Ultragenyx Pharmaceutical Inc. (RARE) Q1 2015 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen and welcome to Ultragenyx Pharmaceutical First Quarter 2015 Financial Results and Corporate Update. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Rob Anstey. Sir, you may begin.

Thanks, Damon [ph]. Good afternoon, everyone and welcome to the Ultragenyx Pharmaceutical financial results and corporate update conference call for the first quarter of 2015. We have issued a press release detailing our financial results which you can find in our website at www.ultragenyx.com. With me today are the following members of the Ultragenyx management team, Emil Kakkis, Chief Executive Officer and President; Shalini Sharp, Chief Financial Officer; Sunil Agarwal, Chief Medical Officer; and Tom Kassberg, Chief Business Officer. We will start today with an overview and key updates from Emil, followed finance and development highlights. We will keep our prepared comments brief in order to allow time for the Q&A portion of the call. First, I would like to remind investors that this presentation contains 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, statements regarding the expected release of data from clinical studies, the initiation of additional clinical studies and the designs of same, plans regarding ongoing studies for existing programs, the sufficiency of existing cash, cash equivalents and short term investments to fund operations for projected periods of time and intent to file for conditional approval. These forward-looking statements represent our views only as of the date of this call and involve substantial risks and uncertainties that could cause our clinical development programs, future results, performance or achievements to differ significantly from those expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others, the uncertainties inherent in the clinical drug development process and actions of regulatory authorities, the timing of our regulatory filings and other matters that could affect the availability or commercial potential of our drug candidates. For further description of the risks and uncertainties that could cause actual results to differ from those expressed in the forward-looking statements as well as risks relating to our business, see our quarterly report on Form 10-Q for the quarter ended December 31, 2014 filed with the Securities and Exchange Commission on March 27, 2015 or our quarterly report on Form 10-Q for the quarter ended March 31, 2015 that will be filed soon and our subsequent periodic reports filed with the SEC. Now I will turn it over to Emil.

Thanks, Rob and good afternoon and thank you for joining us. I’ll provide a high level overview of our progress in Q1, 2015 and Shalini will then give an overview of our first quarter financials. Finally, Sunil will provide additional details on our clinical development progress. Since the start of the year we pressed ahead with all of our clinical and pre clinical programs and have made significant progress in all of them. We have completed some of our planned development milestone; have also announced results from other investigated studies related to our products. We are on-track now for a number of clinical regulatory milestones this year including the following, completing enrolment in the rhGUS Phase 3 and MPS7 with the goal of reporting data in the first half of 2016, 16-week data from the KRN23 Phase 2 in pediatric escalation Q2, initiation of randomized, double-blind, placebo-controlled study in adult escalation in the second half, interim data from the ongoing Phase 2 of KRN23 and Tumor-Induced Osteomalacia, interim data from the Phase 2 study of Triheptanoin and Fatty Acid Oxidation Disorders by half 2015. We’ll be planning and initiating our expand development plan and clinical study in the movement disorder of Glut1 Deficiency Syndrome to supplement our study data in Glut 1 Deficiency Syndrome seizures that’s expected late in 2015. We’ll be initiating a Phase 3 study of Sialic Acid Extended-Release in GNA Myopathy previously known as HIBM in mid 2015. And finally the filing for traditional approval on the Europe for GNA Myopathy in the second half of 2015 to have a full year ahead. In our most recent update, we announced the investor study data on the use of Triheptanoin to reduce the motor events of Glut1 Deficiency Syndrome patients by 90%. We also announced that we would expand our Triheptanoin development strategy to include the randomized controlled study in Glut 1 Deficiency Syndrome patients with these motor problems. The outcome of the investigator pilot study is important for two key reasons. First, it provides a solid basis for the expansion of the Triheptanoin problem to a broader Glut 1 adult patient population as well as potentially provides an alternative regulatory pathway. Second, the data demonstrates that Triheptanoin may improve energy sufficiency in multiple parts of the brain including the basal ganglia that affect motor function in Glut 1 Deficiency Syndrome patients. And t is similar to the effects observed in patients with Huntington diseases as reported earlier in Q1. Based on all these tests we know how data in both adult and pediatric patients suggest that Triheptanoin may reduce neurological energy deficit manifestations in multiple brain locations. These observations will need to be confront in randomized control studies which are either underway or being planned. In addition to the clinical update we have received orphan designations for Triheptanoin in the U.S. for fatty acid oxidation disorders and in the EU for Glut 1 Deficiency Syndrome in addition to the existing U.S. designation for Glut 1 Deficiency Syndrome. Beyond orphan designations we also have issued patents for Triheptanoin including a used patent in FAOD and two other comp additions like patents for the molecule that extend to 20, 25 not including up to 5 years of patent from extensions. Moving from Triheptanoin to rhGUS, our enzyme replacement therapy for MPS 7 our Phase 3 program is on track in steady enrolments progressing Phase 3 blind-start study data are expected in the first half of 2016. In addition to Phase 3, we planned to initiate a study in younger patients less than 5 years old. This study is especially important to the loss of many MPS 7 patients in the first year of life due to hydrops or total body swelling and its associated complications. Early treatment is also likely to benefit the affect on the bones and other tissues as observed in anti models and in other MPS enzyme replacement therapies applied to very young patients. We estimate there are approximately 20 hydrop swollen babies born with MPS 7 each year in the developed world. If treatment with rhGUS is able to help some of these hydropic babies improve, this could be important in changing the course of this disease. One four month old hydropic patient has been on rhGUS infusions on a capacity [ph] basis since the fourth quarter of 2014, but subsequently more data will be needed to know the true potential impact of rhGUS in these early hydropic babies. Lastly, we’ve had a number of personal and corporate updates. We announced recently the Dan Welch is appointed to our Board of Directors. Dan is currently an Executive Partner at Sofinnova Ventures and was previously Chairman and CEO of InterMune until it was acquired by Roche in October 2014. We’re excited to have Dan on the team as it’s a busy and exciting time in the Company’s development. We all continue to build out our senior management team. The most recent addition is Dennis Wong [ph] our new Chief Technical Operations Officer. Dennis will lead our manufacturing process development related activities and be a member of the senior leadership team. He has extensive experience in technical operations for both biologics and small molecules at InterMune, Allergen and a number of other successful companies. In addition to Dennis, we have identified and recruited a Chief Commercial Officer, who will lead development of International sales and marketing organization as we prepare for launch. We look forward to announcing that hiring in the next couple of months. These latest additions to the senior team will help us in executing our development plan and our commercialization plans globally. I’ll now turn the call over to Shalini to provide the financial overview.

