Ultragenyx Pharmaceutical Inc

NASDAQ:RARE

Earnings Call Transcript 2019-Q1

[Operator]

Good afternoon. My name is Jerome, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ultragenyx First Quarter 2019 Financial Results and Corporate Update. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

Thank you. Ms. Danielle Keatley, you may begin your conference.

[Danielle Keatley, Senior Director, IR and Corporate Communications]

Thank you. Good afternoon and welcome to the Ultragenyx Pharmaceutical financial results and corporate update conference call for the first 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 would like to remind investors that this call will include forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 including, but not limited to, the types of statements identified as forward-looking in our 2018 annual report on Form 10-K that was filed on February 20, 2019 and 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 related to our business, see our periodic reports filed with the SEC.

I'll now turn the call over to Emil.

[Emil Kakkis, CEO and President]

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

Camille will then discuss the latest progress across our clinical programs, many of which were also highlighted in greater depth during our Analyst and Investor Day last month. I'll come back at the end of these prepared remarks and close by sharing some milestones to look forward to this year.

In the first quarter of 2019, our commercial organization built on a significant momentum we've established with Crysvita Mepsevii launches in three major territories throughout the world. We're also looking forward to submitting a new drug application later this summer for our third product, UX007, for the treatment of long-chain fatty acid oxidation disorders.

For our gene therapy platform, we saw clinical approved concept in the second program, DTX401, for the treatment of glycogen storage disease 1a. We also successfully raised capital that will enable us to advance our gene therapy and other programs and will also allow us to build a fully scale GMP-compliant gene therapy manufacturing facility that will support late-stage clinical development and commercialization of our gene therapy programs.

This will be a pivotal year as we anticipate the Phase 1/2 data from our two clinical gene therapy programs and plan for our Phase 3 gene therapy studies that will initiate in 2020.

As we discussed at Analyst Day, we are also preparing to submit three INDs in 2020. We've identified the gene therapy program for Wilson Disease, the mRNA program for glycogen storage disease Type 3 and dual-triggered program for creatine transporter deficiency program as our lead preclinical programs is expected to reach the clinic next year.

Now I’ll turn the call over to Vlad to walk you through the commercial performance through the first quarter of the year.

[Vlad Hogenhuis, COO]

Thank you, Emil, and good afternoon, everyone. For the first quarter of 2019, we've continued to build on the successful launch of Crysvita in the United States. We continue to receive feedback from prescribers and patients with XLH that Crysvita has a meaningful impact on patient's lives. Over the last 11 months since launching the product, we've received approximately 1,100 completed start forms from treating physicians.

By the end of the fourth quarter of 2018, nearly all clinical filed patients have successfully transitioned to commercial therapy. Going forward, we expect nearly all new patients will be naïve to prior Crysvita treatment. There continues to be a 60% pediatric and 40% adult split of patients on reimbursed commercial therapy.

Approximately 490 unique physicians have not prescribed Crysvita. As this base of prescribers has grown, the number of physicians writing more than one prescription has grown proportionately with more than 1/3 writing prescription for multiple patients.

As first-time prescribers gain more experience with the treatment and the reimbursement process, we believe will continue to see growth in the number of providers writing multiple prescriptions as well as the total number of prescribers.

Earlier this year, we received a specific J-Code, which has simplified the buy and bill process for Medicare and Medicaid patients. The payer mix as of March 31 reflects this change was 65% private payers and 35% government and other payers. As we stated last quarter, U.S. payers have published policies for Crysvita, covering approximately 200 million lives.

Additional payers without formal policy are approving Crysvita on a case-by-case basis, ensuring nearly full coverage of lives within the U.S. The broad coverage across all payer types has led to approximately 730 patients on reimbursed commercial therapy since launching in April of 2018. We're pleased the early U.S. launch momentum continues to generate meaningful quarter-on-quarter growth across all of these metrics.

For the remaining nine months of 2019, we'll continue to build out the commercial reach of Crysvita in the U.S. We recently implemented easy access to confirmatory genetic testing, independent genetic counseling and pedigree analysis programs.

We believe these initiatives will help identify more patients with a confirmed diagnosis and reduce the amount of time it takes to get on reimbursed therapy as well as potentially identify family members who have XLH.

Now, within the Latin American market, we're pleased that Crysvita received approval in Brazil for the treatment of XLH in adults and children in March. We also look forward to regulatory decisions from the Chilean, Colombian and Mexican health authorities this year and next.

We're eager to launch Crysvita in these key rare disease markets and will continue with reimburse named patient treatments in Argentina, Brazil and Colombia, responding to multiple physician requests.

Over the coming months, we'll continue working with authorities in these regions to ensure broad access to Crysvita for all patients. Reimbursement decisions in these markets can take a few years, but in the meantime, we'll respond to named patient requests.

Briefly turning to Mepsevii, we continue to have discussions with French, German, Spanish and Portuguese government health authorities and look forward to additional regulatory decisions in Mexico, Colombia and Chile this year and next.

We're pleased this product is currently approved in three major geographic regions of the world, including United States, the EU and Brazil. We're encouraged with the difference Mepsevii continues to make for patients with MPS VII around the world.

With that, I'll turn the call to Shalini who will provide a financial update.

[Shalini Sharp, CFO]

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 March 31, 2019 was $18.2 million.

Topline worldwide revenue of Crysvita totaled approximately $57.5 million. This represents the total sales across North America, Europe and Latin America, a portion of which are shared with our partner Kyowa Hakko Kirin, or KHK.

For the quarter ended March 31, 2019, Ultragenyx recognized total Crysvita revenue of $14.5 million. This includes $11.9 million in collaboration revenue in the U.S. profit share territory and $2.0 million in royalty revenue in the European territory. Net product sales for Crysvita in other regions totaled $0.6 million.

Mepsevii product revenue for the first quarter of 2019 was $2.7 million and UX007 named patient revenue was $0.7 million. We also recognized $0.3 million in revenue from our research agreement with Bayer. As we have stated previously, we continue to expect revenues from this agreement to be minimal going forward.

