Ultragenyx Pharmaceutical Inc

NASDAQ:RARE

Earnings Call Transcript 2022-Q1

[Operator]

Good day, and thank you for standing by. Welcome to the Ultragenyx First Quarter 2021 Financial Results and Corporate Update Conference Call. [Operator Instructions].

I'd like to hand the conference over to your speaker today, Joshua Higa.

[Joshua Higa, Director, IR & Corporate Communications]

Good afternoon, and welcome to the Ultragenyx Pharmaceutical financial results and corporate update conference call for the first quarter of 2022. We have issued press release detailing our financial results, which you can find on our website at ultragenyx.com.

I am Joshua Higa, Director of Investor Relations. Joining me on this call are Emil Kakkis, Chief Executive Officer and President; Erik Harris, Chief Commercial Officer; Mardi Dier, Chief Financial Officer; and Camille Bedrosian, Chief Medical Officer.

I would like to remind everyone that during today's call, we will be making forward-looking statements. These statements are subject certain risks and uncertainties, and our actual results may differ materially. Please refer to the risk factors discussed in our latest SEC filings.

I'll now turn the call over to Emil.

[Emil Kakkis, President, CEO & Director]

Thanks, Josh, and good afternoon, everyone. In the first quarter, we continued to make progress across our diverse clinical and commercial programs. In the late-stage clinical pipeline, we're now enrolling patients in 3 registrational studies with the fourth to initiate later this year. This includes the 3 gene therapy programs for glycogen store disease Type 1a, Wilson disease and ornithine transcarbamylase deficiency as well as our anti-sclerostin antibody for osteogenesis imperfecta, the GTX-102 study for Angelman syndrome is progressing well, and we remain confident in the program. The results we shared in 2020 from the original 5 patients led us to reimagine what is possible for patients with Angelman syndrome. Given the importance of this program, we've looked at ways -- various ways to accelerate this program. And recently, we amended our agreement with genetics to allow us an additional option to acquire them at an earlier time point based on interim data.

I'll let Camille share more in her section about the favorable safety profile and enrollment status across the regions. We also look forward to providing a more robust interim update in mid-2022.

On the commercial side, the teams continue developing and executing their plans to define more patients who could benefit from Crysvita, Dojolvi and Mepsevii. These efforts are supported by the work our clinical and regulatory teams are doing with country-specific authorities to enable greater access to these therapies.

In the first quarter, we also closed on the strategic partnership with Regeneron, which pairs our expertise in global rare disease launches with the key opinion leader in antibody drug discovery and development. We leverage our global commercial medical affairs, regulatory functions to bring Evkeeza, a novel, high potent and approved antibody to patients where the current standard of care does not adequately reduce the LDL cholesterol in patients with HoFH.

Since closing the deal, we transferred the marketing authorization in Europe and have begun the process to submit reimbursement dossiers. While this review process and negotiations can take time, we will leverage the team that currently supports Mepsevii and Dojolvi to respond to CREST for named patient access within Europe. Feedback from the KOL community has been enthusiastic for the important role of Keith could play in the management of familial hypercholesterolemia hyperchromia. Evkeeza that gives us a fourth product across 5 different indications that will be generating revenue for the company. This creates a diversified base of value that will help support our continued clinical execution for years to come. I'll let the team go into more detail on their progress in the quarter. Erik can you begin?

[Erik Harris, EVP & Chief Commercial Officer]

Thank you, Emil, and good afternoon, everyone. Commercialization teams have continued to adapt to involve the strategies to meet the constantly changing landscape. For Crysvita, within the North American territory with strong underlying demand from adult and pediatric patients with XLH and TIO continues. Compliance among patients who are already on therapy remains high with patients reflecting on how much better they feel once they start receiving Crysvita.

In the first quarter, approximately 80 new patients began therapy, which is consistent with the steady growth we have seen over the last few quarters. These increases are largely driven by the community prescribers, where nearly 50 new doctors wrote a prescription in the first quarter.

In Latin America, we are continuing to see accelerating demand for Crysvita, driven by patients seeking therapy through the main patient programs. This is particularly the case in Brazil, the largest market in the region, where we are in the final stages of full reimbursement negotiations with the authorities. Ordering in this region can be variable from quarter-to-quarter, but it is clear there is a strong demand for Crysvita from the patient and medical communities.

Crysvita revenue in the first quarter 2022 grew 29% compared to the first quarter of 2021. As is typical, there were some seasonality as patients work through the reauthorization process with their insurance providers at the beginning of the year. As we saw in 2021, we expect stronger revenues in the second half of the year, and we maintained that 2022 Crysvita revenue in Ultragenyx territories will be between $250 million and $260 million, representing 30% growth in the product's fifth year.

Turning now to Dojolvi. As a reminder, we will no longer provide detailed start form and other metrics for this program since we are past the early quarters of launch.

In the U.S., the number of new start forms and patients on reimbursed therapy are consistent with the steady growth we saw in the quarters. While we are seeing utilization at nearly all of the major centers for inborn errors of metabolism, we have begun to find new prescribers as some of the neuromuscular centers of excellence. We will increase our efforts on these specialists as we look to expand the network of prescribers.

Outside of the U.S., use of Dojolvi continues through our main patient and early access programs in Europe. In France and Italy, there continues to be meaningful demand through our named patient program. In Brazil, the health authorities approved Dojolvi for the treatment of both pediatric in adult patients with LC-FAOD late last year. We are continuing to work through the process to get full reimbursement approval, but this can take a little bit of time to complete.

