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Ultragenyx Pharmaceutical Inc (RARE) Q4 2018 Earnings Conference Call Transcript

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Ultragenyx Pharmaceutical Inc (NASDAQ: RARE)
Q4 2018 Earnings Conference Call
Feb. 19, 2019, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen. Welcome to the Ultragenyx Fourth Quarter and Full Year 2018 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions)

I would now like to turn the call over to Danielle Keatley. You may begin.

Danielle Keatley -- Senior Director, Investor Relations and Corporate Communications

Thank you. Good afternoon and welcome to the Ultragenyx Pharmaceutical financial results and corporate update conference call for the fourth quarter and full year 2018. We've issued a press release detailing our financial results, which you can find on our website at ultragenyx.com. I am Danielle Keatley, Senior Director of Investor Relations and Corporate Communications. With me today are Emil Kakkis, Chief Executive Officer and President; Shalini Sharp, Chief Financial Officer and Wlad Hogenhuis, Chief Operating Officer.

I'd like to remind investors that this call will include forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, the types of statements identified as forward-looking in our quarterly report on Form 10-Q that was filed on November 6, 2018. Our Annual Report on Form 10-K for the year ended December 31, 2018, that will be filed soon; and our subsequent periodic reports filed with the SEC, which will all be available on our website in the Investors section.

These forward-looking statements represent our views only as of the date of this call and involve substantial risks and uncertainties, including many that are beyond our control. Please note that actual results could differ materially from those projected in any forward-looking statement. For a further description of the risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements as well as risks relating to our business, see our periodic reports filed with the SEC.

I'll now turn the call over to Emil.

Emil D. Kakkis -- Chief Executive Officer and President

Good afternoon everyone and thank you for joining us. I'll start today by providing some brief introductory remarks, before turning the call over to Wlad Hogenhuis. Wlad joined Ultragenyx last September as our Chief Operating Officer, managing commercial, technical operations and business development. And he'll provide an update on this 15th commercial launches. Next Shalini will update you on our fourth quarter and full-year financial results. I'll come back and close the call providing an update on our clinical programs, as well as things to look forward during 2019.

The last 12 months have been truly transformative for Ultragenyx. Over the course of 2018 we have simultaneously launched Crysvita and Mepsevii in three major geographic regions of the world. We've also successfully worked with the FDA to enable submission of a new drug application for our third product UX007 for launching various application in this year. In our gene therapy programs we have shown clinical proof of concept in both R&D and transfer families' efficiency with two patients achieving apparent toward a strong real Cohort 1 that's historically Type 1a. Our early development successes and approvals are now creating a substantial commercial engine that will fuel our future growth. This will enable us to continue to expand the availability of our currently approved vaccines and develop new therapies for patients with rare diseases who have limited or no option.

With that, I will turn it over to Wlad.

Wladimir Hogenhuis -- Chief Operating Officer

Thanks Emil, and good afternoon, everyone. I'll start with Crysvita which was commercially available for eight months in 2018, following our launch in late April. We are pleased that launch continues to be strong with great enthusiasm, pediatric and adult patients with XLH in the United States.

By the end of the fourth quarter of 2018, we had received more than 900 completed start forms and treating physicians a 50% increase compared to the prior quarter. Approximately 80% of these stock forms are from patients who were not previously treated with Crysvita. And there continues to be a 60-40 split between pediatric and adult patients on commercial therapy. Over 400 unique doctors have prescribed Crysvita with many writing multiple prescriptions. The payer mix as of December 31st remains approximately 70% private plans with the remaining 30% comprised of government and other payers.

Nearly 70 payers in the United States have published policies for Crysvita covering approximately 200 million lives, we believe, we now have nearly full coverage, as additional payers without formal policies are proving Crysvita on a case by case basis. This includes Medicare Part B, which covers Crysvita into the buy and build process. This extensive coverage across all payer types has led to adding nearly 250 patients on reimbursed commercial therapy in the fourth quarter alone. This brings the total number of patients on reimbursed commercial therapy at the end of 2018 to approximately 550 patients in the United States.

From the beginning of Ultragenyx we saw to improve the development and commercial process by enhancing physician and patient advocation with the separate dedicated team in addition to the usual sales and medical science liaison teams. As we prepared for Crysvita launch, we established these three teams with distinct responsibilities to ensure we quickly reach as many patients as broadly in a community as possible. The patient diagnostic liaisons are solely focused on identifying doctors who may have patients with XLH. This thing share the information with the UltraCare liaisons who provide healthcare providers the information and support needed to assist them in placing patients on therapy.

Once start forms are submitted, UltraCare guys are there to ensure patients have a seamless experience gaining access to reimbursed therapy. Eight months into the launch, we're seeing that this three-pronged approach is working well and has created a positive experience for doctors and patients alike. Based on the early launch success, we've added additional UltraCare liaisons an additional UltraCare guys to our team to meet the growing demand for service and we continue to evaluate the size of the team in order to meet the demand, and best serve doctors and patients. We're also making progress in extending the global reach of Crysvita in our commercial territories.

Most notably, at the end of 2018, we received approval and loss Crysvita in Canada for the treatment of XLH in adult and pediatric patients one year of age and older. Canada is covered by the same North America profit share agreement as in the US with our partner Kyowa Hakko Kirin or KHK.