Net loss for the first quarter of 2019 was $96.8 million or $1.82 per share basic and diluted compared with net income of $30.3 million or $0.63 per share and $0.62 per diluted share for the first quarter of 2018. Recall the net income from the first quarter of 2018 includes $130 million gain from the sales of the priority review vouchers.

Cash used in operations for the first quarter ended -- for the quarter ended March 31, 2019 was $95.8 million, which includes adjustments for significant non-cash charges, including stock-based compensation expense of $20.2 million, $2.1 million in depreciation and amortization and $0.6 million due to the fluctuations of exchange rates.

This is compared to cash used in operations of $89.5 million for the same period in 2018. This included adjustments to significant non-cash charges including stock-based compensation expense of $18.8 million, $6.2 million in depreciation and amortization and $4.8 million in non-cash foreign currency remeasurement losses, in connection with the change in the company's tax structure and fluctuations of exchange rates related to intercompany transactions.

We ended the first quarter of 2019 with $715.3 million in cash, cash equivalents and investments on the balance sheet. This includes net proceeds of approximately $330 million raised in an underwritten public equity offering which closed in March 2019.

We intend to use a portion of the net proceeds to build our own GMP gene therapy manufacturing facility with the expectation of reducing the cost and increasing the speed with which we can execute on our gene therapy programs in the future.

I would now like to turn the call over to Camille, who will provide an update on our clinical program.

[Camille Bedrosian, CMO]

Thank you, Shalini and I too wish everyone a good afternoon. Starting with UX007 for long-chain fatty acid oxidation disorder, or LC-FAOD. LC-FAOD is a group of genetic disorders in which the body is unable to convert long-chain fatty acids into energy.

With the severity of these disorders and the high mortality rate despite newborn screening and current treatment with medium-chain triglyceride or MCT oil, we believe that new treatments are urgently needed for patients with this devastating disease. We are on track to submit a new drug application for UX007 to the FDA in mid-2019.

On the regulatory front, earlier this quarter, the U.S. FDA granted fast-track designation as well as rare pediatric disease designations for UX007. Fast-track designation allows for early and frequent communication with the FDA. It also enables eligibility for a Priority Review, if relevant criteria are met. We expect to hear back from FDA on Priority Review designation 60 days after submitting our NDA.

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. As you are aware, ammonia is a very potent neurotoxin.

Patients with OTC deficiency build up excessive amounts of ammonia in their blood and can quickly deteriorate into full metabolic crisis, often induced by an infection. High ammonia results in neurological deficits and other toxicities, leading to hospitalizations, coma and even death.

We provided additional data from patients in the first two cohorts of the Phase 1/2 study at the 2019 American Society of Gene & Cell Therapy Annual Meeting and our recent Analyst Day.

As a reminder, we have had to responders, one in each of the first two dose cohorts, and they have been followed for additional time and extension. We reported data from 52 and 78 weeks.

At these longer term time points, these patients have maintained normalized rates of ureagenesis, continue to tolerate the discontinuation of their ammonia scavenger medications without rises in ammonia and also have liberalized their diet to include more protein.

Furthermore, one of the responders had a lab-documented case of influenza, which typically would initiate a metabolic crisis. This patient was able to stay out of the hospital without experiencing an increase in ammonia levels and without needing scavenger medications.

We view this experience as further validation that the improved rate of ureagenesis observed can protect the patient with OTC deficiency from a hyper M&A mix crisis during an infection. The data suggest so far that a metabolic cure is possible for OTC deficiency with this gene therapy.

And moving to DTX401, our gene therapy program in Glycogen Storage Disease type 1a or GSDIa. GSDIa 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 increase metabolic stress such as infection.

We recently provided additional data on the first three patients in the lowest dose cohort of the Phase 1/2 study. All three patients now have been followed for at least 24 weeks and all are showing durable clinical responses, and further improvement in their glucose metabolism, as defined by time to hypoglycemia and a controlled fasting setting.

At our recent Analyst Day, Dr. David Weinstein, a DTX401 investigator, Professor of Pediatrics at the University of Connecticut and Director of the GSDIa program at the university, shared recent observations from the two patients that he has treated as his center in the first cohort. His two patients have now decreased their cornstarch consumption even further by 76% and 91%, compared to baseline.

Because their cornstarch consumption is decreased so substantially, the livers also are shrinking and these patients are experiencing significant weight loss. In addition, one of the patients recently had gastroenteritis and was able to maintain normal glucose levels despite the infection.

Physically, this would be a major hypoglycemic challenge for patients with GSDIa. The fact that hypoglycemia was not observed suggests that the transgene with its normal expression control region is able to support the patient's glucose needs despite the metabolic stresses from a gastrointestinal infection.

I will now turn the call back to Emil.

[Emil Kakkis, CEO and President]

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 question-and-answer period.

For Crysvita, we expect the breadth and depth to prescribe to treating both adults and children XLH will continue to increase, and we'll update you on our progress in our subsequent earnings calls.

We are also growing our commercial reach with recent approvals in Canada and Brazil, and we are pursuing filings and expect the regulatory decision to other countries in Latin America this year.

For UX007, we're on track to submit our new drug application in the FDA in the mid-2019. Submission will include a comprehensive package of data for more than 75 patients, including the company-sponsored Phase 2 studies, the long-term efficacy and safety extension study, a retrospective medical record review of compassionate use patients, expanded access data and the randomized controlled investigator sponsor study showing the impact of the UX007 on cardiac function.

Moving to the gene therapy programs for DTX301 for the treatment of OTC deficiency, we expect data from our third dose cohort in the mid-2019. For DTX401 for the treatment of GSDIa, we anticipate data from three patients in the second dose cohort also in mid-2019.

For both of these programs, we'll evaluate the data and then determine the path forward for each program. If the data suggest, we have reached optimum dose, we would be enrolling additional three patients at dose before moving to a Phase 3 study.

We also look forward to finalizing the site selection bidding construction of our fully scale GMP manufacturing facility that will support the development and efforts across our gene therapy platform.