Thank you, Emil and good afternoon to everyone. I hope that you’ve all had a chance to review the press release we put out earlier. Our first quarter 2015 results included total operating expenses of $21.5 million. Research and development costs accounted for $17.4 million or 81% of our operating expenses. Not surprisingly, SA-ER and rhGUS our Phase 3 programs accounted for the greatest proportion of R&D costs in the first quarter of 2015 as well as the largest increases in expenditure relative to the first quarter of 2014. Expenses also increased for both Triheptanoin programs and both KRN23 programs. As a reminder, we share KRN23 development cost 50:50 with our collaborative partners Kyowa Hakko Kirin. Costs for our preclinical translational research programs also increased over the prior year. OpEx increased significantly from the first quarter in 2014 due to the expansion and overall advancement of our clinical development pipeline, including the conduct of multiple clinical studies, higher manufacturing cost and related supported general and administrative expenses. Total net loss for the first quarter of 2015 was $21.4 million and cash used in operating activities totaled $17.7 million. Net loss for the quarter included approximately $3.6 million in non-cash charges such as stock-based compensation, amortization of premiums on investment securities and depreciation and amortization. As programs advance into late stage clinical trials and we expand our translation research and global commercial capabilities, we anticipate our expenditures will increase in future quarters. We ended the first quarter with $342.6 million in cash, cash equivalents and short term investments on the balance sheet, which included the $175 million in net proceeds raised from an underwritten public offering of common stock in February. We continue to expect that we have sufficient funding for our currently planned operations into 2018 assuming that all programs proceed successfully. During this period we could see pivotal data from every single clinical stage program. As a reminder, we do not have any debt outstanding. I will now hand it over to Sunil to provide the development update.

