our commercialization, marketing, and manufacturing capabilities and strategy;

our expectations regarding the timing of clinical study commencements and reporting results from same;

the timing and likelihood of regulatory approvals for our product candidates;

the anticipated indications for our product candidates, if approved;

the potential market opportunities for commercializing our products and product candidates;

our expectations regarding the potential market size and the size of the patient populations for our products and product candidates, if approved for commercial use;

estimates of our expenses, revenue, capital requirements, and our needs for additional financing;

our ability to develop, acquire, and advance product candidates into, and successfully complete, clinical studies;

the implementation of our business model and strategic plans for our business, products and product candidates and the integration and performance of any businesses we have acquired or may acquire;  

the initiation, timing, progress, and results of ongoing and future preclinical and clinical studies, and our research and development programs;

the scope of protection we are able to establish and maintain for intellectual property rights covering our products and product candidates;

our ability to maintain and establish collaborations or strategic relationships or obtain additional funding;

our ability to maintain and establish relationships with third parties, such as contract research organizations, contract manufacturing organizations, suppliers, and distributors;

our financial performance and the expansion of our organization;

our ability to obtain supply of our products and product candidates;

the scalability and commercial viability of our manufacturing methods and processes;

developments and projections relating to our competitors and our industry; and

Focus on rare and ultra-rare genetic diseases with significant unmet medical need and clear biology. There are numerous rare and ultra-rare genetic diseases that currently have no drug therapy approved or in development. Patients suffering from these diseases often have a significant morbidity and/or mortality. We focus on developing and commercializing therapies for multiple such indications with the utmost urgency. We also focus on diseases that have biology that is well understood. We believe that developing drugs that directly impact known disease pathways will increase the probability of success of our development programs. Our four modalities of small molecules, biologics, gene therapy and mRNA provide us with what we believe is an optimal set of options to treat metabolic genetic diseases by selecting the best treatment strategy available for each disease.

In-license promising product candidates; retain global commercialization rights to product candidates. Our current product candidates are generally in-licensed from academic institutions or derived from partnerships with other pharmaceutical companies. We believe parties agree to license product candidates to us because they are confident in our team’s expertise in rare disease drug development and commercialization. We generally intend to retain global commercialization rights to our products and product candidates whenever possible to maximize the potential value of our product portfolio. We do not currently intend to invest significant capital in basic research, which can be expensive and time-consuming.

Focus on excellent, rapid, and efficient clinical and regulatory execution on multiple programs in parallel. We believe that building a successful and sustainable rare disease-focused company requires very specific expertise in the areas of patient identification, clinical study design and conduct, and regulatory strategy. Because rare disease programs involve fewer patients and may have accelerated paths to market, we are able to feasibly develop multiple clinical-stage product candidates in parallel, resulting in a more diversified portfolio that provides multiple opportunities to create value, with some economies of scale.

Commercialize through patient-focused global organization. We seek to commercialize our products in North America, the European Union, or EU, Latin America, and select international markets, We have established our own commercial organization in these markets and a network of third-party distributors in smaller markets. We believe our commercial organization is highly specialized and focused, due to the nature of rare disease treatment. In the United States, we have a team of patient diagnosis liaisons who are responsible for finding new doctors with patients with the disease, a separate team of UltraCare Liaisons who assist physicians in placing patients on therapy, and UltraCare Guides who support patients and their families with treatment or reimbursement needs. In addition, we offer a free drug program for patients who are actively navigating the reimbursement process.

Phase 1. The drug is initially introduced into healthy human subjects or patients with the target disease or condition. These studies are designed to evaluate the safety, dosage tolerance, pharmacokinetics and pharmacologic actions of the investigational new drug in humans, and if possible, to gain early evidence on effectiveness.

Phase 2. The drug is administered to a limited patient population to evaluate dosage tolerance and optimal dosage, identify possible adverse side effects and safety risks, and preliminarily evaluate efficacy.

Phase 3. The drug is administered to an expanded patient population, generally at geographically dispersed clinical study sites to generate enough data to statistically evaluate dosage, clinical effectiveness and safety, to establish the overall benefit-risk relationship of the investigational new drug product, and to provide an adequate basis for product approval.

Phase 4. In some cases, additional studies and patient follow-up are conducted to gain experience from the treatment of patients in the intended therapeutic indication. Regulatory authorities may condition approval of a marketing application for a product candidate on the sponsor’s agreement to conduct additional clinical studies after approval. In other cases, a sponsor may voluntarily conduct additional clinical studies after approval to gain more information about the drug. Such post-approval studies are typically referred to as Phase 4 clinical studies.

completion of extensive preclinical laboratory tests and preclinical animal studies performed in accordance with the Good Laboratory Practices, or GLP, regulations;

submission to the FDA of an IND, which must become effective before human clinical studies may begin and must be updated annually;

conducting adequate and well-controlled human clinical studies to establish the safety and efficacy of the product candidate for each proposed indication under an active IND and approved by an independent IRB representing each clinical site;

preparation of and submission to the FDA of a new drug application, or NDA, or biologics license application, or BLA, after completion of all pivotal clinical studies;

potential review of the product application by an FDA advisory committee, where appropriate and if applicable;

satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities where the proposed drug substance and drug product are produced to assess compliance with Good Manufacturing Practices, or GMP;

FDA inspection of one or more clinical sites to assure compliance with GCP; and

FDA review and approval of an NDA or BLA.

the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as the Medicare and Medicaid programs;

the federal transparency laws, including the federal Physician Payment Sunshine Act, that requires drug manufacturers to disclose payments and other transfers of value provided to physicians and teaching hospitals; and

state and foreign law equivalents of each of the above federal laws, such as transparency laws, anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers, and privacy and security of health information laws.

continue our research and nonclinical and clinical development of our product candidates;

expand the scope of our current clinical studies for our product candidates;

advance our programs into more expensive clinical studies;

initiate additional nonclinical, clinical, or other studies for our product candidates;

pursue preclinical and clinical development for additional indications for existing products and product candidates;

change or add additional manufacturers or suppliers;

seek to expand upon or build our own manufacturing-related facilities and capabilities;

seek regulatory and marketing approvals for our product candidates that successfully complete clinical studies;

continue to establish Medical Affairs field teams to initiate relevant disease education;

continue to establish a marketing and distribution infrastructure and field force to commercialize our products and any product candidates for which we may obtain marketing approval;

continue to manage our international subsidiaries and establish new ones;

continue to operate as a public company and comply with legal, accounting and other regulatory requirements;

seek to identify, assess, license, acquire, and/or develop other product candidates, technologies, and/or businesses;

make milestone or other payments under any license or other agreements;

seek to maintain, protect, and expand our intellectual property portfolio;

seek to attract and retain skilled personnel;

create additional infrastructure, including facilities and systems, to support the growth of our operations, our product development, and our commercialization efforts; and

experience any delays or encounter issues with any of the above, including, but not limited to, failed studies, complex results, safety issues, inspection outcomes, or other regulatory challenges that require longer follow-up of existing studies, additional major studies, or additional supportive studies in order to pursue marketing approval.

obtaining regulatory and marketing approvals with broad indications for product candidates for which we complete clinical studies;

developing a sustainable and scalable manufacturing process for our products and any approved product candidates and establishing and maintaining supply and manufacturing relationships with third parties that can conduct the processes and provide adequate (in amount and quality) product supply to support market demand for our products and product candidates, if approved;

launching and commercializing our products and product candidates for which we obtain regulatory and marketing approval, either directly or with a collaborator or distributor;

obtaining adequate market share, reimbursement and pricing for our products and product candidates;

our ability to sell our products and product candidates on a named patient basis or through an equivalent mechanism and the amount of revenue generated from such sales;

our ability to find patients so they can be diagnosed and begin receiving treatment;

addressing any competing technological and market developments;

negotiating favorable terms, including commercial rights, in any collaboration, licensing, or other arrangements into which we may enter, any amendments thereto or extensions thereof;

maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and

the scope, rate of progress, results, and cost of our clinical studies, nonclinical testing, and other related activities;

the cost of manufacturing clinical and commercial supplies of our products and product candidates;

the cost of creating additional infrastructure, including facilities and systems;

the number and characteristics of the product candidates that we pursue;

the cost, timing, and outcomes of regulatory approvals;

the cost and timing of establishing and operating our international subsidiaries;

the cost and timing of establishing and operating field forces, marketing, and distribution capabilities;

the cost and timing of other activities needed to commercialize our products; and

the terms and timing of any collaborative, licensing, acquisition, and other arrangements that we may establish, including any required milestone, royalty, and reimbursements or other payments thereunder.

delays or failures in generating sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of human clinical studies or filings for regulatory approval;

delays in reaching agreement on acceptable terms with contract research organizations, or CROs, clinical study sites, and other clinical trial-related vendors;

failure or delays in obtaining required regulatory agency approval and/or IRB or EC approval at each clinical study site or in certain countries;

failure to correctly design clinical studies which may result in those studies failing to meet their endpoints or the expectations of regulatory agencies;

changes in clinical study design or development strategy resulting in delays related to obtaining approvals from IRBs or ECs and/or regulatory agencies to proceed with clinical studies;

imposition of a clinical hold by regulatory agencies after review of an IND application or amendment, another equivalent application or amendment, or an inspection of our clinical study operations or study sites;

delays in recruiting suitable patients to participate in our clinical studies;

difficulty collaborating with patient groups and investigators;

failure by our CROs, other third parties, or us to adhere to clinical study requirements;

failure to perform in accordance with the FDA’s and/or ICH’s good clinical practices requirements or applicable regulatory guidelines in other countries;

we estimate that several hundred patients in the United States suffer from TIO, for which Crysvita is being studied;

we estimate that several thousand patients in the United States suffer from LC-FAOD, for which UX007 is being studied;

we estimate that approximately 8,000 patients in the developed world suffer from late-onset OTC deficiency, for which DTX301 is being studied, and these all may not be treatable if they are immune to the virus; and

regulatory authorities may disagree with the design, implementation, or conduct of our clinical studies;

the U.S. government may be shut down, which could delay the FDA;

failure of our nonclinical or clinical development to comply with an agreed upon Pediatric Investigational Plan (PIP), which details the designs and completion timelines for nonclinical and clinical studies and is a condition of marketing authorization in the EU; and

regulatory authorities may withdraw approvals of such product;

regulatory authorities may require additional warnings on the product’s label or restrict the product’s approved use;

we may be required to create a REMS plan;

our reputation may suffer.

issue warning or notice of violation letters;

impose civil or criminal penalties;

suspend or withdraw regulatory approval;

suspend any of our ongoing clinical studies;

refuse to approve pending applications or supplements to approved applications submitted by us;

impose restrictions on our operations, including closing our contract manufacturers’ facilities;  

seize or detain products, or require a product recall; or

require entry into a consent decree.