Finally, for the preclinical pipeline, we're encouraged by the preclinical data we shared at Analyst Day that illustrate the strength of our research pipeline and the preclinical model of UX701, or AAV therapy for treatment of Wilson Disease, appears to actually pump copper from the cytoplasm and could be a much more effective option in the current chelator therapies.

For UX053, or mRNA program for the treatment of Glycogen Storage Disease Type III, we have successfully completed non-clinical dose range finding and toxicology study that suggests could be a meaningful way to reduce the liver's ability to break down glycogen into glucose and release it into circulations.

For UX068, our dual-trigger program for the treatment of creatine transporter deficiency, the nonclinical approved concept studies have shown rapid creatine accumulation in the brain suggesting this drug's ability to cross blood-brain barrier and effectively deliver creatine to the brain. We still need to finalize the exact choice of the molecule to bring to the clinic from our top candidates.

Through the remainder of 2019 and early 2020, we will continue to conduct the necessary preclinical studies and assemble data patches that can enable us to submit three INDs in 2020.

Earlier this year, we celebrated the ninth anniversary of the company's founding and the fifth anniversary of our IPO. Stepping back, I'm very proud of what this company has done to relentlessly find solutions for patients. Over the last nine years, we've worked on treatments for 20 different genetic diseases and we conducted 34 clinical studies in eight different diseases.

We received approvals and simultaneously launched two products in three major geographic regions in the world and have two more programs still to file. We've also established a robust gene therapy clinical and manufacturing platform with two successful products in the clinic.

This track record has helped us become a rare disease company that will keep identifying new therapies and bring them patients with rare diseases who have limited or no other treatment options.

Let's move to your questions now. Operator, can you please provide the instructions for the Q&A portion of the call?

[Operator]

[Operator Instructions]

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

[Gena Wang, Barclays]

Thank you very much for taking my questions. I just have two questions. The first one is regarding the revenue. So, for the U.S. revenue it's; A, $12 million, $11.9 million profit sharing exactly roughly into base on our calculation of US$35 million, representing 31% growth over last quarter?

Just wondering any seasonality in this quarter that we should take into consideration when we think about the growth trajectory for the rest of the year? And I have a follow-up question.

[Emil Kakkis, CEO and President]

Thanks, Gena, I think the revenue numbers are a little bit complicated because of the partnership and all the moving parts. We appreciate that can be hard. I think -- I don't think we can know if there's really seasonality.

We're too early in the launch to be comfortable with seeing that. I know that in some regions, there can be regional seasonality, end of gear, and those kinds of things, so I think we're a little bit too early to look at that as reason for anything.

At this point, we feel comfortable how the things are progressing. And I don't see any specific answer I would give to whether the numbers are up or down from anything more than just the natural progression of launch.

[Gena Wang, Barclays]

Okay, great. And a quick follow-up is regarding the OTC and GSDIa program. Just want to confirm, manufacturing cell lines HEK293 suspension cells and already in commercial -- using commercial production. Just wondering any need for future studies?

[Emil Kakkis, CEO and President]

It's an important question. Both programs for OTC and GSDI are in HEK293 currently. The GSDIa program is in a 200x4, 800-liter scale production that is of commercial scale and quality. There may be modest improvements that we will continue to make in GSDI. We do not think version study will be required.

We will eventually move to a HeLa platform for GSDIa. We haven't done it now and -- but we do have an ability to do it via the HeLa platform as well, and we will at some point in the future given the success of the program so far, we think important to proceed promptly head to a commercial rather than introducing a change at this moment.

For OTC, the original Phase 1/2 system is 293 cells again, but originally adherent, but they are also will be running to a suspension system, which are moving to now that's very similar to what we're doing with GSDI, which is a 200-liter type multiple containers giving a run size around 800 liter. Those are very similar processes. We'll be staying with the HEK293 cells for the OTC process heading to approval.

[Gena Wang, Barclays]

Thank you. That’s very helpful.

[Operator]

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

[Unidentified Analyst]

Hi, guys. This is Matthew [ph] on for Cory and thanks for taking my questions. My first one is on cash burn. How should we be thinking about it over the next 12 months with the ramp in R&D and your gene manufacturing coming online?

[Emil Kakkis, CEO and President]

There are a lot of things, obviously, moving parts, but I'll let Shalini provide some color on that one.

Shalini Sharp

Yes. Thank you, Emil. So, we are looking to expect modest increases in expenses on R&D and SG&A and also to begin the build-out of the GMP manufacturing facility for the gene therapy program.

We do also at the same time though expect to have more and more revenue offsetting our expenses over time. Those are the two different dynamics that are moving in different directions, but for 2019 we do expect those lines to increase in the expense side.

[Unidentified Analyst]

Got it. And then just for the DTX301 midyear update, is that reasonable to expect that you'll have enough data to be in a position to make a go or no-go decision?

[Emil Kakkis, CEO and President]

We expect to be able to make a decision if we're ready to move to Phase 3 or not. I think remember that cohort’s only three patients, so what I’d point out to you is that we would certainly do another three patients. We felt that the Cohort 3 showed us enough response to suggest that was an effective therapy. We would proceed ahead and treat another three patients, which would give us a little more information to deal with.

So, that is what we're looking for, we suggest that that we get two out of three or three out of three responders or curers, we would proceed ahead to Phase 3. What I would say is if we're in a position with less clear results, we would be still working hard to proceed and find a way forward because we believe some of the responders have had life altering, life-changing results in terms of their outcome. And it's not something you walk away from when you have that kind of response.

So, there may be things we need to work on, but I actually feel confident that increasing the dose will do a lot towards increasingly consistency of therapy based on what we've seen in many other programs.

[Unidentified Analyst]

Got it. Thanks for taking my questions.

[Operator]

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

[Unidentified Analyst]

Hi. This is Eli [Indiscernible] on for Chris. Thanks for taking the question. So first one on the Crysvita launch. You mentioned having 490 prescribing physicians at this point. So I guess is that a number better than your initial expectations now that you're about one year into launch?

And could you remind us, do you have a number of prescribers that you're targeting and just thinking about drive personal growth in 2019 and into 2020, how do you think about the relative importance of increasing prescriber breadth versus depth of prescribing?