Turning to 2019. We anticipate additional approvals and launches in Brazil and Colombia as well as continued reimbursed named patient treatment in Argentina in response to multiple physician requests. Having recently turning to Mepsevii, which continues to make an important difference in the life of patients with MPS 7. Mepsevii is currently approved in three major geographic regions including the United States, the EU and Brazil. In 2019, we look forward to additional regulatory decisions in Colombia and Chile. Reimbursement discussions with European peers are ongoing and we'll provide updates as they are available. Overall, we are encouraged that we continue to identify new patients with MPS 7 around the world.

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

Shalini Sharp -- Chief Financial Officer, Executive Vice President

Thank you, Wlad and good afternoon everyone. We issued a press release earlier today that included a financial update, which I will briefly summarize. Ultragenyx's total revenue for the 12-month period ending December 31st 2018 was $51.5 million and for the fourth quarter of 2018 was $16.3 million. The following is a product-by-product breakdown of these figures.

For Crysvita, during the year ended 2018 December 31st, we recognized total revenue of $18.9 million. This includes $15.3 million in collaboration revenue in the US profit share territory and $2.9 million in royalty revenue in the European territory from our collaboration and license agreement with KHK. Net product sales for Crysvita and all other regions totaled $0.6 million. Keep in mind these revenues represent eight months of sales after launching Crysvita on April, 27, 2018. Crysvita revenue in the fourth quarter of 2018 was $11.6 million. This includes $9.9 million in collaboration revenue in the US profit share territory and $1.3 million in royalty revenue in the European territory from our collaboration. Net product sales for Crysvita and other regions were $0.4 million.

Earlier this month, KHK reported top line sales of Crysvita totaling JPY7.7 billion or approximately $70 million in 2018. These sales are from their international regions, which include North America, Europe and South America. For the fourth quarter, KHK reported top line Crysvita sales of JPY4.5 billion or approximately $41 million in the same international regions. Mepsevii product revenue for the year ended December 31, 2018 was $7.9 million and for the fourth quarter of 2018 was $2.7 million. UX007 named patient revenue for the year ended December 31st, 2018 was $1.3 million and for the fourth quarter was $0.5 million.

In the year ended December 31st, 2018, we recognized $23.5 million in revenue from our research agreement with Bayer, $1.6 million of which came in the fourth quarter of 2018. We expect these revenues to be minimal going forward.

As a reminder, we are continuing to gain commercial experience with Crysvita and Mepsevii and will not be providing financial guidance at this time. We have provided other launch metrics, including patients on reimbursed therapy, growth in start forms and unique prescribers to help characterize the strength of our launch. We plan to provide this level of granularity only in the early quarters of launch. Our total operating expenses were $106.6 million for the fourth quarter of 2018 and $422.9 million for the full year, including research and development costs of $71.6 million for the fourth quarter and $294 million for the full year. We expect our R&D costs to continue increasing over time as we advance our product candidates from early preclinical development into pivotal studies.

We expect SG&A to increase over time as we support our commercial programs in multiple geographies. We also expect the split of R&D versus SG&A expense to remain fairly consistent. Net loss for the fourth quarter of 2018 was $87.8 million or $1.73 per share basic and diluted with a net loss for the fourth quarter of 2017 of $81.7 million or $1.89 per share basic and diluted. For the year ended December 31, 2018 net loss was $197.6 million or $3.97 per share basic and diluted compared with a net loss for the same period in 2017 of $302.1 million or $7.12 per share basic and diluted. The net loss for the full year ended 2018 was reduced by the sale of the Mepsevii priority review voucher in January 2018 for net proceeds of $130 million and a $40.3 million gain from Ultragenyx's portion of the sales of the PRV received with the Crysvita approval.

Cash used in operations for the year ended December 31st, 2018 was $290.6 million compared to $253.8 million in the same period of 2017. This includes adjustments for the significant noncash charges including stock-based compensation expense of $80.1 million, $19.5 million and depreciation and amortization and $5.3 million in non-cash foreign currency remeasurement losses in connection with the change in the Company's tax structure and fluctuations of exchange rates related to intercompany transactions.

We ended the year with $459.7 million in cash, cash equivalents and investments on the balance sheet. We believe that our cash resources should be sufficient to continue to support the initial years of launch for Crysvita and Mepsevii and allow us to continue making strategic investments, developing our clinical and translational research portfolio.

I will now turn the call back to Emil.

Emil D. Kakkis -- Chief Executive Officer and President

Thank you, Shalini. I'll spend a few minutes on our recent development progress, and we will then open up the call to your questions. For UX007 in long-chain fatty acid oxidation diseases, we released data from the 75 patient long-term extension study. The study includes patients who have previously been treated with UX007 as well as patients who had not received prior UX007 treatment. In the extension study, patients previously treated in our Phase II study, showed sustained clinical efficacy with the median rate going down to zero -- further to zero for both annualized major clinical events and annualized duration rate.

In addition, 20 patients were naive to UX007 at the beginning of the extensive study demonstrated a 70% reduction in median annualized event rate and 80% reduction in median annualized duration rate replicating the fact we saw in the safer set of patients in the Phase II study. The safety profile for all patients in the extensive study was similar to what we've seen in previous UX007 study. These growths are encouraging that they can reconfirm, we previously saw across other studies that are broader and more diverse patient population.