Great, thank you Shalini. I will now give an update on the clinical pipeline starting with the Triheptanoin. As Emil mentioned, the results from the investigator sponsored trial in Glut1 patients with the movement disorder phenotype were presented at AAN last month. The single-arm, open-label, pilot study enrolled patients with non epileptic paroxysmal mode of manifestations. This means that these manifestations are not seizures, but are sudden, transient and voluntary movements that can be debilitating. Paroxysmal motor events were measured by a patient diary over three separate two months Phases of the study, a baseline phase, a treatment phase and a withdrawal phase. During the baseline period, six patients reported an average of 31 paroxysmal events. During the Triheptanoin treatment phase, this rate declined by 90% to an average of three events and was statistically significant. After Triheptanoin was discontinued, the rate of paroxysmal manifestations increased significantly to an average of 24 events which was also statistically significant. In addition, improvements were noted in the clinical, global impression scale and in brain energy metabolism during visual stimulation. Triheptanoin was well tolerated in all patients, however, two patients were considered non-compliant for reasons unrelated to safety and were excluded from the analysis. Based on these results, we plan to initiate a randomized double-blind placebo control study of Triheptanoin in the Glut1 movement disorder phenotype. We anticipate having discussions with the FDA on study design details in the second half of 2015. The Glut1 movement assorted study extends our overall strategy in this potential indication. The expansion is especially important given the particularly high unmet medical need in the movement disorder phenotype of Glut1 deficiency. We believe that a limited number of patients are on the Ketogenic diet to treat movement disorders and their data suggest it may not be very effective in treating the specific manifestation. In addition to the Glut1 movement disorder plan study, a Phase 2 placebo controlled study is ongoing in patient who present primarily with tonic-clonic and/or have some seizures associated with the disease. Interim data from this study evaluating the effective Triheptanoin on seizures are expected by the end of 2015. In addition to Glut1, we continue to treat patients with Triheptanoin in the open-label Phase 2 study in fatty acid oxidation disorders or FAOD. The FAOD trial is intended to be a learning study. We are evaluating a range with endpoint covering the muscular skeletal, liver and heart manifestations of the disease. The ultimate goal is to identify meaningful signals of activity on one or more of these broad manifestations that will enable us to develop in operationalize in pivotal Phase 3 study. This study completed the enrolment of 29 patients in late 2014 and we expect interim data in the second half of 2015. The interim data will look at the acute effects of the disease after six months of treatment with Triheptanoin. After the six month interim analysis we will continue to treat and follow patients for an additional 12 months for a total of 18 months on Triheptanoin. Turning to the KRN23 development program, we are conducting a randomized, open-label, dose finding Phase 2 study in 36 pediatric XLH patients. Patients are divided into three cohorts of escalating starting dose level of KRN23 with either monthly or by weekly dosing regiments. During the initial 16-week dose titration period, doses can be titrated on a monthly basis until patients reach a target serum phosphate level, which is a key biochemical hallmark of this debilitating bone disease. After the initial 16-week period patients can continue to be titrated on monthly basis to an individually optimized dose level as needed. In the second quarter of this year we plan to report the results from the initial 16-week period. These results shall include safety, pharmacokinetic dynamic endpoints including serum phosphate, TMP, GFR which is a measurement of how much phosphate is reabsorbed by the kidney and vitamin D. Our goal is to evaluate the safety and serum phosphate levels can pay with those observed in the Phase 1/2 XLA study in adults. Later this year, or in early 2016, we plan to release additional data from the study after 40 weeks of treatment which will include radiographic evaluation of rickets, which is a key clinical endpoint of this disease. In addition to the pediatric XLH program we are on track with our adult XLH program where we plan to initiate a randomized double-blind placebo control study in the second half of 2015. We also recently initiated an extension study for adult XLH patients who had previously completed studies conducted by our partner KHK. This long term open-label extension study will enroll approximately 25 patients. This study will generate additional long term safety and efficacy data in the adult patient population and it also enables us to continue to provide treatment to the first patients who participated in the clinical studies of KRN23. Many of whom have been requesting to get back on therapy since the original studies were completed. With regard to our recently initiated program evaluating KRN23 in tumor-induced Osteomalacia of TIO we remain on track that initial data available in late 2015 or early 2016. Turning to our rhGUS development program, we continue to enroll patients in our Phase 3 study in MPS 7. We anticipate results in the first half of 2016 and as Emil mentioned we expect to kick off a study of rhGUS in the younger MPS 7 patients around the middle of this year. We’ll provide additional details about that study design when it is initiated. Lastly, with respect to SA-ER and HIBM patients, we continue to move forward. We are planning to file for conditional improvement in Europe in the second half of this year and we would anticipate a decision by the EMA within approximately one year from the date of file. We are also on scheduled to start our global Phase 3 study. This study will enroll approximately 80 patients and evaluate the composite of upper extremity muscle strength as the primary endpoint with key secondary endpoints including the lower extremities. It is intended to convert a conditional approval in Europe to a full approval, as well as to support approval in the U.S. In summary, we are encourage by the progress we have made across all programs and I look forward to providing further update as we reach our next key milestones. Next, I’ll hand it back to Emil to close out the presentation.