And then a second quick one on DTX401, could you just remind us of your thoughts on generating data in pediatric setting or just talk about how this comes into play as you think about the Phase 3 trial design? Since I think previously you indicated that Phase 3, could include patients as young as 12? So just help us out on that. Thanks.

[Emil Kakkis, CEO and President]

Good. So, I think 490 prescribers for any rare disease launch that I've been involved with is extraordinary number of prescribers this soon into the launch. I think many products that work and we never had 490 in the U.S. So we are impressed with the number.

That said, there's still more prescribers out there, and I'll let maybe Vlad talk a little bit about where we are on the question of breadth of prescribers versus the depth that each patient -- each doctor is prescribing.

[Vlad Hogenhuis, COO]

Thank you, Emil. So I think we're pleased with the launch is in the number of prescribers. What's at kind of important for us is to continue to pursue the prescribers in the top academic and metabolic bone centers who still haven't prescribed Crysvita to all of their patients to continue to convert both their adults and pediatric patients, and that's kind of a first priority.

But pretty soon we'll be also moving to expand the breadth and moving to some of the smaller community specialists who are managing patients with XLH, who may have patients with XLH that may not yet have enough knowledge and exposure to prescribe the product yet. So we'll be moving to educating them and helping them compared their diagnosed patients on to therapy with Crysvita.

[Emil Kakkis, CEO and President]

Then I'll answer the second question on DTX401 the setting. Based on the strategy, FDA generally ask people to focus on treating adults first, gain information on safety and then to move down from there.

Our view is that a 12-year old, 16-year old and 18-year old are not that different from the standpoint of GSDIa in terms of their metabolism and so forth. So, our expectation for Phase 3 would be to move the age down to something like 12.

The factor here to consider is that the size of the liver and how much it grows is important and there is some evidence from the dog model that early treatment before liver is fully grown, could result in dilution of the effect and therefore dosing saying in a patient was now more near full-sized would probably result in potential for lifelong effective treatment. So our goal will be move down to age 12.

And the question is, will we go down lower? I think our goal will get approved in something like 12 and up and then explore what we do with younger patients. Obviously, there isn't is in the younger patients as well, but we have to deal with this question of early treatment and dilution. And we're still early on with the process, I think it's prudent to get to the 12 in the population while we are going to make a judgment on what we should do on some of the younger children.

[Unidentified Analyst]

Thank you.

[Operator]

Your next question comes from the line of [Indiscernible] Ahmad. Your line is now open.

[Unidentified Analyst]

Thanks for taking my questions. And the first is on price. Can you give us a sense of at least on a percentage basis, any kind of price differences that you're noticing relative to the U.S., which we presume is the highest price point out the price difference in Europe and LatAm for Crysvita?

[Emil Kakkis, CEO and President]

For Crysvita? Well, pricing is complicated because there's a lot of other factors including required rebates and other things going on. We have set a standard between the companies to have pricing and that was within a range and we agreed upon our strategies for pricing globally to try to achieve a consistent range. Of course, different countries have different situations regarding negotiation. I don't think we can give you a full comparison of all the prices at this point.

I think that what I would say is that, we’re not seeing a dramatic differential pricing for different territories and we purposely went with a more moderated price in the U.S. to allow us to achieve more consistent pricing, which we think is fair and we think that, that responsible approach to pricing has given us a better response from payers in the U.S. so we haven't -- we are planning to try to hold within the range globally, but now it's a little too early to say what the actual price are so I can't give you more detail yet.

[Unidentified Analyst]

Okay. And then for FAOD for the upcoming NDA, how are you thinking about what kind of sales force expansion if at all you need should that get approved next?

[Emil Kakkis, CEO and President]

I'll start with that and I can let Vlad talk to it. First of all, the FAOD the world is generally managed by a certain number of centers in the U.S, and the centers that we work with a lot around 200 in-born error centers across the U.S. that usually manage FAOD.

So, there's a relatively concentrated set of targets unlike Crysvita, which hasn't many more targets in that. So, there's -- those centers happened to be the same one as MPS 7. So, I'll let Vlad talk about our field force strategy at the moment.

[Vlad Hogenhuis, COO]

Yes. So as Emil said, there's a big overlap with the MPS7 patient centers that we're currently servicing and looking at kind of a number of option how to best address them. But fundamentally, I think, we see significant synergies with our current presence, our interactions with these physicians that focus on these inborn areas of metabolism that FAOD represent and working within that narrow physician population to be able to serve our patients well.

[Emil Kakkis, CEO and President]

So, I think -- some synergies we think we would be able to manage with not very many. So, I would look at this as a huge -- some large build-out to occur. There's not going to be. We'll have -- we have some current members already managing this say doctors. And because of the narrow target list, I'm not expecting a large field for change.

[Unidentified Analyst]

Okay. Thanks.

[Operator]

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

[Yaron Werber, Cowen]

Great. Thank you. So, Emil, I've got a couple of questions on 301 first in terms of based on the second and third cohorts, at what point do you really decide to also increase the fourth cohort and let's say, go to the low to the 14 if maybe obviously?

[Emil Kakkis, CEO and President]

Well, by the protocol, E13 is currently the protocol on top dose. We could go to a higher dose. I don't have an answer for you yet, whether we would change the dose. I do think what we've shown is that you can't successful, very successful cure or normalization of your genesis at a lower dose, so we want to really understand that better before we would lead up to a high dose, because that is not benign to go to E14, for example.

Because all the people that are doing that also have long periods of steroid use and a lot of inflammatory reactions to them, we think it would be smart or not to do that too aggressively.

We think E13 is a substantial step and we think that we've seen a lot of people in E13 range that pass the threshold and start seeing more effects. So, we believe E13 will probably be good enough and we also need to look at other factors like modulation, immune response a little bit, if there is an innate immune response as a factor for example, could be something that we enhance our efficiency at a given dose, so that's something that many people have looked at in other settings. So, we're looking at both those things.