Moving to DTX401, our gene therapy program in glycogen storage disease type 1a. We reported positive top line results from the lowest dose cohort of the Phase I, II clinical study in early January. All three patients demonstrated a clinical response reflected by improved glucose control, reduced need for raw cornstarch therapy and increased time to hypoglycemia during fasting. Two patients demonstrated a clinically meaningful improvement in time to hypoglycemia making it possible to sleep through the night without severe hypoglycemia.

Typically for GSD1a patients, cornstarch or tube feeding is required during the night to prevent severe hypoglycemia, which can cause seizures or death. There were no infusion-related adverse events and no treatment-related serious adverse events reported. We are encouraged by the strength and consistency of the response to the gene therapy at even the first lowest dose and look forward to providing updates on the program.

Turning to Crysvita. We recently reached fully 54-week data that demonstrated a superior efficacy in a randomized head-to-head comparison with conventional oral phosphate and active vitamin D treatment to pediatric patients. For these patients Crysvita showed significantly greater improvement in the healing of rickets, growth and bowing of the legs compared to oral phosphate vitamin D regimen that has been the standard of care for the last 30 years. The 64-week safety profile was similar to what we observed at 40 weeks and in other Crysvita pediatric XLH studies. These data are supportive of our label and we will help ensure all pediatric patients with XLH receiving this innovative therapy.

Turning forward to 2019 , we have a number of important milestones in the upcoming months, it will continue to drive our progress. On the commercial front, we look forward to reaching more patients XLH and MPS 7 and updating you on our progress on quarterly earnings calls. We also have a number of active plans expected, additional regulatory and reimbursement decisions ex-US for both Crysvita and Mepsevii throughout the year .

For UX007, we are on track to submit our NDA with the FDA in mid 2019. Submission includes a comprehensive package with data from more than 75 patients including the company's sponsored Phase II study, the long-term efficacy and safety extension study, a retrospective medical record review of compassionate use patients, expanded access data and the randomized control of investigator sponsored study showing impact of UX007 on cardiac function. For DTX401, the treatment of GSD1a, we expect our first data from three patients with the second dose cohort in mid 2019 to further long-term data from the first cohort of patients. For DTX301 our AAV gene therapy for the treatment of OTC deficiency, we expect data from our third dose cohort in mid 2019.

In closing, 2018 was a breakthrough year for us as we build out our commercial organization and launched few products. For Crysvita specifically the first eight months of launch have shown the strength of our clinical data can translate to commercial success and will support the tremendous potential is important therapy for patients with XLH.

Looking forward, we continue to expand our global reach, commercial reach and advance our clinical pipeline and translational research program. On April 17th, we plan to hold an Analyst Day in New York City to provide more detail on our commercial and development programs and also dive deeper into our most advanced translational research programs that are nearing clinical stage. We look forward to sharing more details with you on the Analyst Day in the coming weeks.

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

Questions and Answers:

Operator

Sorry about that. (Operator Instructions). And our first question comes from line of Cory Kasimov from JPMorgan. You may begin.

Carmen Augustine -- JPMorgan -- Analyst

Hi, this is Carmen on for Corey. Thanks for taking the question. So with regards to the gene therapy datasets expected later this year, could you give us a sense of kind of the cadence of events and whether we could expect it at a medical meeting or at the press releases more likely?

Emil D. Kakkis -- Chief Executive Officer and President

Well the case, we have two things coming forward. One is GSD1a, second cohort here which we expect mid-year and we were also expect to have some 24 week data on GSD1 which may come sooner than that. The OTC data second cohort date also is mid-year so somewhere toward the end of the year, you will hear from both of those programs. Our expectation intensely has been to announce the top line data in a press release when we have it rather than holding it for months until a meeting and we will then provide greater detail at a appropriate scientific meeting.

Carmen Augustine -- JPMorgan -- Analyst

Okay, thanks. And then one more follow-up on the gene therapy front. For your Wilson's disease program, you mentioned that you were in a position to potentially move toward clinic soon. When could we expect to see additional preclinical characterization of the program and what additional work needs to be done prior to moving to clinic? Thanks.

Emil D. Kakkis -- Chief Executive Officer and President

We expect to present some data on the program at our Analyst Day on April 17 and that will be probably one of the first place if we're to see additional nonclinical data. We are working through the various parts of the manufacturing, scale-up required in order to do the commercial clinical and commercial treatment of Wilson disease patients, and we need to do some work with the regulators. But our expectation is to give you that first glimpse of data on April 17th.

Carmen Augustine -- JPMorgan -- Analyst

Okay, great. Thank you.

Operator

And our next question comes from the line of Gena Wang from Barclays. You may begin.

Gena Wang -- Barclays -- Analyst

Thank you for taking my questions. I have two related questions about Crysvita launch. So based on my calculation, the Europe -- EU revenue was roughly $14.4 million and in US revenue was roughly $25.4 million, EU revenue seen flattening out but US revenue more than doubling of the last quarter. Should we expect continued modest growth in Europe and the major driver will be from the US?