Thanks, Sunil. Well, we’ve continued to execute in the first quarter this year and raise substantial funds this forth that effort and we continue to track excellent people in filling out our critical roles to drive our programs. This will be a busy year for us with key miles and expected from all six of our development programs in the planning for commercialization finally beginning. We’ve keenly focus on developing much need therapies for patients to rare disease and through that effort creating value for shareholder. Now with that, I’ll end my comments and thanks for listening. We can now move to the Q&A session. Operator, can you please provide the instructions.

Thank you. [Operator Instructions] And our first question comes from the line of Salveen Richter of SunTrust. Your line is now open.

Thanks for taking my questions. Just curious in terms of the KRN23 studies will you be able to file on the pediatrics study or do you have to conduct a Phase 3? And then just remind us if the adult trial that you are starting whether that’s registrational and then just a couple of follow up to post that?

Great. Thanks, Salveen, I think that the – we are always looking for ways to try to accelerate the development plan. But we’ve stated the peds program was Phase 2 and the adult program we’ve been talking with the authorities and I’ll let Sunil provide some more detail on the two studies.

Sure. And thanks again for the question. As Emil mentioned, the Phase 2 study is in pediatrics and as you know that is ongoing and we look forward to providing you data from that study in the second quarter of this year. And again the 40-week X-ray data late this year, early next year and it is Phase 2 as Emil mentioned. On the adult side, we’ve completed our Phase 1/2 programs and to remind people all patients of adult had improvements in serum phosphate after KRN23. We are planning our next study which is a randomized double-blind placebo-controlled trial. As we get further along with our discussions with the agencies, we’ll provide updates as they become available.

I think the change or the peds study was not intended to be pivotal registrational. I think the only way we could potentially go fast would be if we had results that would suggest that it was dramatic and something that could move further, but I wouldn’t want to – what we said, everyone, that we would expect to have to do a randomized-controlled study based on our feedback from regulatory FDA in any case. And -- but obviously we look for ways to go faster if there’s an opportunity. The adult study could potentially be registrational, the Phase 3 randomized-controlled – is a randomized-controlled study with placebo and we’re going to provide some more details on that, but potentially registrational. So the right strategy could include Phase 3 peds and Phase 3 adult could be a Phase 3 peds with the current peds. And I understand the question, Salveen, we’re just trying to get out what’s the real-time line for filing, and what I say is we’re working all the angles to try to maximize our speed through the process but it will depend somewhat on the data we see is what we can or can’t do.

And then, just a follow-up, in terms of is there going to be any build out here in certain territories ahead of name patient sales in HIBM and MPS 7? And then, how is the one MPS 7 patient with NIHF progressing? And then one question for Shalini, when you look at R&D expense should we expect the higher manufacturing cost in Q1 to follow through for the rest of the year? Thank you.

On named-patient sales we are initiating the process in Europe, Turkey for named-patient sales in rhGUS, for MPS 7 as well will be later doing that for UX001 or SA-ER. So, generally these problems can done initially with consultants and don’t requires the same level of commercial infrastructure, but we do have other needs in Europe which relate to patient’s identification as well and so we are planning to start building personnel on the ground and help with patient identification as well as to help to begin managing. But the programs for named-patients sales are being initiated with the use of specialized consultant who we worked with before. Tom, I don’t know it there’s else to add on that.

I think you covered it. And 2015 is really more of a planning year and focusing on patient ID efforts expanding that. And then beginning the planning for personnel where we’ll have direct presence etcetera in Europe – focused on Europe given that where we’re filling MAA this year. And so 2016 will really be more of the ramp up year. We’re probably putting more people on the ground and forming definite [ph] more specific plans for go-to-market.

Obviously hiring a Chief Commercial Officer was a critical step and we’ve been working on that for number of months and we’ve identified someone and we expect to have him on board soon.

And Salveen to answer your question regarding manufacturing, we do expect to be at a higher run rate for manufacturing cost going forward, because we have the two programs that are in Phase 3, so that is a larger number patients we need to manufacture for. There are things like validation runs and other CMC activities required in connection with potential approval and then obviously manufacturing in the commercial setting as well. So I would expect that to continue at a higher run rate.