For the year, we are reaffirming the guidance range of $5 million to $65 million that we put out in January. I commend the team's work to generate more than 50% growth in this product's third year post-approval.

With that, I'll turn the call over to Mardi to share more details on our financial results for the quarter.

[Mardi Dier, EVP & CFO]

Thanks, Erik. Earlier today, we issued a press release included, that included financial results for the quarter, which I will briefly summarize. Company revenue for the 3 months ended March 31, 2022, totaled $79.9 million. Crysvita revenue in Ultragenyx territories were $54.6 million, including $45.2 million from the North America profit share territories and net product sales of $9.4 million in other regions. Total royalty revenue for the sales of Crysvita in the European territory were $4.8 million.

Dojolvi revenue for the first quarter of 2022 was $12.4 million. Mepsevii revenue for the same period was $4.9 million. We expect these revenues may modestly increase over time. We also recognized $3.2 million of revenue in the first quarter related to tech transfer as part of our strategic manufacturing partnership with Daiichi Sankyo around our PCL and HEK293 technologies. Recall the fourth quarter of 2021, the technology transfer activities were substantially completed, and revenue from this agreement going forward will be minimal. Excluding Daiichi revenue in both periods, total revenue has grown 35% in the quarter compared to the first quarter of 2021.

Our total operating expenses for the first quarter of 2022 were $216.6 million which includes research and development expenses of $143.2 million, SG&A expenses of $67.3 million and cost of sales of $6.1 million. I should note, this also includes expense related to non-cash, stock-based compensation of $29.4 million.

As we have discussed in prior quarters, we continue to expect our R&D spend to somewhat increase in 2022 as we support 3 pivotal gene therapy clinical studies the UX143 Phase II/III clinical study in OI and Angelman Phase I/II study and the Phase I/II study for our most advanced mRNA program, UX053 and GSDIII, a number of other preclinical activities as we get ready to advance the next programs into the clinic.

We expect SG&A to modestly increase in 2022 as we continue to support the expansion and launches of our existing commercial products and the launch of Evkeeza.

For the quarter ended March 31, 2022, net loss was $152.3 million or $2.19 per share. The net loss includes $9.3 million decrease in the fair value of equity investment.

Our net cash used for the second quarter 2022 also includes the $30 million up-front payment for the closing of the Regeneron collaboration agreement and significant investments in our gene therapy manufacturing plant which we are planning to be operational in 2023.

We ended the quarter with approximately $814 million in cash, cash equivalents and marketable securities. This puts us in a very solid position to achieve critical clinical milestones and expand our global commercial presence.

Now I'll turn the call over to Camille to touch on some of our clinical programs.

[Camille Bedrosian, Chief Medical Officer & EVP]

Thank you, Mardi, and I too wish everyone a good afternoon. In my section, I will briefly provide status updates for our 6 clinical stage programs, including the GTX-102 Phase I/II study being conducted by our partner, Genetics before turning the call back to Emil.

Starting with the gene therapy programs. DTX401 for the treatment of glycogen storage disease Type Ia or GSD1a is currently dosing patients in the randomized placebo-controlled Phase III study. Similarly, UX701 for the treatment of Wilson disease is currently dosing patients in a seamless Phase I/II/III randomized placebo-controlled study.

DTX301 for the treatment of ornithine transcarbanylase, or OTC deficiency, is currently in the final stage of the study start-up and site activation. We anticipate the first patients will enter the 4- to 8-week baseline screening period in mid-2022. After which, they will be dosed in the Phase III randomized placebo-controlled study.

Outside of gene therapy, UX143 or setrusumab, an anti-sclerostin antibody has begun dosing patients in the SEAMLESS Phase II/III study for pediatric and young adult patients with osteogenesis imperfecta. We are also planning to initiate an additional study in children less than 5 years old in the second half of the year.

GTX-102, the ASO in development with our collaborator, Genetics, for patients with Angelman syndrome continues to dose patients under the amended Phase I/II protocol. In the U.K. and Canada, both Cohorts 4 and 5 have expanded following a review of available safety data by their respective DSMBs. We began dosing patients in December with some receiving up to 5 doses so far. As we have previously indicated, the initial assessment of these patients have shown early and encouraging signs of clinical activity in multiple domains, similar to that which we saw in the original 5 patients at these low doses. To date, there have been no drug-related safety issues or lower extremity weakness in the newly treated patients.

In the U.S., 8 patients allocated one-to-one in the drug and comparator groups have been enrolled. We have received some anecdotal reports of limited improvements from these patients being dosed who have received drug at the 2 mg dose level.

To reiterate, a most important finding for this stage of the study across all regions, there have been no reports of lower extremity weakness in any of the patients treated under the amended protocol. We look forward to providing a more robust update on this program in mid-2022.

UX053, our first mRNA treatment modality being developed for glycogen storage disease type 3 is currently dosing patients in the single ascending dose arm of the Phase I/II study. Preliminary data from that arm as well as initiation of repeat dosing phase of the study are anticipated in the second half of this year.

With these updates, I will now turn back the call to Emil. Thank you.

[Emil Kakkis, President, CEO & Director]

Thank you, Camille. Before we shift to the Q&A portion of the call, I'll provide a quick reminder of the key upcoming milestones for the company for GTX-102 in Angelman syndrome will provide an interim update in mid-2022 on Cohorts 4 and 5 in the Canada and U.K. arm of the study as well as available safety and efficacy data from the patients treated in the U.S. We Continue to be confident this program looks for opportunities to accelerate development.

For UX143 in osteogenesis imperfecta, we'll continue enrolling patients in the Phase II portion of the study and expect to provide an update on the dose strategy we have selected for the Phase III portion in the second half of the year. Separately, we expect to initiate a study in children under 5 years old in the second half of the year.