Emil D. Kakkis -- Chief Executive Officer and President

Well, I think, let me answer that particular question. Obviously, the European launches in -- is under the care of KHK and I think it's gone well, but remember the European launch involve reimbursement in a number of territories, which takes time and it's dragged there over a period of time and I think that's very important in how you look at the launches. In the US launch, obviously, we have a lot of health plans that we have to deal with but it's not quite the same as separate country reimbursement authority you'd have to deal with. So, there may be some differences in the cases and sequence of those reimbursement authorizations and how we grow. But we're pretty bullish about how both the US and Europe are going and we're pleased with the progress we're seeing.

Gena Wang -- Barclays -- Analyst

Okay, thank you. And a quick follow-up for the adult patients on Crysvita. What percentage of patients was based on family tree identification through pediatric patients?

Emil D. Kakkis -- Chief Executive Officer and President

I don't have a specific number for you on family tree identification. There's certainly a number of cases where families team together to clinics to get treated. I don't have a quantified number of that at this point. I don't think it's a big factor in the totals, but we do believe that pedigrees will matter. If you want to add a word on the pedigrees strategy?

Wladimir Hogenhuis -- Chief Operating Officer

I think, that is the way analysis gives an opportunity for patients to connect with their families and connect with them and see whether they might be affected by the disease as well, which represents an opportunity for them to discuss that with their particular physician and see if Crysvita therapy is appropriate and we look forward to launching a pedigree program in the near future to help those patients who have that desire.

Emil D. Kakkis -- Chief Executive Officer and President

Yes. So I think the pedigree part and family connection will be real important part in a overall launch. But at this point I can't give you specific numbers of how much was found that way at this moment in time.

Gena Wang -- Barclays -- Analyst

So is it fair to say minority of the small percentages through family pedigree?

Emil D. Kakkis -- Chief Executive Officer and President

Well, I would say to, we announced that we have greater than 900 start forms right with 400 doctors. So it's clearly distributed along with lot of doctors. So at this point is less groups of families as the both individuals, but I don't think it matters. I think we're in the beginning of launch. And I think the family connections are going to important part of succeeding in an excellent XLH launch.

Gena Wang -- Barclays -- Analyst

Thank you very much.

Operator

And our next question comes from the line of Joseph Schwartz from SVB Leerink. You may begin.

Diggon -- SVB Leerink -- Analyst

Hey, good afternoon. Thanks for taking my questions. This is Diggon (ph) dialing in for Joe. So Emil, one question on UX007 and the other on 401 for GSDIa. First question on UX007, you mentioned the NDA filing by mid 2019. But can you maybe talk a little bit about how the discussions are ongoing on the EMA side, what do they want to see before you can file there. And can you briefly remind us what your patent coverage is on both sides of the Atlantic? And then the second question is on 401, DTX401, what do you see as the ultimate profile for that drug before you can approach the FDA for end of Phase II discussions? And I guess given the significant unmet need, any thoughts on filing under accelerated approval or alternatively, how would you envision the Phase III trial in terms of design?

Emil D. Kakkis -- Chief Executive Officer and President

Very good. Thank you. So for UX007 where we are -- have begun discussion with the European authorities, and those are still ongoing, and we have no complete conclusion at this point, but we are working through the scientific guide process and discussing with regional authorities as well, that continues. On the regard to patents, we do have patents issued to cover the US. I think it's probably too complicated process to go through here and we can provide more follow-up on the various patents. But we do have some patents that are composition like patents that do protect the product. But I'll also remind you that in Europe there's 10-year orphan drug facility where in US, it's seven years. So the 10-year subsidiary, I think is an important protection piece that comes with Europe.

So on 401, I think the reduction in the risk of hypoglycemia during fasting is a fundamental clinical risk problem for these patients and the one that really threatens them every night, and every day. We feel confident that the FDA will recognize as clinically meaningful change. And our expectation is that we can safely extend that time for patients that they're not at risk of going hypoglycemic during the night. But that should be a clinically meaningful and our expectation is to pursue that. We'll certainly look at supportive clinical endpoints on what's happening with their livers and other aspects of the metabolism. But we think that that key piece of hypoglycemia will be positioned.

And we are planning to go talk to FDA as promptly as we can to get our first look. But our expectation is that we are going to do a Phase III trial not file a Phase I, II. And I think that it's fair for us to get enough patients in a Phase III. Our plan for Phase I, II is that the second cohort was the right dose. We would still do another three, but that would make only six patients at the dose and our expectation is that we really would want to treat more than that in order to get file for approval. So at this point, I would expect to see if we'll get to talking to our peers soon with the data we have about what our path forward is.

Diggon -- SVB Leerink -- Analyst

Great. Thanks for taking my questions.

Operator

And our next question comes the line of Chris Raymond from Piper Jaffray. You may begin.

Chris Raymond -- Piper Jaffray -- Analyst

Hey, thanks. Just have two questions, first on Crysvita. I guess could you, I think last quarter you mentioned that the mix was 60-40 peds to adults. I think you also said that at that time there were no discontinuations. Can you maybe give an update on that. Are you still seeing the same trend with respect to that mix? And then maybe an update on the discontinuations. And then on the GSDIa program just on from the data that you had back in January, I think there was a third patient that I think they all had cornstarch intake go down dramatically, but there was one patient that saw, I think just a slight increase from baseline and time to hypoglycemia. Can you give a little bit more color on that third patient? Was there some baseline characteristics that might have driven that, for example. And then if I could slide one more -- for one question in there. Are you assessing gene expression in the study and will you give an update on that at all this year? Thanks.

