Earnings call transcript: Ultragenyx Q1 2025 sees revenue growth but EPS miss
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Overview
The earnings call presents mixed signals. On the positive side, there is strong revenue growth, particularly for Crysvita, and a reaffirmed revenue guidance for 2025, suggesting confidence in future performance. However, the net loss and high operating expenses are concerning. The Q&A reveals uncertainties in clinical trials and the management's evasive answers on some topics. The overall sentiment is balanced, leading to a neutral prediction for the stock price movement over the next two weeks, as positive growth is offset by financial losses and uncertainties in clinical outcomes.
Key Financial Performance
Revenue $139,000,000 (28% growth year-over-year) driven by strong performance of Crysvita, particularly in Latin America and Turkey.
Crysvita Revenue $103,000,000 (25% growth year-over-year), with $41,000,000 from North America, $55,000,000 from Latin America and Turkey, and $7,000,000 from Europe.
Latin America and Turkey Revenue 52% growth year-over-year, attributed to successful reimbursement negotiations and increased patient uptake.
DEJOLVE Revenue $17,000,000, consistent with expected steady growth.
EVKYSA Revenue $11,000,000, as demand continues to build following launches in territories outside of the United States.
Mepsevii Revenue $8,000,000, as the company continues to treat patients in this ultra-rare indication.
Total Operating Expenses $282,000,000, including R&D expenses of $166,000,000, SG&A expenses of $88,000,000, and cost of sales of $29,000,000.
Net Loss $151,000,000 or $1.57 per share.
Cash Position $563,000,000 in cash, cash equivalents, and marketable securities, reflecting $45,000,000 in cash payments for milestones achieved in the previous quarter.
Net Cash Used in Operations $166,000,000, expected to decrease in remaining quarters of the year.
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Operating Highlights
Crysvita: Generated approximately $103 million in revenue, with $41 million from North America, $55 million from Latin America and Turkey, and $7 million from Europe, representing 25% growth over 2024.
AJOVY: Generated approximately $17 million in revenue, with steady growth in new start forms and patients.
DERJOVY: Over 260 patients treated under named patient sales across the EMEA region.
EFKYSA: Contributed $11 million in revenue, with approximately 250 patients treated across 15 countries.
ZTX-401: BLA submission on track for mid-2025 after successful completion of PPQ runs.
UX-111: BLA under review by the FDA, progressing on schedule with a PDUFA action date of August 18.
Latin America: Approximately 775 patients on Crysvita therapy, with growth expected following successful reimbursement negotiations in Brazil and Mexico.
U.S. Market: Expecting continued growth in Crysvita revenue as efforts to identify new pediatric and adult patients progress.
EMEA Region: Strong demand for DERJOVY, with increasing requests from countries in the region.
Operational Efficiency: Total operating expenses for Q1 2025 were $282 million, with a net loss of $151 million.
Cash Position: As of March 31, 2025, cash and equivalents totaled $563 million.
Net Cash Used in Operations: Expected to decrease in remaining quarters of 2025, aiming for full-year GAAP profitability by 2027.
Regulatory Strategy: Two BLAs in progress, with one under review and another to be submitted mid-2025.
Market Positioning: Positioning for a transformational year in 2025 with expected revenue between $640 million and $670 million.
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Risk or Challenges
Regulatory Risks: The company is preparing for two Biologics License Applications (BLAs), with one currently under review and the second expected to be submitted mid-2025. There are uncertainties regarding regulatory interactions, although the company believes they are on track.
Competitive Pressures: The company is entering a competitive space with multiple treatments for Angelman syndrome being developed, which may impact market dynamics and patient choices.
Supply Chain Challenges: The company is actively monitoring the evolving tariff landscape but does not expect material exposure for any of its products, including Crysvita.
Financial Risks: The company reported a net loss of $151 million for the quarter and anticipates a decrease in net cash used in operations in the remaining quarters of the year, but still faces challenges in achieving profitability by 2027.
Market Variability: There is expected quarter-to-quarter variability in revenue, particularly due to uneven ordering patterns for Crysvita in Latin America.
Clinical Trial Risks: Variability in patient responses and the potential impact of baseline characteristics on clinical trial outcomes could affect the success of ongoing studies, particularly for the treatment of osteogenesis imperfecta.