Across the gene therapy pipeline, we'll continue enrolling the Phase III for DTX401 and the Phase I/II/III for UX701. We also expect to finalize study start-up activities for DTX301 and begin dosing patients in mid-2022. On the manufacturing side, we will continue to build out our facility at Bedford, Massachusetts was on track to begin producing material next year.

For UX053 in the second half of the year, we expect to share single-dose data from the first part of the Phase I/II study and to initiate the repeat dosing study stage.

All these programs create a distinct opportunity to make a meaningful difference for patients with a rare genetic disease. We look forward to sharing further updates with you throughout the year. You also may have seen that we have launched our inaugural ESG report for 2021 last month. This report of the meaningful evolution of the journey we've been on for the last 12 years as a company. We'll continue to build on this foundation and report on our progress.

With that, let's move on to your questions. Operator, please provide the Q&A instructions.

[Operator]

[Operator Instructions]. Our first question comes from Gena Wang with Barclays.

[Huidong Wang, Barclays Bank]

I have two questions on Angelman program. So Emil maybe can you comment on any chemistry differences between your log nuclear assets versus Roche's log nuclear assets?

And my second question is based on comments you made that early opting for the GTX-102, should we expect some clinical benefit at the midyear update beyond the 2 CGI score improvement into domain to support the right dose?

[Emil Kakkis, President, CEO & Director]

Thank you, Gena. So on the chemistry differences, I'm not deeply familiar with the specifics of the Roche molecule and all the different linkages because there are a lot of linkages. We know that it has [indiscernible] gapmer like ours is there's some specific differences on the sequence, no doubt, and some other minor chemistry changes. But I think the biggest change is where differences between where these are targeted. And the overall safety profile of a product, it's not just the chemistry. It's also the dose and the potency that will determine it. And we believe [indiscernible] is targeted, it is very potent and that the dose range will be at a lower end of the range which is partly in part related to the potency of the locticleic acid type of ASO. So we're confident about the chemistry [indiscernible]. And while they're both to have LNA locked nucleic acid components, I can't say that those differences are that you can make any conclusions from those differences alone.

Now with regard to the opt-in, the opt-in just gives us an opportunity to execute earlier on interim data and it just gives an opportunity to potentially accelerate the program. It's not -- the decision on efficacy is not -- doesn't indicate that we would need more or better or worse efficacy. It's just an option for us based on the interim data to execute the acquisition earlier under a different -- somewhat different set of terms, but we think it's a potential way for us to excite the program depending on what we see and announced midyear.

[Operator]

Our next question comes from Yigal Nochomovitz, with Citi Group.

[Yigal Nochomovitz, Citigroup]

[Indiscernible] we do have this intent to...

[Emil Kakkis, President, CEO & Director]

Operator, this might not be related to our call.

[Operator]

We'll move on to your questions. Tazeen Ahmad with Bank of America.

[Tazeen Ahmad, Bank of America Merrill Lynch]

Emil, I just wanted to get a sense from you on how you plan on aligning protocols going forward between FDA and EU regulators assuming that you're going to move into your pivotal study for Angelman?

And then secondly, can you talk about the cadence of growth for Crysvita thus far, is turning to move into sort of the mid-stage of growth. What was the main growth driver this quarter? And where do you see the remaining opportunity for growth on a go-forward basis?

[Emil Kakkis, President, CEO & Director]

Good. Well, I'll deal with the protocol piece first, and Erik, maybe you can talk about the areas of growth for Crysvita after I finish with the first part.

So on aligning protocols, it's not actually that difficult. Both protocols are treating essentially a once-a-month but it's just a different dose and regimen for administration. So our expectation to align them in -- will align them in the Phase II. We'll take our data from ex U.S. from Canada and the U.K. that show us that the drug is safe and that the new administration strategy is appropriate and bringing that data along with other safety data, we have to the U.S. and request that they open essentially that an amendment that will align all 3 regions under the same protocol. We think we have enough data at this point to be able to show that the new regimen and the doses are safe.

And while we have been dosing patients at 2 mg, it would give us an opportunity then to bring the higher dosing in that we're using ex U.S.

The other part we would align for individuals who happen to be at lower doses, whether in the U.S. or outside the U.S. If a dose was determined that need to be higher, we'll provide a makeup dose to those patients that will help bring their load level up in line with the other patients, so we'll get them where they need to be. So we'll take the data then and get the U.S. open, we believe, with that ex U.S. data and get everyone aligned in Phase II. From there going forward in Phase III, then we'd have the world or -- all regions aligned on a single Phase III program.

So let's talk about the Crysvita cadence of growth as some of it's been moving toward adults, but Erik, maybe you can provide a little more color on the growth in Crysvita over time.

[Erik Harris, EVP & Chief Commercial Officer]

Yes. So as far as Crysvita is concerned, we're expecting steady growth in North America as we've seen. And we've been building momentum in Latin America for the last couple of quarters. We expect that to continue to accelerate in growth, although as we stated, the growth recognized in stages. It's kind of lumpy in how it grows quarter-to-quarter. But overall, on an annual basis, it should be steady-accelerating growth.

And then when you look at Europe, we're seeing increased -- we're seeing steady sales growth in new patient sales for Dojolvi with some expansion across Europe for named patient sales for Dojolvi and expect a meaningful start to recognize meaningful growth of Evkeeza revenue in 2023 and beyond.