Our next question comes from the line of Marc Frahm of Cowen and Company. Your lines now open.

Hi, guys. Thanks for taking my question. Going back to the Glut1 movement disorder patients group, do you have sense of how many patients there are that have just the movement disorder and not seizure phenotype as well. And then, to what degree did the movement disorders that are seen in seizure patients overlap with the phenotype that’s in purely the movement disorder patients?

Very good, thanks Marc. So, we don’t have a precise number on how many patients have movement disorder. When you look at the phenotypes and the publication that exist on Glut1, it’s pretty clear that the seizure problem tends to be in early younger child problem and then it starts to wane and the movement disorder problem tends to be something you see as a teenagers and adults to varying degrees. There are children that have movement issues as well. But it appears to be a more of a problem – phenotype is more the primary problem for later patients, the seizure tends to diminish. So it’s sort of the evolution of the disease. And clearly it must mean that the cortex of little kids are just really fragile and energy independent and they just get more seizures than later on. It’s the deep part of the brain that is deficient that needs, that gets -- drives the motor dysfunction. So I think that sort of the general feedback. We don’t have solid numbers, but you see the motor problem or dyskinesia problem even in children who may not be having this tonic motor event. There maybe – if they do the [Indiscernible] they have more a difference in their gain [ph] how they behave. So I think this deficiency problem is affecting the whole brain throughout their lives. It’s just the major manifestation shifts from being seizure to the motor dysfunction. One of the challenges with Glut1 and on the patient numbers is that based on surveys of different type of seizures, its pretty clear there’s a lot of Glut1 patients were not diagnosed. And so while we think there are 3,000 to 8,000 Glut1 patients in the U.S., we don’t have a good handle yet one how many are actually diagnosed or not. And we’ve initiated a very expansive patient identification programs providing pre-sequencing opportunities for doctors who have patients with refractory seizures with unknown etiology and we’ll also expand that to motor dysfunction to try to enhance the diagnosis of patients. There are clearly some new diagnosis coming from that program, so we think it’s something needs to happen to help get a better handle how many patients there are.

So, I believe some of the secondary endpoints on the ongoing seizure study, do you look at these kinds of movement disorders, I mean, how much read-through do you think is from those data points into what you might see in the Phase 3 you’re going to start?

The Phase - that study basically is trying to cover all the phenotype, but we only select for patients that have seizures, not motor dysfunctions. So, we kind of think that because we’re selecting for seizure patients is not – there maybe lot of patients, but don’t have movement problems, so I don’t know if you want to say anymore about study.

Emil commented there very well. It’s a good question. I think it’s not extremely well described in literatures. The classical phenotype is what Emil described and that early in life the majority of symptoms are seizure based and later in life it becomes movement disorder based. So there is significant overlap longitudinally if you will. However, there are data supporting those in a classical phenotype like there is a most disease states where the major manifestation is just movement disorders, but I would consider the trial separate, and that the Phase 2 is a seizure disorder primary study. Now our movement disorder study will enroll patients specifically with the movement disorder phenotype and that will be randomized double-blind placebo-controlled study and we look forward to talking with the FDA in the second half of this year on that study design.

So, more simply Mack, I guess to put the question, in that seizure study I’m not sure you would get good read-through to the movement, because there’s just not enough patients who would be necessarily have movement disorder to be able to tell. If it was, it would be just a few and there wouldn’t be a lot of patients, so that might be harder to make a conclusion from that.

Okay. Great.

Our next question comes from the line of Cory Kasimov of JPMorgan.

Hey, guys. This is Britney [ph] on for Cory. Thanks for taking the questions. Just curious following the positive data for the ISP in triheptanoin and movement disorders, what read-through if any does this have to the FAOD indication? Thank you.

Well, it’s interesting question. I think in general the triheptanoin program is based on energy substrate replacement, right, and so if we’re able to do it in the brain and Glut1 it doesn’t read-through to treating the muscle and other tissues. I think it might. I think that -- it does shows the compound has activity and that the activity is real. And so we’re encouraged by it, the one difference though I would say is that, the muscle manifestation in FAOD or the liver hypoglycemia are a little different and they are episodic, but they are harder to predict when they are happening and often they result from injury or current illness like flu or excessive exercise or something else. And so they can be basically dependent on an inducing event, which makes trickier to understand how the study at FAOD in that regard is. And so we were hoping is enrolling that study to focus on people that have ongoing chronic issues that we can measure either musculoskeletal or muscle problem, heart problems or liver hypoglycemic problems and try to verify whether those chronic problems can be changed. But I would agree with you that if you’re able to do energy replacement it show that in a particular setting and I think it helps support the general thesis that such a replacement and restoration of energy function is a general issue that effects both FAOD and Glut1 and the two studies and the data probably are supporting each other, although the tissue targets are different between them.