We'll have dose and eventually we'll look at whether we need to think about some other strategies that have any issues. I feel pretty comfortable that we should be able to get to an effective dose of E13, but it's not within -- it's not impossible that we could consider increasing the dose further, although I don't think we go right to E14 out the gate because of the safety question that I've raised.

[Yaron Werber, Cowen]

Okay, it's very useful. Then at the [Indiscernible] meeting, the presentation noted that one patient has been enrolled and captivated the third dose cohort, and two additional subjects will be enrolled. I don't know if you can give us an update on that. And presumably with 12-week data, I would imagine, it's probably sometime later on in Q3 that we'll get the data is that what you're thinking?

[Emil Kakkis, CEO and President]

Yes, well we haven't put out a formal enrollment for all the studies in one-by-one basis. It's just something we decided we weren't going to do. We still feel we're on track to get 12-week data in the time frame we said. When we say mid, mid is Q2, Q3 time frame. So, we are still on track to build to do that for that program as well the GSDIa program.

[Yaron Werber, Cowen]

Okay. And then just a question on 301 in terms of based on the prior data with the first cohort with the data looked pretty good. Obviously, there's optimism from you as well as Dr. Weinstein with the second dose cohort maybe sufficient. At what point -- if it is sufficient at what point and how fast can you move to pivotal?

[Emil Kakkis, CEO and President]

Yes. So we hope that the second dose cohort, which is 3x higher than the base, so it's a significant jump up that given that we're getting the 70% to 90% reduction in starch that we think the 3x could very well be enough to get as to elimination of cornstarch need, maintenance of glucose and all the secondary effects we'd expect to see if someone who's metabolism has changed. We do want to make sure we are completely changing their metabolism if there's no dependency on support for their glucose.

So, we think that's very possible and we are all certainly are already planning the design and Phase 3 and thinking about execution into Phase 3. But remember, we plan to treat another three patients at that dose if it's positive.

So, I think you would agree that having only three patients at the dose, it's not quite enough to be I would say confident. If it's the right dose and our optimal biologic dose, which we know they’re three and be setting up to go as probably as possible in Phase 3, but Phase will start in 2020.

So, we'll do it as probably we can we have to finish the second three in light of the manufacturing any improvements going to be made to assure that we've got FDA buy and both on the design on the manufacturing plan for the pivotal study.

[Yaron Werber, Cowen]

Okay, great. Final question. It looks like there's been as you noted about 1,100 patients started on Crysvita. Any sense how many patients are actually diagnosed now in the U.S. based on your latest work? Thank you.

[Emil Kakkis, CEO and President]

Yes, Yaron. We have not put out our specific identified or diagnosed. And what we've said and we believe there's around 12,000 U.S., but we haven't individually identified 12,000 here.

We've identified a very substantial number of patients and we feel very comfortable that based on our projections that the 12,000 number is still a pretty accurate number. And I would say to you, you've been -- you've seen a number of rare disease launches.

To get 1,000 people on therapy in the first year, means there's got to be thousands of patients that just doesn’t happened that fast unless you had a lot of patients to get, because that's already a significant fraction of the whole population that we expect. So, we feel like the numbers are right, but we haven't put out more and diagnosed.

And the reason is, it's constantly evolving, and I just don't think there's going to be a lot of value. But we have found a lot of patients, and we feel pretty comfortable that 12,000 is about the right number.

All right, next question?

[Operator]

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

[Unidentified Analyst]

Hi. This is Hannah on for Jeff. For Mepsevii, you've said that its focus point has been finding new patients in Europe and South America. So how are those efforts going? And are there any new learnings or surprises from those geographies? Thank you.

[Emil Kakkis, CEO and President]

Thank you. I'll start, and I'll let Vlad finish and talk about what's going on regionally. With any of the rare disease -- rare MPs launches that I've been through, several, which is right of direct on actually three others.

So, the process in both development and launch phase is a slow step-by-step process in all the products of what we call slow steady growth over time, looking and finding. Sometimes it's not getting the -- it's not getting done. Sometimes the patient sound a bit lost to follow up.

We're doing pulling all the stuff to pool additional patients, and we are finding additional patients one-by-one steadily. Some have been around the whole time, and somehow were not found, and I don't know why that is, but it's been the same when we launched Naglazyme, almost every MPS product.

So, let's Vlad talk a little bit about what's going on in our regions for Mepsevii finding just from a general high level.

[Vlad Hogenhuis, COO]

Yes, from a high level, for example, in Europe, we're evaluating the presence of the MPS 7, deficiency in patients with non-immunologic hydrops fetalis, and are kind of looking to identify patients who have that.

In Latin America, we've actually looked into patients who are suspected of an MPS diagnosis in the past, but did not get a final diagnosis, because either the MPS 7 wasn't there, so it wasn't available. And we're testing those patients. And in those situations, we have been able to find a couple of patients, which I think is to effect so that we can evaluate how Mepsevii works in those patients.

And in the U.S., I think we continue to attest evaluate and diagnose patients and continue to add to the number of patients, who are now on reimbursed therapy, so we're continuing our efforts in the U.S. as well.

[Emil Kakkis, CEO and President]

It will definitely take time, but it's progressing. And I think we're finding the patients with relative frequency. Next question then.

[Operator]

Your next question comes from the line of Edward Nash of SunTrust Robinson Humphrey. Your line is now open.

[Fang-Ke Huang, SunTrust Robinson Humphrey]

Hey. This is Fang-Ke Huang on for Edward. Thank you for taking our questions. Just to follow-up the gene therapy manufacturing. If I recall it correctly, you mentioned that the 401 program is going to transition the HeLa platform, and then for the 301, you're going to stick to HEK293. If that's correct, can you just let us know why one program you are transitioning to HeLa and the other one you choose to stick to HEK293? Thank you.

[Emil Kakkis, CEO and President]

Sure. The GSD1a program could transform -- could transfer to HeLa sooner. But we think it's smarter to move ahead more promptly with the current manufacturing scale and process to just get approved.

And then, after approval we'll put in place the HeLa system do the appropriate producing and manage that in a post approval situation. But, we think long-term the HeLa system will be a better approach for the GSD1a.