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Guidance & Outlook
Revenue Growth: Ultragenyx expects total revenue for 2025 to be between $640 million and $670 million, representing a growth of 14% to 20% over 2024.
Crysvita Revenue: Projected Crysvita revenue is expected to be between $460 million and $480 million, indicating a growth of 12% to 17% over 2024.
DeJolvi Revenue: Expected revenue for DeJolvi is between $90 million and $100 million, representing a growth of 2% to 14% over 2024.
BLA Submissions: Ultragenyx is preparing to submit a BLA for ZTX-401 for GSD1a by mid-2025 and has a BLA for UX-111 for Sanfilippo syndrome under FDA review.
Clinical Trials: Multiple Phase III studies are ongoing, with data readouts expected in 2026.
Operating Expenses: Total operating expenses for Q1 2025 were $282 million, with expectations of reduced cash used in operations for the remaining quarters.
Net Cash Position: As of March 31, 2025, Ultragenyx had $563 million in cash, cash equivalents, and marketable securities.
Profitability Outlook: The company aims for full-year GAAP profitability by 2027.
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Shareholder Return Plan
Shareholder Return Plan: Ultragenyx has reaffirmed its revenue guidance for 2025, expecting total revenue between $640 million and $670 million, which represents a growth of 14% to 20% over 2024. This growth is driven by increasing demand for their products, particularly in Latin America and the U.S. The company also anticipates Crysvita revenue to be between $460 million and $480 million, indicating a growth of 12% to 17% over 2024. Additionally, Ultragenyx has a cash position of $563 million as of March 31, 2025, which supports its ongoing operations and potential shareholder returns.
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Key Q&A
Q:Can you explain what you mean by dispersion in the study and why it’s important?
A:There is variation in the analyzed fracture rate at baseline, and we have patients with varying fracture rates. We stratified those with more than three fractures equally between treatment and placebo groups. The distribution can impact the probability of success, but we are using statistical methods to correct for that.
Q:What was seen when looking at the fracture reduction at fourteen months?
A:We had a sixty-seven percent reduction in fracture frequency median at fourteen months, with a p-value of 0.0014.
Q:What’s your view of the likelihood of success if the study moves to a third interim read?
A:We believe we will hit the p-value threshold of 0.04 at the third interim, but variation in patients is always a concern.
Q:What are your thoughts on the recent CBER nomination and its potential impact on the rare disease space?
A:We are not concerned about our program as we have clinical data showing efficacy. However, the industry needs accelerated approval for gene or cell therapies.
Q:Can you discuss how you plan to message the outcome of the interim to the Street?
A:If the DMC informs us of a positive result, we will inform the Street. If the study continues, we will also communicate that.
Q:Where are you on your enrollment curve for the Angelman program?
A:We are committed to fully enrolling the study this year, and all global sites are active.
Q:Can you provide any perspective on how you’re thinking about the range of effect sizes on AFR reduction needed to succeed on the second interim?
A:Clinically meaningful reduction is generally considered to be at least 30-40%. We expect to see a linear separation in fracture frequency.
Q:Could you expand further on key growth drivers for Crysvita in the quarter?
A:Growth is driven by positive patient experiences and successful reimbursement negotiations in Latin America.
Q:What happens if you don’t hit the second interim look? Will you know how close you were?
A:If we don’t hit it, we will know the study is continuing but won’t receive the p-value.
Q:How do you see the evolution of the Angelman market with multiple ASOs in development?
A:The most potent and effective drug will likely dominate, but there may be room for multiple treatments.
Q:Review of Unclear Management Responses
A:Management avoided giving a direct answer regarding the specific p-value tolerance for the second interim analysis, stating that they haven't set a specific tolerance level. They also did not provide clarity on whether they would disclose interim results together or separately.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
BLA review
DTX group
IA
IE
ORBIT
Officer Ultragenyx
Orbit
Patients
Phase II
Phase III
Phase study
President Ultragenyx
Relations Ultragenyx
Type
Ultragenyx Chief
Ultragenyx Hi
Ultragenyx study
United States
arm
assessment
baseline
bone marrow
cetrusumab
code
collagen
database
dispersion
doctor
facility
marrow density
milestone
molecule
pain
percent reduction
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slope
space
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