Our next question comes from the line of Adam Walsh of Canaccord Genuity. Your line is now open.

Hi, guys. Thanks a lot for taking my question. I understand that the Phase 2 trial have –can you hear me?

Yes.

Okay, I understand that the Phase 2 triheptanoin study for long-chain fatty acid oxidation disorders is a learning study and you're are looking at a wide variety of endpoints, but can you just give us a sense at this point of what you think are the most important endpoints ahead of the data? And then kind of as a follow up to that, once you get the data how do you anticipate the dialogue around the pivotal endpoints playing out with the regulatory agencies? Thank you.

You want us to predict the future with the agencies. I’ll let Sunil, who will handle the question about what we’re looking at and what we think important. But we try to portray the study including muscle patients, liver hypoglycemia patients and potentially heart patients, but we didn’t have very many heart failure patients there. We’re treating lot of heart patients as emergency INDs it turns out, but it’s more about skeletal muscle and liver hypoglycemia, so maybe, you can talk about those.

Yes. That’s right. There is different phenotypes within there and I think the primary patient population that we enroll, they are really the musculoskeletal patient population, and again there were 29 patients enrolled then we’ll have data by the end of the year. And the type of endpoints we look at to see potential benefit of musculoskeletal size are things like a circle ergometry, so cycle testing or bicycle testing, the other thing would be like six-minute walk test. We’d also be looking at energy efficiency or expenditures in other words if you walk or do a certain amount of exercise, what is your heart rate with respect to that exercise and the 12 minute walk test. With respect hypoglycemia or liver, of course you look at glucose. On the cardiac side as Emil mentioned, we didn’t enroll a lot of those patients so we really wouldn’t expect to see, have enough patients to really look on that area. But again, I would focus on a musculoskeletal type of endpoints like the 12-minute walk test and the cycle testing and again after the six month time point we will have the longer term 18-month time point. And Emil you want to add anything.

Yes. So I think -- you think that like any other studies, but we studied endurance using a six-minute walk test, doing the 12- minute and the cycle ergometry, both are going to test exercise endurance and their ability to bicycle or walk distance. And a lot of these patients are sanitary, they don’t move around as much, because they are afraid to because of their muscle. So we think that it would be a solid way to do it. We’re also looking at Creatine kinase and one of the criteria again is that we have a very high – kinase even without having a lot of acute muscle events. And so we are going to look feeling kinase as a symptom muscle rupture which means local muscle cell, energy efficiency, resulting in rupture and that will give another read on are we providing muscle rupture by fixing their energy metabolism, which is something that has been what’s considered absurd in the prior work that is done at Baylor. So I think would another angle to look at here. We are also monitoring events or daily life events in diary, which are harder to do in an open label study but we will collect those. But if we had a handicap, but I think the interims and that measurement are going to be really critical. And then secondarily without a biochemical impact of excess stress testing in addition to events that maybe going on affecting the lives of patients. And as Sunil mentioned, that skeleton Musculoskeletal, it’s the private dominant phenotype we have and the liver hypoglycemic patients are the smaller cohort and what’s been happening on the heart failure size we haven’t enrolled them in the study. And I think just maybe a very small number, but we have been getting emergency request for use of triheptanoin in heart failure patients and we will be probably putting up some of that information later in the year from investigator initiate emergency need treatment for patients with heart failure.

That’s great. Thanks a lot for taking my questions.

Our next question comes from the line of Chris Raymond of Robert Blair and Company. Your line is now open.

Hey, thanks. . Just a couple of question on rhGUS, just kind of struck by your comments on these patients with NIHF the infant trial. I think, I heard you mentioned that the estimated incidence is about 20 a year, wondering if you could maybe put some brackets around what that might do to the overall sort of prevalence estimate I think you guys have always said 200 patients, what should we be thinking if this trial is successful?