[Emil Kakkis, President, CEO & Director]

Thanks, Erik. I think in the U.S., I think one of the elements of color that we can provide here is that there is a continuing shift to more adult patients and pediatric patients. And that -- nearly half the scripts or prescriptions, the new start forms are coming from new prescribers with new adult patients. So there is a very broad, diverse group of doctors out there are treating patients. And that's by seeking and finding those patients will continue to find patients. When we find them, we have a very high rate of conversion to people who actually want to be prescribed. So it's about getting the word out. And so that's continuing to be a driver of steady growth is finding those new doctors, new patients in the U.S., and we'll continue driving that activity. Hopefully, that's good for you, Tazeen.

[Operator]

Thank you. Our next question comes from Yaron Werber with Cowen.

[Brendan Smith, Cowen and Company]

This is Brendan on for Yaron. Just a couple of quick ones from us. First I wanted to ask actually about the OTC pivotal study. I just wanted to see what you can tell us maybe about enrollment and recruitment there. I know originally, thinking to get underway earlier this year. Now looks like it's going to be closer to starting screening midyear. So I just wanted to see if there's any color you can provide.

And then on Angelman assuming the midyear update really focuses on the ex U.S. study as the U.S. kind of gets going here, do you have a sense of maybe timing over the next 6 to 12 months of your planned cadence for additional updates from potentially higher doses?

[Emil Kakkis, President, CEO & Director]

Good. So the OTC program among the 3 gene therapy programs, we had set the DTX401 for GSDIa is kind of our priority. There are a lot of patients ready. We were able to get through the process a little faster. And driving that one ahead, which is now enrolling. We purposely then put the OTC program a little further behind. Remember, we're running 4 pivotal programs at once, which is a lot for any company.

So the OTC is by design a little bit behind it has not started enrolling, but the sites are getting started and we've gotten through the process and the regulatory process. So I think we're aligned up to go ahead and we'll start enrolling, and I think we'll do fine. DTX401 clearly will, I think, be the first gene therapy to get through the Phase III process and yield data.

Now with regard to Angelman, right now, we're coming out midyear with the current dose regimen. What we said in the past is that we would expect to take what we've learned and what doses we've cleared and initiate new cohorts starting at those new doses, so we can load patients at the higher doses that have been cleared as safe. And we would expect to be doing that this year if we then are able to show that, that dose is safe and reach is achieving threshold across patients that we would then expand it to a larger cohort of patients to collect more data.

While that larger cohort be enrolling later this year, we would then be beginning the process of planning and discussing regulatory authorities of the Phase III. And so the Phase III would be expect to be something we'd start next year. Did that gives you a little more color on the time line, Brendan?

[Brendan Smith, Cowen and Company]

Yes, that's great, Emil.

[Operator]

Our next question comes from Cory Kasimov with JPMorgan.

[Unidentified Analyst]

This is Tiffany on for Cory. So at this stage, with Angelman, do you any ideas how many U.S. patients you can expect initial safety and efficacy data from your update? And what would be the cutoff for inclusion there? Would it be simply any data ahead of a specified date before the readout or kind of a required follow-up through a certain amount of time?

[Emil Kakkis, President, CEO & Director]

Well, we would expect, as we said that all 8 patients in the U.S. were enrolled and 4 patients dosed at the 2 mg dose level, we would expect to provide all the data we have on them at that point in time. There will certainly be a certain amount of formal data, but we would provide what we know about how the patients are doing at that time to give people more of an interim look. Remember, this is not a final end of story study update, it's just an interim look. So we'll provide as much as we can on 4 patients that will have received multiple doses of as well as then the patients ex U.S. in cohorts 4 and 5 that would have gotten the higher doses and been going through the titration.

[Unidentified Analyst]

Got it. So sort of like 16 patients.

[Emil Kakkis, President, CEO & Director]

Yes. Well, we've enrolled cordon and then the 4. Yes.

[Operator]

Our next question comes from Yigal Nochomovitz from Citigroup.

[Yigal Nochomovitz, Citigroup]

Apologies for earlier. I was juggling multiple calls. Just a question on the guidance for Crysvita in the Ultragenyx territories. So, as far as I understand, you did $55.5 million in 4Q '21, $54.6 million in the most recent quarter. So just if you could just help elaborate a little bit on the rationale behind the $250 million to $260 million, just because based on the last 2 quarters, it does seem perhaps a touch aggressive.

[Emil Kakkis, President, CEO & Director]

Yes. Well, we have some experience now or a bit of time on the program. So we're actually comfortable with how it performs and how the second half of the year is stronger. And maybe, Erik, do you want to touch on that or Mardi? Erik?

[Erik Harris, EVP & Chief Commercial Officer]

Yes. So with regards to the steady growth in North America, we're seeing accelerating growth in Lat Am and expecting potential full reimbursement by the end of the year, which will help speed up the transition patients that have been waiting for treatment through the injunction prostate patient sales process.

[Emil Kakkis, President, CEO & Director]

Yes. So Latin America will contribute, did you want to add...

[Mardi Dier, EVP & CFO]

I was just going to add, Yigal, if you look at the quarterly progression in '21, in terms of how the sales progressed throughout the year, we expect the same in '22 as well. So you're going to see first quarter as always has seasonal impact and the preop work, et cetera. And then there's just some timing between Q4 and, but you should see in the second half of the year that the revenues continue to accelerate. So yes, we feel good about the guidance range of $250 million to $260 million, so we're reconfirming that today.

[Emil Kakkis, President, CEO & Director]

Yes, seasonal patterns plus improvement in Latin America. We feel good about what Crysvita [ph] continue to grow. And I think the demand is strong and the compliance and persistence has been excellent. So people once they get on, they really do stay on the drug, probably as good as any you've ever seen. So we're -- we think it's a great product will continue to grow.