For OTC, it's been less successful when applying to HeLa strategy. We don't have specific answers as to why we would provide but, we haven't produced the producer cell line for that particular product.

We've done it for many other programs, but not for that one at this point. But it doesn't mean it can't be done. We just need to look at some additional factors for that one and we decided to stay with 293 since it was productive enough to make it viable.

[Fang-Ke Huang, SunTrust Robinson Humphrey]

That’s very helpful. Thank you. And then second one, since Crysvita is recently approved in Brazil, can you just talk about specifically in Brazil how should we think about the reimbursement?

[Emil Kakkis, CEO and President]

For Crysvita?

[Fang-Ke Huang, SunTrust Robinson Humphrey]

That's right, Crysvita.

[Emil Kakkis, CEO and President]

Yes. We will establish a worldwide ban for pricing that we're going to, but we want to be thoughtful and achieve our own goal of getting a majority access within regions including Brazil, and we have a very good Brazilian team. Maybe Vlad, you can touch on a little bit about what the process for both reimbursing that are ongoing as well as the any in-patient responses that are ongoing in Brazil.

[Vlad Hogenhuis, COO]

Sure. So thank you for the question. Thank you, Emil. For Brazil, we'll be pursuing pricing approval for Crysvita, and we should get that done in the next three to six months, at which time we will pursue the formal reimbursement dossier.

Typically, the reimbursement in Brazil can take a significant amount of time, up to one or two years, but we will be studying the recent announcement on Spinraza in Brazil, where a new framework has been put up by the new Brazilian government, and see how that applies to us and get in discussions with the Brazilian government after we get formal pricing approval.

In the meantime, we continue to honor patients' requests for named patient programs, and we have currently a number of patients who are pursuing access through the court system and a number of additional patients who are preparing for that step and prior to us getting formal reimbursement approval.

[Fang-Ke Huang, SunTrust Robinson Humphrey]

Great, appreciate the details. Thank you so much.

[Operator]

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

[Joseph Schwartz, SVB Leerink]

Hi. Thanks very much. I was wondering if you could give us a sense of what your target expression profile is for DTX401 in terms of G6 pace. What are you hoping to see given it seems like the threshold to see a clinically -- or clinical benefit is fairly low, but of course, you want to be able to have this durable and the effect wanes over time. You want to aim a little bit higher perhaps.

So, wondering what are you hoping to see in this ongoing study before you pull the trigger on advancing into Phase 2? And then I have a follow-up.

[Emil Kakkis, CEO and President]

Great. Thanks for the question. I think what we're hoping to do there is certainly is to cure the metabolic concerns that exist for the patient. The time that I have seen is one way of measuring it. There are certainly other metabolic markers we can look at and also look at the liver the size of it and try to assess how the patient's health is improving.

We clearly have heard patients feel better or are doing better from a number of other standpoints are more necessarily capture, and we will work to capture that kind of information for the program. The challenge on a targeted expression profile what level is that, we're talking about a liver-based membrane-bound protein.

So, darn to really figure out expression level achieved, we need to biopsies. And we just didn't decide the things the biopsies were necessary to get there. So, I have to look at the secondary results of improved glucose metabolism, improved secondary metabolism and clinical health of the patients.

Our target would be to expect that the patient would not need cornstarch at all in order to maintain glucose should be able to tolerate the full night without having risk of hypoglycemia, and that the other metabolic markers around lipids, uric acid and other things that the abnormal would have normalized. And that their liver is if enlarged would have shrunken to indicate that the liver is treated enough to clear this glycogen.

So, we are beginning to see that I think we feel good that what we're foreseeing at this low-dose, at a 3x dose should put as well within the range of what's required.

[Joseph Schwartz, SVB Leerink]

Great. Okay. Thanks. And then DTX201, I was wondering if you could give us an update on that program. How is the Phase 1/2 study progressing? And when we expect an update there?

[Emil Kakkis, CEO and President]

And for those that don’t remember what 201 is, it's the Hem A program, did mentioned before we acquired them had a deal develop a Hem A, which is in the clinic now with the partner being driven by the partner buyer. They are treating patients in the clinic and expect to provide an update this year. We won't provide updates on it.

We consider within their control to update the Street on what's happening on that program. But it is in the clinic. I'll remind you that it does include product made with our 2000-liter HeLa system, which has been successfully running at GMP and accepted by regulatory authorities for you. So, we do think it's an important program in terms of demonstrating utility of that process to create scalable, reproducible manufacturing of AV.

[Joseph Schwartz, SVB Leerink]

Thank you.

[Operator]

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

[Edwin Zhang, Stifel, Nicolaus & Company]

Hey, Thanks for taking the question. This is Edwin Zhang on for Adam. Two questions on Crysvita. First, in fourth quarter 2019 by my math, you added about 180 patients on reimbursed commercial therapy. I recall you have added 50 patients last quarter of 4Q 2018. Do you see a slower pace here?

And what could be the reasons if not seasonality? Going forward how, do we think of the growth of new reimbursed patient in the next few quarters? Thanks. Then I have a follow-up.

[Emil Kakkis, CEO and President]

Thank you. I'll start this question, and then let Vlad perhaps add a bit more to it. The trajectory of launch, remember, in Q3, Q4 included a large number of clinical trial patients that were crossing on the therapy that were not naïve, but people on drug in addition to naive patients coming majority those patients now.

Essentially all have traversed onto drug with a very small number left. And so now in Q1, you're seeing only naïve patients. You're not seeing as much a clinical patient. So that's where we're at right now. I don't know, Vlad, if you want to add a little bit more on what our expectations are for growth of reimbursed patient of Crysvita.

[Vlad Hogenhuis, COO]

Yes. These are essentially all new naïve patients last quarter and the 700 patients on reimbursed therapy at 1Q, '19 represents kind of also an increase in those patients. The number of patients represented the start forms continue to grow as well, and we're aggressively pursuing continued growth in them.

And just remind you, we launched a number of programs in the March and April of this year, diagnosis confirmation testing, genetic counseling and the family tree analysis, which will allow us to help identify new patients as well as help shepherd patients quicker to reimbursement.