Chris, thank you. I think its an important question for the overall model for what you’d expect for this program. Our view is that there are number of patients that fully have hydrops and die within the first year. Among patients that survives -- in our survey about 40% of them had hydrops in the new born period, so there clearly are some patients that survived, as well as the number that die. But we don’t have a perfect number on and we mentioned the approximate 20, but that’s based on surveys of people have looked non immune hydrops and determined how many were LCs [ph] but the problem is we don’t know if really all the patients have been actually evaluated for [Indiscernible] disease or MPS 7. And so the true number there is a little hard to know, there maybe more than that number but we don’t really know but some of them maybe surviving. So we’re still trying to triangulate. But what I can say is, the general direction is that there probably the significant number of patients that are dying with hydrops. And so if we were able to improve their survival or change of course their disease, then we would expect that there would be an increasing number of MPS 7 patients beyond our expected population of 200, but the hard part is I can’t give you numbers to plug into a model exactly and so that’s why we’re learning into that one part of the story that we don’t want to position exactly what that number is going to play out. But because 20 is 10% of the world prevalence, right and it becomes cumulatively potentially important. The first thing we got to treat some patients and show that we can actually keep them alive, make them better. As we noted in our release, we have been treating one kid since fourth quarter of last year that continue on therapy, obviously it’s May, so it’s been a number of months. We are getting other request for treatment currently. So which suggest me that the 20 per year number probably not off since we’ve had fair number of request for treatment? So, I think it’s an important part of the equation and I think and if we’re able to successfully treat these patients that it will have an impact on the overall market in the long run.

Fair enough. Okay. And then just follow-up on the pivotal trial and I know with FDA there is no primary endpoint in sort of the direction that you’ve portrayed as you look totality of the data. Just curious if there is any scenario that would you see where the totality of the data may include fewer than 12 patients?

I actually yes, I think it’s very possible, because the reason being that the 12 patients are going to be heterogeneous, right. It is going to be a wide range of ages and types. So it could be that they look at let’s say six patients that can do the pulmonary function testing and the other six can’t. And those 6 have a really nice effect in pulmonary function. Well, I think it could look at something less than every single patient. So I don’t’ when they said, they’re looking each patient individually, they weren’t saying that every single patient have to have same parameter. What they’re saying is, they want to get install, in any patient there’s something getting better or not, I would not to say the same thing and I think it’s very possible that could be a fraction of the patients with the very important effect let’s say in FEC or in walk test or something like that that would give them some confidence that the drug is working. But I can’t actually get inside [Indiscernible] head to know for sure what they’re going to call it, see what I can’t say is that, they look to their data at the expanded excess patient that we’ve been treating and noted a number of improvements that weren’t typical endpoint type improvements that we’re compelling to the agency and they felt like they didn’t want to lose the ability to capture those additional unplanned efficacy changes in these patients and thought with this number of small fall that they can just look at each patient in their total result and maybe capture some benefit that might not have been planned and get a better feel for it. I applaud them for being understanding the difficulty of walking [Indiscernible] and giving some flexibility to the process. But I would not take away from that every single patient have to have efficacy. That’s not certainly the expectations. What we’re looking for is to gain offence to drug overall that’s having a positive benefit risk profile. And they’re going to look at that looking at a variety of clinical things for each patient.

Great. Thanks.

Our next question comes from the line Ryan Martins of Jefferies. Your line is now open.

Hey, guys. Thanks for taking my question. I guess, I just had two kind of high level questions. The first one was around patient identification, given your extensive margin experience in this orphan disease space, where do you think you're patient identification efforts for any of your clinical programs might yield the biggest surprise in terms of what is currently assumed about the Epidemiology versus what you might find out later?