[Yigal Nochomovitz, Citigroup]

All right. Okay. Can I ask another one? Okay. And then hopefully, this wasn't already asked. But in terms of just the quarter-over-quarter trends for North America, I'm assuming that the $45 million in this most recent quarter was a seasonal effect.

And then if you could just comment on Rest of World, looked very, very nice increase quarter-over-quarter. So if you could just comment a little bit on the thinking behind that.

[Emil Kakkis, President, CEO & Director]

Yes. Well, the, let -- maybe, Erik, do you want to talk to this, the core on-quarter thing. I think it's kind of renting we just went through.

[Erik Harris, EVP & Chief Commercial Officer]

Consistent with what Mardi would just say was we -- the first quarter was pretty much in line with our expectations. We had anticipated some seasonality as you stated as a result of the reauthorization process. In addition, the Omicron virus impacted us a bit more than it had than COVID has impacted us previously as we had about 3/4 of our sales force out on protocol at some point in the first 2 months of the year. So there was some impact there.

But consistent with previous years, we are expecting steady growth throughout the year with quarterly splits consistent with what you saw in 2021 with increasing sales in the second half of the year.

And with regards to the rest of the world, I've stated increasing momentum in Latin America as more and more patients are being granted injunctions and receiving reimbursed therapy. And that's going to continue to accelerate as we get full reimbursement in Brazil and across other countries in Latin America.

And then with regards to Europe, we've seen steady growth in named patient sales with Dojolvi, particularly driven by France, Middle and now we're expanding that across other countries in Europe. And subsequently, the potential for meaningful increasing revenue in 2023 with Evkeeza.

[Emil Kakkis, President, CEO & Director]

Good. Hopefully, that answers your question.

[Operator]

Next, we have Joon Lee with Truth Securities.

[Joon So Lee, Truist Securities]

In the prepared remarks regarding GTX-102, you mentioned enrolling in drug and a comparator group. Can you elaborate on what you mean by the comparative group? And also, you said you have administered up to 5 doses in some patients. Are you able to share that's been cohort 4, 5 or in the U.S.?

[Emil Kakkis, President, CEO & Director]

Yes. So in the U.S., with the FDA agreement that we were going to dose -- we dosed 4 patients with 2 mgs once per month. That was the agreement. They also wanted to enroll another 4 patients, not randomized, another 4 patients. To be enrolled to simply just do the assessments on them without drug dosing, all right? So that's the 4 comparators. That was described before but perhaps it got missed. So that's what's happening ex U.S.

The question on up to 5. We're talking about the patients now ex U.S. And so the first few patients have actually gotten all 4 doses plus 1 maintenance dose, all right? So that's 5 doses, all right? And others have lesser numbers. We haven't put out the specifics of all of the time course of all of it. But the point would be that we have now multiple patients who've gotten 5 doses of drug without any lower extremity weakness. So just to clarify the issue that simply exposing the patient or the drug repeatedly is not going to cause the problem by itself at any dose level.

[Joon So Lee, Truist Securities]

Just to clarify, what the rationale for having a comparator that is not a placebo? I don't know if [indiscernible]...

[Emil Kakkis, President, CEO & Director]

Well, you want me to read the FDA's mind. The FDA was looking -- knowing that placebo is hard to do, I think what they're looking for is some measure of how consistent you would do these complex psychologist driven test on a patient and how what that would look like, just to understand the variability of the methods when they're done repeatedly. That's the basis for it. It's not a true control.

I think they just wanted to look at how much variation would you see just in measuring patients with the people doing it. So it's a test of the system really and not really a control group in that sense. And it's fine. I think what we're confident is patients don't really change much, but there's no doubt, when you do measures like this, there's going to be some variation.

The question is whether what we see in our patients is beyond variation, and we've addressed that before to say, that the magnitude of change seen, for example, in the [indiscernible] score that was presented last year at fast showed that the level of change observed was far beyond what you would see in placebo change over time or control group for natural history.

So we're comfortable with that's what that 4 patients before, and we are complying with the FDA's request on just having 4 more patients getting assessed.

[Operator]

The next question comes from Joseph Schwartz with SVB Securities.

[Joori Park, SVB Leerink]

I'm Julie on for Joe. You've previously mentioned using a multi-domain responder index as a possible end point for GTX-102. So curious what the receptivity issue that end point from the regulatory agencies in [indiscernible]?

And then secondly, are there other domains you would consider for the MDRI besides the 5 in the CGI-I-AS. And you know what the minimally important differences are for the individual domains to set as a threshold to be considered a responder?

[Emil Kakkis, President, CEO & Director]

Wow, this is a deep dive into clinical study design. Very good. Thank you. For those of you know what the Multi-domain Responders Index is it's a technique for just analyzing endpoints the live capture, the totality of the data across multiple domains. I've read a paper on it with our Head of biometrics, PK Tendon, and we've also had meetings with the FDA, including a large number of senior FDA people about the meaning of the approach. They are interested in it. They have questions still. But it needs kind of a test case and perhaps Angelman is the test case. It's not been accepted yet, although it was except the sense that we ran an MDRI in our Mepsevvi program that was approved. It did in -- and when we hit the end point in the small study showing the power of the very to capture efficacy.

If we were to approach it in Angelman syndrome, we would -- the 5 domains we're talking about are probably the ones we would pick. The seizure domain because they're on seizure meds and they've all been in control not much power there. If they ever having a lot of seizures, it could be also a domain. But I think the other domains we would use are basically the communication domain, receptor and expressive as well as sleep behavior, which basically through the [indiscernible], and we would also look at fine motor and gross motor scale.