Emil D. Kakkis -- Chief Executive Officer and President

Okay. So let's start with the 60-40 peds adults. The 60-40 still continues the same as before, it hasn't really changed. And so, we're comfortable with that. We haven't really talked about discontinuation in the clinical program that's been very few. And so far, we're in good shape. So let me just stop with that, as you have three questions, GSDIa, data -- third patient, call it, the third patient have kind of a higher baseline time of 5.4 hours and went to 6.5 hours. So there also already is getting through the night, they were at a less, let's say less severely affected. The thing that was important about that patient, even though the time I'm proceeding with modest change. They were already decreasing their cornstarch needs approximately 50%. And so they were -- the're fasting glucose, we're improving sufficiently to allow them reduce cornstarch intake. So I do believe all three patients responded GSD1 and there are some degree of variation of how severe they were and therefore how does it changes. But right now we're very comfortable that all three are responders.

Now with regard to gene expression, we're not measuring gene expression directly because it is going to be expressed in the liver and we don't want to go into the tissues, whereas, I do think that these patients have essentially null -- are null for GSD -- for the, say, glucose 6 phosphatase enzymes, their genotypes are null. Therefore they really have no enzyme at all. Their ability to release glucose for a extended period of time or to send a app, they have a whole bodies expression of that enzyme. And so we think that just simply measuring glucose in a sense of measuring their enzyme assay and we haven't planned anything more specific than that.

Chris Raymond -- Piper Jaffray -- Analyst

Okay. Thank you very much.

Operator

And our next question comes from line of Maury Raycroft from Jefferies. You may begin.

Maury Raycroft -- Jefferies -- Analyst

Hi, and thanks for taking my questions. The first question is on Crysvita for the new 64-week data. We noticed that you showed statistic benefit on the six-minute walk test, which is not shown in the 40-week data. So I'm just wondering if you have any comments on the meaningfulness of the data point if it can make its way into the label.

Emil D. Kakkis -- Chief Executive Officer and President

Well we have shown an effect on walking even from the Phase II study that was quite substantial particularly in those patients that had impairment in walking. So this is simply verifying once again as the walking is improved as a component of the total phenotype. The challenge with walking is that is an effort based test. And although the trial is a randomized trial it's not placebo controlled because it can't be controlled. Therefore on a effort based test might have hard time getting into the label for that reason. However we certainly can ask and I think if you look at the data I think what I would say to you whether it's walking and any other primary measure, Crysvita is so much better than standard of care. There is no question about it, there is no reason for patients to be on oral phosphate any longer given the efficacy up and down line every single endpoint walking, just being another one. And so our hope would be and talk with the agencies to get the best label that will actually give doctors the right advice on what to be doing with their patients with XLH. But we think certainly walking is important, but I think because it's open label or not blinded I think it may be harder to get on the label and other things.

Maury Raycroft -- Jefferies -- Analyst

Got it, that's helpful. And then as a follow-up for Crysvita in the Latin American countries, are you still on track for approval starting in the first half of '19? Can you provide any granularity on how you expect to launch in specific countries to play out?

Emil D. Kakkis -- Chief Executive Officer and President

Well, we have several filings in play and we right now we're not quite predicting exactly when those approvals are coming out, but we expect in 2019 to have at least a couple of countries where we would get approval and we would work through the reimbursement process, which can take some time as well. But we haven't provided any more granularity partly because it will take us time to figure out what they -- what are required and getting through the reimbursement process as well as the regulatory approval, but we're confident that we'll be able to press ahead, get approval and begin the launch process in South America for Crysvita beyond just the named-patient work is going on right now in Argentina.

Maury Raycroft -- Jefferies -- Analyst

Got it. Thank you very much.

Operator

And our next question comes the line of Edward Nash from SunTrust Robinson. You may begin.

Fang-Ke Huang -- SunTrust Robinson Humphrey -- Analyst

Hey, this is Fang-Ke Huang on for Edward. Thank you for taking our questions. My first question is maybe on the manufacturing side for gene therapy. Can you just talk briefly with the capacity you have for gene therapy manufacturing. If I call it correctly both of the 301 or 401 that's currently in manufacturing using HEK293 at HeLa and Hem A cells. Do you have any plans to transition that manufacturing platform to another -- with the molecular cells? Then I have a follow-up. Thank you.

Emil D. Kakkis -- Chief Executive Officer and President

Very good. So, currently, we have no manufacturing gene capacity of our own. We are using contract manufacturer for our program. What we do have at Wilburn is a team and set up that will allow us to run full-scale manufacturing operations to develop the process and then we transfer that to the contract manufacturer that's where it's fully developed. Currently, the 293 cell or HEK293 cells are being used for OTC in an inherent format, but we have developed a suspension format, which is what we would do for Phase III. Really 401 program, we are also in HEK293 cell transaction strategies, but they are already in suspensions of the product we use in the clinics is a suspension not adherent two other (ph) suspension that we run for reactors is an 800 liter process. We have a ability then to convert that to HeLa cells, which is something we plan to do for the GSD1a program. For Wilson we plan to go straight to the HeLa system that's what we're starting with. And for the Hem A program with our partner Bayer it is the HeLa cell of suspension increase your cell line system.