KHK

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KKC has no obligation under our agreement to use diligent efforts to commercialize Crysvita in Europe. The timing and amount of any royalty payments we may receive under our agreement will depend on, among other things, the efforts, allocation of resources, and successful commercialization of Crysvita by KHK in Europe. • the timing and amount of any royalty payments we may receive under our agreement with KHKthat are made by KKC based on sales of Crysvita in Europe will depend on, among other things, the efforts, allocation of resources, and successful commercialization of Crysvita by KHKKKC in Europe. • the timing and amount of any payments we may receive under our agreement with KKC will depend on, among other things, the efforts, allocation of resources, and successful commercialization of Crysvita by KKC in the United States and Canada under our agreement; KHK may change the focus of its commercialization efforts or pursue higher-priority programs; • KKC may change the focus of its commercialization efforts or pursue higher-priority programs; KHK may make decisions regarding the indications for our product candidates in countries where it has the sole right to commercialize the product candidates that limit commercialization efforts in those countries or in countries where we have the right to commercialize our product candidates; • KKC may make decisions regarding the indications for our product candidates in countries where it has the sole right to commercialize the product candidates that limit commercialization efforts in those countries or in countries where we have the right to commercialize our product candidates; KHK may make decisions regarding market access and pricing in countries where it has the sole right to commercialize our product candidates which can negatively impact our commercialization efforts in countries where we have the right to commercialize our product candidates; • KKC may make decisions regarding market access and pricing in countries where it has the sole right to commercialize our product candidates which can negatively impact our commercialization efforts in countries where we have the right to commercialize our product candidates; KHK may fail to manufacture or supply sufficient drug product of Crysvita in compliance with applicable laws and regulations or otherwise for our development and clinical use, which could result in program delays; • KKC may fail to manufacture or supply sufficient drug product of Crysvita in compliance with applicable laws and regulations or otherwise for our development and clinical use or commercial use (including as a result of the COVID-19 pandemic), which could result in program delays or lost revenue; KHK may fail to manufacture or supply sufficient drug product of Crysvita in compliance with applicable laws and regulations or otherwise for our commercial use, which could result in lost revenue; • KKC may elect to develop and commercialize Crysvita indications with a larger market than XLH and at a lower price, thereby reducing the profit margin on sales of Crysvita for any orphan indications, including XLH; KHK may elect to develop and commercialize Crysvita indications with a larger market than XLH and at a lower price, thereby reducing the profit margin on sales of Crysvita for any orphan indications, including XLH; • if KKC were to breach or terminate the agreement with us, we would no longer have any rights to develop or commercialize Crysvita or such rights would be limited to non-terminated countries; if KHK were to breach or terminate the agreement with us, we would no longer have any rights to develop or commercialize Crysvita or such rights would be limited to non-terminated countries; • KKC may terminate its agreement with us, adversely affecting our potential revenue from licensed products; and KHK may terminate its agreement with us, adversely affecting our potential revenue from licensed products; and • the timing and amounts of expense reimbursement that we may receive are uncertain, and the total expenses for which we are obligated to reimburse KKC may be greater than anticipated. the timing and amounts of expense reimbursement that we may receive are uncertain, and the total expenses for which we are obligated to reimburse KHK may be greater than anticipated. We rely on third parties to manufacture our products and most of our product candidates. Our business could be harmed if those third parties fail to provide us with sufficient quantities of drug product, or fail to do so at acceptable quality levels or cost. We have limited infrastructure or capability internally to manufacture our products and product candidates, and we lack the resources and the capability to manufacture most of our product candidates on a clinical or commercial scale. We rely on our manufacturers to purchase from third-party suppliers the materials necessary to produce our product candidates for our clinical studies. There are a limited number of suppliers for raw materials that we use to manufacture our drugs, placebos, or active controls, and there may be a need to identify alternate suppliers to prevent a possible disruption of the manufacture of the materials necessary to produce our products and our product candidates for our clinical studies, and, if approved, ultimately for commercial sale. We do not have any control over the process or timing of the acquisition of these raw materials by our manufacturers. Although we generally do not begin a clinical study unless we believe we have a sufficient supply of a product candidate to complete such study, any significant delay or discontinuity in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical study due to, among other things, the failure of a manufacturer to provide a drug substance or drug product of sufficient quantity or quality, or the need to replace a third-party manufacturer could considerably delay completion of our clinical studies, product testing, and potential regulatory approval of our product candidates, and could also impair named patient sale supply of our product candidates, which could harm our business and results of operations. We have no experience as a company developing a manufacturing facility and may notexperience unexpected costs or delays or ultimately be able to do so successfully ifunsuccessful in developing a facility. During the fourth quarter 2020, we determine to expand or developcompleted our purchase of land located in the Town of Bedford, Massachusetts for construction of our gene therapy manufacturing capabilityfacility and infrastructure. We expect our future manufacturing strategy to involvebegan construction of the use of one or more CMOs as well as our own capabilities and infrastructure, including at our Woburn, MA facility or new facilities we may develop.base building for the facility. We expect that development of our own process developmentthe new facility will provide us with enhanced control of material supply for both clinical trials and the commercial market, enable the more rapid implementation of process changes, and allow for better long-term margins. However, wemargins for our gene therapy products. We currently anticipate construction of the facility to be completed in 2023. We do not have no experience as a company, however, in developing a manufacturing facility and we may neverexperience unexpected costs or delays or ultimately be successfulunsuccessful in developing our own manufacturingthe facility or capability. Additionally,As we expand our commercial footprint to multiple geographies, we may establish multiple manufacturing facilities, which may lead to regulatory delays or prove costly. Even if we are successful, our manufacturing capabilities could be affected by cost-overruns, unexpected delays, equipment failures, lack of capacity, labor shortages, natural disasters, power failures, program failures, and numerous other factors that could prevent us from realizing the intended benefits of our manufacturing strategy and have a material adverse effect on our business. Gene therapy and mRNA, DNA and siRNA product candidates are novel, complex, expensive and difficult to manufacture. We could experience manufacturing problems that result in delays in developing and commercializing these programs or otherwise harm our business. The manufacturing process used to produce our gene therapy, mRNA, DNA and siRNA product candidates is novel, complex, and has not been validated for commercial use. Several factors could cause production interruptions, including equipment malfunctions, regulatory inspections, facility contamination, raw material shortages or contamination, natural disasters, disruption in utility services, human error or disruptions in the operations of our suppliers. Further, given that cGMP gene therapy, mRNA, DNA and siRNA manufacturing is a nascent industry, there are a small number of CMOs with the experience necessary to manufacture our gene therapy product candidates and we may have difficulty finding or maintaining relationships with such CMOs or hiring experts for internal manufacturing and accordingly, our production capacity may be limited. We may establish multiple manufacturing facilities as we expand our commercial footprint to multiple geographies, which may lead to regulatory delays or prove costly. Even if we are successful, our manufacturing capabilities could be affected by cost-overruns, unexpected delays, equipment failures, lack of capacity, labor shortages, natural disasters, power failures and numerous other factors that could prevent us from realizing the intended benefits of our manufacturing strategy and have a material adverse effect on our business. Gene therapy and mRNA product candidates are novel, complex, expensive and difficult to manufacture. We could experience manufacturing problems that result in delays in developing and commercializing these programs or otherwise harm our business. The manufacturing process used to produce our gene therapy and mRNA product candidates is novel, complex, and has not been validated for commercial use. Several factors could cause production interruptions, including equipment malfunctions, regulatory inspections, facility contamination, raw material shortages or contamination, natural disasters, disruption in utility services, human error or disruptions in the operations of our suppliers. Our gene therapy, mRNA, DNA and mRNAsiRNA product candidates require processing steps that are more complex than those required for most small molecule drugs. Moreover, unlike small molecules, the physical and chemical properties of a biologic such as gene therapy, mRNA, DNA and mRNAsiRNA product candidates generally cannot be fully characterized. As a result, assays of the finished product candidate may not be sufficient to ensure that the product candidate is consistent from lot to lot or will perform in the intended manner. Accordingly, we employ multiple steps to control the manufacturing process to assure that the process works reproducibly, and the product candidate is made strictly and consistently in compliance with the process. Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects or manufacturing failures that result in lot failures, noncompliance with regulatory requirements, product recalls, product liability claims or insufficient inventory. We may encounter problems achieving adequate quantities and quality of clinical-grade materials that meet FDA, the EMA or other applicable standards or specifications with consistent and acceptable production yields and costs. In addition, FDA, the EMA and other foreign regulatory authorities may require us to submit samples of any lot of any approved product together with the protocols showing the results of applicable tests at any time. Under some circumstances, FDA, the EMA or other foreign regulatory authorities may require that we not distribute a lot until the agency authorizes its release. Slight deviations in the manufacturing process, including those affecting quality attributes and stability, may result in unacceptable changes in the product that could result in lot failures or product recalls. Lot failures or product recalls could cause us to delay product launches or clinical trials, which could be costly to us and otherwise harm our business, financial condition, results of operations and prospects. We also may encounter problems hiringrely on third parties to manufacture our products and retaining the experienced scientific, quality-controlour product candidates and manufacturing personnel needed to operate our gene therapy and mRNA manufacturing processes, which could result in delays in production or difficulties in maintaining compliance with applicable regulatory requirements. We may be unable to scale up existing or new facilities, including our facility in Woburn, MA, and such facilities may not enable the expansion of our internal manufacturing process discovery and development to the extent we anticipate, or at all. We are subject to a multitude of manufacturing risks, any of which could substantially increase our costs and limit the supply of our product and product candidates. As we currently lack the resources and the capability to manufacture our products and most of our product candidates on a clinical or commercial scale, we rely on third parties to manufacture our products and product candidates. Although we oversee the contract manufacturers, we cannot control the manufacturing process of, and are substantially dependent on, our contract manufacturing partners for compliance with the regulatory requirements. See “- Even if we obtain regulatory approval for our product candidates, our products will remain subject to regulatory scrutiny” risk factor above. Further, we depend on our manufacturers to purchase from third-party suppliers the materials necessary to produce our products and product candidates. There are a limited number of suppliers for raw materials that we use to manufacture our drugs, placebos, or active controls, and there may be a need to identify alternate suppliers to prevent a possible disruption of the manufacture of the materials necessary to produce our products and our product candidates for our clinical studies, and, if approved, ultimately for commercial sale. We also do not have any control over the process or timing of the acquisition of these raw materials by our manufacturers. We may also experience interruptions in supply of product if the product or raw material components fail to meet our quality control standards or the quality control standards of our suppliers. Further, manufacturers that produce our products and product candidates may not have experience producing our products and product candidates at commercial levels and may not produce our products and product candidates at the cost, quality, quantities, locations, and timing needed to support profitable commercialization. We have not yet secured manufacturing capabilities for commercial quantities of all of our product candidates and may be unable to negotiate binding agreements with manufacturers to support our commercialization activities on commercially reasonable terms. Even if our third-party product manufacturers develop acceptable manufacturing processes that provide the necessary quantities of our products and product candidates in a compliant and timely manner, the cost to us for the supply of our products and product candidates manufactured by such third parties may be high and could limit our profitability. For instance, KKC is our sole supplier of commercial quantities of Crysvita. The supply price to us for commercial sales of Crysvita in Latin America and the transfer price for commercial sales of the product in the United States and Canada is 35% of net sales through December 31, 2022 and 30% thereafter, which is higher than the typical cost of goods sold by companies focused on rare diseases. The process of manufacturing our products and product candidates is complex, highly regulated, and subject to several risks, including but not limited to those listed below. The process of manufacturing our products and product candidates is extremely susceptible to product loss due to contamination, equipment failure or improper installation or operation of equipment, or vendor or operator error. Even minor deviations from normal manufacturing processes for our products and any of our product candidates could result in reduced production yields, product defects, and other supply disruptions. If microbial, viral, or other contaminations are discovered in our products and product candidates or in the manufacturing facilities in which our products and product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. • The process of manufacturing our products and product candidates is extremely susceptible to product loss due to contamination, equipment failure or improper installation or operation of equipment, or vendor or operator error. Even minor deviations from normal manufacturing processes for our products and any of our product candidates could result in reduced production yields, product defects, and other supply disruptions. If microbial, viral, or other contaminations are discovered in our products and product candidates or in the manufacturing facilities in which our products and product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. The manufacturing facilities in which our products and product candidates are made could be adversely affected by equipment failures, labor shortages, raw material shortages, natural disasters, power failures, and numerous other factors. • The manufacturing facilities in which our products and product candidates are made could be adversely affected by equipment failures, labor shortages, raw material shortages, natural disasters, power failures, and numerous other factors. Any adverse developments affecting manufacturing operations for our products and product candidates may result in shipment delays, inventory shortages, lot failures, withdrawals or recalls, or other interruptions in the supply of our products and product candidates. For instance, during the fourth quarter of 2019, we experienced disruptions from our third-party supplier related to the fill and finish activities for the manufacture of Mepsevii, which negatively impacted our inventory of the product. Due to their stage of development, small volume requirements, and infrequency of batch production runs, we carry limited amounts of safety stock for our products and product candidates. We may also have to take inventory write-offs and incur other charges and expenses for products and product candidates that fail to meet specifications, undertake costly remediation efforts, or seek more costly manufacturing alternatives. The drug substance and drug product for our products and most of our product candidates are currently acquired from single-source suppliers. The loss of these suppliers, or their failure to supply us with the necessary drug substance or drug product, could materially and adversely affect our business. We acquire most of the drug substances and drug products for our products and product candidates from single sources. If any single source supplier breaches an agreement with us, or terminates the agreement in response to an alleged breach by us or otherwise becomes unable to fulfill its supply obligations, we would not be able to manufacture and distribute the product or product candidate until a qualified alternative supplier is identified, which could significantly impair our ability to commercialize such product or delay the development of such product candidate. The drug substance and drug product for Crysvita are made by KHKKKC pursuant to our license and collaboration agreement with KHK.KKC. The drug substance and drug product for Mepsevii are manufactured by Rentschler under a commercial supply and services agreement, and accompanying purchase orders.orders, and other agreements. The pharmaceutical-grade drug substance for UX007Dojolvi is manufactured by IOI Oleo pursuant to our supply agreement with IOI Oleo, and the drug product for UX007Dojolvi is prepared by Haupt Pharma AG and CPM ContractPharma GmbH & Co. pursuant to a services agreement and accompanying purchase orders. Single source suppliers are also used for our gene therapy programs. We have not currently secured any other suppliers for the drug substance or drug product of our products and product candidates and, although we believe that there are alternate sources of supply that could satisfy our clinical and commercial requirements, we cannot provide assurance that identifying alternate sources and establishing relationships with such sources would not result in significant expense or delay in the commercialization of our products or the development of our product candidates. For instance, we experienced disruptions from our third-party supplier related to the fill and finish activities for the manufacture of Mepsevii during the fourth quarter of 2019 and as a result, we have identified an alternative supplier to conduct such activities. It may take a significant amount of time and expense to qualify such alternative supplier and to transfer activities to such supplier, which are currently ongoing. If we fail to qualify our alternative supplier in a timely manner, we could experience delays or disruptions in the supply of Mepsevii, which would negatively impact sales of the product. Additionally, we may not be able to enter into supply arrangements with our alternative supplierssupplier on commercially reasonable terms or at all. The terms of any new agreement, such as any agreement with our alternative supplier for Mepsevii, may also be less favorable or more costly than the terms we have with our current supplier. A delay in the commercialization of our products or the development of our product candidates or having to enter into a new agreement with a different third-party on less favorable terms than we have with our current suppliers could have a material adverse impact upon on our business. We and our collaborators and contract manufacturers are subject to significant regulation with respect to manufacturing our product candidates. The manufacturing facilities on which we rely may not continue to meet regulatory requirements or may not be able to meet supply demands. All entities involved in the preparation of therapeutics for clinical studies or commercial sale, including our existing contract manufacturers and collaboration partners for our product candidates, are subject to extensive regulation. Components of a finished therapeutic product approved for commercial sale or used in clinical studies must be manufactured in accordance with GMP. These regulations govern manufacturing processes and procedures (including record keeping) and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale. Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of our products and product candidates that may not be detectable in final product testing. We, our collaborators, or our contract manufacturers must supply all necessary documentation in support of an NDA, BLA, MAA, or other application for regulatory approval, on a timely basis and must adhere to GLP, GMP, and similar regulations enforced by the FDA and other regulatory agencies through their facilities inspection programs. Some of our contract manufacturers have never produced a commercially approved pharmaceutical product and therefore have not obtained the requisite regulatory authority approvals to do so. The facilities and quality systems of some or all of our collaborators and third-party contractors must pass a pre-approval inspection for compliance with the applicable regulations as a condition of regulatory approval of our product candidates or any of our other potential products. In addition, the regulatory authorities may, at any time, audit or inspect a manufacturing facility involved with the preparation of our product candidates or our other potential products or the associated quality systems for compliance with the regulations applicable to the activities being conducted. Although we oversee the contract manufacturers, we cannot control the manufacturing process of, and are substantially dependent on, our contract manufacturing partners for compliance with the regulatory requirements. If these facilities cannot schedule manufacturing to meet inspectional demands or do not pass a pre-approval plant inspection, regulatory approval of the products may not be granted or may be substantially delayed until any violations are corrected to the satisfaction of the regulatory authority, if ever. The regulatory authorities also may, at any time following approval of a product for sale, audit the manufacturing facilities of our collaborators, such as KHK, and third-party contractors. If any such inspection or audit identifies a failure to comply with applicable regulations or if a violation of our product specifications or applicable regulations occurs independent of such an inspection or audit, we or the relevant regulatory authority may require remedial measures that may be costly and/or time consuming for us or a third-party to implement, and that may include the temporary or permanent suspension of a clinical study or commercial sales or the temporary or permanent closure of a facility. Any such remedial measures imposed upon us, our collaborators, or third parties with whom we contract could materially harm our business. If we, our collaborators, including KHK, or any of our third-party manufacturers fail to maintain regulatory compliance, the FDA or other applicable regulatory authority can impose regulatory sanctions including, among other things, refusal to approve a pending application for a new drug product or biologic product, withdrawal of an approval, or suspension of production. As a result, our business, financial condition, and results of operations may be materially harmed. Additionally, if supply from one approved manufacturer is interrupted, an alternative manufacturer would need to be qualified through an NDA or BLA supplement or MAA variation, or equivalent foreign regulatory filing, which could result in further delay. The regulatory agencies may also require additional studies if a new manufacturer is relied upon for commercial production. Switching manufacturers may involve substantial costs and is likely to result in a delay in our desired clinical and commercial timelines. These factors could cause us to incur higher costs and could cause the delay or termination of clinical studies, regulatory submissions, required approvals, or commercialization of our product candidates. Furthermore, if our suppliers fail to meet contractual requirements and we are unable to secure one or more replacement suppliers capable of production at a substantially equivalent cost, our clinical studies may be delayed or we could lose potential revenue. The actions of distributors and specialty pharmacies could affect our ability to sell or market products profitably. Fluctuations in buying or distribution patterns by such distributors and specialty pharmacies could adversely affect our revenues, financial condition, or results of operations. We intend to rely on commercial distributors and specialty pharmacies for a considerable portion of our product sales and we expect such sales to beare concentrated within a small number of distributors.distributors and specialty pharmacies. The financial failure of any of these distributorsparties could adversely affect our revenues, financial condition or results of operations. Our revenues, financial condition or results of operations may also be affected by fluctuations in distributor buying or distribution patterns.patterns of such distributors and specialty pharmacies. These fluctuations may result from seasonality, pricing, wholesaler inventory objectives, or other factors. Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed. Because we rely on third parties in connection with the development and manufacture of our products and product candidates and will likely rely on third parties in connection with the commercialization of our approved products, we must, at times, share trade secrets with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements, letters of engagement, or other similar agreements with our collaborators, advisors, employees, and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, such as trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business. Risks Related to Commercialization of Our Products and Product Candidates If the market opportunities for our products and product candidates are smaller than we believe they are, our revenue may be adversely affected, and our business may suffer. Because the target patient populations of our products and product candidates are small, and the addressable patient population potentially even smaller, we must be able to successfully identify patients and acquire a significant market share to achieve profitability and growth. We focus our research and product development on treatments for rare and ultra-rare genetic diseases. Given the small number of patients who have the diseases that we are targeting, it is critical to our ability to grow and become profitable that we continue to successfully identify patients with these rare and ultra-rare genetic diseases. Some of our current clinical programs may be most appropriate for patients with more severe forms of their disease. For instance, our Phase 2 study of UX007 in LC-FAOD enrolled patients with more severe disease. In addition, while adults make up the majority of the XLH patients, they often have less severe disease that may reduce the penetration of Crysvita in the adult population relative to the pediatric population. Given the overall rarity of the diseases we target, it is difficult to project the prevalence of the more severe forms, or the other subsets of patients that may be most suitable to address with our products and product candidates, which may further limit the addressable patient population to a small subset. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our products and product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including the scientific literature, surveys of clinics, patient foundations, or market research, and may prove to be incorrect. Further, new studies may change the estimated incidence or prevalence of these diseases. The number of patients may turn out to be lower than expected. The effort to identify patients with diseases we seek to treat is in early stages, and we cannot accurately predict the number of patients for whom treatment might be possible. Additionally, the potentially addressable patient population for each of our products and product candidates may be limited or may not be amenable to treatment with our products and product candidates, and new patients may become increasingly difficult to identify or access, which would adversely affect our results of operations and our business. Further, even if we obtain significant market share for our products and product candidates, because the potential target populations are very small, we may never become or remain profitable nor generate sufficient revenue growth to sustain our business. Manufacturers that produce our products and product candidates may not have experience producing our products and product candidates at commercial levels and may not achieve the necessary regulatory approvals or produce our products and product candidates at the cost, quality, quantities, locations, and timing needed to support profitable commercialization. We rely on third-party manufacturers to produce our products and product candidates. These manufacturers may not have the experience or ability to produce our products and product candidates at commercial levels. We may run into technical or scientific issues related to manufacturing or development that we may be unable to resolve in a timely manner or with available funds. We also have not completed all of the characterization and validation activities necessary for commercialization and regulatory approvals for all of our product candidates. If our manufacturing partners are not able to conduct all such necessary activities in accordance with applicable regulations, our commercialization efforts will be harmed. We have not yet secured manufacturing capabilities for commercial quantities of all of our product candidates and may be unable to negotiate binding agreements with manufacturers to support our commercialization activities on commercially reasonable terms. Even if our third-party product manufacturers develop an acceptable manufacturing process, if such third-party manufacturers are unable to produce the necessary quantities of our products and product candidates, are unable to comply with GMP or other pertinent regulatory requirements, or are unable to produce our products and product candidates within our planned timeframe and cost parameters, the development and sales of our products and product candidates, if approved, may be materially harmed. Additionally, the cost to us for the supply of our products and product candidates manufactured by such third parties may be high and could limit our profitability, even if our third-party product manufacturers develop acceptable manufacturing processes that provide the necessary quantities of our products and product candidates in a compliant and timely manner. Furthermore, KHK is our sole supplier of commercial quantities of Crysvita. The supply price to us for commercial sales of Crysvita, which is determined on a fixed double-digit percentage of net sales, is higher than the typical cost of goods sold by companies focused on rare diseases. We face intense competition and rapid technological change and the possibility that our competitors may develop therapies that are similar, more advanced, or more effective than ours, which may adversely affect our financial condition and our ability to successfully commercialize our product candidates. The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. We are currently aware of various existing treatments that may compete with our products and product candidates. For example, XLH is treated with oral phosphate and vitamin D therapy, which may compete with Crysvita; LC-FAOD is treated with diet therapy and medium-chain triglyceride oil, which may compete with UX007; OTC deficiency is currently treated with nitrogen scavenging drugs and severe limitations in dietary protein, which may compete with DTX301; and GSD1a is currently treated with corn starch, which may compete with DTX401. Triheptanoin is available in food-grade form, which may compete with our pharmaceutical-grade product. Furthermore, investigator-sponsored trials evaluating triheptanoin in multiple indications are ongoing. Gene therapy, gene correction, RNA-based therapies, and other approaches may also emerge for the treatment of any of the disease areas in which we focus.See “Item 1. Business – Competition” above.   We have competitors both in the United States and internationally, including major multinational pharmaceutical companies, specialty pharmaceutical companies, biotechnology companies, startups, academic research institutions, government agencies, and public and private research institutions. Many of our competitors have substantially greater financial, technical, and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations. Additional mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors. As a result, these companies may obtain regulatory approval more rapidly than we are able to and may be more effective in selling and marketing their products as well. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Competition may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries. Our competitors may succeed in developing, acquiring, or licensing on an exclusive basis, products that are more effective or less costly than any product candidate that we may develop, or achieve earlier patent protection, regulatory approval, product commercialization, and market penetration than we do. Additionally, technologies developed by our competitors may render our potential products and product candidates uneconomical or obsolete, and we may not be successful in marketing our products and product candidates against competitors. We continuemay not be able to build and evolveeffectively manage the expansion of our organization, including building an integrated commercial organization. If we are unable to expand our existing commercial infrastructure or enter into agreements with third parties to market and sell our products and product candidates, as needed, we may be unable to generate significantincrease our revenue. We expect we will need additional managerial, operational, marketing, financial, legal, and other resources to support our development and commercialization plans and strategies. In preparationorder to successfully commercialize Crysvita and Mepseviiour products as well as any additional products that may result from our development programs, we are building aand expanding our commercial infrastructure in North America, Europe and Latin America. This infrastructure consists of both office based as well as field teams with technical expertise, and will be expanded as we approach the potential approval dates of additional products that result from our development programs. This willOur management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. We may not be expensive and time consuming. Any failure or delay inable to effectively manage the expansion of thisour operations, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, loss of employees, and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may adversely impactdivert financial resources from other projects, such as the commercializationdevelopment of additional product candidates. If our approved products. Althoughmanagement is unable to effectively manage our employeesgrowth, our expenses may have promoted other similar productsincrease more than expected, our ability to generate and/or grow revenue could be reduced, and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in the past while employed at other companies, we,part, on our ability to effectively manage any future growth.   We, as a company, have limited, recent experience selling and marketing our product. Further, givenproduct and only some of our limitedemployees have prior experience promoting other similar products in marketing and selling biopharmaceuticalthe past while employed at other companies. As we launch additional products or as demand for our products change, our initial estimate of the size of the required field force may be materially more or less than the size of the field force actually required to effectively commercialize our product candidates. As such, we may be required to hire large teams to adequately support the commercialization of our products and product candidates or we may incur excess costs as a resultin an effort to optimize the hiring of hiring more commercial personnel than necessary.personnel. With respect to certain geographical markets, we may enter into collaborations with other entities to utilize their local marketing and distribution capabilities, but we may be unable to enter into such agreements on favorable terms, if at all. If our future collaborators do not commit sufficient resources to commercialize our future products, if any, and we are unable to develop the necessary marketing capabilities on our own, we will be unable to generate sufficient product revenue to sustain our business. We may be competing with companies that currently have extensive and well-funded marketing and sales operations. Without a large internal team or the support of a third-party to perform key commercial functions, we may be unable to compete successfully against these more established companies. Our exclusive right to promote Crysvita in the United States and Canada expires in 2023. Pursuant to the terms of our collaboration and license agreement with KKC, we have the sole right to promote Crysvita in the United States and Canada, or the profit-share territory, for a specified period of time, with KKC increasingly participating in the promotion of the product until the transition date of April 2023, which is the fifth anniversary of the commercial launch of the product in the United States. After the transition date, KKC will have the right to promote the product, subject to a limited promotion right retained by us. We cannot assure that we will have adequate commercial activity to support our North America field force and other aspects of our commercial infrastructure in the territory after the transition date. After the transition date, we will also solely bear the expenses related to the promotion of Crysvita in the profit-share territory pursuant to our limited promotion right, rather than share such expenses with KKC. Collaboration with KKC may not result in a seamless transition of responsibilities for KKC to promote the product in the profit-share territory after the transition date and the commercial success of Crysvita in the profit-share territory after the transition date will depend on, among other things, the efforts and allocation of resources of KKC.   The commercial success of any current or future product will depend upon the degree of market acceptance by physicians, patients, third-party payors, and others in the medical community. Even with the requisite approvals from the FDA and comparable foreign regulatory authorities, the commercial success of our current and future products will depend in part on the medical community, patients, and payors accepting our current and future products as medically useful, cost-effective, and safe. Any product that we bring to the market may not gain market acceptance by physicians, patients, payors, and others in the medical community. The degree of market acceptance of any of our current and future products will depend on a number of factors, including: the efficacy of the product as demonstrated in clinical studies and potential advantages over competing treatments; • the efficacy of the product as demonstrated in clinical studies and potential advantages over competing treatments; the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling; • the prevalence and severity of any side effects, including any limitations or warnings contained in a product’s approved labeling; the clinical indications for which approval is granted; • the clinical indications for which approval is granted; relative convenience and ease of administration; • relative convenience and ease of administration; the cost of treatment, particularly in relation to competing treatments; • the cost of treatment, particularly in relation to competing treatments; the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; the effectiveness of our field forces and marketing efforts; • the effectiveness of our field forces and marketing efforts; the strength of marketing and distribution support and timing of market introduction of competitive products; • the strength of marketing and distribution support and timing of market introduction of competitive products; publicity concerning our products or competing products and treatments; and • publicity concerning our products or competing products and treatments; and sufficient third-party insurance coverage and reimbursement. • sufficient third-party insurance coverage and reimbursement. Even if a potential product displays a favorable efficacy and safety profile in nonclinical and clinical studies, market acceptance of the product will not be fully known until after it is launched. Our efforts to educate the medical community and payors on the benefits of the product candidates may require significant resources and may never be successful. If our current and future products fail to achieve an adequate level of acceptance by physicians, patients, payors, and others in the medical community, we will not be able to generate sufficient revenue to become or remain profitable. The insurance coverage and reimbursement status of newly approved products is uncertain. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue. Our target patient populations are small, and accordingly the pricing, coverage, and reimbursement of our products and product candidates, if approved, must be adequate to support our commercial infrastructure. Our per-patient prices must be sufficient to recover our development and manufacturing costs and potentially achieve profitability. We expect the cost of a single administration of gene therapy products, such as those we are developing, to be substantial, when and if they achieve regulatory approval. Accordingly, the availability and adequacy of coverage and reimbursement by governmental and private payors are essential for most patients to afford expensive treatments such as ours, assuming approval. Sales of our products and product candidates, if approved, will depend substantially, both domestically and abroad, on the extent to which their costs will be paid for by health maintenance, managed care, pharmacy benefit, and similar healthcare management organizations, or reimbursed by government authorities, private health insurers, and other payors. If coverage and reimbursement are not available, are available only to limited levels, or are not available on a timely basis, we may not be able to successfully commercialize our products and product candidates, if approved. For example, deteriorating economic conditions and political instability in certain Latin American countries and in Turkey may cause us to experience significant delays in receiving approval for reimbursement for our products and consequently impact our product commercialization timelines in such regions. Even if coverage is provided, the approved reimbursement amount may not be high enough to allow us to establish or maintain pricing sufficient to sustain our overall enterprise. There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the United States, the Centers for Medicare & Medicaid Services, or CMS, an agency within the U.S. Department of Health and Human Services, decides whether and to what extent a new drug will be covered and reimbursed under Medicare. Private payors tend to follow the coverage reimbursement policies established by CMS to a substantial degree. It is difficult to predict what CMS or private payors will decide with respect to reimbursement for products such as ours, especially our gene therapy product candidates as there is a limited body of established practices and precedents for gene therapy products. Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, and other countries will put pressure on the pricing and usage of our products and product candidates. In many countries, the prices of medical products are subject to varying price control mechanisms as part of national health systems. Other countries allow companies to fix their own prices for medicinal products, but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the United States, the reimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits. Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for new products and, as a result, they may not cover or provide adequate payment for our products and product candidates. We expect to experience pricing pressures in connection with the sale of any of our products and product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, additional legislative changes, and statements by elected officials. For example, proposals are beinghave been discussed to tie U.S. drug prices to the cost in other countries, several states in the U.S. have introduced legislation to require pharmaceutical companies to disclose their costs to justify the prices of their products, and an “Affordable Drug Pricing Task-Force” has been formed in the U.S. House of Representatives with the goal of combating the increased costs of prescription drugs. Drug pricing is also expected to remain a focus for the new Presidential Administration and Congress.The downward pressure on healthcare costs in general, and with respect to prescription drugs, surgical procedures, and other treatments in particular, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products. The results of the United Kingdom’s referendum on withdrawal from the EU may have a negative effect on our business, global economic conditions, and financial markets. On June 23, 2016, the electorate inJanuary 30, 2020, the United Kingdom voted in favor of leavingformally withdrew from the EU, commonly referred to as Brexit. On March 29, 2017, the country formally notified the EU of its intention to withdraw pursuant to Article 50 of the Lisbon Treaty. Since a significant proportion of the regulatory framework inBrexit, and the United Kingdom is derivedand EU subsequently entered into a trading agreement effective January 1, 2021. In anticipation of Brexit, we had previously adjusted our product inventory and storage plans and as such, our business and operations to date have not been materially or adversely impacted by Brexit. However, the full effects of Brexit and the impact from EU directivesthe trade agreement and regulations, Brexit could materially impact the regulatory regime with respect to the approval of product candidates, disrupt the manufacture of our products and product candidates inother formal agreements between the United Kingdom or theand EU disrupt the importation and export of active substances and other components of drug formulations, and disrupt the supply chain for clinical trial product and final authorized formulations. Any delay in obtaining, or an inability to obtain, any marketing approvals, or disruption to our and our collaborators’ supply chain as a result of Brexit or otherwise, would prevent us from commercializing our product candidates in the United Kingdom and/or the EU and restrict our ability to generate revenue and achieve and sustain profitability. The cumulative effect of disruptions to the regulatory framework or supply chainsthat may add considerably to the development lead time to, and expense of, marketing authorization and commercialization of products in the EU and/or the United Kingdom. In view of the uncertainty surrounding the Brexit implementation, we are unable to predict the effects of such disruption toimpact the regulatory framework and supply chain in Europe. Further, these developments, or the perception that any of them could occur, have had and may continue to have a material adverse effect on global economic conditions and the stability of global financial markets, and could significantly reduce global market liquidity and restrict the ability of key market participants to operate in certain financial markets. Asset valuations, currency exchange rates and credit ratings may be especially subject to increased market volatility. Lack of clarity about future U.K. laws and regulations as the United Kingdom determines which EU laws to replace or replicate in the event of a withdrawal, including financial laws and regulations, tax and free trade agreements, intellectual property rights, supply chain logistics, environmental, health and safety laws and regulations, immigration laws and employment laws, could decrease foreign direct investment in the United Kingdom, increase costs and depress economic activity. If the United Kingdom and the EU are unable to negotiate and obtain the necessary government approvals for acceptable withdrawal terms or if other EU member states pursue withdrawal, barrier-free access between the United Kingdom and other EU member states or among the European economic area overall could be diminished or eliminated. In addition,Europe remain uncertain. For instance, we expect that Brexit could lead to legal uncertaintyadditional processes and potentially divergent national lawssteps with respect to certain regulatory applications and regulations asactivities, which may impact the United Kingdom determines which EU laws to replicatetiming of approvals or replace. Ifresult in additional costs. Further, if the United Kingdom were to significantly alter its regulations affecting the biotechnology or pharmaceutical industries, we could face significant newadditional costs. It may also be time-consuming and expensive for us to alter our internal operations in order to comply with new regulations. Any of these factors could have a material adverse effect on our business, financial condition and results of operations and affect our strategy in the U.K. and EU biotech market. Risks Related to Our Intellectual Property If we are unable to obtain and maintain effective patent rights for our products, product candidates, or any future product candidates, we may not be able to compete effectively in our markets. We rely upon a combination of patents, trade secret protection, and confidentiality agreements to protect the intellectual property related to our technologies, our products, and our product candidates. Our success depends in large part on our and our licensors’ ability to obtain and maintain patent and other intellectual property protection in the United States and in other countries with respect to our proprietary technology,technologies, our products, and our product candidates. We have sought to protect our proprietary position by filing patent applications in the United States and abroad related to our novel technologies, products and productsproduct candidates that are important to our business. This process is expensive and time consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection. The patent position of biotechnology and pharmaceutical companies generally is highly uncertain and involves complex legal and factual questions for which legal principles remain unsolved. The patent applications that we own or in-license may fail to result in issued patents with claims that cover our products or product candidates in the United States or in other foreign countries. There is no assurance that all potentially relevant prior art relating to our patents and patent applications has been found, which can invalidate a patent or prevent a patent from issuing from a pending patent application. Even if patents do successfully issue, and even if such patents cover our products or product candidates, third parties may challenge their validity, enforceability, or scope, which may result in such patents being narrowed, found unenforceable, or invalidated. Furthermore, even if the patents and patent applications we own or in-license are unchallenged, they may not adequately protect our intellectual property, provide exclusivity for our products or product candidates, or prevent others from designing around our claims. Any of these outcomes could impair our ability to prevent competition from third parties, which may have an adverse impact on our business. We, independently or together with our licensors, have filed several patent applications covering various aspects of our products or product candidates. We cannot offer any assurances about which, if any, patents will issue, the breadth of any such patent or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties. Any successful opposition to these patents could impair the exclusivity position of our products or any other patents owned by or licensed to us after patent issuance could deprive us of rights necessary for the successful commercialization of any product candidates that we may develop.are approved. Further, if we encounter delays in regulatory approvals, the period of time during which we could market a product candidate under patent protection could be reduced. Although we have a number ofOur current patents or applications covering methods of use and certain compositions of matter we do not haveprovide complete patent protection for our products and product candidates in all territories. For example, there are no issued patents covering the Crysvita composition of matter in Latin America where we have rights to commercialize the compound. Therefore, a competitor could develop the same antibody or a similar antibody as well as other approaches that target FGF23 for potential commercialization in Latin America, subject to any intellectual property rights or regulatory exclusivities awarded to us. If we cannot obtain and maintain effective patent rights for our products or product candidates, we may not be able to compete effectively and our business and results of operations would be harmed. We may not have sufficient patent terms to effectively protect our products and business. Patents have a limited lifespan. In the United States, the natural expiration of a patent is generally 20 years after its effective filing date. Although various extensions may be available, the life of a patent, and the protection it affords, is limited. Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may be open to competition from generic or biosimilar medications. While patentPatent term extensions under the Hatch-Waxman Act in the United States and under supplementary protection certificates in Europe may not be available to extend the patent exclusivity term for Crysvita, Mepsevii, UX007, DTX301,our products and DTX401,product candidates, and we cannot provide any assurances that any such patent term extension will be obtained and, if so, for how long. Furthermore, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the length of the extension could be less than we request. If we do not have sufficient patent terms or regulatory exclusivity to protect our products, our business and results of operations may be adversely affected. Patent policy and rule changes could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. Changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow the scope of our patent protection. The laws of foreign countries may not protect our rights to the same extent as the laws of the United States. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. We therefore cannot be certain that we or our licensors were the first to make the invention claimed in our owned and licensedin-licensed patents or pending applications, or that we or our licensor were the first to file for patent protection of such inventions. Assuming the other requirements for patentability are met, in the United States prior to March 16, 2013, the first to make the claimed invention is entitled to the patent, while outside the United States, the first to file a patent application is entitled to the patent. After March 15, 2013, under In 2011, the Leahy-Smith America Invents Act or the(the Leahy-Smith Act, enacted on September 16, 2011, the United States has also moved to a first to file system. The Leahy-Smith Act also includes a number ofAct) was signed into law and introduced significant changes that affectto the wayprosecution of U.S. patent applications will be prosecuted and may also affect patent litigation.to the procedures for challenging U.S. patents. The effects of these changes are currentlystill remain unclear asowing to the courts have only begun to address these provisions. In general,evolving nature of the law and the lengthy timelines associated with court system review and interpretation. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition. If we are unable to maintain effective proprietary rights for our products, product candidates, or any future product candidates, we may not be able to compete effectively in our markets. In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our products or product candidate discovery and development processes that involve proprietary know-how, information, or technology that is not covered by patents. However, trade secrets can be difficult to protect. We seek to protect our proprietary technology and processes, in part, by entering intoThe confidentiality agreements entered into with our employees, consultants, scientific advisors, and contractors. We also seekcontractors may not be sufficient to preserve the integrityprotect our proprietary technology and confidentiality of our data and trade secrets by maintainingprocesses. The physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in thesesystems may not preserve the integrity and confidentiality of our data and trade secrets. These individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. AlthoughThe assignment agreements we expect all ofenter into with our employees and consultants to assign their inventions to us, and all ofthe confidentiality agreements we enter into with our employees, consultants, advisors, and any third parties who have access to our proprietary know-how, information, or technology to enter into confidentiality agreements, we cannot provide any assurances that all such agreementsmay not have been duly executed orand we cannot assure that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Misappropriation or unauthorized disclosure of our trade secrets could impair our competitive position and may have a material adverse effect on our business. Additionally, if the steps taken to maintain our trade secrets are deemed inadequate, we may have insufficient recourse against third parties for misappropriating the trade secret. Claims of intellectual property infringement may prevent or delay our development and commercialization efforts. Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of others. There have been many lawsuits and other proceedings involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, inter partes reviews, post grant reviews, oppositions, and reexamination proceedings before the USPTO and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by other parties, exist in the fields in which we are developing product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our products or product candidates may be subject to claims of infringement of the patent rights of these other parties. Other parties may assert that we are employing their proprietary technology without authorization. There may be patents or patent applications with claims to materials, formulations, methods of manufacture, or methods for treatment related to the use or manufacture of our products or product candidates. We have conducted freedom to operate analyses with respect only to our products and certain of our product candidates, and therefore we do not know whether there are any patents of other parties that would impair our ability to commercialize all of our product candidates. We also cannot guarantee that any of our analyses are complete and thorough, nor can we be sure that we have identified each and every patent and pending application in the United States and abroad that is relevant or necessary to the commercialization of our products or product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications that may later result in issued patents that our products or product candidates may infringe. We are aware of three third-party patent familiescertain U.S. and foreign patents owned by third parties that include issued U.S. patents with claims that, if valid and enforceable, coulda court might construe to be construedrelevant to cover one or more of our gene therapy product candidates, if and when approved, or methods of their manufacture. We are also aware of an additional three third-party patent families that include issued European claims that, if valid and enforceable, could be construed to cover certain methods that may be used in thetheir manufacture, ofor certain formulations comprising one or more of our gene therapy product candidates. In addition, otherWe are also aware of certain U.S. and foreign patents owned by third parties that relate to anti-sclerostin antibodies and their use, and which a court might construe to be relevant to setrusumab. There is a risk that one or more of these third parties may obtain patentschoose to engage in the future and claim that use of our technologies infringes upon these patents. If any of these patents were held bylitigation with us to enforce or to otherwise assert their patent rights against us. Even if we believe such claims are without merit, a court of competent jurisdiction to cover aspectscould hold that one or more of our formulations,these patents is valid, enforceable, and infringed, in which case the manufacturing process of our products or any of our product candidates, methods of use, any molecules formed during the manufacturing process or any final product itself, the holdersowners of any such patents may be able to block our ability to commercialize our products or a product candidate unless we obtained a license under the applicable patents, or until such patents expire or are finally determined to be invalid or unenforceable. Suchexpire. However, such a license may not be available on commercially reasonable terms or at all. Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to continue commercialization of our products, or block our ability to develop and commercialize one or more of our product candidates. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products, or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure. We may not be successful in obtaining or maintaining necessary rights to our product candidates through acquisitions and in-licenses. We currently have rights to the intellectual property, through licenses from third parties and under patents that we own, to commercialize our product candidates. Because our programs may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license, or use these proprietary rights. For example, our product candidates may require specific formulations to work effectively and efficiently and the rights to these formulations may be held by others. We may be unable to acquire or in-license any compositions, methods of use, processes, or other third-party intellectual property rights from third parties that we identify as necessary for our product candidates. The licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies are also pursuing strategies to license or acquire third-party intellectual property rights that we may consider attractive. These established companies may have a competitive advantage over us due to their size, cash resources, and greater clinical development and commercialization capabilities. In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us. We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment. We sometimes collaborate with U.S. and foreign academic institutions to accelerate our preclinical research or development under written agreements with these institutions. Typically, these institutions provide us an option to negotiate a license to any of the institution’s rights in technology resulting from the collaboration. Regardless of such option, we may be unable to negotiate a license within the specified timeframe or under terms that are acceptable to us. If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue our program. If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of that program and our business and financial condition could suffer. We may face competition from biosimilars, which may have a material adverse impact on the future commercial prospects of Crysvita, Mepsevii, DTX301,our biological products and DTX401.product candidates. Even if we are successful in achieving regulatory approval to commercialize a product candidate faster than our competitors, we may face competition from biosimilars with respect to Crysvita, Mepsevii, DTX301,our biological products (Crysvita and DTX401.Mepsevii) and our biological product candidates. In the United States, the Biologics Price Competition and Innovation Act of 2009, or BPCI Act, was included in the Affordable Care Act and created an abbreviated approval pathway for biological products that are demonstrated to be “highly similar,” or biosimilar, to or “interchangeable” with an FDA-approved biological product. The BPCI Act prohibits the FDA from approving a biosimilar or interchangeable product that references a brand biological product until 12 years after the licensure of the reference product, but permits submission of an application for a biosimilar or interchangeable product to the FDA four years after the reference product was first licensed. The BPCI Act does not prevent another company from developing a product that is highly similar to the innovative product, generating its own data, and seeking approval. Moreover, it is not known whether the BPCI Act will survive in whole or in part if the Affordable Care Act is repealed by Congress or held unconstitutional by courts. As a result, its ultimate impact, implementation, meaning, and long-term existence are subject to uncertainty. Elimination or modification of the BPCI Act, or changes to the FDA’s interpretation or implementation of the BPCI Act, could have a material adverse effect on the future commercial prospects for Crysvita, Mepsevii, DTX301,our biological products and DTX401.product candidates. In Europe, the European Commission has granted marketing authorizations for several biosimilars pursuant to a set of general and product class-specific guidelines for biosimilar approvals issued over the past few years. In Europe, a competitor may reference data supporting approval of an innovative biological product, but will not be able to get on the market until 10 years after the time of approval of the innovative product. This 10-year marketing exclusivity period will be extended to 11 years if, during the first eight of those 10 years, the marketing authorization holder obtains an approval for one or more new therapeutic indications that bring significant clinical benefits compared with existing therapies. In addition, companies may be developing biosimilars in other countries that could compete with our products. If competitors are able to obtain marketing approval for biosimilars referencing our products, our products may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences. Additional competitorsCompetitors could enter the market with generic versions of Dojolvi or our small-molecule product candidates, which may result in a material decline in sales of UX007 or future small-molecule product candidates.affected products. Under the Hatch-Waxman Act, a pharmaceutical manufacturer may file an abbreviated new drug application, or ANDA, seeking approval of a generic copy of an approved innovator product. Under the Hatch-Waxman Act, a manufacturer may also submit an NDA under section 505(b)(2) that references the FDA’s finding of safety and effectiveness of a previously approved drug. A 505(b)(2) NDA product may be for a new or improved version of the original innovator product. Innovative small molecule drugs may be eligible for certain periods of regulatory exclusivity (e.g., five years for new chemical entities, three years for changes to an approved drug requiring a new clinical study, and seven years for orphan drugs), which preclude FDA approval (or in some circumstances, FDA filing and review of) an ANDA or 505(b)(2) NDA relying on the FDA’s finding of safety and effectiveness for the innovative drug. In addition to the benefits of regulatory exclusivity, an innovator NDA holder may have patents claiming the active ingredient, product formulation or an approved use of the drug, which would be listed with the product in the “Orange Book.” If there are patents listed in the Orange Book, a generic applicant that seeks to market its product before expiration of the patents must include in the ANDA or 505(b)(2) what is known as a “Paragraph IV certification,” challenging the validity or enforceability of, or claiming non-infringement of, the listed patent or patents. Notice of the certification must be given to the innovator, too, and if within 45 days of receiving notice the innovator sues to enforce its patents, approval of the ANDA is stayed for 30 months, or as lengthened or shortened by the court. Accordingly, if UX007 is approved, competitors could file ANDAs for generic versions of UX007,our small-molecule product, Dojolvi, or 505(b)(2) NDAs that reference UX007. If there areDojolvi. For the patents listed for UX007Dojolvi in the Orange Book, those ANDAs and 505(b)(2) NDAs would be required to include a certification as to each listed patent indicating whether the ANDA applicant does or does not intend to challenge the patent. We cannot predict whether any patents issuing from our pending patent applications will be eligible for listing in the Orange Book, how any generic competitor would address such patents, whether we would sue on any such patents, or the outcome of any such suit. We may not be successful in securing or maintaining proprietary patent protection for products and technologies we develop or license. Moreover, if any patents that are granted and listed in the Orange Book are successfully challenged by way of a Paragraph IV certification and subsequent litigation, the affected product could more immediately face generic competition and its sales would likely decline materially. Should sales decline, we may have to write off a portion or all of the intangible assets associated with the affected product and our results of operations and cash flows could be materially and adversely affected. The patent protection and patent prosecution for some of our products and product candidates is dependent on third parties. While we normally seek and gain the right to fully prosecute the patents relating to our products or product candidates, there may be times when patents relating to our products or product candidates are controlled by our licensors. This is the case with our agreement with KHK,KKC, who is primarily responsible for the prosecution of certain patents and patent applications covering Crysvita which are licensed to us under the collaboration agreement. In addition, we have in-licensed patents and patent applications owned by the University of Pennsylvania, relating to the AAV8 vector used in DTX301 and DTX401. These patents and patent applications are licensed or sublicensed by REGENXBIO and sublicensed to us. We do not have the right to control the prosecution of these patent applications, or the maintenance of any of these patents. In addition, under our agreement with REGENXBIO, we do not have the first right to enforce the licensed patents, and our enforcement rights are subject to certain limitations that may adversely impact our ability to use the licensed patents to exclude others from commercializing competitive products. Moreover, REGENXBIO and the University of Pennsylvania may have interests which differ from ours in determining whether and the manner in which to enforce such patents. If KHK,KKC, the University of Pennsylvania, or any of our future licensing partners fail to appropriately prosecute, maintain, and enforce patent protection for the patents covering any of our products or product candidates, our ability to develop and commercialize those products or product candidates may be adversely affected and we may not be able to prevent competitors from making, using, and selling competing products. In addition, even where we now have the right to control patent prosecution of patents and patent applications we have licensed from third parties, we may still be adversely affected or prejudiced by actions or inactions of our licensors and their counsel that took place prior to us assuming control over patent prosecution. If we fail to comply with our obligations in the agreements under which we license intellectual property and other rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business. We are a party to a number of intellectual property license agreements that are important to our business and expect to enter into additional license agreements in the future. Our existing license agreements impose, and we expect that future license agreements will impose, various diligence, milestone payment, royalty, and other obligations on us. If we fail to comply with our obligations under these agreements, or we are subject to a bankruptcy, we may be required to make certain payments to the licensor, we may lose the exclusivity of our license, or the licensor may have the right to terminate the license, in which event we would not be able to develop or market products covered by the license. Additionally, the milestone and other payments associated with these licenses will make it less profitable for us to develop our drugproduct candidates. See “Business—License and Collaboration Agreements” in the Annual Report for a description of our license agreements with KHK, Baylor Research Institute, Saint Louis University, Bayer, REGENXBIO, and the University of Pennsylvania, which include descriptions of the termination provisions of these agreements.   In certain cases, we control the prosecution of patents resulting from licensed technology. In the event we breach any of our obligations related to such prosecution, we may incur significant liability to our licensing partners. Licensing of intellectual property is of critical importance to our business and involves complex legal, business, and scientific issues. Disputes may arise regarding intellectual property subject to a licensing agreement, including but not limited to: the scope of rights granted under the license agreement and other interpretation-related issues; • the scope of rights granted under the license agreement and other interpretation-related issues; the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; • the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; the sublicensing of patent and other rights; • the sublicensing of patent and other rights; our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our collaborators; and • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our collaborators; and the priority of invention of patented technology. • the priority of invention of patented technology. If disputes over intellectual property and other rights that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates. Although we are not currently involved in any intellectual property litigation, weWe may bebecome involved in lawsuits to protect or enforce our patents or the patents of our licensors, or be subject to claims that challenge the inventorship or ownership of our patents or other intellectual property, which could be expensive, time consuming, and unsuccessful.result in unfavorable outcomes. Competitors may infringe our patents or the patents of our licensors. Although we are not currently involved in any intellectual property litigation, ifIf we or one of our licensing partners were to initiate legal proceedings against a third party to enforce a patent covering our products or one of our product candidates, the defendant could counterclaim that the patent covering our product or product candidate is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability is unpredictable. Interference proceedings or derivation proceedings now available under the Leahy-Smith Act provoked by third parties or brought by us or declared or instituted by the USPTO may be necessary to determine the priority of inventions with respect to our patents or patent applications or those of our licensors. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. In addition, the validity of our patents could be challenged in the USPTO by one of the new post grant proceedings (i.e., inter partes review or post grant review) now available under the Leahy-Smith Act. Our defense of litigation, interference proceedings, or post grant proceedings under the Leahy-Smith Act may fail and, even if successful, may result in substantial costs and distract our management and other employees. We may in the future also be subject to claims that former employees, collaborators, or other third parties have an interest in our patents as an inventor or co-inventor. In addition, the uncertainties associated with litigation couldwe may have a material adverse effect on our ability to raise sufficient capital to continue our clinical studies, continue our research programs, license necessary technologyownership disputes arise from third parties,conflicting obligations of consultants or enter into development partnerships that would help us bringothers who are involved in developing our product candidatescandidates. Litigation may be necessary to market.defend against these and other claims challenging inventorship or ownership. If we fail to successfully defend against such litigation or claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Furthermore, becauseEven if we are successful in defending against such litigation and claims, such proceedings could result in substantial costs and distract our management and other employees. Because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments.developments related to such litigation or claims. If securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock. We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. We employ certain individuals who were previously employed at universities or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although we tryOur efforts to ensure thatvet our employees, consultants, and independent contractors do notand prevent their use of the proprietary information or know-how of others in their work for us may not be successful, and we are not currentlymay in the future be subject to any claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties, we may in the future be subject to such claims. Litigation may be necessary to defend against these claims.parties. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel, which could adversely impact our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and distract management and other employees. We may be subject to claims challenging the inventorship of our patents and other intellectual property. Although we are not currently experiencing any claims challenging the inventorship of our patents or ownership of our intellectual property, we may in the future be subject to claims that former employees, collaborators, or other third parties have an interest in our patents or other intellectual property as an inventor or co-inventor. For example, we may have inventorship disputes arise from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship. If we fail to successfully defend against such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and distract management and other employees. Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products. As is the case with other biotechnology and pharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biotechnology and pharmaceutical industries involves both technological and legal complexity. Therefore, obtaining and enforcing such patents is costly, time consuming, and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. For example, in Association for Molecular Pathology v. Myriad Genetics, Inc., the Supreme Court ruled that a “naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated,” invalidating Myriad Genetics’ patents on the BRCA1 and BRCA2 genes. Certain claims of our licensed U.S. patents covering DTX301 and DTX401 relate to isolated AAV8 vectors, capsid proteins, or nucleic acids. To the extent that such claims are deemed to be directed to natural products, or to lack an inventive concept above and beyond an isolated natural product, a court may decide the claims are invalid under Myriad. Additionally, there have been recent proposals for additional changes to the patent laws of the United States and other countries that, if adopted, could impact our ability to obtain patent protection for our proprietary technology or our ability to enforce our proprietary technology. Depending on future actions by the U.S. Congress, the U.S. courts, the USPTO and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. We may not be able to protect our intellectual property rights throughout the world. Filing, prosecuting, and defending patents on our products or product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Further, licensing partners such as KHKKKC may not prosecute patents in certain jurisdictions in which we may obtain commercial rights, thereby precluding the possibility of later obtaining patent protection in these countries. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and may also export infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets, and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, could put our patent applications at risk of not issuing, and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. Risks Related to Our Business Operations Actual or threatened public health epidemics or outbreaks, including the ongoing COVID-19 pandemic, could materially and adversely impact our business and operating results. A public health epidemic or outbreak, and the public and governmental efforts to mitigate the spread of such disease, could materially and adversely impact the commercialization of our products, development and regulatory approval of our product candidates and our clinical trial operations and significantly disrupt our business operations as well as those of our third party suppliers, CRO and collaboration partners that we rely on. In December 2019, a new strain of novel coronavirus (COVID-19) emerged in Wuhan, Hubei Province, China. In March 2020, the World Health Organization declared COVID-19 a pandemic. Our clinical trial activities, including the initiation and completion of such activities and the timing thereof, have been and are expected to continue to be significantly delayed or disrupted by COVID-19. For instance, enrollment of patients in certain of our clinical trials for our gene therapy product candidates have been disrupted and dosing was delayed in one of our trials. Changes in local regulations in response to COVID-19 have also required us to change the way our clinical trials are conducted and certain data from our clinical trials were delayed as a result. Further, healthcare resources have been and may continue to be diverted away from the conduct of clinical trials, such as the diversion of hospitals serving as our clinical trial sites, in response to the COVID-19 pandemic. We have also had difficulties in recruiting clinical site investigators and clinical staff for our studies, and may continue to experience such difficulties. Any of these events, including if we are required to initiate new or additional sites in response to such events, could require us to incur substantial increased expenses, delay the development and commercialization of our product candidates, delay the timing of anticipated data releases, and impact our operating results. The COVID-19 pandemic has also impacted the timing of review of our submissions. The FDA has delayed certain key meetings or discussions with us related to one of our product candidates, which may adversely impact the progression of our clinical study for such product candidate. The pandemic has also significantly impacted our commercialization efforts for our products. Social distancing measures and travel limitations have prevented our field sales and medical teams from meeting with health care professionals, customers and patients in person and it has become increasingly difficult to maintain consistent contact with our current patients or identify new patients for our commercialized products and product candidates. Further, certain of our patients may experience interruptions in insurance coverage due to job loss or change in employment status due to the economic impact from the pandemic, which would limit patient access to our products. Effects from government budgetary constraints, either in the United States or internationally, due to the economic impact of the pandemic, such as changes to state coverage rules under Medicaid programs in the United States, could also impact continued insurance coverage and reimbursement for our products. Any of these events could impact our ability to commercialize our products and adversely affect our operating results and revenue. The continuing spread of the COVID-19 pandemic has caused delays in delivery of ancillary clinical trial materials to us and may also impact the ability of our other suppliers to deliver drug product or raw materials on a timely basis, if at all, or result in increased costs or expenses. Facility shutdowns or operational restrictions imposed by government-imposed mandates could result in supply disruptions that could impact the availability of drug product for our clinical trials as well as our commercialized products. For instance, certain of our third party manufacturers or suppliers have prioritized and allocated more resources and capacity to supply materials to other companies engaged in the study of potential treatments or vaccinations for COVID-19, which has resulted in delays or shortages in supply of such materials to us. Any of these events could adversely impact our clinical trial activities and our ability to meet commercial demand for our product and product candidates and result in loss of revenue. In response to these events, we are currently seeking alternative sources of supply of drug product or raw materials in an attempt to avoid future potential delays in supply of product, which may result in additional expenses. In an effort to protect the health of our employees, their families and our communities, and in accordance with shelter-in-place direction from state and local government authorities, we have restricted access to our facilities to personnel and third parties who must perform critical activities that must be completed on-site, limited the number of such personnel that can be present at our facilities at any one time, and requested that most of our personnel work remotely, including significant limitations on access to our laboratory space. The effects of the shelter-in-place and our remote working policies may negatively impact productivity and disrupt our business operations. Further, notwithstanding these measures, the COVID-19 pandemic could affect the health and availability of our workforce, including members of our management. If members of our management and other key personnel in critical functions across our organization are unable to perform their duties or have limited availability due to illness from COVID-19, we may not be able to execute on our business strategy and/or our operations may be negatively impacted. Further, the safety protocols we may implement may not prevent employees from contracting COVID-19 at the workplace if and when we ease restrictions to our facilities and our employees return to work on-site. The magnitude of the adverse effect on our business operations will depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in the ordinary course. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets, which could adversely impact our operating results. For instance, delays or defaults in payments by our customer and third-party partners could adversely impact our accounts receivables. The value of our investments currently held in a variety of accounts could also be negatively impacted by the volatility in certain markets, such as the fixed income market, and impact our sources of liquidity. The stock market in general and the stock price of biopharmaceutical companies, in particular, have also experienced extreme price and volume fluctuations. Broad market and industry factors, including worsening economic conditions or a recession resulting from the ongoing COVID-19 pandemic, may adversely impact the value of our common stock and our ability to raise capital. If we do raise additional capital and issue equity securities when the value of our common stock is depressed, the dilutive impact on our stockholders may be greater compared to when the value of our common stock is higher. The COVID-19 pandemic has already impacted our operations and those of our third-party partners. The magnitude and extent to which the outbreak may impact or continue to impact our business operations, clinical trial activities, product candidate approvals, supply chain and commercialization of our products and product candidates will continue to remain highly dependent on future developments, which are very uncertain and cannot be predicted with confidence, such as the duration of the outbreak, the scope and magnitude of any resurgence in the outbreak due to virus mutations or other factors, the timing and availability of treatments and vaccines against the virus, the duration of, or implementation of additional, restrictions to contain the outbreak and the effectiveness of other actions taken in the United States and other countries to contain and address the pandemic. This pandemic may also amplify many of the other risks described throughout the “Risk Factors” section of this Annual Report on Form 10-K. Our future success depends in part on our ability to retain our Founder, President, and Chief Executive Officer and to attract, retain, and motivate other qualified personnel. We are dependent on Emil D. Kakkis, M.D., Ph.D., our Founder, President, and Chief Executive Officer, the loss of whose services may adversely impact the achievement of our objectives. Dr. Kakkis could leave our employment at any time, as he is an “at will” employee. Recruiting and retaining other qualified employees, consultants, and advisors for our business, including scientific and technical personnel, will also be critical to our success. There is currently a shortage of skilled personnel in our industry, which is likely to continue. As a result, competition for skilled personnel is intense and the turnover rate can be high. WeOur investments and efforts in human capital management may not be able to attract and retain personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for individuals with similar skill sets. In addition, failure to succeed in preclinical or clinical studies may make it more challenging to recruit and retain qualified personnel. The inability to recruit and retain qualified personnel, or the loss of the services of Dr. Kakkis, may impede the progress of our research, development, and commercialization objectives. If we fail to obtain or maintain orphan drug exclusivity for our products, our competitors may sell products to treat the same conditions and our revenue will be reduced. Our business strategy focuses on the development of drugs that are eligible for FDA and EU orphan drug designation. In the United States, orphan drug designation entitles a party to financial incentives such as opportunities for grant funding towards clinical study costs, tax advantages, and user-fee waivers. In addition, if a product receives the first FDA approval for the indication for which it has orphan designation, the product is entitled to orphan drug exclusivity, which means the FDA may not approve any other application to market the same drug for the same indication for a period of seven years, except in limited circumstances, such as a showing of clinical superiority over the product with orphan exclusivity or where the manufacturer is unable to assure sufficient product quantity. In the EU, orphan drug designation entitles a party to financial incentives such as reduction of fees or fee waivers and ten years of market exclusivity following drug or biological product approval. This period may be reduced to six years if the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity. Because the extent and scope of patent protection for our products may in some cases be limited, orphan drug designation is especially important for our products for which orphan drug designation may be available. For eligible drugs, we plan to rely on the exclusivity period under the Orphan Drug Act to maintain a competitive position. If we do not obtain orphan drug exclusivity for our drug products and biologic products that do not have broad patent protection, our competitors may then sell the same drug to treat the same condition sooner than if we had obtained orphan drug exclusivity, and our revenue will be reduced. Even though we have orphan drug designation for UX007Dojolvi for the treatment of fatty acid oxidation disorders in the United States and for various subtypes of LC-FAOD in Europe, as well as for Crysvita, Mepsevii, DTX301, DTX401 and DTX401UX701 in the United States and Europe, we may not be the first to obtain marketing approval for any particular orphan indication due to the uncertainties associated with developing pharmaceutical products. Further, even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active moieties can be approved for the same condition or the same drug can be approved for a different indication unless there are other exclusivities such as new chemical entity exclusivity preventing such approval. Even after an orphan drug is approved, the FDA or EMA can subsequently approve the same drug with the same active moiety for the same condition if the FDA or EMA concludes that the later drug is safer, more effective, or makes a major contribution to patient care. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. We will need to expand our organization and we may experience difficulties in managing this growth, which could disrupt our operations. As our development and commercialization plans and strategies develop, we expect to need additional managerial, operational, field forces, marketing, financial, legal, and other resources. Our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, loss of employees, and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenue could be reduced, and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth. Our operating results would be adversely impacted if our intangible assets become impaired. As a result of the accounting for our acquisition of Dimension Therapeutics, Inc. (Dimension) in November 2017, we have recorded on our balance sheet intangible assets for in-process research and development (“IPR&D”)(IPR&D) related to DTX301 and an acquired contract asset.DTX401. Following the FDA approval of Dojolvi in June 2020, we have also recorded contract-based intangible assets related to our license from third parties for certain assets related to the product. We test the intangible assets for impairment annually during the fourth quarter and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If the associated research and development effort is abandoned, the related assets will be written-off and we will record a noncash impairment loss on our statement of operations. We have not recorded any impairments related to our intangible assets through the end of December 31, 2018.2020. We may not be successful in our efforts to identify, license, discover, develop, or commercialize additional product candidates. Although a substantial amount of our effort will focus on the continued clinical testing, potential approval, and commercialization of our existing product candidates, theThe success of our business also depends upon our ability to identify, license, discover, develop, or commercialize additional product candidates in addition to the continued clinical testing, potential approval, and commercialization of our existing product candidates. Research programs to identify and develop new product candidates, such as those under our collaboration with Arcturus, require substantial technical, financial, and human resources. We may focus our efforts and resources on potential programs or product candidates that ultimately prove to be unsuccessful. Our research programs or licensing efforts may fail to yield additional product candidates for clinical development and commercialization for a number of reasons, including but not limited to the following: our research or business development methodology or search criteria and process may be unsuccessful in identifying potential product candidates; • our research or business development methodology or search criteria and process may be unsuccessful in identifying potential product candidates; we may not be able or willing to assemble sufficient technical, financial or human resources to acquire or discover additional product candidates; • we may not be able or willing to assemble sufficient technical, financial or human resources to acquire or discover additional product candidates; we may face competition in obtaining and/or developing additional product candidates; • we may face competition in obtaining and/or developing additional product candidates; our product candidates may not succeed in research, discovery, preclinical or clinical testing; • our product candidates may not succeed in research, discovery, preclinical or clinical testing; our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval; • our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products unmarketable or unlikely to receive marketing approval; competitors may develop alternatives that render our product candidates obsolete or less attractive; • competitors may develop alternatives that render our product candidates obsolete or less attractive; product candidates we develop may be covered by third parties’ patents or other exclusive rights; • product candidates we develop may be covered by third parties’ patents or other exclusive rights; the market for a product candidate may change during our program so that such a product may become unreasonable to continue to develop; • the market for a product candidate may change during our program so that such a product may become unreasonable to continue to develop; a product candidate may not be capable of being produced in commercial quantities at an acceptable cost or at all; and • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost or at all; and a product candidate may not be accepted as safe and effective by regulatory authorities, patients, the medical community, or payors. • a product candidate may not be accepted as safe and effective by regulatory authorities, patients, the medical community, or payors. If any of these events occur, we may be forced to abandon our development efforts for a program or programs, or we may not be able to identify, license, discover, develop, or commercialize additional product candidates, which would have a material adverse effect on our business and could potentially cause us to cease operations. We may expend our limited resources to pursue a particular product, product candidate or indication and fail to capitalize on products, product candidates or indications that may be more profitable or for which there is a greater likelihood of success. Because we have limited financial and managerial resources, we focus our sales, marketing and research programs on certain products, product candidates or for specific indications. As a result, we may forego or delay pursuit of opportunities with other products or product candidates or other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates may not yield any commercially viable products. If we are unable to maintain and further develop effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our stock may decrease. The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures. In particular, we are required to perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting, as required by Section 404(a) of the Sarbanes-Oxley Act. We are also subject to the compliance requirements of Section 404(b) of the Sarbanes-Oxley Act, which results in us incurring substantial expenses and expending significant management efforts. We currently do not haveaccurately evaluate the commercial potential or target market for a separate internal audit group. Weparticular product or product candidate, we may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. If we are not able to comply with the requirements of Section 404(b) or if we or our independent registered public accounting firm identify deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC,relinquish valuable rights through collaboration, licensing, or other regulatory authorities,royalty arrangements in cases in which it would require additional financialhave been advantageous for us to retain sole development and management resources.commercialization rights or we may allocate internal resources to a product candidate in a therapeutic area in which it would have been more advantageous to enter into a partnering arrangement. Changes to healthcare and FDA laws, regulations, and policies may have a material adverse effect on our business and results of operations. United States InAs described above under “Item 1. Business - Government Regulation” and in the United States,Risk Factor above entitled “ – The insurance coverage and reimbursement status of newly approved products is uncertain” there have been and continue to be a number of legislative initiatives to contain healthcare costs and to modify the regulation of drug and biologic products. For example, the Affordable Care Act, as amended, substantially changed the way health care is financed by both governmental and private insurers, and significantly impacts the U.S. pharmaceutical industry. The Affordable Care Act, among other things, subjects biologic products to potential competition by lower-cost biosimilars, addresses a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected, increases the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extends the rebate program to individuals enrolled in Medicaid managed care organizations, and establishes annual fees and taxes on manufacturers of certain branded prescription drugs. A federal district court ruled the entire Affordable Care Act to be unconstitutional in December 2018, but issued a stay, meaning the law will remain in effect while the ruling is appealed. Implementation of the Affordable Care Act remains ongoing, but there is uncertainty as to how the law’s various provisions will ultimately affect the industry and whether the law will remain in place. Other legislative changes have been adopted in the United States, including the Cures Act and the Budget Control Act of 2011, or the Budget Act, signed into law on August 2, 2011. The Cures Act introduced a wide range of reforms and the Budget Act, among other things, required reductions in federal spending, which eventually triggered Medicare sequestration—the requirement to reduce Medicare payments to providers up to 2% per fiscal year. In 2013, the 2% Medicare payment reductions were applied to fee-for-service claims with dates of service or dates of discharge on or after April 1, 2013. Sequestration was initially set to expire in fiscal year 2021 but has been extended to 2025. We expect that additional state and federal healthcare reform measures and regulations will be adopted in the future, including proposals to reduce the exclusivity protections provided to already approved biological products and to provide biosimilar and interchangeable biologic products an easier path to approval. Any of these measures and regulations could limit the amounts that federal and state governments will pay for healthcare products and services, result in reduced demand for our product candidates or additional pricing pressures and affect our product development, testing, marketing approvals and post-market activities. EU In the EU, the European Commission has adopted detailed rules for the safety features appearing on the packaging of medicinal products for human use. The regulations set forth the rules for the features appearing on the packaging of these medicinal products, including, inter alia, the characteristics and technical specifications of the unique identifier that enables the authenticity of medicinal products to be verified and individual packs to be identified, the modalities for the verification of the safety features, and the list of medicinal products and product categories subject and not subject to prescription which shall not bear and bear (respectively) safety features. The European Commission has also launched a series of public consultations that are aimed at the adoption of notices and guidelines which will serve the interpretation of currently applicable regulations and directives. For example, between August 2015 and December 2016, the European Commission launched public consultations which concerned good manufacturing practices, clinical trials for human medicinal products, and orphan medicinal products. The purpose of the consultation on orphan medicinal products (which will be replaced with a Notice) is to streamline the regulatory framework and to adapt the applicable regulations to technical progress. The consultation focuses on a variety of elements of Regulation (EC) No 141/2000, which include the encouragement of development of orphan medicinal products for communicable diseases and the simplification of the procedure for the reassessment of orphan criteria when two authorization application procedures are pending in parallel for two orphan medicinal products. We are subject, directly and indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, and health information privacy and security laws. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties. Our operations are directly, and indirectly through our customers, subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, the federal False Claims Act, and physician sunshine laws and regulations. These laws impact, among other things, our field marketing and education programs. In addition, we are subject to patient privacy regulation by both the federal government and the states in which we conduct our business. The laws that may affect our ability to operate are described under “Business—Government Regulation” in the Annual Report. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from participation in government health care programs, such as Medicare and Medicaid, imprisonment, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. International expansion of our business exposes us to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United States. Our business strategy includes international expansion. We currently conduct physician and patient association outreach activities, as well as clinical studies, outside of the United States and plan to maintain field forces representatives internationally in the future. Doing business internationally involves a number of risks, including but not limited to: multiple, conflicting, and changing laws and regulations such as privacy and data regulations, transparency regulations, tax laws, export and import restrictions, employment laws, regulatory requirements, and other governmental approvals, permits, and licenses; introduction of new health authority requirements and/or changes in health authority expectations; failure by us to obtain and maintain regulatory approvals for the use of our products in various countries; additional potentially relevant third-party patent rights; complexities and difficulties in obtaining protection for, and enforcing, our intellectual property; difficulties in staffing and managing foreign operations; complexities associated with managing multiple payor reimbursement regimes, government payors, or patient self-pay systems; limits in our ability to penetrate international markets; financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products, and exposure to foreign currency exchange rate fluctuations; natural disasters and political and economic instability, including wars, terrorism, political unrest, results of certain elections and votes, outbreak of disease, boycotts, adoption or expansion of government trade restrictions, and other business restrictions; certain expenses including, among others, expenses for travel, translation, and insurance; regulatory and compliance risks that relate to maintaining accurate information and control over commercial operations and activities that may fall within the purview of the U.S. Foreign Corrupt Practices Act, or FCPA, its books and records provisions, or its anti-bribery provisions, including those under the U.K. Bribery Act and similar foreign laws and regulations; and regulatory and compliance risks relating to doing business with any entity that is subject to sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury. Any of these factors could significantly harm our future international expansion and operations and, consequently, our results of operations. We may incur additional tax liabilities related to our operations. We have a multinational tax structure and are subject to income tax in the United States and various foreign jurisdictions. Our effective tax rate is influenced by many factors including changes in our operating structure, changes in the mix of our earnings among countries, our allocation of profits and losses among our subsidiaries, our intercompany transfer pricing agreements and rules relating to transfer pricing, the availability of U.S. research and development tax credits, and future changes in tax laws and regulations in the U.S. and foreign countries. Significant judgment is required in determining our tax liabilities including management’s judgment for uncertain tax positions. The Internal Revenue Service, other domestic taxing authorities, or foreign taxing authorities may disagree with our interpretation of tax laws as applied to our operations. Our reported effective tax rate and after-tax cash flows may be materially and adversely affected by tax assessments in excess of amounts accrued for our financial statements. This could materially increase our future effective tax rate thereby reducing net income and adversely impacting our results of operations for future periods. Failure to comply with laws and regulations could harm our business and our reputation. Our business is subject to regulation by various federal, state, local and foreign governmental agencies, including agencies responsible for monitoring and enforcing employment and labor laws, workplace safety, and tax laws and regulations. In certain jurisdictions, these regulatory requirements may be more stringent than those in the United States, and in other circumstances these requirements may be more stringent in the United States. Noncompliance In particular, our operations are directly, and indirectly through our customers, subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, the federal False Claims Act, and physician sunshine laws and regulations and patient privacy regulations, including the EU General Data Protection Regulation and the California Consumer Privacy Act (CCPA), as described above under “Item 1. Business – Government Regulation”. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws. For instance, as we and our employees increasingly use social media tools as a means of communication with the public, there is a risk that the use of social media by us or our employees to communicate about our products or business may cause to be found in violation of applicable laws, despite our attempts to monitor such social media communications through company policies and guidelines. In addition, our employees may knowingly or inadvertently make use of social media in ways that may not comply with our company policies or other legal or contractual requirements, which may give rise to liability, lead to the loss of trade secrets or other intellectual property, or result in public exposure of personal information of our employees, clinical trial patients, customers, and others. If our operations are found to be in violation of any of the laws described above or any other governmental regulations or requirements couldthat apply to us, we may be subject us to investigations, sanctions, mandatory recalls, enforcement actions, disgorgement of profits, fines, damages,penalties, including civil and criminal penalties, damages, fines, exclusion from participation in government health care programs, such as Medicare and Medicaid, imprisonment, disgorgement of profits, and the curtailment or injunctions.restructuring of our operations. If any governmental sanctions, fines or penalties are imposed, or if we do not prevail in any possible civil or criminal litigation, our business, operating results, financial condition and our reputation could be harmed. In addition, responding to any action will likely result in a significant diversion of management’s attention and resources and an increase in professional fees. Enforcement actions and sanctions could further harm our business, operating results, financial condition, and our reputation. In particular, ourOur research and development activities, including our process and analytical development activities in our quality control laboratory, and our and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use, and disposal of hazardous materials, including the components of our product candidates, such as viruses, and other hazardous compounds, which subjects us to laws and regulations governing such activities. In some cases, these hazardous materials and various wastes resulting from their use are stored at our or our manufacturers’ facilities pending their use and disposal. We cannot eliminate the risk of contamination, which could cause an interruption of our commercialization efforts, research and development efforts, and business operations or environmental damage that could result in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling, and disposal of these materials and specified waste products. We cannot guarantee that the safety procedures utilized by us and our third-party manufacturers for handling and disposing of these materials comply with the standards prescribed by these laws and regulations, or eliminate the risk of accidental contamination or injury from these materials. In such an event, we may be held liable for any resulting damages—and such liability could exceed our resources—and state or federal or other applicable authorities may curtail our use of certain materials and/or interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently, and have tended to become more stringent. We cannot predict the impact of such changes and cannot be certain of our future compliance. We do not currently carry biological or hazardous waste insurance coverage. International expansion of our business exposes us to business, regulatory, political, operational, financial, and economic risks associated with doing business outside of the United States. Our business strategy includes international expansion. We currently conduct clinical studies and regulatory activities and we also commercialize products outside of the United States. Doing business internationally involves a number of risks, including but not limited to: • multiple, conflicting, and changing laws and regulations such as privacy and data regulations, transparency regulations, tax laws, export and import restrictions, employment laws, regulatory requirements, and other governmental approvals, permits, and licenses; • introduction of new health authority requirements and/or changes in health authority expectations; • failure by us to obtain and maintain regulatory approvals for the use of our products in various countries; • additional potentially relevant third-party patent rights; • complexities and difficulties in obtaining protection for, and enforcing, our intellectual property; • difficulties in staffing and managing foreign operations; • complexities associated with managing multiple payor reimbursement regimes, government payors, or patient self-pay systems; • limits on our ability to penetrate international markets; • financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products, and exposure to foreign currency exchange rate fluctuations; • natural disasters and political and economic instability, including wars, terrorism, political unrest, results of certain elections and votes, actual or threatened public health emergencies and outbreak of disease (including for example, the COVID-19 pandemic), boycotts, adoption or expansion of government trade restrictions, and other business restrictions; • certain expenses including, among others, expenses for travel, translation, and insurance; • regulatory and compliance risks that relate to maintaining accurate information and control over commercial operations and activities that may fall within the purview of the U.S. Foreign Corrupt Practices Act, or FCPA, its books and records provisions, or its anti-bribery provisions, including those under the U.K. Bribery Act and similar foreign laws and regulations; and • regulatory and compliance risks relating to doing business with any entity that is subject to sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury. Any of these factors could significantly harm our future international expansion and operations and, consequently, our results of operations. Risks generally associated with a company-wide implementation of an enterprise resource planning (ERP) system may adversely affect our business and results of operations or the effectiveness of our internal controls over financial reporting. We are in the process of implementing a company-wide ERP system to upgrade certain existing business, operational, and financial processes. Our ERP implementation is a complex and time-consuming project that we expect will require multiple years to complete. Our results of operations could be adversely affected if we experience time delays or cost overruns during the ERP implementation process, or if the ERP system or associated process changes do not give rise to the benefits that we expect. This project has required and may continue to require investment of capital and human resources, the re-engineering of processes of our business, and the attention of many employees who would otherwise be focused on other aspects of our business. Any deficiencies in the design and implementation of the new ERP system could result in potentially much higher costs than we had incurred and could adversely affect our ability to develop and launch solutions, provide services, fulfill contractual obligations, file reports with the SEC in a timely manner, operate our business or otherwise affect our controls environment. Any of these consequences could have an adverse effect on our results of operations and financial condition. Our business and operations may be materially adversely affected in the event of computer system failures or security breaches.   Despite the implementation ofOur security measures, our internal computer systems, and those of our CROs and other third parties on which we rely, are vulnerable to damage from computer viruses, unauthorized access, cyber-attacks, natural disasters, fire, terrorism, war, and telecommunication and electrical failures. Risks of unauthorized access and cyber-attacks have increased as most of our personnel, and the personnel of many third-parties with which we do business, have adopted remote working arrangements as a result of the COVID-19 pandemic. Improper or inadvertent employee behavior, including data privacy breaches by employees, contractors and others with permitted access to our systems, may also pose a risk that sensitive data may be exposed to unauthorized persons or to the public. If a system failure or security breach occurs and interrupts our operations or the operations at one of our third-party vendors, it could result inintellectual property and other proprietary or confidential information being lost or stolen or a material disruption of our drug development programs. For example, the loss of clinical trial data from ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of or damage to our data or applications, loss of trade secrets or inappropriate disclosure of confidential or proprietary information, including protected health information or personal data of employees or former employees, access to our clinical data, or disruption of the manufacturing process, we could incur liability and the further development of our drug candidates could be delayed. We may also be vulnerable to cyber-attacks by hackers or other malfeasance. This type of breach of our cybersecurity may compromise our confidential information and/or our financial information and adversely affect our business or reputation or result in legal or regulatory proceedings. We or the third parties upon whom we depend may be adversely affected by earthquakes or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster. Our corporate headquarters and one of our laboratories are located in the San Francisco Bay Area, and our collaboration partner for Crysvita, KHK,KKC, is located in Japan, which have both in the past experienced severe earthquakes and other natural disasters. We do not carry earthquake insurance. Earthquakes or other natural disasters could severely disrupt our operations or those of our collaborators, and have a material adverse effect on our business, results of operations, financial condition, and prospects. If a natural disaster, power outage, or other event occurred that prevented us from using all or a significant portion of our headquarters, that damaged critical infrastructure (such as the manufacturing facilities of our third-party contract manufacturers) or that otherwise disrupted operations, it may be difficult or, in certain cases, impossible for us to continue our business for a substantial period of time. The disaster recovery and business continuity plans we have in place currently are limited and are may be inadequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans, which, particularly when taken together with our lack of earthquake insurance, could have a material adverse effect on our business. We may acquire companies or products or engage in strategic transactions, which could divert our management’s attention and cause us to incur various costs and expenses.expenses, or result in fluctuations with respect to the value of such investment, which could impact our operating results. We may acquire or invest in businesses or products that we believe could complement or expand our business or otherwise offer growth opportunities. For example, we acquired Dimension in November 2017.2017 and during the third quarter 2019, we entered into an agreement with GeneTx to collaborate on the development of a product for the treatment of Angelman Syndrome which included an exclusive option to acquire GeneTx. The pursuit of potential acquisitions or investments may divert the attention of management and may cause us to incur various costs and expenses in identifying, investigating, and pursuing them, whether or not they are consummated. We may not be able to identify desirable acquisitions or investments or be successful in completing or realizing anticipated benefits from such transactions. In addition, we may receive inquiries relating to potential strategic transactions, including collaborations, licenses, and acquisitions. Such potential transactions may divert the attention of management and may cause us to incur various costs and expenses in investigating and evaluating such transactions, whether or not they are consummated. LitigationThe value of our investments in other companies or businesses may substantially increasealso fluctuate significantly and impact our costsoperating results quarter to quarter or year to year. For instance, in June 2019, we purchased 2.4 million shares of common stock of Arcturus and harmin May 2020, we exercised our business. option to purchase an additional 600,000 shares of Arcturus’ common stock pursuant to the terms of our equity purchase agreement with Arcturus; we subsequently sold an aggregate of 800,000 shares in December 2020. We also purchased 7,825,797 shares of common stock of Solid in October 2020. We have been,elected to apply the fair value option to account for our equity investments in Arcturus and maySolid. As a result, increases or decreases in the future become, party to lawsuits including, without limitation, actionsstock price of Arcturus and proceedingsSolid common stock will result in accompanying changes in the ordinary coursefair value of business relating to our directors, officers, stockholders, intellectual property,investments, and employment matters, which will cause us to incur legal fees and other costs related thereto, including potential expensessubstantial volatility in, our operating results for the reimbursementreporting period. For instance, the changes in fair value of legal feesthe Arcturus and Solid investments recognized in the Consolidated Statements of officersOperations for the years ended December 31, 2020 and directors under indemnification obligations.2019 was a $170.4 million and $13.4 million increase, respectively, primarily due to the higher Arcturus and Solid stock price as of December 31, 2020 and 2019 compared to the prior year for Arcturus and the acquisition date for Solid. The expensegains in fair value of defending against such litigation may be significantthe equity investments for the years ended December 31, 2020 and there can be no assurance that we will be successful in any defense. Further,2019 decreased the amount of time that may be requiredour net loss during those periods. If the Arcturus or Solid stock price had been lower at December 31, 2020 and 2019 compared to resolve such lawsuits is unpredictable,the prior year or the acquisition date, as applicable, we would have reported an even greater net loss for the years ended December 31, 2020 and these actions may divert management’s attention from2019. As the day-to-day operationsfair value of our business,investments in Arcturus and Solid is dependent on the stock price of Arcturus and Solid, which could adversely affecthas recently seen wide fluctuations, the value of our business, results of operations,investments and cash flows. Litigation is subject to inherent uncertainties, and an adverse result in such matters that may arise from time to time could have a material adverse effectthe impact on our business,operating results may similarly fluctuate significantly from quarter to quarter and year to year such that period-to-period comparisons may not be a good indication of operations,the future value of the investments and financial condition.our future operating results. Risks Related to Ownership of Our Common Stock The market price of our common stock may be highly volatile. The market price of our common stock has been, and is likely to continue to be, volatile, including for reasons unrelated to changes in our business. Our stock price could be subject to wide fluctuations in response to a variety of factors, including but not limited to the following: adverse results or delays in preclinical or clinical studies; any inability to obtain additional funding; • adverse results or delays in preclinical or clinical studies;   • any inability to obtain additional funding; • any delay in filing an IND, NDA, BLA, MAA, or other regulatory submission for any of our product candidates and any adverse development or perceived adverse development with respect to the applicable regulatory agency’s review of that IND, NDA, BLA, MAA, or other regulatory submission; the perception of limited market sizes or pricing for our products and product candidates; • the perception of limited market sizes or pricing for our products and product candidates; decisions by our collaboration partners with respect to the indications for our products and product candidates in countries where they have the right to commercialize the products and product candidates; • decisions by our collaboration partners with respect to the indications for our products and product candidates in countries where they have the right to commercialize the products and product candidates; decisions by our collaboration partners regarding market access and pricing in countries where they have the right to commercialize our products and product candidates; • decisions by our collaboration partners regarding market access and pricing in countries where they have the right to commercialize our products and product candidates; failure to successfully develop and commercialize our products and product candidates; • failure to successfully develop and commercialize our products and product candidates; the level of any revenue we receive from named patient sales; • the level of revenue we receive from our commercialized products or from named patient sales; post-marketing safety issues; • post-marketing safety issues; failure to maintain our existing strategic collaborations or enter into new collaborations; • failure to maintain our existing strategic collaborations or enter into new collaborations; failure by us or our licensors and strategic collaboration partners to prosecute, maintain, or enforce our intellectual property rights; • failure by us or our licensors and strategic collaboration partners to prosecute, maintain, or enforce our intellectual property rights; changes in laws or regulations applicable to our products; • changes in laws or regulations applicable to our products; any inability to obtain adequate product supply for our products and product candidates or the inability to do so at acceptable prices; • any inability to obtain adequate product supply for our products and product candidates or the inability to do so at acceptable prices; adverse regulatory decisions; • adverse regulatory decisions; introduction of new products, services, or technologies by our competitors; • introduction of new products, services, or technologies by our competitors; failure to meet or exceed financial projections we may provide to the public; • changes in or failure to meet or exceed financial projections or other guidance we may provide to the public; failure to meet or exceed the financial projections of the investment community; • changes in or failure to meet or exceed the financial projections or other expectations of the investment community; the perception of the pharmaceutical industry or our company by the public, legislatures, regulators, and the investment community; • the perception of the pharmaceutical industry or our company by the public, legislatures, regulators, and the investment community; the perception of the pharmaceutical industry’s approach to drug pricing; • the perception of the pharmaceutical industry’s approach to drug pricing; announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us, our strategic collaboration partners, or our competitors; • announcements of significant acquisitions, strategic partnerships, joint ventures, or capital commitments by us, our strategic collaboration partners, or our competitors; the integration and performance of any businesses we have acquired or may acquire; • the integration and performance of any businesses we have acquired or may acquire; disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; • disputes or other developments relating to proprietary rights, including patents, litigation matters, and our ability to obtain patent protection for our technologies; additions or departures of key scientific or management personnel; • additions or departures of key scientific or management personnel; significant lawsuits, including patent or stockholder litigation; • significant lawsuits, including patent or stockholder litigation; securities or industry analysts’ reports regarding our stock, or their failure to issue such reports; • securities or industry analysts’ reports regarding our stock, or their failure to issue such reports; changes in the market valuations of similar companies; • changes in the market valuations of similar companies; general market or macroeconomic conditions; • general market or macroeconomic conditions, including the impact from the COVID-19 pandemic; sales of our common stock by us or our stockholders in the future; and • sales of our common stock by us or our stockholders in the future; and trading volume of our common stock. • trading volume of our common stock. In addition, biotechnology and biopharmaceutical companies in particular have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance. Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. We will need additional capital in the future to continue our planned operations. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities, or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities, or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. These sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders. Pursuant to our 2014 Incentive Plan, or the 2014 Plan, our management is authorized to grant stock options and other equity-based awards to our employees, directors, and consultants. At December 31, 2018, 2,055,5892020, 2,980,163 shares were available for future grants under the 2014 Plan. TheThrough January 1, 2024, the number of shares available for future grant under the 2014 Plan will automatically increase on January 1 of each year by the lesser of 2,500,000 shares or 4% of all shares of our capital stock outstanding as of December 31 of the prior calendar year, subject to the ability of our compensation committee to take action to reduce the size of the increase in any given year. Pursuant to our 2014 Employee Stock Purchase Plan, or 2014 ESPP, eligible employees can acquire shares of our common stock at a discount to the prevailing market price. At December 31, 2018, 2,211,0752020, 3,248,367 shares were available for issuance under the 2014 ESPP. TheThrough January 1, 2024, the number of shares available for issuance under the 2014 ESPP will automatically increase on January 1 of each year by the lesser of 1,200,000 shares or 1% of all shares of our capital stock outstanding as of December 31 of the prior calendar year, subject to the ability of our compensation committee to take action to reduce the size of the increase in any given year. CurrentlyIn February 2021, our board of directors adopted an employment inducement plan with a maximum of 500,000 shares available for grant under the plan. We plan to register all the shares under our inducement plan. In addition, we currently plan to register the increased number of shares available under the 2014 Plan and the 2014 ESPP each year. If our board of directors elects to increase the number of shares available for future grant under the 2014 Plan, or the 2014 ESPP or the inducement plan, our stockholders may experience additional dilution, which could cause our stock price to fall. Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. We have incurred substantial losses during our history. To the extent that we continue to generate taxable losses, unused taxable losses will, subject to certain limitations, carry forward to offset future taxable income, if any, until such unused losses expire. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the IRC, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards, or NOL carryforwards, and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. An analysis to determine limitations upon our NOL carryforwards and other pre-change tax attributes for ownership changes that have occurred previously has been performed, resulting in a permanent decrease of federal and state NOL carryforwards in the amount of $7.2 million and a permanent decrease in federal research tax credit carryforwards in the amount of $0.2 million. As a result of these decreases and others that may occur as a result of future ownership changes, our ability to use our pre-change NOL carryforwards and other tax attribute carryforwards to offset U.S. federal taxable income and tax liabilities is limited and may become subject to even greater limitations, which could potentially accelerate or permanently increase future federal tax liabilities for us. In addition, there may be periods during which the use of state income tax NOL carryforwards and other state tax attribute carryforwards (such as state research tax credits) are suspended or otherwise limited, which could potentially accelerate or permanently increase future state tax liabilities for us. We do not intend to pay dividends on our common stock so any returns will be limited to the value of our stock. We have never declared or paid any cash dividends on our common stock. We currently intend to retain all available funds and any future earnings, if any, for the development, operation, and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the appreciation of their stock. Provisions in our amended and restated certificate of incorporation and by-laws, as well as provisions of Delaware law, could make it more difficult for a third-party to acquire us or increase the cost of acquiring us, even if doing so would benefit our stockholders, or remove our current management. Our amended and restated certificate of incorporation, amended and restated by-laws, and Delaware law contain provisions that may have the effect of delaying or preventing a change in control of us or changes in our management. Our amended and restated certificate of incorporation and by-laws include provisions that: authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock; create a classified board of directors whose members serve staggered three-year terms; specify that special meetings of our stockholders can be called only by our board of directors or the chairperson of our board of directors; prohibit stockholder action by written consent; • authorize “blank check” preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend, and other rights superior to our common stock;   • create a classified board of directors whose members serve staggered three-year terms; • specify that special meetings of our stockholders can be called only by our board of directors or the chairperson of our board of directors; • prohibit stockholder action by written consent; • establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors; provide that our directors may be removed only for cause; • provide that our directors may be removed only for cause; provide that vacancies on our board of directors may be filled only by a resolution adopted by the board of directors; • provide that vacancies on our board of directors may be filled only by a resolution adopted by the board of directors; expressly authorize our board of directors to modify, alter or repeal our amended and restated by-laws; and • expressly authorize our board of directors to modify, alter or repeal our amended and restated by-laws; and require holders of 75% of our outstanding common stock to amend specified provisions of our amended and restated certificate of incorporation and amended and restated by-laws. • require holders of 75% of our outstanding common stock to amend specified provisions of our amended and restated certificate of incorporation and amended and restated by-laws. These provisions, alone or together, could delay, deter, or prevent hostile takeovers and changes in control or changes in our management. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us. Further, no stockholder is permitted to cumulate votes at any election of directors because this right is not included in our amended and restated certificate of incorporation. Any provision of our amended and restated certificate of incorporation or amended and restated by-laws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock. Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees. Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or other employees to us or to our stockholders, (3) any action asserting a claim against us arising under the Delaware General Corporation Law or under our amended and restated certificate of incorporation or bylaws, or (4) any action against us asserting a claim governed by the internal affairs doctrine. The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition. General Risk Factors If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our stock may decrease. The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures. In particular, we are required to perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting, as required by Section 404(a) of the Sarbanes-Oxley Act. Section 404(b) of the Sarbanes-Oxley Act also requires our independent auditors to attest to, and report on, this management assessment. Ensuring that we have adequate internal controls in place so that we can produce accurate financial statements on a timely basis is a costly and time-consuming effort that will need to be evaluated frequently. If we are not able to comply with the requirements of Section 404 or if we or our independent registered public accounting firm are unable to attest to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities, which would require additional financial and management resources. We may incur additional tax liabilities related to our operations. We have a multinational tax structure and are subject to income tax in the United States and various foreign jurisdictions. Our effective tax rate is influenced by many factors including changes in our operating structure, changes in the mix of our earnings among countries, our allocation of profits and losses among our subsidiaries, our intercompany transfer pricing agreements and rules relating to transfer pricing, the availability of U.S. research and development tax credits, and future changes in tax laws and regulations in the U.S. and foreign countries. Significant judgment is required in determining our tax liabilities including management’s judgment for uncertain tax positions. The Internal Revenue Service, other domestic taxing authorities, or foreign taxing authorities may disagree with our interpretation of tax laws as applied to our operations. Our reported effective tax rate and after-tax cash flows may be materially and adversely affected by tax assessments in excess of amounts accrued for our financial statements. This could materially increase our future effective tax rate thereby reducing net income and adversely impacting our results of operations for future periods. Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. We have incurred substantial losses during our history. To the extent that we continue to generate taxable losses, unused taxable losses will, subject to certain limitations, carry forward to offset future taxable income, if any, until such unused losses expire. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the IRC, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards, or NOL carryforwards, and other pre-change tax attributes (such as research tax credits) to offset its post-change income may be limited. An analysis to determine limitations upon our NOL carryforwards and other pre-change tax attributes for ownership changes that have occurred previously has been performed, resulting in a permanent decrease of federal and state NOL carryforwards in the amount of $7.2 million and a permanent decrease in federal research tax credit carryforwards in the amount of $0.2 million. As a result of these decreases and others that may occur as a result of future ownership changes, our ability to use our pre-change NOL carryforwards and other tax attribute carryforwards to offset U.S. federal taxable income and tax liabilities is limited and may become subject to even greater limitations, which could potentially accelerate or permanently increase future federal tax liabilities for us. In addition, there may be periods during which the use of state income tax NOL carryforwards and other state tax attribute carryforwards (such as state research tax credits) are suspended or otherwise limited, which could potentially accelerate or permanently increase future state tax liabilities for us. Litigation may substantially increase our costs and harm our business. We have been, and may in the future become, party to lawsuits including, without limitation, actions and proceedings in the ordinary course of business relating to our directors, officers, stockholders, intellectual property, and employment matters, which will cause us to incur legal fees and other costs related thereto, including potential expenses for the reimbursement of legal fees of officers and directors under indemnification obligations. The expense of defending against such litigation may be significant and there can be no assurance that we will be successful in any defense. Further, the amount of time that may be required to resolve such lawsuits is unpredictable, and these actions may divert management’s attention from the day-to-day operations of our business, which could adversely affect our business, results of operations, and cash flows. Litigation is subject to inherent uncertainties, and an adverse result in such matters that may arise from time to time could have a material adverse effect on our business, results of operations, and financial condition. Item 1B. Unresolved Staff Comments None. Item 2. Properties Our primary operations are conducted at the leased facilities described below. We lease approximately 149,500 square feetsummarized in the below table. During the fourth quarter of office space2020, we completed our purchase of land located in Novato, California used primarily for corporate, clinical, regulatory, quality,Bedford, Massachusetts and began construction of our gene therapy manufacturing administration, and commercial functions. The leases for approximately 74,000 square feet will expire in April 2019, the lease for approximately 42,500 square feet will expire in December 2020, the lease for approximately 13,000 square feet will expire in April 2022, and the lease for approximately 20,000 square feet will expire in November 2028. We also lease approximately 63,000 square feet of office space in Brisbane, California. The rental term for this space will expire in June 2026. We also lease approximately 15,000 square feet of office and laboratory space in Cambridge, Massachusetts. This lease will expire in January 2020. We also lease approximately 17,600 square feet of laboratory and office space in Woburn, Massachusetts. This lease will expire in March 2021. facility. We believe our facilities are adequate and suitable for our current needs, and that we will be able to obtain new or additional leased space in the future when necessary. Property Location Use Lease Expiration Date Novato, California Headquarters and office December 2024 Novato, California Laboratory and office November 2028 Brisbane, California Office June 2026 South San Francisco, California Laboratory and office March 2025 Cambridge, Massachusetts Laboratory and office December 2023 Woburn, Massachusetts Laboratory and office April 2025 Woburn, Massachusetts Laboratory and office October 2026 Bedford, Massachusetts Manufacturing facility Owned property Item 3.  Legal Proceedings We are not currently a party to any material legal proceedings. We may, however, in the ordinary course of business face various claims brought by third parties or government regulators and we may, from time to time, make claims or take legal actions to assert our rights, including claims relating to our directors, officers, stockholders, intellectual property rights, employment matters and the safety or efficacy of our products. Any of these claims could subject us to costly litigation and, while we generally believe that we have adequate insurance to cover many different types of liabilities, our insurance carriers may deny coverage, may be inadequately capitalized to pay on valid claims, or our policy limits may be inadequate to fully satisfy any damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on our consolidated operations, cash flows and financial position. Additionally, any such claims, whether or not successful, could damage our reputation and business.   Item 4.  Mine Safety Disclosures Not applicable.       PART PART II   Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock has been traded on The Nasdaq Global Select Market since January 31, 2014 under the symbol “RARE”. As of February 14, 2019,8, 2021, we had 45 holders of record of our common stock. Certain shares are held in “street” name and, accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.     STOCK PRICE PERFORMANCE GRAPH The following stock performance graph compares our total stock return with the total return for (i) the Nasdaq Composite Index and the (ii) the Nasdaq Biotechnology Index for the period from JanuaryDecember 31, 2014 (the date our common stock commenced trading on the Nasdaq Global Market)2015 through December 31, 2018.2020. The figures represented below assume an investment of $100 in our common stock at the closing price of $42.25$112.18 on JanuaryDecember 31, 20142015 and in the Nasdaq Composite Index and the Nasdaq Biotechnology Index on JanuaryDecember 31, 20142015 and the reinvestment of dividends into shares of common stock. The comparisons in the table are required by the SEC and are not intended to forecast or be indicative of possible future performance of our common stock. This graph shall not be deemed “soliciting material” or be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, or otherwise subject to the liabilities under that section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.     $100 investment in stock or index   Ticker   January 31, 2014     December 31, 2014     December 31, 2015     December 31, 2016     December 31, 2017     December 31, 2018       Ticker   December 31, 2015     December 31, 2016     December 31, 2017     December 31, 2018     December 31, 2019     December 31, 2020     Ultragenyx Pharmaceutical Inc.   RARE   $ 100.00     $ 103.86     $ 265.51     $ 166.41     $ 109.78     $ 102.91       RARE   $ 100.00     $ 62.68     $ 41.34     $ 38.76     $ 38.07     $ 123.40     NASDAQ Composite Index   ^IXIC   $ 100.00     $ 115.40     $ 122.02     $ 131.17     $ 168.22     $ 161.68       ^IXIC   $ 100.00     $ 107.50     $ 137.86     $ 132.51     $ 179.19     $ 257.38     NASDAQ Biotechnology Index   ^NBI   $ 100.00     $ 123.70     $ 137.83     $ 107.94     $ 130.67     $ 118.48       ^NBI   $ 100.00     $ 78.32     $ 94.81     $ 85.97     $ 106.95     $ 134.42     Dividend Policy We have never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any future earnings, if any, to fund the development, operation, and expansion of our business, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future. Any future determination to pay dividends will be made at the discretion of our board of directors or any authorized committee thereof. Unregistered Sales of Equity Securities None Issuer’s Purchases of Equity Securities None Item 6. Selected Financial Data The information set forth below for the five years ended December 31, 20182020 is not necessarily indicative of the results that may be expected in the future and interim results are not necessarily indicative of results to be expected for the full year. You should read the selected historical financial data below in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes included elsewhere in this Annual Report.   Year Ended December 31,   Year Ended December 31,   2018     2017     2016     2015     2014   2020     2019     2018     2017     2016   (in thousands, except share and per share amounts)   (in thousands, except share and per share amounts)   Consolidated Statements of Operations Data:                                       Consolidated Statement of Operations Data:                                       Revenues:                                                                             Collaboration and license $ 41,693     $ 2,136     $ —     $ —     $ —   $ 219,315     $ 83,493     $ 41,693     $ 2,136     $ —   Product sales   9,802       476       133       —       —     38,720       20,221       9,802       476       133   Non-cash collaboration royalty revenue   12,995       —       —       —       —   Total revenues   51,495       2,612       133       —       —     271,030       103,714       51,495       2,612       133   Operating expenses:                                                                             Cost of sales   1,146       1       —       —       —     6,129       9,008       1,146       1       —   Research and development   293,998       231,644       183,204       114,737       45,967     412,084       357,355       293,998       231,644       183,204   Selling, general and administrative   127,724       99,909       64,936       33,001       10,811     182,933       161,524       127,724       99,909       64,936   Total operating expenses   422,868       331,554       248,140       147,738       56,778     601,146       527,887       422,868       331,554       248,140   Loss from operations   (371,373 )     (328,942 )     (248,007 )     (147,738 )     (56,778 )   (330,116 )     (424,173 )     (371,373 )     (328,942 )     (248,007 ) Interest income   9,542       4,074       3,789       2,320       608     7,038       13,238       9,542       4,074       3,789   Gain from sale of priority review vouchers   170,322       —       —       —       —     —       —       170,322       —       —   Change in fair value of equity investments   170,403       13,413       —       —       —   Non-cash interest expense on liability related to the sale of future royalties   (33,291 )     (1,135 )     —       —       —   Other income (expense)   (5,588 )     6,530       (1,621 )     (200 )     (3,632 )   607       (787 )     (5,588 )     6,530       (1,621 ) Loss before income taxes   (197,097 )     (318,338 )     (245,839 )     (145,618 )     (59,802 )   (185,359 )     (399,444 )     (197,097 )     (318,338 )     (245,839 ) Benefit from (provision for) income taxes   (514 )     16,199       (35 )     —       —   Provision for income taxes   (1,207 )     (3,283 )     (514 )     16,199       (35 ) Net loss $ (197,611 )   $ (302,139 )   $ (245,874 )   $ (145,618 )   $ (59,802 ) $ (186,566 )   $ (402,727 )   $ (197,611 )   $ (302,139 )   $ (245,874 ) Net loss attributable to common stockholders(1) $ (197,611 )   $ (302,139 )   $ (245,874 )   $ (145,618 )   $ (64,610 ) Net loss per share attributable to common stockholders, basic and diluted(1) $ (3.97 )   $ (7.12 )   $ (6.21 )   $ (3.96 )   $ (2.25 ) Shares used to compute net loss per share attributable to common stockholders, basic and diluted(1)   49,775,223       42,453,135       39,586,908       36,782,603       28,755,758   Net loss per share, basic and diluted(1) $ (3.07 )   $ (7.12 )   $ (3.97 )   $ (7.12 )   $ (6.21 ) Shares used to compute net loss per share, basic and diluted(1)   60,845,550       56,576,885       49,775,223       42,453,135       39,586,908       (1) See Notes 2 and 1516 to our audited consolidated financial statements of this Annual Report for an explanation of the calculations of basic and diluted net loss per share attributable to common stockholders.   As of December 31,   As of December 31,   2018     2017     2016     2015     2014   2020     2019     2018     2017     2016   (in thousands)   (in thousands)   Consolidated Balance Sheets Data:                                       Cash, cash equivalents and investments $ 459,706     $ 244,468     $ 498,111     $ 536,256     $ 187,487   Consolidated Balance Sheet Data:                                       Cash, cash equivalents and marketable debt securities $ 1,212,039     $ 760,404     $ 459,706     $ 244,468     $ 498,111   Working capital   447,644       198,569       341,436       422,289       180,899     1,105,695       747,717       447,644       198,569       341,436   Total assets   719,558       490,753       540,626       559,569       197,967     1,759,555       1,135,496       719,558       490,753       540,626   Liability related to the sale of future royalties   335,665       315,369       —       —       —   Total stockholders' equity   608,908       383,454       473,974       531,090       184,945     1,154,375       653,764       608,908       383,454       473,974     Item Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations together with the section of this Annual Report entitled “Selected Financial Data” and our consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion and analysis generally covers our financial condition and results of operations for the year ended December 31, 2020, including year-over-year comparisons versus the year ended December 31, 2019. Our Annual Report on Form 10-K for the year ended December 31, 2019 includes a discussion and analysis of our financial condition and results of operations for the year ended December 31, 2018 in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Overview We areUltragenyx Pharmaceutical Inc. (we or the Company) is a biopharmaceutical company focused on the identification, acquisition, development, and commercialization of novel products for the treatment of serious rare and ultra-rare genetic diseases. We target diseases for which the unmet medical need is high, the biology for treatment is clear, and for which there are typically no currently approved therapies.therapies treating the underlying disease. Our strategy, which is predicated upon time- and cost-efficient drug development, allows us to pursue multiple programs in parallel with the goal of delivering safe and effective therapies to patients with the utmost urgency. Impact of COVID-19 Pandemic Our business operations have been and continue to be affected by the COVID-19 pandemic. In addition to some impact on our preclinical manufacturing activities and certain regulatory interactions, we have experienced interruptions to our clinical trial activities, primarily due to delays or disruptions to patient enrollment and dosing as a result of shelter-in-place orders or quarantines, and certain data from our gene therapy product candidates was delayed as a result of the COVID-19 pandemic. The FDA has also delayed certain key meetings or discussions with us related to one of our product candidates, which may adversely impact the progression of our clinical study for such product candidate. The continuing outbreak has caused delays in delivery of ancillary clinical trial materials as certain of our third-party manufacturers or suppliers have prioritized and allocated more resources and capacity to supply drug product or raw materials to other companies engaged in the study of potential treatments or vaccinations for COVID-19. Social distancing measures and travel limitations in response to the pandemic have also made it difficult for us to identify new patients for our commercialized products, which may result in loss of revenue. We have also restricted access to our facilities to personnel and third parties who perform critical activities that must be performed on-site and as a result, most of our personnel currently work remotely. Such remote working policies may negatively impact productivity and disrupt our business operations. As the COVID-19 global pandemic continues, we may experience lower revenue and increased expenses as a result of disruptions to our clinical trial, commercialization and regulatory activities, in addition to delays or shortages of drug product and raw materials. The magnitude and extent to which the pandemic may impact our business operations and operating results will continue to remain highly dependent on future developments, which are very uncertain and cannot be predicted with confidence. As a result, we cannot reliably estimate the extent to which the COVID-19 pandemic will impact our financial statements in 2021 and beyond. See Item 1A: "Risk Factors" for additional details. Approved Therapies and Clinical Product Candidates Our current approved therapies and clinical-stage pipeline consist of threefour product categories: biologics, small molecules, and gene therapy, and nucleic acid product candidates. Our biologic We have three commercially approved products, include approved therapies Crysvita® (burosumab) and Mepsevii™ (vestronidase alfa): Crysvita is an antibody targeting fibroblast growth factor 23, or FGF23, developed for the treatment of X-linked hypophosphatemia, or XLH, a rare, hereditary, progressive and lifelong musculoskeletal disorder characterized by renal phosphate wasting caused by excess FGF23 production. Crysvita is approved in the United States for the treatment of XLH in adult and pediatric patients one year of age and older. In the European Union, or EU, Crysvita is conditionally approvedTIO, Mepsevii® (vestronidase alfa) for the treatment of XLH with radiographic evidence of bone disease in children one year of age and older and adolescents with growing skeletons. A filing to expand the label to include adults with XLH is also planned in the EU. Crysvita is also being developed for the treatment of tumor-induced osteomalacia, or TIO. TIO results from typically benign tumors that produce excess levels of FGF23, which can lead to severe hypophosphatemia, osteomalacia, fractures, fatigue, bone and muscle pain, and muscle weakness. We are collaborating with Kyowa Hakko Kirin, or KHK, and Kyowa Kirin International, or Kyowa Kirin, a wholly owned subsidiary of KHK, on the development and commercialization of Crysvita globally. Mepsevii is an intravenous, or IV, enzyme replacement therapy, developed for the treatment of Mucopolysaccharidosis VII, also known as MPS VIIMPSVII or Sly syndrome, a rare lysosomal storage disease that often leads to multi-organ dysfunction, pervasive skeletal disease,Syndrome, and death. Mepsevii is approved in the United States for the treatment of children and adults with MPS VII. In the EU, Mepsevii is approved under exceptional circumstances for the treatment of non-neurological manifestations of MPS VII. In Brazil, Mepsevii is approved for the treatment of MPS VII for patients of all ages. Our small molecule pipeline includes UX007, which is in clinical development for the treatment of long-chain fatty acid oxidation disorders, or LC-FAOD: UX007 is a synthetic triglyceride with a specifically designed chemical composition being studiedDojolvi® (triheptanoin) for the treatment of LC-FAOD, which is a set of rare metabolic diseases that prevents the conversion of fat into energy and can cause low blood sugar, muscle rupture, and heart and liver disease. The U.S. Food and Drug Administration, or FDA, has accepted our most recent proposal to submit a new drug application, or NDA for UX007 for the treatment of LC-FAOD based on existing Phase 2 study data. We intend to submit an NDA to the FDA for the treatment of LC-FAOD in mid-2019 and are continuing discussions with EU regulatory authorities. Our gene therapy pipeline includes DTX301 and DTX401 in clinical development for the treatment of two diseases: DTX301 is an adeno-associated virus 8, or AAV8 gene therapywe anticipate having six product candidate designed for the treatment of patients with ornithine transcarbamylase, or OTC, deficiency. OTC is part of the urea cycle, an enzymatic pathwaycandidates in the liver that converts excess nitrogen,clinical pipeline in the form2021. Please see “Part I. Item 1. Business” above for a description of ammonia, to urea for excretion. OTC deficiency is the most common urea cycle disorderour approved products and leads to increased levels of ammonia. Patients with OTC deficiency suffer from acute hyperammonemic episodes that can lead to hospitalization, adverse cognitive and neurological effects, and death. We have reported positive data from the first and second dose cohorts of the Phase 1/2 study, and are enrolling patients in the third dose cohort, with data expected in mid-2019. DTX401 is an AAV8 gene therapyour clinical candidate for the treatment of patients with glycogen storage disease type Ia, or GSDIa, a disease that arises from a defect in G6Pase, an essential enzyme in glycogen and glucose metabolism. GSDIa is the most common glycogen storage disease. We have reported positive data from the first dose cohort of the Phase 1/2 study, and expect data from the second dose cohort in mid-2019.stage pipeline products. Financial Operations Overview We are a biopharmaceutical company with a limited operating history. To date, we have invested substantially all of our efforts and financial resources in identifying, acquiring, and developing our products and product candidates, including conducting clinical studies and providing selling, general and administrative support for these operations. To date, we have funded our operations primarily from the sale of our equity securities.securities, the sale of certain future royalties, and strategic collaboration arrangements. We have incurred net losses in each year since inception. Our net losses were $197.6 million, $302.1$186.6 million and $245.9$402.7 million for the years ended December 31, 2018, 2017,2020 and 2016. Our net2019. Net loss for the yearyears ended December 31, 20182020 and 2019 included a $170.4 million and $13.4 million gain, respectively, resulting from changes in fair value of $197.6 million includes the gains from the sale of priority review vouchers of $170.3 million, which we received from the FDAour investments in connection with the approval of Crysvita Arcturus Therapeutics Holdings Inc. (Arcturus) and Mepsevii.Solid Biosciences Inc. (Solid) equity securities. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from selling, general and administrative costs associated with our operations. We recordFor the year ended December 31, 2020, our total revenues increased to $271.0 million, compared to $103.7 million for the same period in 2019. Revenue for the year ended December 31, 2020 included $89.2 million in revenue from our collaboration and license agreements andagreement with Daiichi Sankyo Co., Ltd. (Daiichi Sankyo) which we executed in March 2020. The remainder of the increase was driven by higher revenue from Crysvita collaboration revenue in the sale of our two approved products – Crysvita and Mepsevii. In addition, we also record sales of certain products on a “named patient” basis, which are allowedprofit-share territory, increase in certain countries prior to regulatory approval. For the years ended December 31, 2018, 2017, and 2016, we recorded $18.2 million, $9 thousand, and $0, respectively, in collaboration and license revenue for Crysvita sales and $23.5 million, $2.1 million, and $0, respectively, for providing certain research and development services under our collaboration and license arrangement with Bayer. For the years ended December 31, 2018, 2017 and 2016, we recorded $9.8 million, $0.5 million and $0.1 million, respectively, in product sales from our approved products and named patient salesan increase in certain countries.  collaboration royalty revenue. As of December 31, 2020, we had $1,212.0 million in available cash, cash equivalents and marketable debt securities. Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We periodically review our estimates as a result of changes in circumstances, facts and experience. The effects of material revisions in estimates are reflected in the financial statements prospectively from the date of the change in estimate. Our significant accounting policies are more fully described in Note 2 to our financial statements included elsewhere in this Annual Report. We define our critical accounting policies as those GAAP accounting principles generally accepted in the United States of America that require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material impact on our financial condition and results of operations as well as the specific manner in which we apply those principles. We believe the critical accounting policies used in the preparation of our financial statements that require significant estimates and judgments are as follows: Valuation of Goodwill and Acquired Intangible Assets We have recorded goodwill and acquired intangible assets related to our acquisition of Dimension Therapeutics, Inc., or Dimension, in November 2017. Intangible assets with definite useful lives are amortized over their estimated useful lives or other systematic basis and reviewed for impairment if certain events occur. Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment. Impairment testing is performed at least annually in the fourth quarter or when a triggering event occurs that could indicate a potential impairment. If the carrying value of the assets is not expected to be recovered, the assets are written down to their estimated fair values with the related impairment charge recognized in our consolidated statements of operations in the period in which the impairment occurs. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are deemed finite-lived and are amortized over a period that best reflects the economic benefits provided by these assets. If projects are not successfully developed, our sales and profitability may be adversely affected in future periods. Additionally, the value of the acquired intangible assets, including IPR&D, may become impaired if the underlying projects do not progress as we initially estimated. We believe that the assumptions used in developing our estimates of intangible asset values were reasonable at the time of the acquisition. However, the underlying assumptions used to estimate expected project sales, development costs, profitability, or the events associated with such projects, such as clinical results, may not occur as we estimated at the acquisition date. Goodwill represents the excess of purchase price over fair value of net assets acquired in a business combination and is not amortized. Goodwill is subject to impairment testing at least annually in the fourth quarter or when a triggering event occurs that could indicate a potential impairment. We have determined that we operate in a single operating segment and have a single reporting unit. Some of the factors considered in the assessment include general macroeconomic conditions, conditions specific to the industry and market, cost factors which could have a significant effect on earnings or cash flows, the overall financial performance of the reporting unit, and whether there have been sustained declines in the Company’s share price. Additionally, the Company evaluates the extent to which the fair value exceeded the carrying value of the reporting unit at the last date a valuation was performed. If the Company concludes it is more likely than not that the fair value of a reporting unit is less than its carrying amount, a quantitative fair value test is performed. The Company completed its annual impairment test in the fourth quarters of 2018 and determined that the carrying value of goodwill was not impaired. The fair value of the reporting unit, which includes goodwill, was significantly in excess of the carrying value of the reporting unit. Accrued Research and Development, and Research and Development Expenses As part of the process of preparing consolidated financial statements, we are required to estimate and accrue expenses, the largest of which is related to accrued research and development expenses. This process involves reviewing contracts and purchase orders, identifying services that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual costs. We record accruals for estimated costs of research, preclinical and clinical studies, and manufacturing development. These costs are a significant component of our research and development expenses. A substantial portion of our ongoing research and development activities is conducted by third-party service providers. We accrue the costs incurred under our agreements with these third parties based on actual work completed in accordance with agreements established with these third parties. We determine the actual costs through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. We make significant judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any particular period. Our accrual is dependent, in part, upon the receipt of timely and accurate reporting from clinical research organizations and other third-party vendors. Research and development costs are expensed as incurred and consist of salaries and benefits, stock-based compensation, lab supplies, materials and facility costs, as well as fees paid to other nonemployees and entities that conduct certain research and development activities on our behalf. Amounts incurred in connection with collaboration and license agreements are also included in research and development expense. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received. To date, there have been no material differences from our accrued estimated expenses to the actual clinical trial expenses; however, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical studies and other research activities. Revenue Recognition Collaboration and License Revenue We have certain license and collaboration agreements that are within the scope of Accounting Standards Codification (ASC) 808, Collaborative Agreements, which provides guidance on the presentation and disclosure of collaborative arrangements. Generally, the classification of the transactions under the collaborative arrangements is determined based on the nature of contractual terms of the arrangement, along with the nature of the operations of the participants. We record our share of collaboration revenue, net of transfer pricing related to net sales in the period in which such sales occur, if we are considered as an agent in the arrangement. We are considered an agent when the collaboration partner controls the product before transfer to the customers and has the ability to direct the use of and obtain substantially all of the remaining benefits from the product. Funding received related to research and development services and commercialization costs areis generally classified as a reduction of research and development expenses and selling, general and administrative expenses, respectively, in the consolidated statement of operations, because the provision of such services for collaborative partners isare not considered to be part of our ongoing major or central operations. We also receiverecord royalty revenues under certain of our license or collaboration agreements in exchange for license of intellectual property. If we do not have any future performance obligations for these license or collaboration agreements, royalty revenue is recorded as the underlying sales occur. In order to record collaboration revenue, we utilize certain information from our collaboration partners, including revenue from the sale of the product, associated reserves on revenue, and costs incurred for development and sales activities. For the periods covered in the financial statements presented, there have been no significant or material changes to prior period estimates of revenues and expenses. The terms of our collaboration and license agreements may contain multiple performance obligations, which may include licenses and research and development activities. We evaluate these agreements under ASC 606, Revenue from Contracts with Customers(ASC 606), to determine the distinct performance obligations.We analogize to ASC 606 for the accounting for distinct performance obligations for which there is a customer relationship. Prior to recognizing revenue, we make estimates of the transaction price, including variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. Total consideration may include nonrefundable upfront license fees, payments for research and development activities, reimbursement of certain third-party costs, payments based upon the achievement of specified milestones, and royalty payments based on product sales derived from the collaboration. If there are multiple distinct performance obligations, we allocate the transaction price to each distinct performance obligation based on itsour relative standalone selling price. The standalone selling price is generally determined based on the prices charged to customers or measuring the cost, plus an estimatedusing expected cost-plus margin. We estimate the effortefforts needed to complete the performance obligationobligations and recognizerecognizes revenue by measuring the progress towards complete satisfaction of the performance obligationobligations using an input measure.measures. Product Salessales We sell our approved products through a limited number of distributors. Under ASC 606, revenue from product sales is recognized at the point in time when the delivery is made and when title and risk of loss transfers to these distributors. We also recognize revenue from sales of certain products on a “named patient” basis, which are allowed in certain countries prior to the commercial approval of the product. Prior to recognizing revenue, we make estimates of the transaction price, including any variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. Product sales are recorded net of estimated government-mandated rebates and chargebacks, estimated product returns, and other deductions. Provisions for returns and other adjustments are provided for in the period the related revenue is recorded, as estimated by management. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are reviewed periodically and adjusted as necessary. Our estimates of government mandated rebates, chargebacks, estimated product returns, and other deductions depends on the identification of key customer contract terms and conditions, as well as estimates of sales volumes to different classes of payors. If actual results vary, we may need to adjust these estimates, which could have an effect on earnings in the period of the adjustment. The following table presents Non-cash collaboration royalty revenue Effective January 1, 2020, we sold the activity and ending balances for our sales-related accruals and allowances (in thousands):right to receive certain royalty payments from net sales of Crysvita in the European territories to RPI Finance Trust (RPI), an affiliate of Royalty Pharma. We record the royalty revenue from the net sales of Crysvita in the applicable European territories on a prospective basis as non-cash royalty revenue in the Consolidated Statements of Operations over the term of the arrangement.     Product sales reserves   December 31, 2016   $ —   Provisions     41   December 31, 2017     41   Provisions     2,466   Payments and adjustments     (1,267 ) December 31, 2018   $ 1,240   Inventory We expense costs associated with the manufacture of our products prior to regulatory approval. Typically, capitalization of such inventory beginscosts begin when we have received the regulatory approval of the product. Prior to the FDA approval of Mepsevii in November 2017, and Crysvita in April 2018, and Dojolvi in June 2020, manufacturing and related costs were expensed; accordingly, these costs were not capitalized and as a result are not reflected in the costs of sales duringafter the current period. If manufacturing and related costs were capitalized prior to theregulatory approval period, we expect that cost of sales for the years ended December 31, 2018 and 2017 would have been approximately $2.1 million, including $0.4 million in inventory reserves, and $39 thousand, respectively.date. We expect inventory to increase as we produce Mepsevii at costs that reflectproducts and capitalize the full costs of manufacturing similar biologicthe products. Similarly, we expect cost of sales to increase in relation to product revenues as we deplete the previously expensed inventories prior to receiving FDA approval. For the inventoryInventory that is being manufactured after regulatory approval we value inventoryis valued at the lower of cost and net realizable value and determine the cost of inventoryis determined using the average-cost method. Inventories consist of currently approved products. We periodically review our inventories for excess amounts or obsolescence and write down obsolete or otherwise unmarketable inventory to the estimated net realizable value.   Liability Related to the Sale of Future Royalties In December 2019, we entered into a Royalty Purchase Agreement with RPI Finance Trust (RPI), an affiliate of Royalty Pharma. Pursuant to the agreement, RPI paid us $320.0 million in consideration for the Company’s right to receive royalty payments on the net sales of Crysvita in the European Union, the United Kingdom, and Switzerland effective January 1, 2020 under the terms of our Collaboration and License Agreement with KKC. The agreement with RPI will automatically terminate, and the payment of royalties to RPI will cease, in the event aggregate royalty payments received by RPI are equal to or greater than the capped amount of $608.0 million prior to December 31, 2030, or in the event aggregate royalty payments received by RPI are less than $608.0 million prior to December 31, 2030, when aggregate royalty payments received by RPI are equal to $800.0 million. Proceeds from the transaction was recorded as a liability related to sale of future royalties on the balance sheet. We will amortize $320.0 million, net of transaction costs of $5.8 million using the effective interest method over the estimated life of the arrangement. In order to determine the amortization of the liability, we estimate the total amount of future royalty payments to be received by us and paid to RPI, subject to the capped amount, over the life of the arrangement. The aggregate future estimated royalty payments, less the $314.2 million of net proceeds, will be recorded as non-cash interest expense over the life of the arrangement. Consequently, we estimate an imputed interest on the unamortized portion of the liability and record interest expense relating to the transaction. We will continue to record the royalty revenue arising from the net sales of Crysvita in the applicable European territories as non-cash royalty revenue in our Consolidated Statements of Operations over the term of the arrangement. We periodically assess the expected royalty payments using a combination of historical results, internal projections and forecasts from external sources. To the extent future expected royalty payments are greater or less than our initial estimates or the timing of such payments is materially different than its original estimates, we will prospectively adjust the amortization of the liability and the effective interest rate. For the three months ended December 31, 2020, our effective annual interest rate was approximately 9.8%. There are a number of factors that could materially affect the amount and timing of royalty payments from KKC in the applicable European territories, most of which are not within our control. Such factors include, but are not limited to, the success of KKC’s sales and promotion of Crysvita, changing standards of care, the introduction of competing products, pricing for reimbursement in various European territories, manufacturing or other delays, intellectual property matters, adverse events that result in governmental health authority imposed restrictions on the use of Crysvita, significant changes in foreign exchange rates as the royalty payments are made in U.S. dollars (USD) while significant portions of the underlying European sales of Crysvita are made in currencies other than USD, and other events or circumstances that could result in reduced royalty payments from European sales of Crysvita, all of which would result in a reduction of non-cash royalty revenues and the non-cash interest expense over the life of the arrangement. Conversely, if sales of Crysvita in Europe are more than expected, the non-cash royalty revenues and the non-cash interest expense recorded by us would be greater over the term of the arrangement. Stock-Based Compensation Stock-based compensation costs related to equity awards granted to employees are measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. We estimate the grant date fair value of options, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model. The grant date fair value of the stock-based awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. We expect to continue to grant stock options in the future, and to the extent that we do, our actual stock-based compensation expense will likely increase. The Black-Scholes option-pricing model requires the use of certain subjective assumptions which determine the estimated fair value of stock-based awards. Expected term — The expected term represents the period that the stock-based awards are expected to be outstanding and is determined using the simplified method (based on the midpoint between the vesting date and the end of the contractual term). • Expected Term — The expected term represents the period that the stock-based awards are expected to be outstanding and is determined using the simplified method (based on the midpoint between the vesting date and the end of the contractual term). Expected Volatility—As we do not have sufficient historical stock price information to meet the expected life of the stock-based awards, our approach to estimating expected volatility is to phase in our own common stock trading history and supplement the remaining historical information with a blended volatility from the trading history for the common stock of a set of comparable publicly traded biopharmaceutical companies. • Expected Volatility— The expected volatility is based on historical volatility over the look-back period corresponding to the expected term. In addition to the assumptions used in the Black-Scholes option-pricing model, we also estimate a forfeiture rate to calculate the stock-based compensation for our awards. We will continue to use judgment in evaluating the expected volatility, expected terms, and forfeiture rates utilized for our stock-based compensation calculations on a prospective basis and will revise in subsequent periods, if actual forfeitures differ from those estimates. For restricted stock units (RSUs) and performance stock units (PSUs), the fair value is based on the market value of our common stock on the date of grant. Stock-based compensation expense for RSUs is recognized on a straight-line basis over the requisite service period. PSUs are subject to vestingvest only if certain specified criteria are achieved and the employees’ continued service.service with the Company after achievement of the specified criteria. For certain PSUs, the number of PSUs that may vest are also subject to the achievement of certain specified criteria. Compensation expense for PSUs is recognized only after the achievement of the specified criteria is considered probable and recognized on a straight-line basis between the grant date and the expected vest date, with a catch-up for previously unrecognized expense, if any, recognized in the period the achievement criteria is deemed probable. For the years ended December 31, 2018, 2017,2020, 2019, and 20162018 stock-based compensation expense was $80.1$85.7 million, $68.0$82.0 million and $48.3$80.1 million, respectively. As of December 31, 2018,2020, we had $131.0$155.6 million of total unrecognized stock-based compensation costs, net of estimated forfeitures, which we expect to recognize over a weighted-average period of 2.362.48 years. Income Taxes We use the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We assess the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. In conjunction with the Dimension acquisition in 2017, we recorded a deferred tax liability reflecting the tax impact of the difference between the book basis and tax basis of acquired IPR&D. Such deferred income tax liability was not used to offset deferred tax assets when analyzing our valuation allowance as the acquired IPR&D is considered to have an indefinite life until we complete or abandon development of the acquired IPR&D. We recognize benefits of uncertain tax positions if it is more likely than not that such positions will be sustained upon examination based solely on their technical merits, as the largest amount of benefit that is more likely than not to be realized upon the ultimate settlement. Our policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no interest or penalties charged in relation to the unrecognized tax benefits. As of December 31, 2018,2020, our total deferred tax assets were $361.7$561.1 million, excluding the deferred tax liability generated from the Dimension acquisition. Due to our lack of earnings history and uncertainties surrounding our ability to generate future taxable income, the net deferred tax assets have been fully offset by a valuation allowance. The deferred tax assets were primarily comprised of federal and state tax net operating losses and tax credit carryforwards. Utilization of the net operating loss and tax credit carryforwards may be subject to an annual limitation due to historical or future ownership percentage change rules provided by the Internal Revenue Code of 1986, and similar state provisions. The annual limitation may result in the expiration of certain net operating loss and tax credit carryforwards before their utilization. Results of Operations Comparison of Years Ended December 31, 20182020 and 20172019 Revenues (dollars in thousands) Year Ended December 31,     Dollar     % Year Ended December 31,     Dollar     %   2018     2017     Change     Change 2020     2019     Change     Change   Collaboration and license revenue:                                                         KHK (Crysvita) $ 18,226     $ 9     $ 18,217     * Crysvita collaboration revenue in profit-share territory $ 128,597     $ 74,869     $ 53,728       72 % Crysvita royalty revenue in European territory   1,498       8,120       (6,622 )     (82 %) Daiichi Sankyo   89,220       —       89,220     *   Bayer   23,467       2,127       21,340     *   —       504       (504 )     (100 %) Total collaboration and license revenue   41,693       2,136       39,557     *   219,315       83,493       135,822       163 % Product sales:                                                         Crysvita   644       —       644     *   10,350       4,286       6,064       141 % Mepsevii   7,903       476       7,427     *   15,342       12,634       2,708       21 % UX007   1,255       —       1,255     * Dojolvi   13,028       3,301       9,727       295 % Total product sales   9,802       476       9,326     *   38,720       20,221       18,499       91 % Crysvita non-cash collaboration royalty revenue   12,995       —       12,995     *   Total revenues $ 51,495     $ 2,612     $ 48,883     * $ 271,030     $ 103,714     $ 167,316       161 % * not meaningful                                                         We received approvalFor the year ended December 31, 2020, the Company’s share of Crysvita collaboration revenue in the EUprofit-share territory increased by $53.7 million, as compared to the same period in February 2018 and2019. The increase primarily reflects the continuing increase in demand for Crysvita due to an increase in the U.S.number of patients on therapy. In December 2019, we sold the rights to the Crysvita royalty payments in April 2018. As a result, forthe European territory, including the United Kingdom and Switzerland, to Royalty Pharma. Beginning in 2020, we recorded the royalty revenue as non-cash royalty revenues. During the year ended December 31, 2018,2020, there was a change in estimate of the revenue reserves related to sales made prior to January 1, 2020. As a result, we recorded an additional $1.5 million as royalty revenue in the European territory. In March 2020, we executed a license agreement with Daiichi Sankyo, pursuant to which we granted Daiichi Sankyo a non-exclusive license to intellectual property, including know-how and patent applications, with respect to our HeLa PCL and HEK293 transient transfection manufacturing technology platforms for AAV-based gene therapy products. We will also provide certain technical assistance and technology transfer services during the technology transfer period of three years to enable Daiichi Sankyo to use the technologies for its internal gene therapy programs. For the year ended December 31, 2020, we recognized $18.2$89.2 million inas collaboration and license revenue from our collaboration and license agreement with KHK,this arrangement. As of December 31, 2020, we expect to recognize a substantial majority of the remaining contract liabilities balance of $66.6 million as revenue over the technology transfer service period, which included $2.9 million in royalty revenue from Europe and $15.3 million in profit sharing revenue fromis currently estimated to be complete by the U.S.end of 2021. We recognized $23.5 millionThe decrease in collaboration and license revenue from our research arrangement with Bayer for the year ended December 31, 2018. The increase comparedwas due to the same period in 2017 is due to our acquisition of Dimension in November 2017 resulting in the assumptiontransition of the clinical development to Bayer agreement for a full fiscal year in 2018.as part of the research arrangement. The increase in product sales of $9.3$18.5 million for the year ended December 31, 2018 is2020 compared to the same period in 2019 was primarily due to the approvallaunch of Dojolvi in the United States in the third quarter of 2020, continuing increase in demand for Crysvita and Mepsevii, and an increase in November 2017 andsales of Dojolvi under our named patient sales of certain productsprogram in certain countries. Cost of Sales (dollars in thousands)   Year Ended December 31,     Dollar     %   2018     2017     Change     Change Cost of sales $ 1,146     $ 1     $ 1,145     *   Year Ended December 31,     Dollar     %     2020     2019     Change     Change   Cost of sales $ 6,129     $ 9,008     $ (2,879 )     (32 %) We recognized $1.1 million in costCost of sales related to our approved products decreased by $2.9 million for the year ended December 31, 2018 which includes a reserve2020, compared to the same period in 2019. The cost of $0.4 million for excess inventorysales for the year ended December 31, 2018. A nominal amount2020 included a credit for the manufacturing of future inventory batches with an estimated value of $4.6 million and was agreed to during the period with one of our manufacturers due to certain inventory batches that did not meet specified quality standards. The Company previously recorded reserves of $5.7 million on these inventory batches during the year ended December 31, 2019. For the year ended December 31, 2020, we recorded an additional $3.0 million in reserves related to inventory in excess of our forecasted demand. The decrease in cost of sales was recognized for the year ended December 31, 2017. 