for Liisa. Just two questions for me. Can you remind us of your current gene therapy manufacturing capacity if you're going to have enough clinical supply for all the studies throughout next year? And then just on cost of sales, it's a pretty substantial quarter-over- quarter increase.

Is there anything behind that number? Is that something we should look for moving forward or is that kind of a one off? Thanks..

Well, I'll talk about gene therapy manufacturing, and let Shalini deal with the financial part. So on the gene therapy manufacturing, we're using contract manufacturers. We developed the process at our Woburn facility with our own process, own team.

We are fully fledged, processes for how to develop them produce.We are building out our quality control lab to actually do analytical testing ourselves, which will have operational next year, which will allow us to accelerate the testing and release of product made.

But we're continuing to use several contract manufacturers across the country.Now with time we plan and we are planning and designing our own manufacturing plan as well.

But because of program at this point will depend on contract manufacturers and potentially our own testing lab.Currently we've actually been running a number of the runs in preparation for Phase 3 and we will have - we've increased the investment in that to allow us to move more promptly had with the Phase 3 program and we expect to have accumulated enough product to start and run the Phase 3 well before those programs get started.

So I think we should be in good shape of capacity. I know there is competition for space, but we've been reserving well ahead and setting up and we have good relationships with the number of the contract manufacturers..

And on cost of goods sold there is this quarter a $1.9 million reserve associated with a lot of products that did not meet our quality standards. So that is some things specific to this quarter..

And we have your last question coming from the line of Vincent Chen from Bernstein. Please proceed..

Just a couple of them. I guess the first one is just about Crysvita commercial dynamics.

So you're about fix, six quarters into launch at this point, which is often about the point that growth trajectory for rare disease drugs tends to change a little since many of the have been kind of waiting to start trolling in our pent up demand at launch likely are been on drug.

How should we think about these dynamics with Crysvita going forward? And how do you think about different patient pools on both the adult and pediatric sides and how far penetrate are we into them and what might this imply for trajectory going forward?And then second one would just be a quick one to follow up on the early on manufacturing.

I'm curious about how you - could you provide us some additional color on how you think about the merits of contract manufacturing versus your own manufacturing? That's the sort of broader gene therapy manufacturing landscape evolves going forward?.

Sure. So let's talk about Burosumab launch. I think when we announced start forms, you're looking at summarized numbers through time. I think if you - if I showed you the line graph, which I've asked the team to put into our deck. So you can see the line. I think you would see that it doesn't really look like it's flattening.

It's a steady course, but it's not the same as it was the first few quarters where we had the trial patients on where we were. And we definitely had some warehouse stations people lined up and ready to go.But we're seeing a pretty steady smooth growth to us. So I just think it's not quite as distinctive a change, but it's not unexpected.

There would be some slowing. Now what one of our key tenants of the PDL strategy is that we wouldn't run out of docs, I mean patients and the doctors were seeing because those patients would - those PDLs would be finding new patients that our reps have not even gone to.

So the idea is to keep the funnel full with investing essentially as many people finding patients as who are doing the sales piece.

That's what the unique about the model.My hope would be if it works out well, but we'll continue to growth rate because it keeps the funnel full of fresh identified patients and doctors and that's why the prescriber numbers continues to go up as we keep finding those new doctors and getting them prescribing.So that's sort of the way we see it.

And I will - that graph will be put into our deck and you can kind of get maybe a greater feel of what it looks like over time. And maybe that'll help manage question. We don't want it to be caged on that.

It's pretty straight forward.Now on the manufacturing - contract manufacturing for simple products is definitely more cost efficient where you - there's a whole bunch of capacity and you can pick and choose and it's plenty. You don't have to have a hard time getting to a gene therapy has been very competitive.

It's also very sophisticated and complex manufacturing, which requires higher standards of performance in people.Our contract manufacturers are doing a fine job more moving ahead to the programs, but I think in the long run for this kind of sophisticated product, we would expect most companies to go to their own manufacturing plant where they control a process, they can control now, know how that will help elevate and improve the productivity, the processes and allow them to gain efficiencies.And since we have two pros in the clinic and third one coming, having our own plant will allow us dramatic efficiencies being able to run three programs essentially in one plant, when that plant was go on online.

If you're running one at a time, it maybe you wouldn't have that efficiency.So we have enough in play to make it worthwhile, but it takes some time to put a plan together and we want to do it well.

The contract is working the meantime, but I would say for an expensive sophisticated product, you're almost always better off from a cost perspective and a control perspective of running your own manufacturing.

If it's simple manufacturing like Mepsevii contract manufacturing for [indiscernible] type thing, I wouldn't build a plant to do that with so many people that can do a nice job for you..

Thank you. I am showing no further questions at this time. I would now like to turn the conference back to Ms. Danielle Keatley..

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

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