For each of those scales like the Bayley-4 Express Communication and the fine motor, those tools have normative data as well as what are considered MID's data to support them, not necessarily in Angelman syndrome but in general. And so we think there's a lot of those types of thresholds that we could capture.

I have -- we have an entire team headed by [indiscernible], who is terrific at this stuff, and they can generate more MIDs or supportive data, but we feel like it's a very powerful way to look at heterogeneous complex diseases like Angelman.

That said, if we had to, we could do CGI, we see tremendous power in the CGI and the FDA has accepted before. So I don't see any risk here. We do one or the other. We can always put the MRI as a secondary and gain the benefit of it there if we get approved off of a primary CGI Angelman syndrome.

So at this point, I feel like, the good part is we're talking about magnitude of changes that are meaningful, easily captured. Therefore, you can do it practically any way you want to and then work.

[Operator]

Our next question comes from Maury Raycroft with Jefferies.

[Maurice Raycroft, Jefferies]

I was going to ask you a question about Angelman Safety. So based on time course of the SAE in your original patient #2 disclosed previously, it appears to be a peak dose effect. But how do you get comfortable with cumulative dosing effects since the SAE occurred about 6 to 30 days after the last dose across the 5 patients?

[Emil Kakkis, President, CEO & Director]

Well, the reason we get comfort that it's not a cumulative is because the actual dose, cumul dose at which someone had the problem with highly variable between patients and unrelated in severity. So 1 patient, the fifth patient had 1 dose only 20 and had the effect. We had also the first patient that had 106 milligrams and had mild problems.

So there's not much relationship to the accumulation and the time course of the effect, like the 6 days or -- the time course of these adverse effects it the efficacy effect. So this has nothing to do with the drug acting as an ASO in the brain tissue. It has to do with fact that's very local like something irritating the nerves there, right? So it is really something operating on a time course, different mechanism. And everything we have says it's a concentration-dependent effect, and what we're seeing right now dosing for as many months as we have, we're not seeing the effect of accumulation causing the problem, right, Mardi, that was your question. We've dosed why we told you dose now multiple patients have given 5 doses over a month, right, and not seeing the effects of accumulation would have done it, they had a problem, but they haven't.

So I think it verifies our view that this is an acute toxic kind of effect due to high concentration. It's more like an irritation of the meninges and the nerve roots. And we think that the change in administration method, dosing administration method are going to mitigate that, and we think we've seen that that's true.

[Operator]

Our next question comes from Salveen Richter with Goldman Sachs.

[Unidentified Analyst]

This is [indiscernible] on for Salveen. I wanted to about Angelman safety. Basically your confidence on why the FCs were to specific rather than molecule-specific specifically as it relates to like the chemistry and the binding site of [indiscernible]. And then an update maybe of where you're at now with dose escalation, what level do you think could be reached by the update?

[Emil Kakkis, President, CEO & Director]

Sure. So thanks for your question. I think you're asking whether the safety effect was related to the molecule versus the chemistry I think from the safety work done on the molecule, meaning the sequence itself, we're comfortable that it's not hitting off-site target effects in other situations. When you look at the pattern of the safety, the fact that peaks in a week or 2 and then declining over several weeks, it doesn't fit the specific antisense omitted pattern of its concentration and presence it fits a different kind of thing.

What we do know, and it's been published that ASOs in general, have a nonspecific chemistry toxicity kind of thing that can be demonstrated in vitro, put a lot of it in there. It goes in, we'll buy in certain proteins and cause some toxicities. And so this tells you, you just have to manage the local concentration carefully at the time you administer it.

That chemistry effect can be enhanced by being a locked nucleic acid, but the locked nucleic acid also gives you longer half-life and greater potency. So the question is how do you balance those benefits of locked nucleic acid versus the toxicity issues.

I think there are ways to look at that. And we think the molecule we have worth targeting and the fact that only 1 milligram in a monkey can provide sufficient knockdown, which is well below what's been seen with other ASOs. We think we have the global potency that the benefit alone can be obtained without risking the toxicity issues that happened from those more stable and those type of ASOs.

[Unidentified Analyst]

And just a follow-up on the dose escalation, the progress there.

[Emil Kakkis, President, CEO & Director]

Well, as we've said, we have several patients have gone through 5 doses, which means they've gone through the 4 doses and have gotten into maintenance. We haven't really disclosed all the levels of dose titration, have been titration, and we'll put out all that detail on titration to what dose level and outcomes in all the patients at the midyear. It's not really appropriate to start putting that out yet. But as I said, multiple patients reached 5, which means they had 4 loading doses and then 1 dose of their maintenance regimen, which happens 3 months after the fourth dose.

[Operator]

Our next question comes from Dae Gon Ha with Stifel.

[Joshua Higa, Director, IR & Corporate Communications]

Dae Gon, are you there? Operator, why don't we move to the next caller.

[Operator]

Our next question comes from Jeff Hung with Morgan Stanley.

[Jeff Hung, Morgan Stanley]

Can you talk about what we should expect to see from the setrusumab and the UX053 updates later this year?

[Emil Kakkis, President, CEO & Director]

Sure. So in setrusumab, we expect to have almost 40 patients enrolled that have gotten 2 months of dosing, and we'll have this information on their biomarker, the P1 biomarker, which we're based on the historical data from the ASTEROID study in 90 patients showed a nice correlation between their bone density improvements and the P1 MP. So we'll look at the P1 P-marker and other data, safety and efficacy and to help make a decision we put out what our decision is on the dosing algorithms for pediatric and adult patients in the disease. So you learn about safety, biomarker information at a high level, and then we'll talk about what our dosing strategy going forward in our plan a Phase III setrusumab.