2020 compared to the same period in 2019 was due to the reserve on inventory batches recorded in 2019 and related manufacturing credit recorded in 2020, partially offset by an increase in demand for our approved products, the launch of Dojolvi in the third quarter of 2020, and the increase in reserve for excess inventory. Prior to the approval of our approved products, manufacturing and related costs were expensed; accordingly, these costs were not capitalized and as a result are not fully reflected in the costs of sales during the current period.year ended December 31, 2020. If manufacturing and related costs were capitalized prior to the approval period and the credit of $4.6 million as noted above were excluded, we expectestimate that cost of sales for the years ended December 31,, 2018 2020 and 2017 2019 would have been approximately $2.1$11.4 million which includes a reserve of $0.4and $9.7 million, for excess inventory, and $39 thousand, respectively, for our commercial product sales. These estimates include the additional $3.0 million and $5.7 million of reserves on inventory for the year ended December 31, 2020 and 2019, respectively. We expect inventoryour gross margin percentage to increasedecrease as we produce Mepsevii at costsapproved products that reflect the full costs of manufacturing similar biologic products. Similarly, we expect cost of sales to increase in relation to product revenuesand as we deplete inventories that we had expensed prior to receiving FDA approval. Research and Development Expenses (dollars in thousands)   Year Ended December 31,     Dollar     %   Year Ended December 31,     Dollar     %   2018     2017     Change     Change   2020     2019     Change     Change   Crysvita $ 45,918     $ 42,847     $ 3,071       7 % $ 29,270     $ 37,872     $ (8,602 )     (23 %) Mepsevii   24,576       33,472       (8,896 )     -27 %   13,738       17,299       (3,561 )     (21 %) UX007   46,883       38,335       8,548       22 % Dojolvi   34,678       36,652       (1,974 )     (5 %) DTX401   39,235       33,245       5,990       18 % DTX301   17,730       472       17,258     *     39,193       39,191       2       0 % DTX401   19,304       2,094       17,210     *   DTX201   26,077       1,468       24,609     *   Ace-ER   7,330       34,630       (27,300 )     -79 % Other research costs and preclinical costs   106,180       78,326       27,854       36 % GTX102   28,100       20,172       7,928       39 % Translational research   103,087       57,300       45,787       80 % Other research costs   124,783       115,624       9,159       8 % Total research and development expenses $ 293,998     $ 231,644     $ 62,354       27 % $ 412,084     $ 357,355     $ 54,729       15 % Research and development expenses increased $62.4$54.7 million for the year ended December 31, 20182020 compared to the same period in 2017.2019. The increase in research and development expenses iswas primarily due to: for Crysvita, an increase of $3.1 million related to patient diagnosis efforts, medical and scientific education expense, and regulatory filing preparation costs, net of KHK reimbursement; • for Crysvita, a decrease of $8.6 million primarily related to reduced clinical trial activity with the progressive completion of our extension studies and reduced allocation of employees and contractors to R&D support activities, net of KKC reimbursement; for Mepsevii, a decrease of $8.9 million from expensing manufacturing activities prior to regulatory approval in late 2017 and reduced clinical trial activity with the progressive completion of our extension studies; • for Mepsevii, a decrease of $3.6 million primarily related to reduced clinical trial activity with the progressive completion of our extension studies and reduced allocation of employees and contractors to R&D support activities; for UX007, an increase of $8.5 million primarily related to the conduct of our Phase 3 movement disorder study, manufacturing expense, and regulatory filing preparation activities; • for Dojolvi, a decrease of $2.0 million primarily related to the impact of inventory capitalization of commercial manufacturing costs post-approval by the FDA in June 2020 and NDA filing costs incurred in 2019; for DTX301, an increase of $17.3 million, related to the conduct of the Phase 1/2 study and clinical manufacturing expense; as the program costs are reflected only after the acquisition of Dimension in November 2017, the previous year does not reflect a full fiscal year of activity for basis of comparison; • for DTX401, a net increase of $6.0 million, primarily related to close out costs for one of our manufacturing sites, as well as the timing of clinical drug substance manufacturing activities and drug product batch releases, including a credit for the manufacturing of future batches with an estimated value of $2.9 million that was agreed to in 2020 with one of our manufacturers due to certain batches that did not meet specified quality standards, in addition to increased internal and clinical vendor expenses in preparation for our Phase 3 trial; for DTX401, an increase of $17.2 million, related to clinical manufacturing expense, IND filing preparation expense, and conduct of our Phase 1/2 clinical study; as the program costs are reflected only after the acquisition of Dimension in November 2017, the previous year does not reflect a full fiscal year of activity for basis of comparison; • for DTX301, a nominal increase, primarily related to the timing of clinical drug substance manufacturing activities and drug product batch releases; for DTX201, an increase of $24.6 million, primarily related to clinical manufacturing expense, IND filing preparation expense, and amortization of the intangible asset related to our Bayer collaboration agreement; as the program costs are reflected only after the acquisition of Dimension in November 2017, the previous year does not reflect a full fiscal year of activity for basis of comparison; • for GTX102, an increase of $7.9 million, primarily due to the $25.0 million option extension payment to GeneTx that occurred in 2020, compared to the $20.0 million upfront payment to GeneTx that occurred in 2019; for Ace-ER, a decrease of $27.3 million due to a reduction in our activities on the Ace-ER program as a consequence of our decision to terminate the program in August 2017; and • for translational research, an increase of $45.8 million primarily related to research, process development, and manufacturing activities, including the progression of our UX701, UX053, and UX068 programs toward IND filings; and in 2020, the $7.0 million payment to REGNEXBIO for exclusive, worldwide rights to NAV AAV8 and AAV9 vectors for the development and commercialization of gene therapy treatments for a rare metabolic disorder; and • an increase of $9.2 million in other research and development costs primarily related to the one-time in-process R&D expense of $13.2 million related to the Solid Collaboration and License Agreement incurred in October 2020 and increases in general operating, facilities, IT, and other overhead expenses in support of our clinical and research program pipeline, partially offset by reduced clinical trial expense for the wind-down of the UX007 Glut 1 program. an increase of $27.9 million in other research and development costs including operating expenses related to our research stage programs and research collaborations (including programs acquired with the Dimension acquisition), general personnel, facility, administrative, and information technology expenses in support of our clinical and research program pipelines, and certain allocations of stock compensation, depreciation, and corporate overhead expense. We expect our annual research and development expenses to continue to increase in the future as we advance our product candidates such as UX143 through clinical development. The timing and amount of expenses incurred will depend largely upon the outcomes of current or future clinical studies for our product candidates as well as the related regulatory requirements, manufacturing costs, and any costs associated with the advancement of our preclinical programs. Selling, General and Administrative Expenses (dollars in thousands)     Year Ended December 31,     Dollar     %     2018     2017     Change     Change   Selling, general and administrative $ 127,724     $ 99,909     $ 27,815       28 %   Year Ended December 31,     Dollar     %     2020     2019     Change     Change   Selling, general and administrative $ 182,933     $ 161,524     $ 21,409       13 %   Selling, general and administrative expenses increased $27.8$21.4 million for the year ended December 31, 20182020 compared to the same period in 2017.2019. The increaseincreases in selling, general and administrative expenses waswere primarily due to increases in personnel costs resulting from an increase in the number of employees in support of our commercial activities, stock-based compensation, commercialization costs, and professional services costs.costs, partially offset by lower travel and related expenses due to travel restrictions in connection with the COVID-19 pandemic. We expect selling, general and administrative expenses to continue to increase in the future to support our organizational growth and for our expected staged build out of our commercial organization over the next several years related to our approved products and multiple clinical-stage product candidates. Interest Income (dollars in thousands)     Year Ended December 31,     Dollar     %     2018     2017     Change     Change   Interest income $ 9,542     $ 4,074     $ 5,468       134 %   Year Ended December 31,     Dollar     %     2020     2019     Change     Change   Interest income $ 7,038     $ 13,238     $ (6,200 )     (47 %)   Interest income increased $5.5decreased $6.2 million for the year ended December 31, 20182020 compared to the same period in 2017,2019, primarily due to an lower portfolio yields as a result of lower interest rates during the year ended December 31, 2020. Change in Fair Value of Equity Investments (dollars in thousands)   Year Ended December 31,     Dollar     %     2020     2019     Change     Change   Change in fair value of equity investments $ 170,403     $ 13,413     $ 156,990       1170 % The increase in the balancefair value of our invested funds and due to an increase in yields on our investment portfolio. Gain from Saleequity investments of Priority Review Vouchers (dollars in thousands)   Year Ended December 31,     Dollar     %   2018     2017     Change     Change Gain from sale of priority review vouchers $ 170,322     $ —     $ 170,322     * The gain from the sale of the Priority Review Vouchers, or PRVs, of $170.3$157.0 million for the year ended December 31, 20182020 was due to the completionincrease in our unrealized gains from the remeasurement of the salesArcturus common stock, and the realized gains from the sale of a portion of the PRVs we received from the FDACompany’s Arcturus common stock holdings, resulting in connection with the approvalan increase in net change of Crysvita and Mepsevii. The Mepsevii PRV was sold in January 2018 for net proceeds of $130.0$124.5 million, and the Crysvita PRV was soldunrealized gains on our investment in April 2018 for net proceedsSolid common stock of $80.6 million,$32.5 million. Given the historic volatility of the publicly traded stock price of Arcturus and Solid, the fair value adjustments of our equity investments may be subject to wide fluctuations which was shared equally with KHK.may have a significant impact on our earnings in future periods. Other Income (Expense)Non-cash Interest Expense on Liability Related to the Sale of Future Royalties (dollars in thousands)   Year Ended December 31,     Dollar     %     2018     2017     Change     Change   Other income (expense) $ (5,588 )   $ 6,530     $ (12,118 )     -186 %   Year Ended December 31,     Dollar     %     2020     2019     Change     Change   Non-cash interest expense on liability related to the     sale of future royalties $ 33,291     $ 1,135     $ 32,156       2833 % Other income (expense) decreased $12.1The increase in the non-cash interest expense on liability related to the sale of future royalties of $32.2 million for the year ended December 31, 2018 compared to the same period in 2017, primarily due to prior period fluctuations of exchange rates related to intercompany loans with foreign subsidiaries that are denominated in our reporting currency and the strengthening of the respective foreign exchange rates. The increase in expense recognized during the year ended December 31, 2018 was primarily due to the recognition of cumulative foreign currency translation losses related to the substantial liquidation of subsidiaries with a functional currency other than the U.S. Dollar and prior period fluctuations of exchange rates related to intercompany loans with foreign subsidiaries that are denominated in our reporting currency. These recognized foreign currency losses are substantially offset by the reclassification adjustment reported as a component of other comprehensive income (loss). Benefit from (provision for) income taxes   Year Ended December 31,     Dollar     %   2018     2017     Change     Change Benefit from (provision for) income taxes $ (514 )   $ 16,199     $ (16,713 )   * The provision for incomes taxes recorded for the year ended December 31, 2018 was primarily related to income tax provisions for U.S. states and certain foreign taxes. For the year ended December 31, 2017, we recorded $47.4 million in non-current deferred tax liability resulting from the acquisition of Dimension, reflecting the tax impact of the difference between the book basis and tax basis of IPR&D assets. The income tax benefit of $16.2 million2020 was due to the reductioninterest accreted on the liability related to the sale of the U.S. corporate tax rate from 34% to 21% and the resulting reductionfuture royalties for net sales of Crysvita in the deferred tax liability. Comparison of Years Ended December 31, 2017 and 2016 Revenue   Year Ended December 31,     Dollar     %     2017     2016     Change     Change   Revenues:                                     Collaboration and license $ 2,136     $ —     $ 2,136     *         Product sales   476       133       343       258 % Total revenues $ 2,612     $ 133     $ 2,479     *   We recognized revenue of $2.1 million in collaboration and license revenue for our research arrangement with Bayer and $0.5 million in product sales of Mepsevii for the year ended December 31, 2017 compared to $0.1 million in product sales for the year ended December 31, 2016. The increase in collaboration and license revenue is due to our acquisition of Dimension, and the increase in product sales is dueEuropean territory pursuant to the approvalRoyalty Purchase Agreement entered into with RPI in December 2019. To the extent the royalty payments are greater or less than our initial estimates or the timing of Mepsevii in November 2017.such payments is materially different than our original estimates, we will prospectively adjust the effective interest rate. Research and Development ExpensesOther Income (Expense) (dollars in thousands)     Year Ended December 31,     Dollar     %     2017     2016     Change     Change   Crysvita $ 42,847     $ 34,723     $ 8,124       23 % Mepsevii   33,472       29,707       3,765       13 % UX007   38,335       34,478       3,857       11 % DTX301   472       —       472     *   Ace-ER   34,630       32,532       2,098       6 % Other research costs and preclinical costs   81,888       51,764       30,124       58 % Total research and development expenses $ 231,644     $ 183,204     $ 48,440       26 %   Year Ended December 31,     Dollar     %     2020     2019     Change     Change   Other income (expense) $ 607     $ (787 )   $ 1,394       (177 %) Research and development expenses Other income (expense) increased $48.4 $1.4 million for the year ended December 31, 20172020 compared to the same period in 2016.2019. The increase in research and development expenses isfluctuations were primarily due to:to fluctuations in foreign exchange rates. Provision for income taxes   Year Ended December 31,     Dollar     %     2020     2019     Change     Change   Provision for income taxes $ (1,207 )   $ (3,283 )   $ 2,076       (63 %) The provision for Crysvita, an increase of $8.1 million related to the continued development of our clinical program, the enrollment of our Phase 3 adult and pediatric studies, regulatory filing preparation costs, patient identification efforts, and other development planning activities, net of KHK reimbursement; for Mepsevii, an increase of $3.8 million related to regulatory filing preparation costs and the timing of manufacturing-related costs; for UX007, an increase of $3.9 million primarily related to the initiation of our Phase 3 movement disorder study and support of investigator-sponsored studies across multiple diseases; for DTX301, an increase of expense of $0.5 million, related to the conduct of the Phase 1/2 study, as the program costs are reflected only after the acquisition of Dimension, and are primarily Phase 1 study costs; for Ace-ER, an increase ofincomes taxes decreased by $2.1 million primarily related to our Phase 3 and extension studies and one-time manufacturing-related expenses incurred as a result of our decision to terminate the program; and an increase of $30.1 million in other research and development costs including expenses in support of our clinical product candidate pipeline, expenses related to our existing research stage programs and research programs added with the Dimension acquisition, research collaborations, and certain cost allocations. Selling, General and Administrative Expenses (dollars in thousands)   Year Ended December 31,     Dollar     %     2017     2016     Change     Change   Selling, general and administrative $ 99,909     $ 64,936     $ 34,973       54 % Selling, general and administrative expenses increased $35.0 million for the year ended December 31, 20172020 compared to the same period in 2016. 2019. The increase in selling, general and administrative expensesdecrease was primarily due to increaseschanges in personnel costs resulting fromstate tax apportionment which resulted in an increase in the number of employees in support of our activities, stock-based compensation, acquisition-related costs, and commercial planning costs. Interest Income (dollars in thousands)   Year Ended December 31,     Dollar     %     2017     2016     Change     Change   Interest income $ 4,074     $ 3,789     $ 285       8 % Interest income increased $0.3 million for the year ended December 31, 2017 compared to the same period in 2016, primarily due to an increase in yields on our investment portfolio. Other Income (Expense) (dollars in thousands)   Year Ended December 31,     Dollar     %     2017     2016     Change     Change   Other income (expense) $ 6,530     $ (1,621 )   $ 8,151       -503 % Other income (expense) increased $8.2 million for the year ended December 31, 2017 compared to the same period in 2016. Other income (expense) primarily consists of gains (losses) resulting from the remeasurement of transactions denominated in foreign currencies. Our primary exposure to currency risk is related to intercompany balances with our foreign subsidiaries, resulting in the foreign currency gains and losses generated on the remeasurement of our intercompany balances with our foreign subsidiaries, which are reported in other income (expense). For the year ended December 31, 2017, we recorded a remeasurement gain of $10.0 million on intercompany balances which was offset by the transfer of foreign currency translation adjustment balance of $3.5 million as a result of the liquidation of a foreign entity due to the termination of the Ace-ER program. Benefit from (provision for) income taxes We recorded $47.4 million in non-current deferred tax liability resulting from the acquisition of Dimension reflecting the tax impact of the difference between the book basis and tax basis of IPR&D assets. Wethat was recorded an income tax benefit of $16.2 million for the year ended December 31, 2017 due to the reduction of the US corporate tax rate from 34% to 21% and reduced the deferred tax liability accordingly. We also recorded nominal amounts in income tax provision for US states and certain foreign taxes.2019. Liquidity and Capital Resources WeTo date, we have funded our operations primarily from the sale of our equity securities.securities, the sale of certain future royalties, and strategic collaboration arrangements. As of December 31, 2018,2020, we had $459.7$1,212.0 million in available cash, cash equivalents, and investments. marketable debt securities. We believe that our existing capital resources will be sufficient to fund our projected operating requirements for at least the next twelve months. Our cash, cash equivalents, and investmentsmarketable debt securities are held in a variety of deposit accounts, interest-bearing accounts, corporate bond securities, U.S government securities, asset-backed securities, and money market funds. Cash in excess of immediate requirements is invested with a view toward liquidity and capital preservation, and we seek to minimize the potential effects of concentration and credit risk. In December 2019, we received net proceeds of $314.2 million from the sale of future royalties to RPI. In March 2020, we received $75.0 million in cash from the sale of 1,243,913 shares of our common stock to Daiichi Sankyo and in April 2020, we received $125.0 million in an upfront payment related to the Daiichi Sankyo License Agreement. In November 2020, we completed an underwritten public offering in which we sold 5,111,110 shares of common stock and received net proceeds of $435.6 million. In December 2020, we sold 800,000 shares of Arcturus common stock and received net proceeds of $79.8 million. During the year ended December 31 2018, , 2020, the proceeds from our at-the-market, or ATM, offering were approximately $38.1was $20.4 million, after commissions and other offering costs. As of December 31, 2018, $45.9 million remained to be sold2020, we had completed the sale of all available amounts under our ATM facility.facility. The following table summarizes our cash flows for the periods indicated (in thousands):     Year Ended December 31,     Year Ended December 31,     2018     2017     2016     2020     2019     2018   Cash used in operating activities   $ (290,566 )   $ (253,843 )   $ (160,975 )   $ (132,220 )   $ (345,383 )   $ (290,566 ) Cash provided by (used in) investing activities     (33,331 )     55,482       91,117   Cash used in investing activities     (179,121 )     (13,039 )     (33,331 ) Cash provided by financing activities     336,853       136,267       138,676       600,272       679,306       336,853   Effect of exchange rate changes on cash     (472 )     528       (65 )     1,119       (165 )     (472 ) Net increase (decrease) in cash, cash equivalents, and restricted cash   $ 12,484     $ (61,566 )   $ 68,753   Net increase in cash, cash equivalents, and restricted cash   $ 290,050     $ 320,719     $ 12,484   Cash Used in Operating Activities Our primary use of cash is to fund operating expenses, which consist primarily of research and development and commercial expenditures. Due to our significant research and development expenditures, we have generated significant operating losses since our inception. Cash used to fund operating expenses is affected by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. Cash used in operating activities for the year ended December 31, 20182020 was $290.6$132.2 million and reflected a net loss of $197.6$186.6 million, $170.3$170.4 million for a change in fair value of equity investments from Arcturus and Solid and $13.0 million for non-cash collaboration royalty revenues related to the sale of future royalties to RPI, offset by non-cash charges of $85.7 million for stock-based compensation, $12.3 million for depreciation, $0.8 million for the gain fromamortization of the premium paid on purchased investments, and $33.3 million for non-cash interest incurred on the liability related to the sale of future royalties to RPI. Cash used in operating activities also reflected a $1.3 million decrease due to an increase in inventory for Mepsevii and Dojolvi. These decreases were offset by a $9.8 million increase due to a decrease in accounts receivable primarily related to change in the PRVs,timing of billing to a collaboration partner, a $2.7 million increase due to decrease in prepaid expenses and $2.6other assets primarily related to a change in the timing of billing to a collaboration partner, a $26.9 million increase in accounts payable, accrued, and other liabilities primarily due to an increase in annual accrued bonus due to higher employee headcount and attainment of company goals, and an increase of $66.6 million in contract liabilities, net, related to the license agreements with Daiichi Sankyo. Cash used in operating activities for the year ended December 31, 2019 was $345.4 million and reflected a net loss of $402.7 million, $6.2 million for the amortization of the discount paid on purchased investments, and $13.4 million for an unrealized gain in the Arcturus equity investment,offset by non-cash charges of $80.1$82.0 million for stock-based compensation, $19.5$8.5 million for depreciation and amortization, of intangible assets acquired, and $5.3$0.7 million non-cash foreign currency remeasurement losses in connection with the substantial liquidation of subsidiaries due to a change in the Company’s tax structure and fluctuations of exchange rates related to intercompany transactions with foreign subsidiaries that are denominated in our reporting currency, and $1.1 million for non-cash interest incurred on the liability related to the sale of future royalties to RPI. Cash used in operating activities also reflected a $7.6$20.1 million decrease due to an increase in accounts receivable from the commercialization of Mepsevii and Crysvita, a $5.3$4.5 million decrease due to an increase in inventory as we build out our commercial inventory supplies as we commercialize Mepsevii, and a $13.9 $8.2 million decrease due to an increase in prepaid expenses and other current assets primarily from an increase in prepaid manufacturing costs, a $0.4 million decrease in non-current assets, and a $1.0 million decrease in accrued expenses and other liabilities. These decreases were offset by a $3.4 million increase in accounts payable primarily due to increased spend and the timing of payments. Cash used in operating activities for the year ended December 31, 2017 was $253.8 million and reflected a net loss of $302.1 million, offset by non-cash charges of $68.0 million for stock-based compensation, $1.7 million for the amortization of premium paid on purchased investments, $5.8 million for depreciation and amortization and a decrease of $7.0 million for foreign currency remeasurement gain due to an increase in foreign entity transactions and fluctuations in the foreign exchange rate during the period. Cash used in operating activities also reflected a $5.2 million decrease due to an increase in accounts receivable related to the receivables under a collaboration agreement, a $0.8 million decrease due to an increase in inventory as we build out our commercial inventory supplies as we commercialize Mepsevii, a $4.6 million decrease in accrued expenses and other liabilities due to decrease in liabilities for Ace-ER related vendors and a reduction of the repayment liability for the Takeda collaboration agreement, and a $16.2 million decrease in deferred tax liabilities recorded in conjunction with the Dimension acquisition which were then revalued as a result of the reduction of the U.S. corporate tax rate in December 2017 from 34% to 21%. These decreases were offset by a $2.6 million increase due to a decrease in prepaid expenses and other current assets, a $0.5 million increase in non-current assets, and a $3.5 million increase in accounts payable primarily due to increased spend and the timing of payments. Cash used in operating activities for the year ended December 31, 2016 was $161.0 million and reflected a net loss of $245.9 million, offset by non-cash charges of $48.3 million for stock-based compensation, $4.8 million for the amortization of premium paid on purchased investments, $3.4 million for depreciation and amortization, $1.3 million for a foreign currency remeasurement loss due to an increase in foreign entity transactions and fluctuations in the foreign exchange rate during the period, and $0.7 million for the estimated fair value of a license fee in conjunction with the Takeda collaboration agreement. Cash used in operating activities also reflected a $7.1 million increase in prepaid expenses and other current assets primarily due to an increase in prepaid manufacturinggeneral receivables, amounts due from a collaboration partner, and an increase in receivables related toamounts owed for a tenant improvement allowance, and a $1.2 million increase in non-current assets as a result of an increase in upfront payments to contract research organizations and in clinical study costs.allowance. These increasesdecreases were offset by a $32.2 million increase in accrued expenses and other liabilities as a result of an accrual for a liability under a collaboration agreement, increase in clinical study, manufacturing, and related costs as we continued to increase our research and development activities and employee compensation in bonuses and vacation due to higher headcount, and a $2.5$13.3 million increase in accounts payable, accrued, and other liabilities primarily due to increased spend commercial and research activities and the timing of payments.payments and receipt of invoices offset by the derecognition of deferred rent obligations for the new lease accounting guidance and a $2.1 million increase in deferred tax liabilities due to adjustments made related to the Dimension acquisition. Cash Provided by (Used in)Used in Investing Activities Cash used in investing activities for the year ended December 31, 20182020 was $33.3$179.1 million and related to purchases of property, plant, and equipment of $4.1$43.9 million, which includes $21.1 million paid for the acquisition of the land and ongoing construction costs for the gene therapy manufacturing plant in Bedford, Massachusetts, purchases of marketable debt securities of $813.2 million, purchases of equity investments of $509.8$37.1 million primarily related to $26.8 million for the purchase of Solid shares and $9.6 million for the exercise of the option to purchase additional Arcturus shares, and other activities of $5.6 million that included $3.3 million for the purchase of a convertible notes receivable and the milestone payments of $2.3 million recorded as an intangible asset resulting from the FDA approval of Dojolvi, offset by proceeds from maturities of marketable debt securities of $589.8 million, the sale of PRVsArcturus common stock of $170.3 million, proceeds from maturities of investments of $302.6$79.8 million, and the sale of investmentsmarketable debt securities of $7.7$51.0 million. Cash provided byused in investing activities for the year ended December 31, 20172019 was $55.5 million and related to proceeds from maturities of investments of $273.6 million and the sale of investments of $157.9 million, offset by $142.8 million of cash used for the Dimension acquisition, purchases of property and equipment of $2.8 million, and purchases of investments of $230.5 million. Cash provided by investing activities for the year ended December 31, 2016 was $91.1$13.0 million and related to purchases of investments of $442.5 million and purchases of property, plant, and equipment of $10.2$24.8 million, purchases of marketable debt securities of $692.8 million, and the purchase of the Arcturus equity investment of $14.3 million, offset by proceeds from maturities of investmentsmarketable debt securities of $403.2$676.2 million and the sale of investmentsmarketable debt securities of $140.6$42.7 million. Cash Flows Provided by Financing Activities Cash provided by financing activities for the year ended December 31, 20182020 was $336.9$600.3 million and was comprised of $271.0$435.6 million in net proceeds from the issuance of sale of common stock in our underwritten public offering, $38.1$55.3 million in net proceeds from the saleissuance of common stock in connection with the license agreement with Daiichi Sankyo in March 2020, $20.4 million in net proceeds from the issuance of common stock from our ATM offering, and $27.8$89.3 million in net proceeds from the issuance of common stock upon the exercise of warrants and stock options, offset bynet of taxes withheld from the vesting of restricted stock units.units, offset by other activities of $0.2 million in principal repayments of finance leases. Cash provided by financing activities for the year ended December 31, 20172019 was $136.3$679.3 million and was comprised of $132.0$314.2 million related to net proceeds from the sale of common stock from our ATM offering and $9.3future royalties to Royalty Pharma, $330.4 million in net proceeds from the issuance of common stock upon the exercise of stock options, offset by taxes withheldin our underwritten public offering, $24.8 million in net proceeds from the vesting of restricted stock units. These increases are offset by the payment of notes payable of $4.9 million. Cash provided by financing activities for the year ended December 31, 2016 was $138.7 million and was comprised of $79.5 million from the saleissuance of common stock from our ATM offering, $51.4 million from the sale of common stock to Takeda, and $7.8$9.8 million in net proceeds from the issuance of common stock upon the exercise of stock options, offset by taxes withheld from the vesting of restricted stock units. Funding Requirements We anticipate that, excluding non-recurring items, that we will continue to generate annual losses for the foreseeable future as we continue the development of, and seek regulatory approvals for, our product candidates, and continue with commercialization of approved products. We will likely require additional capital to fund our operations, to complete our ongoing and planned clinical studies, andto commercialize our products.products, to continue investing in early-stage research capabilities to promote our pipeline growth, to continue to acquire or invest in businesses or products that complement or expand our business, and to further develop our general infrastructure, including construction of our GMP gene therapy manufacturing facility, and such funding may not be available to us on acceptable terms or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may be required to delay, limit, reduce the scope of, or terminate one or more of our clinical studies, research and development programs, future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Our future funding requirements will depend on many factors, including the following: the scope, rate of progress, results and cost of our clinical studies, nonclinical testing, and other related activities; the cost of manufacturing clinical and commercial supplies of our products and product candidates; the cost of creating additional infrastructure, including facilities and systems; the number and characteristics of the product candidates that we pursue; the cost, timing, and outcomes of regulatory approvals; the cost and timing of establishing and operating our international subsidiaries; • the scope, rate of progress, results and cost of our clinical studies, nonclinical testing, and other related activities;   • the cost of manufacturing clinical supplies, and establishing commercial supplies, of our product candidates, products that we have begun to commercialize, and any products that we may develop in the future, including the potential development of our own GMP gene therapy manufacturing plant; • the number and characteristics of product candidates that we pursue; • the cost, timing, and outcomes of regulatory approvals; • the cost and timing of establishing our field forces, marketing,commercial infrastructure, and distribution capabilities; the cost and timing of other activities needed to commercialize our products; and • the magnitude and extent to which the COVID-19 pandemic impacts our business operations and operating results, as described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors – Risks Related to Our Business Operations”; and the terms and timing of any collaborative, licensing, acquisition and other arrangements that we may establish, including any required milestone, royalty, and reimbursements or other payments thereunder. • the terms and timing of any collaborative, licensing, marketing, distribution, acquisition (including whether we exercise our option to acquire GeneTx pursuant to the terms of our Unitholder Option Agreement with them) and other arrangements that we may establish, including any required upfront milestone, royalty, reimbursements or other payments thereunder. We expect to satisfy future cash needs through existing capital balances and through some combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements, and other marketing and distribution arrangements. Please see “Risk Factors—Risks Related to Our Financial Condition and Capital Requirements.” Contractual Obligations We have contractual obligations from our operating and finance leases, manufacturing and service contracts, licenses, royalties, development and collaboration arrangements, and other research and development activities. The following table summarizes our significant binding contractual obligations at December 31, 20182020 (in thousands):   Payments due by period   Payments due by period   Less than 1 year     1 to 3 years     3 to 5 years     More than 5 years     Total   Less than 1 year     1 to 3 years     3 to 5 years     More than 5 years     Total   Operating leases $ 5,965     $ 7,679     $ 5,673     $ 8,451     $ 27,768   Operating and finance leases $ 11,931     $ 24,784     $ 16,566     $ 3,456     $ 56,737   Manufacturing and service contracts   6,790       62     $ —     $ —     $ 6,852     4,330       472       —       —       4,802   Land and building construction agreement   26,078       382       —       —       26,460   License and collaboration agreement*   50,000       —       —       —       50,000   Total $ 12,755     $ 7,741     $ 5,673     $ 8,451     $ 34,620   $ 92,339     $ 25,638     $ 16,566     $ 3,456     $ 137,999   * Includes a $50.0 million purchase commitment with Mereo BioPharma Group plc under the license and collaboration agreement which was subsequently paid in January 2021 upon the closing of the transaction The terms of certain of our licenselicenses, royalties, development and collaboration agreements, as well as other research and development activities, require us to pay potential future milestone payments based on product development success. The above table excludes milestone or contractual paymentsuch obligations as the amount and timing of such obligations are unknown or uncertain, which potential obligations are further described in Note 14Notes 9 and 15 to the accompanying Consolidated Financial Statements.    Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which requires an entity that is a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases. This guidance also requires disclosures about the amount, timing, and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods and early adoption is permitted. In July 2018, the FASB issued updated guidance which allows an additional transition method to adopt the new leases standard at the adoption date, as compared to the beginning of the earliest period presented, and allows entities to recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption. We expect to elect to use this transition method at the adoption date of January 1, 2019, and, as a result, will record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. We also plan to elect the practical expedient to not separate lease and non-lease components and to use the package of practical expedients upon transition that will retain the lease classification and initial direct costs for any leases that exist prior to adoption of the new guidance. As of January 1, 2019, we expect to record a right-to-use asset in the range of $15.0 million to $18.4 million, short-term lease liability in the range of $4.1 million to $5.0 million, and long-term lease liability in the range of $15.7 million to $19.2 million and no adjustment to the retained earnings. We are continuing to evaluate the effect that this guidance will have on our Consolidated Financial Statements and related disclosures.None Off-Balance Sheet Arrangements Since our inception in April 2010, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.   Item Item 7A. Quantitative and Qualitative Disclosures About Market Risk Equity Risk We have exposure to equity risk with respect to the equity investments that we hold in Arcturus and Solid. The carrying value of our equity investment held in Arcturus was $95.4 million and $27.8 million as of December 31, 2020 and 2019, respectively, and the carrying value of our equity investment held in Solid was $59.3 million as of December 31, 2020. If the Arcturus or Solid stock price had been lower at December 31, 2020 compared to December 31, 2019, we would have reported an even greater net loss for the year ended December 31, 2020. A hypothetical 10 percent decrease in the market price for our equity investments as of December 31, 2020 and 2019 would decrease the fair value by $15.5 million and $2.7 million, respectively. Given the historic volatility of the publicly traded stock price of Arcturus and Solid, the fair value of our investments in Arcturus and Solid is subject to wide fluctuations which may have a significant impact on our net income (loss) in future periods. Interest Rate Risk Our exposure to market risk for changes in interest rates relates primarily to interest earned on our cash equivalents and investments.marketable debt securities. The primary objective of our investment activities is to preserve our capital to fund operations. A secondary objective is to maximize income from our investments without assuming significant risk. Our investment policy provides for investments in low-risk, investment-grade debt instruments. As of December 31, 20182020 and 2017,2019, we had cash, cash equivalents, and investmentsmarketable debt securities totaling $459.71,212.0 million and $244.5$760.4 million, respectively, which include bank deposits, money market funds, U.S. government treasury and agency securities, and investment-grade corporate bond securities which are subject to default, changes in credit rating, and changes in market value. The securities in our investment portfolio are classified as available for sale and are subject to interest rate risk and will decrease in value if market interest rates increase. Due to the COVID-19 pandemic and the reduction of rates by the U.S. Federal Reserve, we expect that the interest yield on our investments may continue to decrease. A hypothetical 100 basis point change in interest rates during any of the periods presented would not have had a material impact on the fair market value of our consolidated financial statements.cash equivalents and marketable debt securities as of December 31, 2020 and 2019. To date, we have not experienced a loss of principal on any of our investments and as of December 31, 2020, we did not record any allowance for credit loss from our investments. Foreign Currency Risk We face foreign exchange risk as a result of entering into transactions denominated in currencies other than U.S. dollars. Due to the uncertain timing of expected payments in foreign currencies, we do not utilize any forward exchange contracts. All foreign transactions settle on the applicable spot exchange basis at the time such payments are made. Volatile market conditions arising from the COVID-19 pandemic may result in significant changes in exchange rates, and in particular a weakening of foreign currencies relative to the U.S. dollar may negatively affect our revenue and operating income as expressed in U.S. dollars. An adverse movement in foreign exchange rates could have a material effect on payments made to foreign suppliers and for license agreements. For the year ended December 31 2018,, 2020, a majority of our revenue and expense activities and capital expenditures were denominated in U.S. dollars. A hypothetical 10% change in foreign exchange rates during any of the periods presented would not have had a material impact on our consolidated financial statements.  statements.   Item 8.  Financial Statements and Supplementary Data Our financial statements are annexed to this Annual Report beginning on page F-1 and are incorporated by reference into this Item 8.   Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.   Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our “disclosure controls and procedures” as of the end of the period covered by this Annual Report, pursuant to Rules 13a-15(b) and 15d-15(b) under the Exchange Act. In connection with that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective and designed to provide reasonable assurance that the information required to be disclosed is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms as of December 31, 2018.2020. For the purpose of this review, disclosure controls and procedures means controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management’s Annual Report on Internal Control Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our management used the Committee of Sponsoring Organizations of the Treadway Commission Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), or the COSO framework, to evaluate the effectiveness of internal control over financial reporting. Management believes that the COSO framework is a suitable framework for its evaluation of financial reporting because it is free from bias, permits reasonably consistent qualitative and quantitative measurements of our internal control over financial reporting, is sufficiently complete so that those relevant factors that would alter a conclusion about the effectiveness of our internal control over financial reporting are not omitted and is relevant to an evaluation of internal control over financial reporting. Management has assessed the effectiveness of our internal control over financial reporting as of December 31, 20182020 and has concluded that such internal control over financial reporting is effective. Our independent registered public accounting firm, Ernst & Young LLP, has audited the financial statements included in this Annual Report and has issued a report on the effectiveness of our internal control over financial reporting. The report of Ernst & Young LLP is included below. Changes in Internal Control over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our fourth quarter ended December 31, 2018,2020, that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.   Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Ultragenyx Pharmaceutical Inc.: Opinion on Internal Control over Financial Reporting We have audited Ultragenyx Pharmaceutical Inc.’s internal control over financial reporting as of December 31, 2018,2020, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013(2013 framework) (the COSO criteria). In our opinion, Ultragenyx Pharmaceutical Inc.Inc (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2020, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the CompanyUltragenyx Pharmaceutical Inc. (the Company) as of December 31, 20182020 and 2017,2019, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2018 and related notes2020, and our report dated February 19, 201911, 2021 expressed an unqualified opinion thereon.   Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management'sManagement’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.   Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.   /s/ Ernst & Young LLP   San Jose, California February 19, 201911, 2021   Item 9B.  Other Information None.     PART PART III   Item 10.  Directors, Executive Officers and Corporate Governance The information required by this Item is incorporated herein by reference to information in the proxy statement for our 20192021 Annual Meeting of Stockholders, which we will file with the SEC within 120 days of the end of the fiscal year to which this Annual Report relates (the “2019“2021 Proxy Statement”), including under the headings “Proposal No. 1—Election of Class IIIII Directors,” “Executive“Information About Our Executive Officers,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Governance—Global Code of Conduct,” “Proposal No. 1—Election of Class IIIII Directors—Nomination of Directors” andDirectors,” “Board of Directors and Committees.Committees,” and, as applicable, “Delinquent Section 16(a) Reports.” We have adopted a code of ethics that applies to all of our directors, officers and employees, including our principal executive, principal financial and principal accounting officers, or persons performing similar functions, or Code of Ethics. Our Code of Ethics is posted on our corporate governance website located at www.ultragenyx.com. We intend to disclose future amendments to certain provisions of the Code of Ethics, and waivers of the Code of Ethics granted to executive officers and directors, on the website within four business days following the date of the amendment or waiver. Item 11.  Executive Compensation The information required by this Item is incorporated herein by reference to information in the 20192021 Proxy Statement, including under the headings “Executive Compensation,” “Director Compensation,” “Board of Directors and Committees—Compensation Committee Interlocks and Insider Participation,” “Executive Compensation—Risk Management and Mitigation,” and “Executive Compensation—Compensation Committee Report.” Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is incorporated herein by reference to information in the 20192021 Proxy Statement, including under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information.” Item 13.  Certain Relationships and Related Transactions, and Director Independence The information required by this Item is incorporated herein by reference to information in the 20192021 Proxy Statement, including under the headings “Certain Relationships and Related-Person Transactions,” “Corporate Governance,” and “Board of Directors and Committees.” Item 14.  Principal Accountant Fees and Services The information required by this Item is incorporated herein by reference to information in the 20192021 Proxy Statement, including under the heading “Proposal No. 2—Ratification of the Selection of Independent Registered Public Accounting Firm.”       PART PART IV   Item 15.  Exhibits and Financial Statement Schedules   (a) The following documents are filed as part of this Annual Report.   (1) Consolidated Financial Statements   Consolidated Financial Statements—See Index to Consolidated Financial Statements at page F-1 of this Annual Report.   (2) Consolidated Financial Statement Schedules   Consolidated Financial statement schedules have been omitted in this Annual Report because they are not applicable, not required under the instructions, or the information requested is set forth in the consolidated financial statements or related notes thereto.   (b) Exhibits   Exhibit Number   Exhibit Description   Incorporated by Reference   Filed     Form   Date   Number   Herewith   3.1     Amended and Restated Certificate of Incorporation     8-K     2/5/2014     3.1       3.2     Amended and Restated Bylaws     8-K     2/5/2014     3.2       4.1     Reference is made to Exhibits 3.1 and 3.2                         4.2     Form of Common Stock Certificate     S-1     11/8/2013     4.2       4.3     Warrant, dated as of June 30, 2010, issued to Emil D. Kakkis, M.D., Ph.D.     S-1     11/8/2013     4.3       4.4     Warrant, dated as of June 14, 2011, issued to Emil D. Kakkis, M.D., Ph.D.     S-1     11/8/2013     4.6       4.5     Warrant, dated as of June 14, 2011, issued to Emil D. Kakkis, M.D., Ph.D.     S-1     11/8/2013     4.7       10.1†     Collaboration and License Agreement, dated as of August 29, 2013, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.     S-1/A     12/23/2013     10.1                           10.2   Amendment No. 1 to Collaboration and License Agreement, dated as of August 24, 2015, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-Q   11/10/2015   10.2     10.3   Amendment No. 2 to Collaboration and License Agreement, effective as of November 28, 2016, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-K   2/21/2018   10.3     10.4†   Amendment No. 3 to Collaboration and License Agreement, effective September 29, 2017, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-K   2/21/2018   10.4     10.5†   Amendment No. 4 to Collaboration and License Agreement, effective as of January 29, 2018, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-K   2/21/2018   10.5     10.6†   Amendment No. 5 to Collaboration and License Agreement, effective as of April 30, 2018, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-Q   8/3/2018   10.1       10.7†     License Agreement, dated as of September 20, 2012, between Ultragenyx Pharmaceutical Inc. and Baylor Research Institute     S-1/A     12/23/2013     10.3     Exhibit Number   Exhibit Description   Incorporated by Reference   Filed     Form   Date   Number   Herewith   3.1     Amended and Restated Certificate of Incorporation     8-K     2/5/2014     3.1       3.2     Amended and Restated Bylaws     8-K     2/5/2014     3.2       4.1     Reference is made to Exhibits 3.1 and 3.2                         4.2     Form of Common Stock Certificate     S-1     11/8/2013     4.2       4.3     Description of Common Stock   10-K   2/14/2020   4.3       10.1†     Collaboration and License Agreement, effective as of August 29, 2013, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.     S-1/A     12/23/2013     10.1                           10.2   Amendment No. 1 to Collaboration and License Agreement, effective as of August 24, 2015, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-Q   11/10/2015   10.2     10.3   Amendment No. 2 to Collaboration and License Agreement, effective as of November 28, 2016, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-K   2/21/2018   10.3     10.4†   Amendment No. 3 to Collaboration and License Agreement, effective September 29, 2017, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-K   2/21/2018   10.4     10.5†   Amendment No. 4 to Collaboration and License Agreement, effective as of January 29, 2018, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-K   2/21/2018   10.5     10.6†   Amendment No. 5 to Collaboration and License Agreement, effective as of April 30, 2018, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-Q   8/3/2018   10.1     10.7*   Amendment No. 6 to Collaboration and License Agreement, effective as of February 1, 2019, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-Q   5/7/2019   10.2     10.8*   Amendment No. 7 to Collaboration and License Agreement, effective as of December 5, 2018, between Ultragenyx Pharmaceutical Inc. and Kyowa Hakko Kirin Co., Ltd.   10-Q   5/7/2019   10.3     10.9*   Amendment No. 8 to Collaboration and License Agreement, effective as of July 4, 2019, between Ultragenyx Pharmaceutical Inc. and Kyowa Kirin Co., Ltd. (formerly, Kyowa Hakko Kirin Co., Ltd.)   10-Q   8/2/2019   10.1     Exhibit Number   Exhibit Description   Incorporated by Reference   Filed     Form   Date   Number   Herewith   10.8†     Amendment to the License Agreement, dated as of March 22, 2013, between Ultragenyx Pharmaceutical Inc. and Baylor Research Institute     S-1     11/8/2013     10.4       10.9†     Exclusive License Agreement, dated as of November 22, 2010, between Ultragenyx Pharmaceutical Inc. and Saint Louis University     S-1/A     12/23/2013     10.8       10.10     Supply Agreement, dated as of November 19, 2012, between Ultragenyx Pharmaceutical Inc. and CREMER OLEO GmbH & Co KG     10-K     2/21/2018     10.11           10.11†     License and Collaboration Agreement, dated June 6, 2016, by and between Ultragenyx Pharmaceutical Inc. and Takeda Pharmaceutical Company Limited     10-Q/A     12/12/2016     10.1       10.12†     License Agreement, dated October 30, 2013, by and between Dimension Therapeutics, Inc. and REGENXBIO Inc. (f/k/a ReGenX Biosciences, LLC), as amended     10-K     2/21/2018     10.13       10.13†     Option and License Agreement, dated March 10, 2015, by and between Dimension Therapeutics, Inc. and REGENXBIO Inc.     10-K     2/21/2018     10.14       10.14†     Collaboration and License Agreement, dated June 18, 2014, by and between Dimension Therapeutics, Inc. and Bayer HealthCare LLC     10-K     2/21/2018     10.15       10.15†     Research, Collaboration and License Agreement, dated as of May 5, 2016, by and between Dimension Therapeutics, Inc. and The Trustees of the University of Pennsylvania, as amended     10-K     2/21/2018     10.16       10.16†     3rd Amendment to Research, Collaboration and License Agreement, entered into as of October 30, 2017, by and between Dimension Therapeutics, Inc. and The Trustees of the University of Pennsylvania     10-K     2/21/2018     10.17                           10.17†   Commercial Supply and Services Agreement – Drug Substance, effective December 7, 2017, between Ultragenyx Europe GmbH and Rentschler Biopharma SE   10-K   2/21/2018   10.18                           10.18†   Commercial Supply and Services Agreement – Drug Product, effective January 31, 2018, between Ultragenyx Europe GmbH and Rentschler Biopharma SE   10-K   2/21/2018   10.19                             10.19   Sales Agreement, dated July 27, 2017, between Ultragenyx Pharmaceutical Inc. and Cowen and Company, LLC   10-Q   7/28/2017   1.1       10.20     Amendment No. 1 to Sales Agreement, dated as of March 30, 2018, between Ultragenyx Pharmaceutical Inc. and Cowen and Company, LLC     8-K     3/30/2018     1.1       10.21#     2011 Equity Incentive Plan (including forms of Stock Option Grant Notice and Stock Option Agreement thereunder)     S-1     11/8/2013     10.11       10.22#     Amendment to the 2011 Equity Incentive Plan     S-1     11/8/2013     10.12     Exhibit Number   Exhibit Description   Incorporated by Reference   Filed     Form   Date   Number   Herewith 10.10*   Amendment No. 9 to Collaboration and License Agreement, effective December 23, 2019, between Ultragenyx Pharmaceutical Inc. and Kyowa Kirin Co., Ltd.   10-K   2/14/2020   10.10     10.11*   Amendment No. 10 to Collaboration and License Agreement, effective as of April 1, 2020, between Ultragenyx Pharmaceutical Inc. and Kyowa Kirin Co., Ltd.   10-Q   5/7/2020   10.2       10.12*     License Agreement, dated as of September 20, 2012, between Ultragenyx Pharmaceutical Inc. and Baylor Research Institute                 X   10.13*     Amendment to the License Agreement, dated as of March 22, 2013, between Ultragenyx Pharmaceutical Inc. and Baylor Research Institute                 X   10.14†     Exclusive License Agreement, dated as of November 22, 2010, between Ultragenyx Pharmaceutical Inc. and Saint Louis University     S-1/A     12/23/2013     10.8       10.15†     License Agreement, dated October 30, 2013, by and between Dimension Therapeutics, Inc. and REGENXBIO Inc. (f/k/a ReGenX Biosciences, LLC), as amended     10-K     2/21/2018     10.13       10.16†     Option and License Agreement, dated March 10, 2015, by and between Dimension Therapeutics, Inc. and REGENXBIO Inc.     10-K     2/21/2018     10.14     10.17*   First Amendment to Option and License Agreement, dated March 18, 2019, by and between REGENXBIO, Inc. and Ultragenyx Pharmaceutical Inc. (as assignee of Dimension Therapeutics, Inc.)   10-Q   5/7/2019   10.1     10.18*   Amended and Restated Collaboration Agreement and License Agreement, dated June 3, 2019, between Ultragenyx Pharmaceutical Inc. and Bayer Healthcare LLC   10-Q   8/2/2019   10.2       10.19†     Research, Collaboration and License Agreement, dated as of May 5, 2016, by and between Dimension Therapeutics, Inc. and The Trustees of the University of Pennsylvania, as amended     10-K     2/21/2018     10.16       10.20†     3rd Amendment to Research, Collaboration and License Agreement, entered into as of October 30, 2017, by and between Dimension Therapeutics, Inc. and The Trustees of the University of Pennsylvania     10-K     2/21/2018     10.17                           10.21†   Commercial Supply and Services Agreement – Drug Substance, effective December 7, 2017, between Ultragenyx Europe GmbH and Rentschler Biopharma SE   10-K   2/21/2018   10.18                           10.22†   Commercial Supply and Services Agreement – Drug Product, effective January 31, 2018, between Ultragenyx Europe GmbH and Rentschler Biopharma SE   10-K   2/21/2018   10.19                           10.23   Supply Agreement, dated as of November 19, 2012, between Ultragenyx Pharmaceutical Inc. and CREMER OLEO GmbH & Co KG   10-K   2/21/2018   10.11                               Exhibit Number Exhibit Description Incorporated by Reference Filed Form Date Number Herewith 10.23# 2014 Incentive Plan (as amended) 10-K 2/17/2017 10.20 10.24# Form of Incentive Stock Option Agreement S-1/A 1/17/2014 10.14 10.25# Form of Non Statutory Stock Option Agreement (Employees) S-1/A 1/17/2014 10.15 10.26# Form of Non Statutory Stock Option Agreement (Employees)(ex-U.S.) 10-Q 5/10/2016 10.3 10.27# Form of Non-Statutory Stock Option Agreement (Directors) S-1/A 1/17/2014 10.16 10.28# Form of Restricted Stock Unit Agreement (Employees) 10-Q 5/10/2016 10.1 10.29# Form of Restricted Stock Unit Agreement (Employees)(ex-U.S.) 10-Q 5/10/2016 10.2 10.30# Form of Restricted Stock Unit Agreement (Directors) S-1/A 1/17/2014 10.18 10.31# Form of Performance Stock Unit Agreement (Current Employees) 10-K 2/21/2018 10.31 10.32# Form of Performance Stock Unit Agreement (New Employees) 10-K 2/21/2018 10.32 10.33# 2014 Employee Stock Purchase Plan (as amended) 10-K 2/17/2017 10.28 10.34# Corporate Bonus Plan S-1/A 1/17/2014 10.27 10.35# Executive Employment Agreement, dated as of June 15, 2011, between Ultragenyx Pharmaceutical Inc. and Emil D. Kakkis, M.D., Ph.D. S-1 11/8/2013 10.18 10.36# Amendment No. 1 to Executive Employment Agreement, dated August 8, 2014, by and between Ultragenyx Pharmaceutical Inc. and Emil D. Kakkis, M.D., Ph.D. 10-Q 8/11/2014 10.2 10.37# Offer Letter, dated as of October 31, 2011, between Ultragenyx Pharmaceutical Inc. and Thomas Kassberg S-1 11/8/2013 10.19 10.38# Amendment No. 1 to Offer of Employment, dated as of August 8, 2014, by and between Ultragenyx Pharmaceutical Inc. and Thomas Kassberg 10-Q 8/11/2014 10.3 10.39# Offer Letter, dated as of March 12, 2012, between Ultragenyx Pharmaceutical Inc. and Shalini Sharp S-1 11/8/2013 10.20 10.40# Amendment No. 1 to Offer of Employment, dated as of August 8, 2014, by and between Ultragenyx Pharmaceutical Inc. and Shalini Sharp 10-Q 8/11/2014 10.4 10.41# Offer Letter, dated as of April 26, 2016, between Ultragenyx Pharmaceutical Inc. and Karah Parschauer 10-Q 8/9/2016 10.3 10.42# Offer Letter, dated as of February 20, 2015, between Ultragenyx Pharmaceutical Inc. and Dennis Huang 10-K 2/17/2017 10.36 10.43# Offer Letter, dated as of June 11, 2015, between Ultragenyx Pharmaceutical Inc. and John R. Pinion II 10-K 2/17/2017 10.37 10.44# Offer Letter, dated as of January 15, 2018, between Ultragenyx Pharmaceutical Inc. and Camille Bedrosian, M.D. 10-K 2/21/2018 10.46 Exhibit Number   Exhibit Description   Incorporated by Reference   Filed     Form   Date   Number   Herewith 10.24*   Master Services Agreement, dated April 8, 2019, between Ultragenyx Pharmaceutical Inc. and Aenova Haupt Pharma Wolfratshausen GmbH                   X 10.25*   Royalty Purchase Agreement, dated as of December 17, 2019, between Ultragenyx Pharmaceutical Inc. and RPI Finance Trust     10-K     2/14/2020     10.25     10.26   Equity Purchase Agreement, dated as of June 18, 2019 by and among Ultragenyx Pharmaceutical Inc. and Arcturus Therapeutics Ltd.     10-Q     7/30/2020     10.1       10.27#     2011 Equity Incentive Plan (including forms of Stock Option Grant Notice and Stock Option Agreement thereunder)     S-1     11/8/2013     10.11       10.28#     Amendment to the 2011 Equity Incentive Plan     S-1     11/8/2013     10.12       10.29#     2014 Incentive Plan (as amended)     10-K     2/17/2017     10.20       10.30#     Form of Incentive Stock Option Agreement     S-1/A     1/17/2014     10.14       10.31#     Form of Non Statutory Stock Option Agreement (Employees)     S-1/A     1/17/2014     10.15       10.32#     Form of Non Statutory Stock Option Agreement (Employees)(ex-U.S.)   10-Q   5/10/2016   10.3       10.33#     Form of Non-Statutory Stock Option Agreement (Directors)     S-1/A     1/17/2014     10.16       10.34#     Form of Restricted Stock Unit Agreement (Employees)     10-Q     5/10/2016     10.1       10.35#     Form of Restricted Stock Unit Agreement (Employees)(ex-U.S.)     10-Q     5/10/2016     10.2       10.36#     Form of Restricted Stock Unit Agreement (Directors)     S-1/A     1/17/2014     10.18       10.37#     Form of Performance Stock Unit Agreement (Current Employees)     10-K     2/21/2018     10.31       10.38#     Form of Performance Stock Unit Agreement (New Employees)     10-K     2/21/2018     10.32     10.39#   Form of Performance Stock Unit Agreement (2019)   10-Q   5/7/2019   10.4     10.40#   Form of Performance Stock Unit Agreement (2020)   10-Q   5/7/2020   10.3       10.41#     2014 Employee Stock Purchase Plan (as amended)     10-K     2/17/2017     10.28       10.42#     Corporate Bonus Plan     S-1/A     1/17/2014     10.27     10.43#   Employment Inducement Plan               X 10.44#   Form of Non Statutory Stock Option Agreement (Inducement Plan)               X 10.45#   Form of Non Statutory Stock Option Agreement (Inducement Plan) (ex-US)               X 10.46#   Form of Restricted Stock Unit Agreement (Inducement Plan)               X 10.47#   Form of Restricted Stock Unit Agreement (Inducement Plan)(ex-US)               X   10.48#     Executive Employment Agreement, dated as of June 15, 2011, between Ultragenyx Pharmaceutical Inc. and Emil D. Kakkis, M.D., Ph.D.     S-1     11/8/2013     10.18                           10.49#   Amendment No. 1 to Executive Employment Agreement, dated August 8, 2014, by and between Ultragenyx Pharmaceutical Inc. and Emil D. Kakkis, M.D., Ph.D.   10-Q   8/11/2014   10.2     Exhibit Number   Exhibit Description   Incorporated by Reference   Filed     Form   Date   Number   Herewith                       10.45#   Offer Letter, dated August 2, 2018, between Ultragenyx Pharmaceutical Inc. and Wladimir Hogenhuis, M.D.   10-Q   11/6/2018   10.1                           10.46#   Form of Indemnification Agreement   10-K   3/24/2014   10.23       10.47     Standard Lease, dated as of July 5, 2011, between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.     S-1     11/8/2013     10.22                           10.48   Addendum One to Standard Lease, dated as of July 5, 2011, between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-K   2/26/2016   10.34                           10.49   Addendum Two to Standard Lease, dated as of March 7, 2012, between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-K   2/26/2016   10.35                           10.50   Addendum #3 to Standard Lease, effective as of February 12, 2014, by and between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.     8-K     2/25/2014     10.1                           10.51   Addendum #4 to Standard Lease, effective as of March 9, 2015, by and between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   8-K   3/13/2015   10.1                           10.52   Addendum #5 to Standard Lease, effective as of April 7, 2015, by and between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-K   2/26/2016   10.38       10.53     License and Services Agreement, dated as of September 24, 2010, between Ultragenyx Pharmaceutical Inc. and The Buck Institute for Research on Aging     S-1     11/8/2013     10.23       10.54     Amendment No. 1 to License and Services Agreement, dated as of September 4, 2012, between Ultragenyx Pharmaceutical Inc. and The Buck Institute for Research on Aging     S-1     11/8/2013     10.24                           10.55   Amendment No. 2 to License and Services Agreement, effective as of September 15, 2014, by and between Ultragenyx Pharmaceutical Inc. and The Buck Institute for Research on Aging   10-Q   11/10/2014   10.1                           10.56   Amendment No. 3 to License and Services Agreement, effective September 21, 2015, between Ultragenyx Pharmaceutical Inc. and The Buck Institute for Research on Aging   10-Q   11/10/2015   10.3                           10.57   Amendment No. 4 to License and Services Agreement, effective September 28, 2016, between Ultragenyx Pharmaceutical Inc. and The Buck Institute for Research on Aging   10-K   2/17/2017   10.51                           10.58   Lease Agreement between Marina Boulevard Property, LLC and Ultragenyx Pharmaceutical Inc., dated as of December 8, 2015   10-K   2/26/2016   10.43                           Exhibit Number   Exhibit Description   Incorporated by Reference   Filed     Form   Date   Number   Herewith   10.50#     Offer Letter, dated as of October 31, 2011, between Ultragenyx Pharmaceutical Inc. and Thomas Kassberg     S-1     11/8/2013     10.19                           10.51#   Amendment No. 1 to Offer of Employment, dated as of August 8, 2014, by and between Ultragenyx Pharmaceutical Inc. and Thomas Kassberg   10-Q   8/11/2014   10.3       10.52#   Transition Letter Agreement, dated as of March 5, 2020, between Ultragenyx Pharmaceutical Inc. and Shalini Sharp   8-K   3/6/2020   10.1                           10.53#   Amendment, dated as of August 28, 2020 to Transition Letter Agreement between Ultragenyx Pharmaceutical Inc. and Shalini Sharp dated as of March 5, 2020   8-K   9/2/2020   10.2     10.54#   Amendment No. 2, dated as of October 8, 2020, to Transition Letter Agreement between Ultragenyx Pharmaceutical Inc. and Shalini Sharp dated as of March 5, 2020, as amended on August 28, 2020   8-K   10/13/2020   10.2     10.55#   Offer Letter, dated as of August 28, 2020 between Ultragenyx Pharmaceutical Inc. and Mardi C. Dier.   8-K   9/2/2020   10.1     10.56#   Amendment, dated as of, October 9, 2020 to the Offer Letter between Ultragenyx Pharmaceutical Inc. and Mardi C. Dier dated August 28, 2020   8-K   10/13/2020   10.1                           10.57#   Offer Letter, dated as of April 26, 2016, between Ultragenyx Pharmaceutical Inc. and Karah Parschauer   10-Q   8/9/2016   10.3                           10.58#   Offer Letter, dated as of February 20, 2015, between Ultragenyx Pharmaceutical Inc. and Dennis Huang   10-K   2/17/2017   10.36                           10.59#   Offer Letter, dated as of June 11, 2015, between Ultragenyx Pharmaceutical Inc. and John R. Pinion II   10-K   2/17/2017   10.37                           10.60#   Offer Letter, dated as of January 15, 2018, between Ultragenyx Pharmaceutical Inc. and Camille Bedrosian, M.D.   10-K   2/21/2018   10.46                           10.61#   Offer Letter, dated May 16, 2017, by and between Ultragenyx Pharmaceutical Inc. and Erik Harris   10-Q   8/2/2019   10.4     10.62#   Addendum #1, dated August 8, 2017, to Offer Letter dated May 16, 2017 between Ultragenyx Pharmaceutical Inc. and Erik Harris   10-Q   8/2/2019   10.5                           10.63#   Addendum #2, dated June 19, 2019, to Offer Letter dated May 16, 2017 between Ultragenyx Pharmaceutical Inc. and Erik Harris   10-Q   8/2/2019   10.6                           10.64#   Form of Indemnification Agreement   10-K   3/24/2014   10.23       10.65     Standard Lease, dated as of July 5, 2011, between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.     S-1     11/8/2013     10.22                           10.66   Addendum One to Standard Lease, dated as of July 5, 2011, between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-K   2/26/2016   10.34                           Exhibit Number   Exhibit Description   Incorporated by Reference   Filed     Form   Date   Number   Herewith 10.59   Standard Lease, dated December 17, 2015, between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-K   2/21/2018   10.60                           10.60   Addendum 1 to Standard Lease, dated December 17, 2015, between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-K   2/21/2018   10.61                           10.61   Addendum 2 to Standard Lease, dated March 14, 2016, between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-K   2/21/2018   10.62                           10.62   Addendum 3 to Standard Lease, dated September 22, 2017, between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-K   2/21/2018   10.63                           10.63   Addendum 4 to Standard Lease, effective April 1, 2018, between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-Q   8/3/2018   10.2                           10.64   Indenture of Lease between Dimension Therapeutics, Inc. and Rivertech Associates II, LLC, dated March 11, 2014, as amended   10-K   2/21/2018   10.64                           10.65   Second Lease Amendment to the Lease between Dimension Therapeutics, Inc. and Rivertech Associates II, LLC, dated April 28, 2017   10-K   2/21/2018   10.65                           10.66   Third Lease Amendment to the Lease between Ultragenyx Pharmaceutical Inc. and Rivertech Associates II, LLC, effective December 31, 2018               X                       10.67   Lease Agreement, by and between Dimension Therapeutics, Inc. and ARE-MA Region No. 20, LLC, dated November 2, 2015, and Consent to Assignment to Ultragenyx Pharmaceutical Inc.   10-K   2/21/2018   10.66                           10.68   First Amendment to Lease Agreement, dated March 20, 2018, between Ultragenyx Pharmaceutical Inc. and ARE-MA Region No. 20, LLC   10-Q   5/8/2018   10.6                           10.69   Second Amendment to Lease Agreement, made July 1, 2018, between Ultragenyx Pharmaceutical Inc. and ARE-MA Region No. 20, LLC   10-Q   8/3/2018   10.3       21.1     Subsidiaries of Ultragenyx Pharmaceutical Inc.                 X   23.1     Consent of Independent Registered Public Accounting Firm                 X   24.1     Power of Attorney (included on the signature page of this report)                         31.1      Certification of Chief Executive Officer of Ultragenyx Pharmaceutical Inc., as required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                     X Exhibit Number   Exhibit Description   Incorporated by Reference   Filed     Form   Date   Number   Herewith 10.67   Addendum Two to Standard Lease, dated as of March 7, 2012, between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-K   2/26/2016   10.35                           10.68   Addendum #3 to Standard Lease, effective as of February 12, 2014, by and between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.     8-K     2/25/2014     10.1                           10.69   Addendum #4 to Standard Lease, effective as of March 9, 2015, by and between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   8-K   3/13/2015   10.1                           10.70   Addendum #5 to Standard Lease, effective as of April 7, 2015, by and between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-K   2/26/2016   10.38                           10.71   Addendum #6 to Standard Lease, effective as of April 29, 2019, by and between Ultragenyx Pharmaceutical Inc. and Condiotti Enterprises, Inc.   10-Q   8/2/2019   10.3                           10.72   Lease Agreement between Marina Boulevard Property, LLC and Ultragenyx Pharmaceutical Inc., dated as of December 8, 2015   10-K   2/26/2016   10.43                           10.73   Indenture of Lease between Dimension Therapeutics, Inc. and Rivertech Associates II, LLC, dated March 11, 2014, as amended   10-K   2/21/2018   10.64                           10.74   Second Lease Amendment to the Lease between Dimension Therapeutics, Inc. and Rivertech Associates II, LLC, dated April 28, 2017   10-K   2/21/2018   10.65                           10.75   Third Lease Amendment to the Lease between Ultragenyx Pharmaceutical Inc. and Rivertech Associates II, LLC, effective December 31, 2018   10-K   2/20/2019   10.66                           10.76   Lease Agreement, by and between Dimension Therapeutics, Inc. and ARE-MA Region No. 20, LLC, dated November 2, 2015, and Consent to Assignment to Ultragenyx Pharmaceutical Inc.   10-K   2/21/2018   10.66                           10.77   First Amendment to Lease Agreement, dated March 20, 2018, between Ultragenyx Pharmaceutical Inc. and ARE-MA Region No. 20, LLC   10-Q   5/8/2018   10.6                           10.78   Second Amendment to Lease Agreement, made July 1, 2018, between Ultragenyx Pharmaceutical Inc. and ARE-MA Region No. 20, LLC   10-Q   8/3/2018   10.3     10.79   Third Amendment, dated July 29, 2019, to the Lease Agreement dated October 30, 2015 by and between Ultragenyx Pharmaceutical Inc. and ARE-MA Region No., LLC.   10-Q   7/30/2020   10.2     10.80   Amended and Restated Fourth Amendment, dated August 4, 2020, to the Lease Agreement dated October 30, 2015 by and between Ultragenyx Pharmaceutical Inc. and ARE-MA Region No., LLC.   10-Q   10/27/2020   10.5     Exhibit Number Exhibit Description Incorporated by Reference Filed Form Date Number Herewith 31.2 Certification of Chief Financial Officer of Ultragenyx Pharmaceutical Inc., as required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X 32.1§ Certification by the Chief Executive Officer and Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 36 of Title 18 of the United States Code (18 U.S.C. §1350) X 101.INS XBRL Instance Document X 101.SCH XBRL Taxonomy Extension Schema Document X 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB XBRL Taxonomy Extension Labels Linkbase Document X 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document X Exhibit Number   Exhibit Description   Incorporated by Reference   Filed     Form   Date   Number   Herewith 10.81   Lease Agreement, dated December 15, 2019, between Ultragenyx Pharmaceutical Inc. and ARE-San Francisco No. 17, LLC.               X 10.82   First Amendment, dated September 20, 2020, to the Lease Agreement dated December 15, 2019 between Ultragenyx Pharmaceutical Inc. and ARE-San Francisco No. 17, LLC.               X 10.83   Second Amendment, dated October 21, 2020, to the Lease Agreement dated December 15, 2019 between Ultragenyx Pharmaceutical Inc. and ARE-San Francisco No. 17, LLC.               X                       10.84   Office Lease, dated April 19, 2019, between Ultragenyx Pharmaceutical Inc. and Woburn MCB II, LLC   10-K   2/14/2020   10.70                           10.85   Commercial Lease, dated July 2, 2018, between Ultragenyx Pharmaceutical Inc. and 32 Leveroni LLC   10-K   2/14/2020   10.71       21.1     Subsidiaries of Ultragenyx Pharmaceutical Inc.                 X   23.1     Consent of Independent Registered Public Accounting Firm                 X   24.1     Power of Attorney (included on the signature page of this report)                         31.1      Certification of Chief Executive Officer of Ultragenyx Pharmaceutical Inc., as required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                     X   31.2     Certification of Chief Financial Officer of Ultragenyx Pharmaceutical Inc., as required by Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                     X   32.1§     Certification by the Chief Executive Officer and Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 36 of Title 18 of the United States Code (18 U.S.C. §1350)                       X 101.INS   XBRL Instance Document, formatted in Inline XBRL               X                       101.SCH   Inline XBRL Taxonomy Extension Schema Document               X                       101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document               X                       101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document               X                       101.LAB   Inline XBRL Taxonomy Extension Labels Linkbase Document               X                       101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document               X                       104   The cover page from this Annual Report on Form 10-K, formatted in Inline XBRL                 † Confidential treatment has been granted with respect to certain portions (indicated by asterisks) of this exhibit. Omitted portions have been filed separately with the SEC. *       Certain confidential portions of this exhibit were omitted by means of marking such portions with asterisks because the    identified confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed. # Indicates management contract or compensatory plan. § The certification attached as Exhibit 32.1 that accompanies this Annual Report is not deemed filed with the SEC and is not to be incorporated by reference into any filing of Ultragenyx Pharmaceutical Inc. under the Securities Act or the Exchange Act, whether made before or after the date of this Annual Report, irrespective of any general incorporation language contained in such filing.   Item 16.  Form 10-K Summary None. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.   ULTRAGENYX PHARMACEUTICAL Inc.   By:      /s/ Emil D. Kakkis     Emil D. Kakkis, M.D., Ph.D.     President and Chief Executive Officer Date: February 19, 201911, 2021 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Emil D. Kakkis, M.D., Ph.D. and Shalini Sharp,Mardi C. Dier, and each of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution for him or her, and in his or her name in any and all capacities, to sign any and all amendments to this Annual Report, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, and any of them, his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.     Signature       Title       Date     /s/ Emil D. Kakkis   Emil D. Kakkis, M.D., Ph.D.                   President and Chief Executive Officer and Director (Principal Executive Officer)   February 19, 201911, 2021   /s/ Shalini SharpMardi C. Dier   Shalini SharpMardi C. Dier     Executive Vice President and Chief Financial Officer (Principal Financial Officer)     February 19, 201911, 2021   /s/ Theodore A. Huizenga   Theodore A. Huizenga     Senior Vice President, Corporate Controller (Principal Accounting Officer)     February 19, 201911, 2021   /s/ Daniel G. Welch   Daniel G. Welch.Welch     Chairman of the Board     February 19, 201911, 2021   /s/ William Aliski   William Aliski     Director     February 19, 201911, 2021   /s/ Deborah Dunsire   Deborah Dunsire, M.D.     Director     February 19, 201911, 2021   /s/ Lars Ekman   Lars Ekman, M.D., Ph.D.     Director     February 19, 201911, 2021   /s/ Matthew K. Fust   Matthew K. Fust     Director     February 19, 201911, 2021   /s/ Michael Narachi   Michael Narachi     Director     February 19, 201911, 2021   /s/ Clay B. Siegall   Clay B. Siegall, Ph.D.     Director     February 19, 201911, 2021   /s/ Shehnaaz Suliman     Director   February 19, 2019 11, 2021 Shehnaaz Suliman, M.D.           Ultragenyx Pharmaceutical Inc. INDEX TO FINANCIAL STATEMENTS     Page Report of Independent Registered Public Accounting Firm F-2 Consolidated Financial Statements:   Consolidated Balance Sheets F-3 Consolidated Statements of Operations F-4 Consolidated Statements of Comprehensive LossOperations F-5 Consolidated Statements of Stockholders’ EquityComprehensive Loss F-6 Consolidated Statements of Cash FlowsStockholders’ Equity F-7 Consolidated Statements of Cash Flows F-8 Notes to Consolidated Financial Statements F-8F-10       Report of Independent Registered Public Accounting Firm   To the Stockholders and the Board of Directors of Ultragenyx Pharmaceutical Inc.:   Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Ultragenyx Pharmaceutical Inc. (the “Company”)Company) as of December 31, 20182020 and 2017,2019, the related consolidated statements of operations, comprehensive loss, stockholders’stockholders' equity and cash flows for each of the three years in the period ended December 31, 2018,2020, and the related notes (collectively referred to as the “financial“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as ofat December 31, 20182020 and 2017,2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018,2020, in conformity with USU.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’sCompany's internal control over financial reporting as of December 31, 2018,2020, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework)framework) and our report dated February 19, 201911, 2021 expressed an unqualified opinion thereon.   Basis for Opinion These financial statements are the responsibility of the Company’sCompany's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the USU.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures includeincluded examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Net product sales Description of the Matter The Company sells approved products through a limited number of distributors. As discussed in Note 2, when recognizing revenue, the Company makes an estimate of the transaction price, including an assessment of whether to constrain any variable consideration. Product sales are recorded net of estimated government-mandated rebates and chargebacks, estimated product returns, and other deductions at the time revenue is recorded. Limited historical data is available for use in developing such estimates which are periodically reviewed and adjusted as necessary. Auditing the Company’s net product sales was complex due to the Company’s limited history of product sales and the growth of sales in international markets. The Company’s estimates of government mandated rebates, chargebacks and estimated product returns depend on the identification of key customer contract terms and conditions, as well as estimates of sales volumes to different classes of payors. The revenue recognition process can be complex and involves significant judgment to identify and assess the terms and conditions of customer agreements and related government regulations that could affect revenue recognition, as the Company’s revenue expands with new customers and new markets. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process of recording product sales and related rebates, chargebacks and returns. We also tested management’s controls related to the identification and assessment of the terms and conditions of customer agreements and the completeness and accuracy of data utilized in the controls, and the calculations supporting management’s estimates.   To test net product sales, our audit procedures included, among others, tracing a sample of revenue transactions recognized during the year to source documentation. We also confirmed a sample of outstanding receivable balances directly with the Company’s customers. To test management’s estimates of rebates, chargebacks and returns, we obtained management’s calculations for the respective estimates and performed one or more of the following procedures: tested management’s estimation process to assess whether the recorded reserve balances are within a reasonable range of estimate, performed retrospective reviews, assessed subsequent events, and tested a sample of credits issued throughout the year. Liability related to the sale of future royalties Description of the Matter As discussed in Note 10, the Company entered into a royalty purchase agreement in 2019, in which the Company sold its right to receive royalty payments arising from the net sales of Crysvita in the European market in exchange for $320 million. The proceeds from the transaction were recorded as a liability that is being amortized using the effective interest method over the estimated life of the arrangement. In order to determine the amortization of the liability, the Company is required to estimate the total amount of future royalty payments to be paid to the counterparty, subject to the capped amount, over the life of the arrangement. The Company estimates an imputed interest on the unamortized portion of the liability and records interest expense relating to the transaction. Auditing the Company’s liability related to the sale of future royalties was complex due to the subjective judgments required to forecast the expected royalty payments subject to the agreement. Specifically, the forecasted revenues of Crysvita in the European market involved significant estimation uncertainty. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process of accounting for the liability related to the sale of future royalties, including controls over the Company’s estimates of projected sales of Crysvita in the European market. To test management’s estimates of the future royalties and the imputed effective interest rate, we performed audit procedures that included, among others, evaluating the reasonableness of management’s assumptions related to the treatable patient population, estimated pricing and reimbursement, and the rate of adoption. We compared the significant assumptions with historical trends of actual sales, analyst expectations and performed sensitivity analyses of estimated future royalties to evaluate the impact of the changes in the future royalties on the implied effective interest rate.   /s/ Ernst & Young LLP   We have served as the Company’s auditor since 2010.   San Jose, California February 19, 201911, 2021         ULTRAGENYX PHARMACEUTICAL INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts)     December 31,     December 31,     2018     2017     2020     2019   ASSETS                                 Current assets:                                 Cash and cash equivalents   $ 113,432     $ 100,488     $ 713,526     $ 433,584   Short-term investments     346,274       134,005   Accounts receivable     12,740       5,172   Marketable debt securities     488,007       321,646   Accounts receivable, net     23,093       32,844   Inventory     7,065       757       13,048       11,546   Prepaid expenses and other current assets     42,858       29,161       57,630       51,397   Total current assets     522,369       269,583       1,295,304       851,017   Property and equipment, net     20,046       21,837   Long-term investments     —       9,975   Property, plant, and equipment, net     73,515       44,348   Equity investments     155,375       27,752   Marketable debt securities     10,506       5,174   Right-of-use assets     40,524       30,328   Intangible assets, net     129,223       141,545       131,113       129,000   Goodwill     44,406       44,406       44,406       44,406   Other assets     3,514       3,407       8,812       3,471   Total assets   $ 719,558     $ 490,753     $ 1,759,555     $ 1,135,496                                   LIABILITIES AND STOCKHOLDERS' EQUITY                                 Current liabilities:                                 Accounts payable   $ 12,275     $ 8,886     $ 12,923     $ 12,871   Accrued liabilities     62,450       62,128       108,491       83,194   Contract liabilities     59,219       —   Lease liabilities     8,976       7,235   Total current liabilities     74,725       71,014       189,609       103,300   Contract liabilities     7,349       —   Lease liabilities     39,251       29,757   Deferred tax liabilities     31,166       31,166       33,306       33,306   Other liabilities     4,759       5,119   Liability related to the sale of future royalties     335,665       315,369   Total liabilities     110,650       107,299       605,180       481,732   Commitments and contingencies (Note 14)                 Commitments and contingencies (Notes 8 and 15)                 Stockholders’ equity:                                 Preferred stock, par value of $0.001 per share—25,000,000 shares authorized; nil outstanding as of December 31, 2018 and 2017     —       —   Common stock, par value of $0.001 per share—250,000,000 shares authorized; 50,860,588 and 44,167,071 shares issued and outstanding as of December 31, 2018 and 2017, respectively     51       44   Preferred stock, par value of $0.001 per share—25,000,000 shares authorized; nil outstanding as of December 31, 2020 and 2019     —       —   Common stock, par value of $0.001 per share—250,000,000 shares authorized; 66,818,520 and 57,838,220 shares issued and outstanding as of December 31, 2020 and 2019, respectively     67       58   Additional paid-in capital     1,639,773       1,221,762       2,773,195       2,086,863   Accumulated other comprehensive loss     (633 )     (5,680 ) Accumulated other comprehensive income (loss)     689       (147 ) Accumulated deficit     (1,030,283 )     (832,672 )     (1,619,576 )     (1,433,010 ) Total stockholders’ equity     608,908       383,454       1,154,375       653,764   Total liabilities and stockholders’ equity   $ 719,558     $ 490,753     $ 1,759,555     $ 1,135,496   See accompanying notes.       ULTRAGENYX PHARMACEUTICAL INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts)     Year Ended December 31,     Year Ended December 31,     2018     2017     2016     2020     2019     2018   Revenues:                                                 Collaboration and license   $ 41,693     $ 2,136     $ —     $ 219,315     $ 83,493     $ 41,693   Product sales     9,802       476       133       38,720       20,221       9,802   Non-cash collaboration royalty revenue     12,995       —       —   Total revenues     51,495       2,612       133       271,030       103,714       51,495   Operating expenses:                                                 Cost of sales     1,146       1       —       6,129       9,008       1,146   Research and development     293,998       231,644       183,204       412,084       357,355       293,998   Selling, general and administrative     127,724       99,909       64,936       182,933       161,524       127,724   Total operating expenses     422,868       331,554       248,140       601,146       527,887       422,868   Loss from operations     (371,373 )     (328,942 )     (248,007 )     (330,116 )     (424,173 )     (371,373 ) Interest income     9,542       4,074       3,789       7,038       13,238       9,542   Gain from sale of priority review vouchers     170,322       —       —       —       —       170,322   Change in fair value of equity investments     170,403       13,413       —   Non-cash interest expense on liability related to the sale of future royalties     (33,291 )     (1,135 )     —   Other income (expense)     (5,588 )     6,530       (1,621 )     607       (787 )     (5,588 ) Loss before income taxes     (197,097 )     (318,338 )     (245,839 )     (185,359 )     (399,444 )     (197,097 ) Benefit from (provision for) income taxes     (514 )     16,199       (35 ) Provision for income taxes     (1,207 )     (3,283 )     (514 ) Net loss   $ (197,611 )   $ (302,139 )   $ (245,874 )   $ (186,566 )   $ (402,727 )   $ (197,611 ) Net loss per share, basic and diluted   $ (3.97 )   $ (7.12 )   $ (6.21 )   $ (3.07 )   $ (7.12 )   $ (3.97 ) Shares used in computing net loss per share, basic and diluted     49,775,223       42,453,135       39,586,908       60,845,550       56,576,885       49,775,223   See accompanying notes.       ULTRAGENYX PHARMACEUTICAL INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (In thousands)     Year Ended December 31,     Year Ended December 31,     2018     2017     2016     2020     2019     2018   Net loss   $ (197,611 )   $ (302,139 )   $ (245,874 )   $ (186,566 )   $ (402,727 )   $ (197,611 ) Other comprehensive income (loss):                         Other comprehensive income:                         Foreign currency translation adjustments     (303 )     (10,110 )     1,322       735       23       (303 ) Transfer of currency translation adjustments balance to other income related                                                 to the liquidation of foreign subsidiaries     5,272       3,490       —       —       —       5,272   Unrealized gain on available-for-sale securities     78       35       451       101       463       78   Other comprehensive income (loss):     5,047       (6,585 )     1,773   Other comprehensive income:     836       486       5,047   Total comprehensive loss   $ (192,564 )   $ (308,724 )   $ (244,101 )   $ (185,730 )   $ (402,241 )   $ (192,564 ) See accompanying notes.       