And as physicians get more positive experience with Crysvita continue to see and expect to see greater penetration within the existing XLH population. But we'll also go to new Crysvita prescribers will be treating some of their patients who were not in a larger center, so to continue the opportunity to grow our patient base.

[Edwin Zhang, Stifel, Nicolaus & Company]

Great. Second, Crysvita aiming PAO. Where are we now in terms of the registration plan? Have you studied the conversation with FDA? And how likely is the agency to allow your filing with the Phase 2 data? Thank you.

[Emil Kakkis, CEO and President]

Yes, so the filing for Crysvita, we have had some additional discussions with the FDA about the data set we have and are continuing that discussion. We won't know an answer to our filing plan until some later in the year after we provide some additional information.

Our position is that we have adequate data support filing in the sense that we have biopsy information showing the same effect on osteomalacia that we saw in XLH associated with the same benefits on bone function and bone structure and symptoms.

And therefore, we are confident. I think I'll let Camille, if you like, to add -- if there's anything else we should talk about on TIO.

[Camille Bedrosian, CMO]

Sure. Thank you, Emil. Thank you for the question. Yes, we're also seeing our trial with patients with TIO normalization increased in phosphorus or phosphate, which is an important marker of the effectiveness of Crysvita in the setting.

As Emil said, we will be continuing and progressing our discussions with the agency, and we'll have more updates for you later this year.

[Emil Kakkis, CEO and President]

So, phosphate bone structure, everything else suggests drugs work just the same and we think it makes sense for us to be able to file off the data we have and not subject further delays to the population. But we will update you later in the year.

[Operator]

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

[Andrea Tan, Goldman Sachs]

Great. This is Andrea Tan for Salveen. Thanks for taking our question. Maybe just a real quick one if you could comment on what if any of the potential impacts of the international pricing index could be to Crysvita and Mepsevii?

[Emil Kakkis, CEO and President]

That's an interesting question, perhaps similar to the question talking about pricing earlier. We think that our pricing strategy will set us up well to be able to manage that because we are targeting similar pricing across territories.

Therefore we don't think there'll be a large impact on us if that we're to come to be. It's a little different from other programs where there's huge differentials and that might be an issue.

But we think, we've been sort of forward thinking on these strategies and the pricing and trying to find that right balance between achieving -- maximizing revenue, but also maximizing access for patients. So, we don't think it will have an important impact on, us but were certainly keeping a close eye and it.

[Andrea Tan, Goldman Sachs]

Got it. Thanks so much.

[Operator]

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

[Yigal Nochomovitz, Citigroup]

Hi Emil and Shalini. Thanks for taking the question. I think at the Analyst Day, Dr. Weinstein made an interesting comment regarding the third subject in the 401 study in that he was very impressed with that result even though they only had a 20% increase time to hypoglycemia, and apparently that rapidly coming off the cornstarch.

And I think it was off for perhaps three weeks. Are you doing anything in the second cohort in addition to obviously tripling the dose to tweak or fine-tune the titration of the cornstarch? Thanks.

[Emil Kakkis, CEO and President]

Thanks, Yigal. I think the issue is an important one. What he's getting at is we've got patients at this age is getting a large dose of cornstarch chronically. They are in constant sad mode and their insulin is constantly being produced. And so now we're trying to adapt them into a new world where they actually can release glucose, but their insulin is still being overproduced.

So, what you're saying is you need to step down glucose to get the insulin to back off, but it may be a time of -- it may be a time for modulation a ramp back of insulin that may slow them down.

I think he thought that patient was just losing a lot of insulin. But his view is how the clinical finding that patients were compelling to him. He's very comfortable patients are responding, doing well. So, he's taking a little more time on slowing him down, not going too fast so he doesn't -- his insulin levels don't overtake what his treatment will do.

We're going to have to look closely at that question in other patients who were on larger amounts of starch. So, it's an important consideration. Because remember as we take them off, they get us around cornstarch and the time of hypoglycemia test, right? But if they reduce their starch a lot and their insulin is not kept up, you're actually making it a little harder for them to tolerate hypoglycemia.

So, we're going to look at that carefully to make sure we are managing how that works. But I don't think it is a problem. I think it's just an issue that we have to manage in the timing and how the process goes.

I don't think it's something that will change the fundamentals of what we do. The patient still has dropped his cornstarch over time and doing well. So, we're really encouraged by that we're going to have to pay attention to that whole story.

[Yigal Nochomovitz, Citigroup]

And then just a couple of questions on the partnership with KHK. I believe that they're still seeking approval in Europe for adults, I don't know if you can ride any update on that. I understand that there's a Phase 2b clinical study running long-term safety expansion the safety data that KHK is waiting for in order to file for adults in Europe.

And then more generally just providing a strategy in the United States, obviously, you've developed a lot of experience with the product in the last year or so, and you've got good momentum. And your sales force is obviously continuing to get even better educated on the market.

So, with respect to the switch to the profit split in five years -- sorry, with respect to the switch to the royalty in five years, is any potential for renegotiations so that you could keep your own salesforce as supposed to turn it over to KHK and sort of let them start the process from scratch? Thanks.

[Emil Kakkis, CEO and President]

All right. I'll start with the adults in Europe. They're planning to file adult, but it's not really waiting on that warrant. They already have all the adult randomized controlled data they need to file. I think they're just working through some other steps in their process, and I'd rather let them kind of provide more updates on what their timing is than have do it for them. But it's not related to any trial data, it's more related to others aspects of the execution of the plan.

On the question of the switch to the royalty, I think it was an important part of the deal for Kirin that they become a global commercial company and they're also launching an antibody product for cancer indication in the U.S.

We certainly have a good partnership with them and I think our goals with them will always do the right thing for the product and patients, and we're certainly open to looking at ways to optimize that execution. But I want -- that needs to be a joint decision between us and Kirin how we manage that transition. So far it's done so well, I feel comfortable we can do it.