4053, we're going to have basically single dose -- single sending dose data in which we'll look at the safety, of course, and as well as effects on glucose and other biomarkers and clinical assessments as well. But because it's early and it's only a single dose, we wouldn't expect to see dramatic clinical benefit at this point, but we're looking to see clinical activity in the biomarkers endpoints that would help us assess that the enzyme being delivered as being the mRNA being levered is being translated enzyme is active and is doing what it needs to do in the liver.

[Operator]

Next question comes from Joel Beatty with Baird.

[Joel Beatty, Robert W. Baird & Co.]

I want to start there. What's the [indiscernible] of them sticking on therapy? Have you seen any [indiscernible]? And then also for gene therapy and manufacturing, once the plant is operational next year, how does that capacity of that plant compared to the clinical pipeline programs that you have in development?

[Emil Kakkis, President, CEO & Director]

Okay. So the persistence or compliance -- you're talking about was for Crysvita?

[Joel Beatty, Robert W. Baird & Co.]

Yes.

[Emil Kakkis, President, CEO & Director]

Yes. Okay. The Crysvita is in the Crysvita persistence is in the high 90 percentile range. So it's quite excellent. And compliance is in the 90% plus range. So we see these are really good numbers for compliance and persistence so far. And I think part of the reason for that is patients can feel when they're on the drug and when they're not on the drugs. If they miss a dose, the phosphate will start to fall, and they'll feel that effect of that, and that just tells them need to get back on. So, we think that the fact that they can feel when their phosphate goes down is probably a factor in why they're staying in compliant. And once they get on, they want to stay on. So that's that the -- gene therapy plant it's about 100,000 square foot plant. It will have ultimately 2 suites, independent suites that can run up to 2,000-liter production, and we'll turn over a number of runs of the year.

It should be able to handle a significant fraction of our total, although where plan was still to a hybrid model with some contract manufacturing to supplement it. If we hit our marks and we get where we want to be on commercializing gene therapy, we have also the ability, we have additional land that we have purchased next to the plant, that we can add essentially double the plant up with 2 more suites that could make double the total capacity.

So within those ranges, we have a good traction on what we're doing on but we still are planning a hybrid model, not a complete takeover of manufacturing.

But if time goes push comes to shove, we need to, we certainly would have the capacity ultimately to take on the programs we have short of Duchenne. If the Duchenne program does well hit the clinic, the quality of product required for that program will be substantial, and we'll need more capacity.

[Operator]

Our next question comes from Laura Chico with Wedbush.

[Laura Chico, Wedbush Securities]

I guess I wanted to take a step back. And for Emil and team, how should we be thinking about the potential for longer-term revenue guidance targets? Obviously, Crysvita, you have considerable experience with this, but you're approaching a transition point. Just kind of wondering what is the potential for longer-range targets? And then maybe secondarily, how do you balance becoming profitable with continuing to expand your pipeline efforts at this point?

[Emil Kakkis, President, CEO & Director]

Thank you, Laura. Well, first of all, I think our expectation is to see steady growth and the addition of that piece is to help also fill out the pipeline growth. But Crysvita will be continuing to grow, we believe, along with Dojolvi, which is doing really well, that puts us on track with the 3 products and now adding Evkeeza to hit substantial revenue growth every year in the 30-plus% range or more, so we feel very good about where that's taking us.

Now with regard to our pipeline, our plan here was not to run -- we run about 68 clinical stage programs at the same time, we're -- and not to grow beyond that. To be able to run 68 clinical stage, I want to become commercial, it's separate, but if the -- in development stage 68.

The idea is that we want to create a certain size of spend around R&D that would generate a product filing on an average every year, if you average it over 2 to 3 years. And we think that's when we can do it. So we don't want to keep growing R&D indefinitely. We're growing to the size. We are at a peak right now because we have 4 programs in pivotal, which is not normal. And what our expectation is that over the next couple of years, we'll start to plateau, and we will try to hold line there around that level of R&D spend, and our expectation then the revenue continue to grow, and we'll get operating leverage and go profitable. And that is our plan.

Our plan to go profitable is to go profitable with a lot of products, new products launching, which we'd expect in the next 3 or 4 years, which would put us in position to cross profitability, but not profit but to really fly far above it.

So I think there's always a debate of how much you want to spend versus how much you want to manage profitability. The key is when you spend well and to spend smartly and effectively. And that's what we focus a lot on. But right now, we think the level of spend we're at is around the range we want to be in the long run. And as long as we continue to grow our revenues, we can -- we'll have to be a profitable company and the picture we see in the long-range plan shows a whole series of products generating revenue for us and a very robust, diversified pipeline across mode and therapeutic indication, which I think will make us one of the leading companies in the field of rare diseases.

[Operator]

Our next question comes from Dae Gon Ha with Stifel.

[Dae Gon Ha, Stifel, Nicolaus & Company]

Questions for me, one on GTX-102. Emil, I wanted to ask you about sort of the confidence and the strength in the GTX-102 IP. It looks like there is a little bit of an overlap on the sequence targets that Roche, ionis and [indiscernible] kind of going after. And what's your take on that?

And secondly, following up on the previous question, going back to Evkeeza, you kind of prioritized a readily commercializable product? But I guess, going forward, what kind of directionality would be enticing to you? Is it more commercializable products or something like Genetics where you can take basically the entire ownership of a program?