I think there’s a number of places where that is possible and I think particularly in HIBM and/or GNE Myopathy is the modern term or/and with Glut1 Deficiency Syndrome. Both those diseases appear to have a lot of undiagnosed patients because the diagnostic pathway is not easy to do and sequencing which is the most definitive way to make diagnosis is often not readily available. So we think for GNE myopathy we are supporting sequencing of programs with -- sequencing of patients with limb-girdle or other types of muscular diseases which are maybe similar, but don’t have definitive methods of diagnosis in which case there have been publications already suggesting that maybe a few percent of limb-girdle or other types of myopathy patients that are ill-defined may infact have GNE myopathy. Our original 2000 number that we put out was based on a bottoms up analysis of clinics for actual identified patients and so the – a pool of patients that maybe misdiagnosis limb girdles and some other sources. We are looking at this because they are having some publications suggesting that the carrier frequency is higher than would be predicted based on the current prevalence. But right now what we are doing is several things, one of them is driving individual clinic by clinic patient diagnosis, -- we’ll include a free sequencing program for patients with myopathy of undetermined type possibly GNE to help drive awareness as well as diagnosis. And thirdly, we are supporting these sequencing programs that are doing massive sequencing of other muscle disorders where there is no definitive diagnosis in which case we expect to see from those three methods some input into what the true GNE myopathy prevalence is like. In Glut 1 we are doing the same thing what our patient ID program which involves the central center that’s run like a commercial launch and has individuals that are in the field they are basically doing disease awareness contacting for example physicians that have or high prescribers for seizure meds and letting them be aware of the Glut 1 in existence and the existence of free sequencing program and that program then allows them to send the kit off and get their patient diagnosed, and that is going very well getting a lot of request for the sequencing, and I hope that will be to discover what the real pool is. We are also going now to expanding with the current data into motor clinics, a different type of clinic. The neurology patients, neurologists tend to be specialized, they tend to do certain things -- other things. We are going to a motor specialist now to try to find out how many patients with episodic movement disorder problem are actually Glut 1 patient. What we are finding is a lot of neurologists are not very familiar with Glut 1. I think most of them when they learned it 15, 20 years ago considered it a very ocane [ph] and narrow unusual thing not realizing its actually a lot more common cause of seizures or movements problems than they expected. So, we are kind of raising awareness through that sequencing program, and I expect that may find additional patience but I think that the 3 day 1000 number we’ve been talking about was really based on genetic screening of surveys the patient with seizures alone, I tell those numbers where they really come from. So what we’re really doing there is more about not really creating more upside to the market, but simply making sure we’re actually getting the patients we think are there diagnosed in this case.

Yes, okay. And then I guess just another kind of high level question. What is exciting in the pipeline for you operationally is it RHPPCA or is it something maybe you haven’t talked about?

You mean the early stage work.

Yeah pre-clinically.

Our PPCA for [indiscernible] doses is a program its’ very similar to MPS7, it’s something that’s right up our alley in terms of --it sits very well with the kind of knowledge we have and its moving along very well you know and we are in the manufacturing stage, getting the product made at scale so we can do toxin and clinical programs and I think it’s going on well. We have a couple of other programs that are earlier stage we haven’t announced in our – look we are also doing a lot of this while I’m looking at a lot of possible products well. What I would say in general that our philosophy on preclinical or early stage work is that we don’t want to talk about it until we’ve made the call to file an IND that we are heading to an IND. We made the transition and we are investing and talks are going IND then the spend becomes more material than we think. It becomes an event more worthy of discussion. So, right now we’ve only talked about PPCA because we are comfortable that one is one that will move forward and the other ones are still, we’re going to keep under wraps until we are ready to make the call that we are moving forward. We do plan to have an R&D day later this year, so it’s an advertisement for that and we would hope to talk about a new program at that point in time or at least tell you where are and the others, so that will set the date yet up soon.

Okay, great. Thanks for taking my questions.

Our final question comes from the line of Heather Behanna of Wedbush Securities. Your line is now open.

Hi, thanks most of my questions have been answered. I think just a quick one from Shalini if things for the color entering the manufacturing expense moving forward, and just when we think about SG&A and potential launch in Europe. You know should we think about a gradual build overtime or is there going to be step up potentially as we reach like mid 2016?

That’s a good question, Heather. So I think as Tom alluded to earlier we are starting to ramp up our presence in Europe with regard to patient identification activities, and then starting next year we would anticipate building out our infrastructure there further including, establishing additional entities in Europe and also are starting to put more boots on the grounds in terms of commercial and other functional areas infrastructure. It should be gradual overtime and we also consider other territories not just Europe, so there will certainly be an increase but it should be gradual, it shouldn’t be sort of an overnight change in the operating expenses.

Perfect. Thank you.

You’re welcome.

That concludes today’s question and answer session. I would now like to turn the call back to Mr. Rob Anstey for any further remarks.

Thanks Damon, with no additional questions that concludes the call. A replay of the call will be available shortly on our website. If there are any additional questions, feel free to contact us at 844-758-7273 or at ir@ultragenyx.com. Thanks everyone for joining us.

Ladies and gentlemen, thank you for participating in today’s conference. This concludes today’s program. You may all disconnect. Everyone have a great day.