Fang-Ke Huang -- SunTrust Robinson Humphrey -- Analyst

Great. That's very helpful. Second question is more related to the 401 program. You mentioned that the second dose cohort could be the right dose. And can you just provide some quantitative like magic testing, when do you think it's going to be the right dose? Thank you.

Emil D. Kakkis -- Chief Executive Officer and President

I think it's an important question, getting the dose right. Our expectation is we want them to last through the night, in other words beyond an 8 hour period, but we expect to be full night without any risk of getting hypoglycemia. And so that's kind of the basic important thing. We want to also know that there is improvements in the metabolism, in the liver that are consistent with achieving a complete effect, because we wouldn't want to stop at a dose that was very good, but not essentially taking the patient to a cure. And those are the additional elements that we will look at in totality, but we haven't specified to the public at any specificv criteria. But I would focus on the time that hypoglycemia needs to be not just we get barely through the 90s, to be comfortably safely through the night for all patients.

Fang-Ke Huang -- SunTrust Robinson Humphrey -- Analyst

Got it. Thank you very much.

Operator

And our next question comes from the line of Vincent Chen from Bernstein. You may begin.

Vincent Chen -- Bernstein -- Analyst

Great. Thank you very much for taking the questions. A couple of quick ones. The first one, a bit of a follow-up on the previous question on the gene therapy manufacturing. I'd be curious here a little bit more about how you think about the trade-offs and choosing between different manufacturing platforms sort of here -- at here at HEK293 cells, the suspension and then on the HeLa cells. Clearly there is scalability advantages of different ones, but hopefully there's more time involved in sort of making those transitions. So we'd love to hear a little bit, how you think about that? And then a second follow. I'll talk to you later on the UX007 opportunity in LC-FAOD.

Emil D. Kakkis -- Chief Executive Officer and President

Well, our view is that suspension HEK293 is essentially transaction, multiple plasma transaction. It is a rapid way to get to the clinic and to initiate development. And I think it can't be commercial and we often succeeding scaling it up further. The producer cell line approach with HeLa cells I think provides a larger scale more commercially long-term viable strategy in which you can run 2,000 meter production and have it -- create a very consistent way. This is a lot like producing vaccine where you grow up by call in cell lines to 2,000 liters and then to use the helper virus to cover your AAV.

So I think there is advantages to file 293 cells systems, maybe it's little bit faster to get there and very well widely used, improved. The HeLa cell system takes a little longer to get set up but long run provide you a better cost structure and scalability that you can get. The 293 we are using both of these in our armamentarium for manufacturing and this is matching as we move ahead to get to the clinic as promptly as we can and also to manage the necessary scale and costs required to create a long-term gene therapy business.

Vincent Chen -- Bernstein -- Analyst

I see. And then on the UX007 opportunity and LC-FAOD, we think about the US prevalence of LC-FAOD sort of 2,000 to 3,500 or so. How do these patients break down into the different sub-segments of LC-FAOD is, how well identified is each segment and what segments would you expect to see more or less uptake in?

Emil D. Kakkis -- Chief Executive Officer and President

So when you say sub-segment, I assume you mean the different genotypes that are...

Vincent Chen -- Bernstein -- Analyst

Yeah, the difference, I guess the, different LC-FAOD, yeah.

Emil D. Kakkis -- Chief Executive Officer and President

Yeah, there's six different genotypes that are considered within the LC-FAOD pool, five of them have been in our clinical studies into any significant degree. So VLCAD type is the most common we'd expect to see in most of those patients. The CPT II and LCHAD types are less common and form a smaller fraction of the total. The CPT type is a very small fraction, very small number, but also very lethal and potent, and some of our compassion use patients have been the CPT type are in terrible heart failure that have gotten approved. So I think it gives you at least the sense. VLCAD is definitely the largest and the LCHAD, TFP, CPT II group is a smaller fraction of the total. This is you can find the information on this in the public literature using numerous screening program data from either California or other states, that will give you a sense for the ratios.

Vincent Chen -- Bernstein -- Analyst

Okay. Thank you very much.

Operator

Thank you. And our next question comes from line of Arlinda Lee from Canaccord. You may begin.

Arlinda Lee -- Canaccord -- Analyst

Hi, guys. Thanks for taking my questions. I also wanted to follow up on the gene therapy question. So you touched on little bit about what you're looking for in the second cohort 401. Could you also talk about what kind of a profile, you'd like to see in the third cohort of 301 that would lead you to go to decide on a go-forward dose? And then can you talk about what the next steps might be and what might be getting to a registrational trial or cohort? Thanks.

Emil D. Kakkis -- Chief Executive Officer and President

Sure. So, Arlin, you're asking about the 301 ornithine transcarbamylase program. What we're looking for is what we'd consider is cure (ph) for 2 out of 3, or 3 out of 3. What I mean by cure is achieving normalized ureagenesis which will also come off their drugs and potentially up dietary restriction. We can achieve that in 2 out of 3, and feel that as an adequate dose. We certainly hope to see all three patients having clinical response. Some patients may start with a lower OTC level, which make it harder to reach full normality. But that is our general view to get a lead to for us to move onto the next dose. At this point, we have two patients that have shown cure effect, out of one we've treated and we are hoping the higher dose would give us the consistency of effect across more patients that allow us to proceed to next stage of Phase III.