I'd also point out to you that we are looking at other bone metabolic products that we might, for example, work on and expand so that -- in plus other programs that will probably proceed to approval, so we'll have many things for our field force to do including potential other bone metabolic products as well as products we might do, gene therapy or otherwise.

So, I will look at that as an opportunity for us to work on other products as well. Anyways, in summary. I think Kirin and Ultragenyx have great partnership and we've done very well at the other and we'll always work in getting the right decision, but I wouldn't want to predict a revision to the deal at this point in time, but we'll work with them as we get there and make the right decision.

[Yigal Nochomovitz, Citigroup]

Great. Thank you.

[Operator]

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

[Vincent Chen, Bernstein]

Great. Thank you very much for fitting me in. I was wondering if you could comment briefly on trends that you're seeing with respect to the timing of conversion of start forms to reimburse drug for the disposition.

I notice at the end of third quarter, you had 600 start forms, which translated to 550 U.S. patients a quarter later at the end of 4Q 2018. But over 900 patients would complete their start forms as of the end of 4Q 2018 translates to 730 at the end of first quarter, which seems to suggest that it could be taken a little longer to get on reimbursed commercial drug.

Could you provide some color on why it's taking longer for start forms to translate into commercial patients on Crysvita? Or is there some other factor that's driving the slowdown in sort of the conversion between the aggregate start forms and the aggregate commercial patients?

[Emil Kakkis, CEO and President]

Again, I'll start to that question and then let Vlad sort of finish out some of the detail. I think one of the things that's important to recognize is that while initially there were very few plans requiring genetic testing, as the year went on after one started doing it, now majority of these plans want genetic testing.

I think that was probably one of the biggest drivers. And some of the patients are hung up then in the testing process because they fill their start form, it goes to plan, then they will sent their request rejection requiring the test, then they had to get the test and the test takes several weeks. And then they have to get that resubmitted and then reviewed.

So, there are some factors there that we're working through. And that will start to happen. It's not a big problem. I think Vlad can talk to what we're doing to address that and to help improve that.

But I think the trajectory of start forms is excellent. We just need to work through those conversions. So maybe you can talk a little bit about the programs we're doing, to help accelerate that conversion.

[Vlad Hogenhuis, COO]

Yes, in addition to the confirmatory testing which helps kind of managed care with the having the test results. We're doing some quality improvement initiatives to make sure that the start forms are all compete. And have no errors before we submit since that tends to delay things.

In fact, we've seen an accelerating trend in the hearing the completed start forms especially with our commercial payers. I think what you see in 1Q is also the new Medicare/Medicaid patients, getting used to the new J code. Some states take a little bit longer in publishing their Medicaid policies for Crysvita.

Just to mention the Illinois, Wisconsin had a little bit of a delay. And then, in New York, their fiscal year starts in April. So, working through that, but and generally are seeing an accelerating trend in actually carrying to start forms into fully reimbursed patients.

[Vincent Chen, Bernstein]

Great. Thank you very much for details.

[Operator]

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

[Arlinda Lee, Canaccord]

Hi guys. Thanks for taking my question.

[Emil Kakkis, CEO and President]

Hi Arlinda.

[Arlinda Lee, Canaccord]

I had a couple more follow-ups on 301. You mentioned that it's currently manufactured in, two nights we have here. So, what are the technical or maybe regulatory requirements to convert to suspension? And how important is that to incorporate now for the regulators? Or can you -- do you need bridging study to kind of convert that?

And then, maybe secondly, on the inter-patient variability. Do you think this next dose level will help you get be able to dose above that? Or do you think that it will little help inform maybe which patients need a little more dosing later on? Thanks.

[Emil Kakkis, CEO and President]

Okay, so, on the first question we have had a discussion with the regulators about the adherence of the suspension. They already have a plan in place. And really required just a comparability protocol, which we're very comfortable with and we have already evaluated.

So, it's a relatively modest step. And this is same cell substrate, and it's the same plasma, et cetera. So it's really a shift from adherence suspension, which many people have made and they seem pretty comfortable with that. So, I don't see that as a barrier. I don't see a bridging study a being required.

The second question, consistency, we think that the data we've seen so far suggests that, we're probably close to a threshold and that E13 I think is going to get to that place where we should be able to get through.

We have seen some other programs need to get up to, let's say in environment case, either up to the 60:13 kind of does so but that was AV5. And AV8 is several folds more potent than AV5 in our view. And so we think from a lot of triangulation, that we should be at E13 at a good place. And start to see consistent responders across all types of patients.

Again, as I said before, if we see any limitations on affecting the population of patients, we would look at not only dose, but potentially also prophylactic treatment with medications to help improve their response is another strategy, that using prophylactic steroids, for example, the way of enabling better potency.

So, there are some options, not only dose. And I think the E13, should get us close and our hope would be if that's good for most, that we will look at possibly another strategy around using modulation of their immunity as a way to improve them further.

But still many unknowns, but we're encouraged about what we have so far, particularly because what we're seeing in those who has responded and has been sustained now for a year or more. And that makes us feel confident that we have a real therapeutic effect that's meaningful for patients.

[Arlinda Lee, Canaccord]

Thanks. And then Maybe lastly, just to help build out the gene therapy facility. When do you think we might start to get first batches of commercial or clinical product?

[Emil Kakkis, CEO and President]

Well, I would be reluctant to predict the live -- go-live time for our manufacturing plant. I'm sure if they are on the call, they would be reluctant to have me do that too. But, our plants take time. Because you know we design and build them but you also have to prepare, staff them and validate, and get approval to use a product.

So, you should always think of it as at least a couple year process. In the meantime, we continue CMO. And we expect the CMO even after the plant is in place. The plant would just give us greater flexibility to manage and put more products in the clinic more quickly. And manage our cost over the long run. But we expect to still use CMO between now and then, and we have several partners doing good work for us.

[Operator]

There are no further questions at this time. Ms. Keatley, you may continue.

[Danielle Keatley, Senior Director, IR and Corporate Communications]

Thank you. This concludes our call today and the replay will be available on our website shortly. If you have additional questions please contact us by phone or at [e-mail]. Thank you for joining us.

[Operator]

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