[Emil Kakkis, President, CEO & Director]

Okay. So with regard to the GTX-102 IP, there is a distinct region within the IP that [indiscernible] has a genetic license that we license part of our deal, is distinctive and separate from where ionis and Roche operate, distinct separate towards the [indiscernible] message.

And the description we use involved that sequence plus we also are targeting not necessarily just introns but seriously consider other and other aspects of what we do that are unique, different, which are important in achieving potency because the fire prime end is a lot more potent at determining the transcription of RNA as well as destroying existing messages, and that's why we think that fire prime in is uniquely patented is powerful and important. That is where the [indiscernible] end of the long and this message come from. So that's why we think there's a separation, a distinct one that's why we did the deal originally because there's no way I would have planned to go head-to-head with Roche and Biogen ionis on a neurologic disease for the fact that the group had an edge, and they wanted to work with us and it looked like an opportunity we should take.

So on the question of commercial versus pipeline. I think it was a fundamental question for you because I've had people say, why don't you buy $1 billion product that's commercial? Well, yes, but how much do you have to pay for a $1 billion product or commercial?

So obviously, I don't think buying a product you know is building our product already commercial is a good deal because I don't think there's any gain. There's an arbitrage there. There's no way to make money as a company. We can't do that with the premium for the rest.

So when we buy a layer commercial products, they may be smaller niche products that are great for us where we can extract value with our unique distribution system and team across the globe. That is what Regeneron wanted, and we're able to use that skill to gain value from something with a $30 million upfront.

Now Angelman, we can't make build a company on the smaller products. We need to have some larger return. Those are going to have to be earlier stage programs, where then we have to take our development insight and skill to pick, design, drive and execute in a reasonable time frame to take something of uncertain value and turn it into something of value.

And I think you would agree that a $20 million investment on a multi-billion dollar opportunity that has now turned into something of great value is the kind of investment we should be in as a biotech. But adding a late-stage commercial product that leverages our operating revenue and takes advantage of our rare disease skills commercially is also a good deal. So if you see a late-stage deal is more likely to be smaller, niche and perfect fit for us.

And if it's earlier stage, we might do some things that are higher risk, higher return, but where we can add value and grow the value through our particular skills. Hopefully, that gives you a kind of a feel for our view.

[Dae Gon Ha, Stifel, Nicolaus & Company]

Yes, it does.

[Operator]

Our next question comes from Yigal Nochomovitz from Citi Group.

[Yigal Nochomovitz, Citigroup]

Just two clinical ones, Emil. On the gene therapy programs, I don't think I've ever asked you this before, but could you just clarify as to why for 401 and for 301 you're doing a 1:1 randomization. But for Wilsons, do you opt to port 2:1 randomization?

[Emil Kakkis, President, CEO & Director]

Yes. Well, in the 301 and 401, originally, we were going to do a 2:1 in 40 patients study steady and I specifically decided we ought to go 1:1 to improve the power of the study. And because I thought a 40-patient study was on the smallest side.

And powering of study is dependent on the size of the placebo arm. And since we're looking at patients who are on control treatments, we need to make sure we have an adequate power. And so by increasing and making it 1:1. We're able to look at the existing treatment and the others.

Now for the Wilson, if you notice the total size of the program is much larger, right? So there's 27 people in the first part, 6 treated, 3 placebo in each dose group, the right? That's 27 plus, there will be 60, 70 in the Phase III part of the study. So because the study is much larger, we can afford to do the 2:1 randomization still have enough power remaining by a large enough placebo group.

And because it has really good biomarker essentially urinary copper excretion, these are things we can measure with great reliability. And so, we think the 2:1 works for that. It's nicer to patients. And we think the largest size of the study, which is enabled by our better PCL manufacturing platform puts us in a position to be able to do a study that will cost less to make, but it will treat more patients.

[Yigal Nochomovitz, Citigroup]

Okay. That's very logical. And then just one on Angelman's -- apologies if this has already been asked, but just with respect to feeling comfortable moving into a Phase III for Angelman, could you be a little more specific in terms of the point improvement you'd like to see in CGI-AS and across a minimum number of domains. So if you could provide a little quantitative commentary on sort of what point improvement you need to see and then how many domains you're aiming for to feel good about taking the Phase III?

[Emil Kakkis, President, CEO & Director]

Well, we had described before that for the purpose of dose titration, we were looking at least 2 domains of plus 2 or better, plus 2, meaning much improved or very much improved. In the prior program, we had 3 patients that were much improved were plus 2 and 2 patients that were very much improved. So that gives you kind of a sense of what we might see. But I would look at those as a trajectory amount of improvement over a period of time.

The act true differential and efficacy might depend on how long we decide to marker and treat them. But I think that, that level of change suggests to us that the not long antisense message must be knocked down on the UV expression must be induced.

And once you even listed maximally, doing it more doesn't matter. You just need to give patients time to develop and improve their skills. So we are looking -- and if we were running a study with CGI AS, we want to see a plus 2 or better in our design for our Phase III. That's what we'd want to see. We wouldn't want to go with a program that was going to give you a plus one. We want to make sure we get our titration dosing such that we're looking at a much approved kind of score. And I think patients deserve to have us do the work to make that's right.

I think it's within our graph, we know it can be achieved, and we're close to where we need to be. So I think it's to get that level of efficacy with this program.

[Operator]

Thank you. I'm showing no further questions at this time. I'd now like to turn the conference back to Joshua Higa.

[Joshua Higa, Director, IR & Corporate Communications]

Thank you. This concludes today's call. If there are additional questions, please contact us by phone or at [e-mail]. Thank you.

[Operator]

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