Arlinda Lee -- Canaccord -- Analyst

And then, can you maybe talk about what kinds of things are you looking for in discussions with regulatory agencies or could you go ahead and start expanding a dose cohort to maybe gather additional information at the dose that you've selected? Thanks.

Emil D. Kakkis -- Chief Executive Officer and President

Yes. So, Arlin, our strategy and always has been to manage the timeline. And what we would do is if we hit our -- if the mid -- if this next third cohort show what we wanted to see, we would then initiate the process of talking to regulatory authorities. While we in parallel would treat another three patients at that same dose. We are teeded up to move briskly ahead. By the time the meeting would happen, we'd probably have some of the information from those other patients. But our expectation is not to sit and wait for the next cohort but to take the data we have and move to those discussions with the regulatory authorities promptly to manage the timeline as crisply as we can.

Arlinda Lee -- Canaccord -- Analyst

Great. Thank you very much.

Operator

And our next question comes from the line of Martin Auster from Credit Suisse. You may begin.

Tiago Fauth -- Credit Suisse -- Analyst

Hey guys, this is Tiago for Marty. So for Crysvita and the opportunity in Latin America. Just curious if you could give us any color on how well established is patient identification, there is their registries, how well established is standard of care, how dispersed those patients there? And how could that impact the launch? And just on the gene therapy programs for OTC and just GSDIa, if you could outline the patient segmentation and given the broad severity spectrum. What do you think is actual addressable population considering the patients that you are enrolling and the target product profile you're pursuing right now? Thank you.

Emil D. Kakkis -- Chief Executive Officer and President

Very good. Well, I'll give you a little tanner about Latin American outlet then Wlad touch on more specifically on what we're doing in XLH. In general Latin America through the other launches I've been involved with, there tend to be centers of excellence that have very large reach areas of coverage to which patients go to, to get at least diagnose. Care of course may become more local but there's usually centers of excellence which is their primary place to start with in identifying patients. Obviously Crysvita is extremely important product for us in Latin America and we are doing our best to get set to manage and reach all the patients there. We do believe the frequency of XLH in Latin America is same as it is elsewhere, because it is excellent dominant. But of course there's challenges differences in how Latin America will operate. I'll let Wlad then talk little about the team, and what we're doing to set up for a launch in Latin America.

Wladimir Hogenhuis -- Chief Operating Officer

Sure, Emil. So we have a strong General Manager, Eduardo Thompson, who has a lot of experience in Latin America. He's built the three strong teams in Argentina, Brazil and Colombia with a mixture of MSLs and liaisons, UltraCare liaisons who are now in the process of working with the different metabolic bone centers, mapping in number of patients and responding to named-patient program request that we are supporting. We also have built up a strong reimbursement function that helps with the different submissions for reimbursement. And as soon as we have updates, regulatory approvals and reimbursement, we'll share that with you that we got a strong team that's experienced, and well-established to clear the task, not only for Crysvita but also Mepsevii where we are approved in Brazil.

Operator

All right. And our next question comes from the line of Salveen Richter from Goldman Sachs. You may begin.

Andrea Tan -- Goldman Sachs -- Analyst

Thanks. This is Andrea on for Salveen. Thanks for taking our questions. My first one is as you come up on one year post the Crysvita launch in the US, can you speak on the feedback that you've received thus far and have you seen any gating factors to doctors prescribing this drug?

Emil D. Kakkis -- Chief Executive Officer and President

I think the feedback for doctors who have experienced treating patients are -- is very positive. I think doctors are discovering patients are feeling better than they -- and this is more better than they thought they could because the doctors didn't always appreciate how sick the patients were. We've had a number of doctors tell us that patients they thought were not that bad actually still got a lot better on treatment. So we're really interested in making sure that doctors aren't -- get out of the habit of not treating adults that they haven't for a while and start stepping forward in really changing the view of what needs to happen. And so I thought -- Wlad if you have any thoughts a little bit on what else we might do with it -- what we're doing with results.

Wladimir Hogenhuis -- Chief Operating Officer

Yeah, I think the other piece of feedback in addition to the clinical observations by pediatric endocrinologists and else, endocrinologists is also the acquisition of the physician of how we're supporting their offices with getting their patients would apply hospitalization process by assisting them them, making sure all the information is compiled, available and processed promptly, so that the patients don't have to wait too long for getting their reimbursed therapies, so I would add that as a second point.

Andrea Tan -- Goldman Sachs -- Analyst

Great. And then my second question is with regards to the FAOD program, assuming approval on launching early 2020, can you speak on any launch preparations that may have already been started and if additional sales force would be necessary?

Emil D. Kakkis -- Chief Executive Officer and President

Well, I think this is a good question. What I'd point out to you is that our expectation is to launch the UX007 product with the same team that we're launching with in the US, Europe and Latin America. In fact, it is the same doctors that are trading MPS 7 and does service well. So I think that we'd be able to do this with great synergy and efficiency launching globally. So I would not expect a substantial change in the team that we need but of course we will do what we need to ensure that the launch goes well. But the synergy, I think is important there between our other metabolic programs and the fatty acid oxidation defect.

Andrea Tan -- Goldman Sachs -- Analyst

Great. Thank you so much.

Operator

Thank you. And our next question comes from the line of Yigal Nochomovitz from Citi. You may begin.

Samantha Semenkow -- Citi -- Analyst

Hi, this is Samantha on for Yigal. Thanks for taking our questions. I wonder for DTX301, is there anything in your preclinical work that gives you confidence that the dosage in Cohort 3 could be sufficient to demonstrate the dose response relative to corresponding to sort of the 2 out of 3 or 3 out of 3, you mentioned earlier in the call?

Emil D. Kakkis -- Chief Executive Officer and President

Well, I think we've shown in our nonclinical model that we do get better expression at higher doses, that's very consistent. So I think there is no plateau or maximum effect seen at those dose. So there is data showing that the higher doses will get a better effect. So we're profitable from a nonclinical standpoint that we'd expect to get better expression from higher doses.

Samantha Semenkow -- Citi -- Analyst

Great. And then just switching gears to Crysvita with all the new insight into the XLH market you've gathered into the launch thus far, who is on vitamin D and oral phosphate and all the additional identification you've done with the families with XLH, are you maintaining your estimate for the 12,000 XLH patients in the US as it would be reasonable to assume that you'd have some updated thoughts either up or down approaching one year into the launch?

Emil D. Kakkis -- Chief Executive Officer and President

We are still maintaining the 12,000 number. I think everything we've found through various channels seems consistent with getting that number. And I think I would say in eight months getting the 900 prescriptions also tells you that that number is probably pretty real based on what we think would happen. So at this point, we don't have a reason to change it and everything we've found seem to triangulate toward that kind of number. Now, I would tell you that doesn't mean they're all found or readily available, there definitely would be some adults who are lost the follow-up and other doctors and a lot of our patient diagnose efforts will be focused on finding those patients, wherever they are. But right now, we're sticking to the 12,000 number.

Samantha Semenkow -- Citi -- Analyst

Great. Thank you so much.

Operator

And our next question comes from the line of Jeff Hung from Morgan Stanley. You may begin.

Jeffrey Hung -- Morgan Stanley -- Analyst

Thanks for taking the questions. For Crysvita can you provide an update on identifying adults and remind us what you think the biggest hurdles are with that process?

Emil D. Kakkis -- Chief Executive Officer and President

Well, it's different from pediatrics where the patients are already being managed with treatment are going to the doctor frequently. These adults may not be seeing the prescriber on a regular basis, because they had nothing to prescribe. So they're not seeing their endocrinologists that they were seeing five, six years ago. They're going to their orthopedic doctor, the rheumatologists, the pain management person, they're seeing all these different doctors. So they're not really at somewhere who is ready or able to prescribe this product. So we need to find them the secondary specialists and to find the prescriber for them and get them back. That's just going to take a little bit more time to get deep into the adult population, but we think through a number of tools, including new ICD-10 codes and our efforts with the PDLs that we'll be able to continue to find those patients. But it's just -- the tradition had been the stop treating when you got to purity (ph). Then you could have people that have been for many years not really seen by the doctors as it matters. In addition, the outreaching doctors might see the patients for other reasons using codes and other techniques.

We're also of course doing what Wlad has mentioned before, which is the work on the pedigree to make sure we're finding the aunts and uncles of our pediatric patients. In some cases, grandmothers, we have found grandmothers too. Wherever they are in that pediatric -- pedigree effort will be one of those other ways we triangulate to find more patients through the system. This is an important part of the launch, but right now we feel like it's going well.

Jeffrey Hung -- Morgan Stanley -- Analyst

Great. And then can you remind us what remains outstanding in your discussions with the FDA on the regulatory path for Crysvita and TIO and what additional data you might need to collect?

Emil D. Kakkis -- Chief Executive Officer and President

We've had some initial discussions them on TIO and the question of course is that we have Stage 2 data and biopsy data and say on TIO and the question is whether a rambling study would be required or not. We think we have more than adequate data to show that TIO is behaving like XLH and we're continuing that discussion with XLH to be able to file off the existing data, which we think is the right move. So that discussion continues and we should have an update later in the year.

Jeffrey Hung -- Morgan Stanley -- Analyst

Thank you.

Operator

Thank you. And I'm showing no further questions at this time. I'd like to turn the call back to Daniel for closing remarks.

Danielle Keatley -- Senior Director, Investor Relations and Corporate Communications

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

Operator

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.

Duration: 55 minutes

Call participants:

Danielle Keatley -- Senior Director, Investor Relations and Corporate Communications

Emil D. Kakkis -- Chief Executive Officer and President

Wladimir Hogenhuis -- Chief Operating Officer

Shalini Sharp -- Chief Financial Officer, Executive Vice President

Carmen Augustine -- JPMorgan -- Analyst

Gena Wang -- Barclays -- Analyst

Diggon -- SVB Leerink -- Analyst

Chris Raymond -- Piper Jaffray -- Analyst

Maury Raycroft -- Jefferies -- Analyst

Fang-Ke Huang -- SunTrust Robinson Humphrey -- Analyst

Vincent Chen -- Bernstein -- Analyst

Arlinda Lee -- Canaccord -- Analyst

Tiago Fauth -- Credit Suisse -- Analyst

Andrea Tan -- Goldman Sachs -- Analyst

Samantha Semenkow -- Citi -- Analyst

Jeffrey Hung -- Morgan Stanley -- Analyst

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