ULTRAGENYX PHARMACEUTICAL INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In thousands, except share amounts)     Common Stock     Additional Paid-In     Accumulated Other Comprehensive     Accumulated     Total Stockholders'     Common Stock     Additional Paid-In     Accumulated Other Comprehensive     Accumulated     Total Stockholders'     Shares     Amount     Capital     Income (Loss)     Deficit     Equity     Shares     Amount     Capital     Income (Loss)     Deficit     Equity   Balance as of December 31, 2015     38,882,394     $ 39     $ 816,578     $ (868 )   $ (284,659 )   $ 531,090   Issuance of common stock in connection with at-the-market offering, net of issuance costs     1,159,415       1       79,485       —       —       79,486   Issuance of common stock in connection with collaboration agreement, net of issuance costs     727,120       1       52,271       —       —       52,272   Put option grant in connection with collaboration agreement     —       —       (916 )     —       —       (916 ) Employee stock-based compensation     —       —       48,309       —       —       48,309   Issuance of common stock under equity plan awards, net of tax     471,301       —       7,834       —       —       7,834   Other comprehensive income     —       —       —       1,773       —       1,773   Net loss     —       —       —       —       (245,874 )     (245,874 ) Balance as of December 31, 2016     41,240,230       41       1,003,561       905       (530,533 )     473,974   Issuance of common stock in connection with at-the-market offering, net of issuance costs     2,251,217       2       131,958       —       —       131,960   Fair value of vested stock options assumed from acquisition     —       —       8,979       —       —       8,979   Employee stock-based compensation     —       —       68,014       —       —       68,014   Issuance of common stock under equity plan awards, net of tax     675,624       1       9,250       —       —       9,251   Other comprehensive loss     —       —       —       (6,585 )     —       (6,585 ) Net loss     —       —       —       —       (302,139 )     (302,139 ) Balance as of December 31, 2017     44,167,071       44       1,221,762       (5,680 )     (832,672 )     383,454       44,167,071     $ 44     $ 1,221,762     $ (5,680 )   $ (832,672 )   $ 383,454   Issuance of common stock in connection with underwritten public offering, net of issuance costs     5,043,860       5       270,964       —       —       270,969       5,043,860       5       270,964       —       —       270,969   Issuance of common stock in connection with at-the-market offering, net of issuance costs     640,257       1       38,055       —       —       38,056       640,257       1       38,055       —       —       38,056   Employee stock-based compensation     —       —       81,165       —       —       81,165   Stock-based compensation expense     —       —       81,165       —       —       81,165   Issuance of common stock under equity plan awards, net of tax     1,009,400       1       27,827       —       —       27,828       1,009,400       1       27,827       —       —       27,828   Other comprehensive income     —       —       —       5,047       —       5,047       —       —       —       5,047       —       5,047   Net loss     —       —       —       —       (197,611 )     (197,611 )     —       —       —       —       (197,611 )     (197,611 ) Balance as of December 31, 2018     50,860,588     $ 51     $ 1,639,773     $ (633 )   $ (1,030,283 )   $ 608,908       50,860,588       51       1,639,773       (633 )     (1,030,283 )     608,908   Issuance of common stock in connection with underwritten public offering, net of issuance costs     5,833,333       6       330,409       —       —       330,415   Issuance of common stock in connection with at-the-market offering, net of issuance costs     468,685       —       24,828       —       —       24,828   Stock-based compensation expense     —       —       82,025       —       —       82,025   Issuance of common stock under equity plan awards, net of tax     675,614       1       9,828       —       —       9,829   Other comprehensive income     —       —       —       486       —       486   Net loss     —       —       —       —       (402,727 )     (402,727 ) Balance as of December 31, 2019     57,838,220       58       2,086,863       (147 )     (1,433,010 )     653,764   Issuance of common stock in connection with underwritten public offering, net of issuance costs     5,111,110       5       435,551       —       —       435,556   Issuance of common stock in connection with license agreement, net of issuance costs     1,243,913       1       55,267       —       —       55,268   Issuance of common stock in connection with at-the-market offering, net of issuance costs     283,333       —       20,391       —       —       20,391   Stock-based compensation expense     —       —       85,833       —       —       85,833   Issuance of common stock upon exercise of warrants and under equity plan awards, net of tax     2,341,944       3       89,290       —       —       89,293   Other comprehensive income     —       —       —       836       —       836   Net loss     —       —       —       —       (186,566 )     (186,566 ) Balance as of December 31, 2020     66,818,520     $ 67     $ 2,773,195     $ 689     $ (1,619,576 )   $ 1,154,375   See accompanying notes.       ULTRAGENYX PHARMACEUTICAL INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)       Year Ended December 31,       2018     2017     2016   Operating activities:                         Net loss   $ (197,611 )   $ (302,139 )   $ (245,874 ) Adjustments to reconcile net loss to net cash used in operating activities:                         Stock-based compensation     80,107       68,014       48,309   Amortization of premium (discount) on investment securities, net     (2,641 )     1,706       4,842   Depreciation and amortization     19,538       5,825       3,424   Foreign currency remeasurement (gain) loss     5,309       (7,018 )     1,322   Gain on sale of priority review voucher     (170,322 )     —       —   Other     (156 )     —       700   Changes in operating assets and liabilities:                         Accounts receivable     (7,583 )     (5,172 )     —   Inventory     (5,283 )     (757 )     —   Prepaid expenses and other current assets     (13,908 )     2,591       (7,147 ) Other assets     (377 )     522       (1,242 ) Accounts payable     3,372       3,459       2,502   Accrued liabilities and other liabilities     (1,011 )     (4,628 )     32,189   Deferred tax liabilities     —       (16,246 )     —   Net cash used in operating activities     (290,566 )     (253,843 )     (160,975 ) Investing activities:                         Acquisition, net of cash acquired     —       (142,804 )     —   Purchase of property and equipment     (4,076 )     (2,793 )     (10,188 ) Purchase of investments     (509,796 )     (230,487 )     (442,490 ) Proceeds from sale of investments     7,655       157,934       140,556   Proceeds from maturities of investments     302,564       273,632       403,239   Proceeds from sale of priority review vouchers     170,322       —       —   Net cash provided by (used in) investing activities     (33,331 )     55,482       91,117   Financing activities:                         Proceeds from the issuance of common stock in connection with underwritten     public offerings, net     270,969       —       —   Proceeds from the issuance of common stock in connection with at-the-market    offering, net     38,056       131,960       79,486   Proceeds from the issuance of common stock in connection with collaboration    agreement, net     —       —       51,356   Proceeds from the issuance of common stock under equity plan awards, net of tax     27,828       9,251       7,834   Repayment of note payable     —       (4,944 )     —   Net cash provided by financing activities     336,853       136,267       138,676   Effect of exchange rate changes on cash     (472 )     528       (65 ) Net increase (decrease) in cash, cash equivalents, and restricted cash     12,484       (61,566 )     68,753   Cash, cash equivalents, and restricted cash at beginning of year     103,041       164,607       95,854   Cash, cash equivalents, and restricted cash at end of year   $ 115,525     $ 103,041     $ 164,607                             Supplemental disclosures of non-cash investing and financing information:                         Stock-based compensation capitalized into inventory   $ 1,058     $ —     $ —   Fair value of vested stock options assumed in acquisition   $ —     $ 8,979     $ —   Costs of property and equipment included in accounts payable and accrued    liabilities   $ 1,192     $ 400     $ 147   Tenant improvement allowance   $ —     $ —     $ 3,467       Year Ended December 31,       2020     2019     2018   Operating activities:                         Net loss   $ (186,566 )   $ (402,727 )   $ (197,611 ) Adjustments to reconcile net loss to net cash used in operating activities:                         Stock-based compensation     85,735       81,995       80,107   Amortization of premium (discount) on marketable debt securities, net     848       (6,214 )     (2,641 ) Depreciation and amortization     12,261       8,539       19,538   Foreign currency remeasurement (gain) loss     (221 )     688       5,309   Change in fair value of equity investments     (170,403 )     (13,413 )     —   Non-cash collaboration royalty revenue     (12,995 )     —       —   Non-cash interest expense on liability related to the sale of future royalties     33,291       1,135       —   Gain from sale of priority review vouchers     —       —       (170,322 ) Other     1,167       1,933       (156 ) Changes in operating assets and liabilities:                         Accounts receivable     9,840       (20,104 )     (7,583 ) Inventory     (1,346 )     (4,451 )     (5,283 ) Prepaid expenses and other assets     2,748       (8,216 )     (14,285 ) Accounts payable, accrued, and other liabilities     26,853       13,312       2,361   Contract liabilities, net     66,568       —       —   Deferred tax liabilities     —       2,140       —   Net cash used in operating activities     (132,220 )     (345,383 )     (290,566 ) Investing activities:                         Purchase of property, plant, and equipment     (43,905 )     (24,832 )     (4,076 ) Purchase of marketable debt securities     (813,237 )     (692,824 )     (509,796 ) Purchase of equity investments     (37,062 )     (14,339 )     —   Proceeds from sale of marketable debt securities     50,990       42,718       7,655   Proceeds from sale of equity investment     79,842       —       —   Proceeds from maturities of marketable debt securities     589,806       676,238       302,564   Proceeds from sale of priority review vouchers     —       —       170,322   Other     (5,555 )     —       —   Net cash used in investing activities     (179,121 )     (13,039 )     (33,331 ) Financing activities:                         Proceeds from the sale of future royalties, net     —       314,234       —   Proceeds from the issuance of common stock in connection with underwritten     public offerings, net     435,556       330,415       270,969   Proceeds from the issuance of common stock in connection with the license    agreement, net     55,268       —       —   Proceeds from the issuance of common stock in connection with at-the-market   offering, net     20,391       24,828       38,056   Proceeds from the issuance of common stock from exercise of warrants and equity     plan awards, net     89,293       9,829       27,828   Other     (236 )     —       —   Net cash provided by financing activities     600,272       679,306       336,853   Effect of exchange rate changes on cash     1,119       (165 )     (472 ) Net increase in cash, cash equivalents, and restricted cash     290,050       320,719       12,484   Cash, cash equivalents, and restricted cash at beginning of year     436,244       115,525       103,041   Cash, cash equivalents, and restricted cash at end of year   $ 726,294     $ 436,244     $ 115,525   See accompanying notes. ULTRAGENYX PHARMACEUTICAL INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)     Year Ended December 31,       2020     2019     2018   Supplemental disclosures of non-cash investing and financing information:                         Acquired lease liabilities arising from obtaining right-of-use assets   $ 18,775     $ 21,861     $ —   Stock-based compensation capitalized into ending inventory   $ 1,304     $ 1,206     $ 1,058   Costs of property and equipment included in accounts payable, accrued, and other     liabilities   $ 8,515     $ 10,367     $ 1,192   See accompanying notes.     F-7F-9 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements   1.       Organization and Basis of Presentation Ultragenyx Pharmaceutical Inc. (the Company) is a biopharmaceutical company incorporated in California on April 22, 2010. The Company subsequently reincorporated in the state of Delaware in June 2011. The Company is focused on the identification, acquisition, development, and commercialization of novel products for the treatment of serious rare and ultra-rare genetic diseases. The Company has twothree commercially approved therapies.products. Crysvita® (burosumab) is approved in the United States by the U.S. Food and Drug Administration (FDA) and in Canada for the treatment of X-linked hypophosphatemia (XLH) in adult and pediatric patients one year of age and older, and has receivedis approved in the European conditional marketing authorizationUnion (EU) and the United Kingdom, for the treatment of XLH with radiographic evidence of bone disease in children 1one year of age and older, adolescents, and adolescentsadults. In Brazil and Mexico, Crysvita is approved for treatment of XLH in adult and pediatric patients one year of age and older. Crysvita was approved by the FDA on June 18, 2020 for the treatment of fibroblast growth factor 23 (FGF23)-related hypophosphatemia in tumor-induced osteomalacia (TIO), associated with growing skeletons. phosphaturic mesenchymal tumors that cannot be curatively resected or localized in adults and pediatric patients 2 years of age and older. The Company has also received FDA approval and European marketing authorization under exceptional circumstances for Mepsevii™ (vestronidase alfa), the first medicine approved for the treatment of children and adults with mucopolysaccharidosis VII (MPS VII), also known as Sly syndrome. In addition to the European Union and the United Kingdom, Mepsevii is approved treatmentsunder exceptional circumstances for XLH and MPS VII, the Company has four ongoing clinical development programs. Crysvita is being studiedpatients of all ages for the treatment of tumor induced osteomalacia (TIO), a rare disease that impairs bone mineralization.non-neurological manifestations of MPS VII. In Brazil, Mepsevii is approved for the treatment of MPS VII for patients of all ages. Dojolvi, formerly known as UX007, is being studied inwas approved by FDA on June 30, 2020 for the treatment of pediatric and adult patients severely affected by long-chain fatty acid oxidation disorders (LC-FAOD), a genetic disorder in which. In addition to the body is unable to convert long chain fatty acids into energy. The companyapproved products, the Company has two gene therapy pipeline candidates: DTX301the following ongoing clinical development programs: DTX401 is an adeno-associated virus 8 (AAV8) gene therapy product candidate for the treatment of patients with glycogen storage disease type Ia (GSDIa); and DTX301 is an AAV8 gene therapy product candidate in development for the treatment of patients with ornithine transcarbamylase (OTC) deficiency, the most common urea cycle disorder;disorder. UX143 (setrusumab) which the Company began collaborating on the development with Mereo BioPharma 3 Limited (Mereo) beginning in January 2021, is a fully human monoclonal antibody that inhibits sclerostin, a protein that acts on a key bone-signaling pathway and DTX401 is an AAV8 gene therapy product candidateinhibits the activity of bone-forming cells for the treatment of patients with glycogen storage diseaseosteogenesis imperfect (OI). GTX-102 is an antisense oligonucleotide, or ASO, which the Company is collaborating on the development with GeneTx Biotherapeutics LLC (GeneTx) for the treatment of Angelman syndrome, a debilitating and rare neurogenetic disorder caused by loss-of-function of the maternally inherited allele of the UBE3A gene. UX701 is an AAV type Ia (GSDIa). 9 gene therapy designed to deliver stable expression of a truncated version of the ATP7B copper transporter following a single intravenous infusion to improve copper distribution and excretion from the body and reverse pathological findings of Wilson liver disease. The Company operates as one1 reportable segment. The Company has sustained operating losses and expects such annual losses to continue over the next several years. The Company’s ultimate success depends on the outcome of its research and development and commercialization activities, for which it expects to incur additional losses in the future. Management recognizes that the Company will likely need to raise additional capital to fully implement its business plan.plans. Through December 31, 2018,2020, the Company has relied primarily on the proceeds fromits sale of equity offeringssecurities, its sale of future royalties, and strategic collaboration arrangements, to finance its operations. The Company intends towill likely raise additional capital through the issuance of equity, borrowings, or strategic alliances with partner companies. However, if such financing is not available at adequate levels, the Company willwould need to reevaluate its operating plans. 2.       Summary of Significant Accounting Policies Basis of Consolidation The consolidated financial statements include the accounts of Ultragenyx Pharmaceutical Inc. and ourits wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated. Use of Estimates The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”)(GAAP). The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities and the reported amounts of expenses in the consolidated financial statements and the accompanying notes. On an ongoing basis, management evaluates its estimates, including those related to clinical trial accruals, fair value of assets and liabilities, income taxes, stock-based compensation, and stock-based compensation.the liability related to the sale of future royalties. Management bases its estimates on historical experience and on various other market-specific and relevant assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. F-10 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market accounts. Restricted cash primarily consists of money market accounts used as collateral for the Company’s obligations under its facility leases.leases and the gene therapy building construction project. F-8 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) In November 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which requires restricted cash to be presented with cash and cash equivalents on the statement of cash flows and disclosure of how the statement of cash flows reconciles to the balance sheet if restricted cash is shown separately from cash and cash equivalents on the balance sheet. The Company adopted the standard as of January 1, 2018 on a retrospective basis, wherein the statement of cash flows for each period presented was adjusted to reflect the effects of applying the new guidance. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the amounts shown in the consolidated statement of cash flows (in thousands):     December 31,     December 31,     2018     2017     2016     2020     2019     2018   Cash and cash equivalents   $ 113,432     $ 100,488     $ 161,120     $ 713,526     $ 433,584     $ 113,432   Restricted cash included in prepaid expenses and other current assets     271       461       1,411       10,847       161       271   Restricted cash included in other assets     1,822       2,092       2,076       1,921       2,499       1,822   Total cash, cash equivalents, and restricted cash shown in the statements of cash flows   $ 115,525     $ 103,041     $ 164,607     $ 726,294     $ 436,244     $ 115,525     InvestmentsMarketable Debt Securities All investmentsmarketable debt securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its investments at the time of purchase and reevaluates such designation as of each balance sheet date. Investments with a maturity of one year or less from the balance sheet date are reported as short-term investmentscurrent marketable debt securities and investments with a maturity of greater than one year from the balance sheet date are reported as long-term investments.non-current marketable debt securities. Unrealized gains and losses are excluded from earnings and are reported as a component of comprehensive loss. Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in other income (expense). The cost of securities sold is based on the specific-identification method. Interest on investments is included in interest income.   Equity Investments In June 2019, the Company entered into an amendment to the Research Collaboration and License Agreement and an Equity Purchase Agreement with Arcturus Therapeutics Holdings Inc. (Arcturus). Pursuant to the Equity Purchase Agreement, the Company purchased 2,400,000 shares of common stock and received an option to purchase an additional 600,000 shares of common stock, which was exercised in May 2020. In December 2020, the Company sold 800,000 shares. The Company elected to apply the fair value option to account for the equity investment in Arcturus. The option to purchase additional Arcturus stock was accounted for at fair value using the Black-Scholes option pricing method prior to the exercise of options. In October 2020, the Company entered into a Research Collaboration and License Agreement, Stock Purchase Agreement and Investor Agreement, with Solid Biosciences Inc. (Solid). Pursuant to the Stock Purchase Agreement, the Company purchased7,825,797 shares of Solid’s common stock. The investment is being accounted at fair value based on quoted market prices. The changes in fair value of the equity investments and an option to purchase additional stock are included in the Consolidated Statements of Operations. See “Note 7. License and Research Agreements” for additional details on the transaction. Concentration of Credit Risk, Credit Losses, and Other Risks and Uncertainties Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash, cash equivalents, and investments. The Company’s cash, cash equivalents, and investments are held by financial institutions that management believes are of high credit quality. The Company’s investment policy limits investments to fixed income securities denominated and payable in U.S. dollars such as U.S. government obligations, money market instruments and funds, corporate bonds, commercial paper, and asset-backed securities and places restrictions on maturities and concentrations by type and issuer. Such deposits may, at times, exceed federally insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents and its accounts are monitored by management to mitigate risk. The Company is exposed to credit risk in the event of default by the financial institutions holding its cash and cash equivalents, corporate bond issuers, and other financial instruments, to the extent recorded in the balance sheets. Effective January 1, 2020, the Company adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments — Credit Losses, (Topic 326): Measurement of Credit Losses on Financial Instruments, which changed the impairment model for most financial assets and certain other instruments. For trade receivables and other instruments, the Company uses a new forward-looking F-11 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) expected loss model that generally results in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, the losses are recognized as allowances rather than as reductions in the amortized cost of the securities. The Company has not experienced anyis exposed to credit losses primarily through receivables from customers and collaborators and through its available-for-sale debt securities. The Company’s expected loss allowance methodology for the receivables is developed using historical collection experience, current and future economic market conditions, a review of the current aging status and financial condition of the entities. Specific allowance amounts are established to date fromrecord the appropriate allowance for customers that have a higher probability of default. Balances are written off when determined to be uncollectible. The Company’s expected loss allowance methodology for the debt securities is developed by reviewing the extent of the unrealized loss, the size, term, geographical location, and industry of the issuer, the issuers’ credit ratings and any changes in those ratings, as well as reviewing current and future economic market conditions and the issuers’ current status and financial condition. The Company considered the current and expected future economic and market conditions surrounding the novel coronavirus (COVID-19) pandemic and determined that the estimate of credit losses was not significantly impacted. The adoption of the guidance did not have a material impact on the Condensed Consolidated Financial Statements and related disclosures and there was 0 allowance for losses on available-for-sale debt securities which were attributable to credit risk concentration. Concentration of credit risk with respect to accounts receivable from customers is primarily limited to collaboration partners, drug wholesalers, and retail pharmacy distributors. Credit is extended to our customers based on an evaluation of a customer’s financial condition, and collateral is not required. Further,for the Company maintains a policy to record allowances for potentially doubtful accounts for estimated losses resulting from the inability of customers to make required payments. As ofyear ended December 31, 2018, there were no allowances for doubtful accounts and the Company has not had any write-offs historically.2020. The Company is dependent on third-party manufacturers to supply products for research and development activities in its programs. In particular, the Company relies and expects to continue to rely on a small number of manufacturers to supply it with its requirements for the active pharmaceutical ingredients and formulated drugs related to these programs. These programs could be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients and formulated drugs. Inventory The Company values inventory at the lower of cost and net realizable value and determines the cost of inventory using the average-cost method. The Company expenses costs associated with the manufacture of product candidates prior to regulatory approval. Inventories consist of currently approved products. F-9 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) The Company periodically reviews its inventories for excess amounts or obsolescence and writes down obsolete or otherwise unmarketable inventory to its estimated net realizable value. Management determines excess inventory based on expected future demand. Estimates related to future demand are sensitive to significant inputs and assumptions such as acceptance by patients and physicians and the availability of formulary coverage and adequate reimbursement from private third-party payers for the product. Property, Plant, and Equipment Property, plant, and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the respective assets. Depreciation and amortization begins at the time the asset is placed in service. Maintenance and repairs are charged to operations as incurred. Upon sale or retirement of assets, the cost and related accumulated depreciation or amortization are removed from the balance sheet and the resulting gain or loss, if any, is reflected in operations. The useful lives of property, plant, and equipment are as follows:   Research and development equipment    5 years Furniture and office equipment    5 years Computer equipment    3 years Software    3-5 years Land Not applicable Leasehold improvements    Shorter of lease term or estimated useful life Intangible Assets The Company recognizes an acquired intangible apart from goodwill whenever the intangible arises from contractual or other legal rights, or whenever it can be separated or divided from the acquired entity and sold, transferred, licensed, rented or exchanged, either individually or in combination with a related contract, asset or liability. The Company’s intangible assets consist of acquired in-process research and development (IPR&D) and an acquired contract asset.contractual payments made for certain milestones achieved with collaboration partners. IPR&D assets represent capitalized incomplete research projects that the Company acquired through business combinations.Such assets are initially measured at their acquisition date fair values and are tested for impairment, until the completion or abandonment of the associated research and development efforts. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets will be deemed finite-lived and will be amortized over a period that best reflects the economic benefits provided by these assets.The acquired contract assetcontractual payments made for certain milestones achieved was initially recorded at fair valueas an intangible and isare amortized over its estimated useful life. F-12 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) The Company tests its definite and indefinite-lived intangible assets for impairment annually during the fourth quarter and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If it is determined that the asset becomes impaired, the carrying value is written down to its fair value with the related impairment charge recognized in consolidated statements of operations in the period in which the impairment occurs. The Company has not recorded any impairments of intangible assets. Goodwill Goodwill represents the excess of purchase price over fair value of net assets acquired in a business combination and is not amortized. Goodwill is subject to impairment testing at least annually during the fourth quarter or when a triggering event occurs that could indicate a potential impairment. If it is determined that the goodwill becomes impaired, the carrying value is written down to its fair value with the related impairment charge recognized in consolidated statements of operations in the period in which the impairment occurs. The Company has not recorded any impairments of goodwill. Impairment of Long-Lived Assets The Company evaluates its long-lived assets, including property and equipment, for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. The Company has not recorded impairment of any long-lived assets. F-10 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) Accruals of Research and Development Costs The Company records accruals for estimated costs of research, preclinical and clinical studies and manufacturing development. These costs are a significant component of the Company’s research and development expenses. A substantial portion of the Company’s ongoing research and development activities are conducted by third-party service providers, including contract research organizations. The Company accrues the costs incurred under its agreements with these third parties based on actual work completed in accordance with agreements established with these third parties. The Company determines the actual costs through discussions with internal personnel andobtaining information from external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. Revenue Recognition Effective January 1, 2017, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (ASC 606) using the full retrospective method. The adoption did not have an effect on the Consolidated Financial Statements on the adoption date and no adjustment to the 2016 consolidated financial statements was required. Collaboration and license revenue The Company has certain license and collaboration agreements that are within the scope of Accounting Standards Codification (ASC) 808, Collaborative Agreements, which provides guidance on the presentation and disclosure of collaborative arrangements. Generally, the classification of the transactions under the collaborative arrangements is determined based on the nature of contractual terms of the arrangement, along with the nature of the operations of the participants. The Company records its share of collaboration revenue, net of transfer pricing related to net sales in the period in which such sales occur, if the Company is considered as an agent in the arrangement. The Company is considered an agent when the collaboration partner controls the product before transfer to the customers and has the ability to direct the use of and obtain substantially all of the remaining benefits from the product. Funding received related to research and development services and commercialization costs areis generally classified as a reduction of research and development expenses and selling, general and administrative expenses, respectively, in the consolidated statement of operations, because the provision of such services for collaborative partners are not considered to be part of the Company’s ongoing major or central operations. The Company also receivesrecords royalty revenues under certain of the Company’s license or collaboration agreements in exchange for license of intellectual property. If the Company does not have any future performance obligations for these license or collaboration agreements, royalty revenue is recorded as the underlying sales occur. In order to record collaboration revenue, the Company utilizes certain information from its collaboration partners, including revenue from the sale of the product, associated reserves on revenue, and costs incurred for development and sales activities. For the periods covered in the financial statements presented, there have been no significant or material changes to prior period estimates of revenues and expenses. The terms of the Company’s collaboration and license agreements may contain multiple performance obligations, which may include licenses and research and development activities. The Company evaluates these agreements under ASC 606, Revenue from Contracts with Customers(ASC 606), to determine the distinct performance obligations. The Company analogizes to ASC 606 for the accounting for distinct performance obligations for which there is a customer relationship. Prior to recognizing revenue, the Company makes estimates of the transaction price, including variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of F-13 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. Total consideration may include nonrefundable upfront license fees, payments for research and development activities, reimbursement of certain third-party costs, payments based upon the achievement of specified milestones, and royalty payments based on product sales derived from the collaboration. If there are multiple distinct performance obligations, the Company allocates the transaction price to each distinct performance obligation based on its relative standalone selling price. The standalone selling price is generally determined based on the prices charged to customers or using expected cost pluscost-plus margin. The Company estimates the efforts needed to complete the performance obligationobligations and recognizes revenue by measuring the progress towards complete satisfaction of the performance obligationobligations using an input measure.measures. Product sales The Company sells its approved products through a limited number of distributors. Under ASC 606, revenue from product sales is recognized at the point in time when the delivery is made and when title and risk of loss transfers to these distributors. The Company also recognizes revenue from sales of certain products on a “named patient” basis, which are allowed in certain countries prior to the commercial approval of the product. Prior to recognizing revenue, the Company makes estimates of the transaction price, including any variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction F-11 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. Product sales are recorded net of estimated government-mandated rebates and chargebacks, estimated product returns, and other deductions. Provisions for returns and other adjustments are provided for in the period the related revenue is recorded, as estimated by management. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are reviewed periodically and adjusted as necessary. The Company’s estimates of government mandated rebates, chargebacks, estimated product returns, and other deductions depends on the identification of key customer contract terms and conditions, as well as estimates of sales volumes to different classes of payors. If actual results vary, the Company may need to adjust these estimates, which could have an effect on earnings in the period of the adjustment. Non-cash collaboration royalty revenue Effective January 1, 2020, the Company sold the right to receive certain royalty payments from net sales of Crysvita in the European territories to RPI Finance Trust (RPI), an affiliate of Royalty Pharma, as further described in “Note 10. Liability Related to the Sale of Future Royalties”. The Company records the royalty revenue from the net sales of Crysvita in the applicable European territories on a prospective basis as non-cash royalty revenue in the Consolidated Statements of Operations over the term of the arrangement. Leases The Company enters intoadopted Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842) as of January 1, 2019 using the modified retrospective method. The results for years ended December 31, 2019 and 2020 are presented under ASC 842. The results for the year ended December 31, 2018 were not adjusted and continue to be reported in accordance with historical accounting under prior lease agreementsguidance, ASC 840, Leases (Topic 840). The Company also elected the package of practical expedients under the transition guidance that will retain the historical lease classification and initial direct costs for its officeany leases that existed prior to adoption of the new guidance and laboratory facilities. Thesethe practical expedient to not separate lease and non-lease components. The Company determines if an arrangement includes a lease at inception. Right-of-use lease assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The right-of-use lease asset includes any lease payments made and excludes lease incentives. Incremental borrowing rate is used in determining the present value of future payments. The Company applies a portfolio approach to the property leases are classifiedto apply an incremental borrowing rate to leases with similar lease terms. The lease terms may include options to extend or terminate the lease. The Company recognizes the options to extend the lease as operating leases. Rentpart of the right-of-use lease assets and lease liabilities only if it is reasonably certain that the option would be exercised. Lease expense for minimum lease payments is recognized on a straight-line basis over the termnon-cancelable lease term. As a result of the lease and, accordingly,adoption of the new guidance, effective January 1, 2019, the Company recordsrecorded a right-of-use lease asset of $16.2 million, a current lease liability of $4.5 million, and a non-current lease liability of $17.0 million and 0 cumulative effect adjustment was made to the difference between cash rent payments andretained earnings as of the recognitionadoption date. In addition, as of rent expense asthe adoption date, the Company derecognized a net deferred rent liability. Incentives granted under the Company’s facilities leases, including allowancesobligation of $5.2 million. See “Note 8. Leases” for further disclosure. F-14 ULTRAGENYX PHARMACEUTICAL INC. Notes to fund leasehold improvements, are deferred and are recognized as adjustments to rental expense on a straight-line basis over the term of the lease.Consolidated Financial Statements (continued) Comprehensive Loss Comprehensive loss is the change in stockholders’ equity from transactions and other events and circumstances other than those resulting from investments by stockholders and distributions to stockholders. The Company’s other comprehensive loss is comprised of unrealized gains and losses on investments in available-for-sale securities and foreign currency translation adjustments. Research and Development Research and development costs are expensed as incurred and consist of salaries and benefits, stock-based compensation expense, lab supplies and facility costs, as well as fees paid to other nonemployees and entities that conduct certain research and development activities on the Company’s behalf. Amounts incurred in connection with license agreements are also included in research and development expense. Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred. The deferred amounts are expensed as the related goods are delivered or the services are performed. Stock-Based Compensation Stock-based awards issued to employees, including stock options, restricted stock units (RSUs), and performance stock units (PSUs) are recorded at fair value as of the grant date and recognized as expense on a straight-line basis over the employee’s requisite service period (generally the vesting period). PSUs vest only if certain specified criteria are achieved and the employees’ continued service requirements are met; therefore, the expense recognition occurs when the likelihood of the PSUs being earned is deemed probable. Stock compensation expense on awards expected to vest are recognized net of estimated forfeitures. Income Taxes The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company must then assess the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Due to the Company’s lack of earnings history, the net deferred tax assets have been fully offset by a valuation allowance. In conjunction with Dimension acquisition, a deferred tax liability was recorded reflecting the tax impact of the difference between the book basis and tax basis of acquired IPR&D. Such deferred income tax liability is not used to offset deferred tax assets when analyzing the Company’s valuation allowance as the acquired IPR&D is considered to have an indefinite life until the Company completes or abandons development of the acquired IPR&D. The Company recognizes benefits of uncertain tax positions if it is more likely than not that such positions will be sustained upon examination based solely on their technical merits, as the largest amount of benefit that is more likely than not to be realized upon the ultimate settlement. The Company’s policy is to recognize interest and penalties related to the underpayment of income taxes as a component of income tax expense or benefit. To date, there have been no0 interest or penalties charged in relation to the unrecognized tax benefits. F-12 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) Foreign Currency Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where the local currency is the functional currency, are translated to U.S. dollars at exchange rates in effect at the balance sheet date, with the resulting translation adjustments directly recorded to a separate component of accumulated other comprehensive loss. Income and expense accounts are translated at average exchange rates for the period. Transactions which are not in the functional currency of the entity are remeasured into the functional currency and gains or losses resulting from the remeasurement recorded in other income (expense). Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is the same as basic net loss per share, since the effects of potentially dilutive securities are antidilutive. In periods when we have incurred a net loss, options and warrants to purchase common stock are considered common stock equivalents, but have been excluded from the calculation of diluted net loss per share, as their effect is antidilutive. Business Combinations The Company applies the provisions of ASC 805, “Business Combinations”, in the accounting for acquisitions. The Company allocates the purchase price of acquired businesses to the tangible and intangible assets acquired and liabilities assumed based upon their estimated fair values on the acquisition date. The purchase price allocation process requires management to make significant estimates and assumptions, especially at the acquisition date with respect to intangible assets which includes IPR&D. Recent Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires an entity that is a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases. This guidance also requires disclosures about the amount, timing, and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods and early adoption is permitted. In July 2018, the FASB issued updated guidance which allows an additional transition method to adopt the new leases standard at the adoption date, as compared to the beginning of the earliest period presented, and allows entities to recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption. The Company expects to elect to use this transition method at the adoption date of January 1, 2019, and, as a result, will record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. The Company also plans to elect the practical expedient to not separate lease and non-lease components and to use the package of practical expedients upon transition that will retain the lease classification and initial direct costs for any leases that exist prior to adoption of the new guidance. As of January 1, 2019, the Company expects to record a right-to-use asset in the range of $15.0 million to $18.4 million, short-term lease liability in the range of $4.1 million to $5.0 million, and long-term lease liability in the range of $15.7 million to $19.2 million and no adjustment to the retained earnings. The Company is continuing to evaluate the effect that this guidance will have on its Consolidated Financial Statements and related disclosures. 3.       Dimension Acquisition On November 7, 2017, the Company acquired all of the issued and outstanding share capital of Dimension Therapeutics, Inc. (Dimension), headquartered in Cambridge, Massachusetts for a purchase price of $6.00 per share or $152.3 million in cash. In connection with the acquisition, the Company also paid a $2.9 million termination fee to REGENXBIO Inc. (REGENX), as a result of a previously existing merger agreement between REGENX and Dimension and assumed all the outstanding equity awards of Dimension at the date of the acquisition. The assumed equity awards were valued at $15.4 million using a Black-Scholes option pricing model on the acquisition date. The equity awards assumed were allocated $9.0 million to the purchase consideration relating to the vested portion of stock options assumed, $2.2 million for the acceleration of certain awards that were recognized immediately as expense in the post-combination financial statements and $4.2 million is being recognized as expense after the acquisition date over the employee’s remaining service period. The acquisition date fair value of the consideration transferred for Dimension was approximately $164.1 million, which consisted of the following (in thousands): Cash payments $ 152,292   Fair value of vested stock options assumed   8,979   REGENX termination fee   2,850   Fair value of total consideration $ 164,121   The following table summarizes the fair values of assets acquired and liabilities assumed as of the date of acquisition (in thousands): F-13 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) Cash and cash equivalents $ 12,338   Short-term investments   9,737   Other current assets   11,155   Property and equipment   6,580   In-process research and development   129,000   Bayer collaboration agreement   13,526   Accounts payable and accrued liabilities   (10,265 ) Notes payable   (4,944 ) Deferred tax liabilities   (47,412 ) Net identifiable net assets acquired   119,715   Goodwill   44,406   Net assets acquired $ 164,121   The transaction was accounted for as a business combination under the acquisition method of accounting as outlined in ASC 805, Business Combinations. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. The fair values assigned to tangible and identifiable intangible assets acquired and liabilities assumed were based on management’s estimates and assumptions based on the information that was available as of the date of the acquisition. See also Note 6 “Intangible Assets, net” for a description of the intangible assets.   The Company recorded $47.4 million in non-current deferred tax liability resulting from the acquisition reflecting the tax impact of the difference between the book basis and tax basis of acquired IPR&D. Such deferred income tax liability is not used to offset deferred tax assets when analyzing the Company’s valuation allowance as the acquired IPR&D is considered to have an indefinite life until the Company completes or abandons development of the acquired IPR&D. Subsequent to the acquisition date, the deferred tax liability was reduced to $31.2 million due to the reduction of U.S. corporate tax rate from 34% to 21% in December 2017. The goodwill balance is primarily attributed to the deferred tax liabilities arising from the temporary differences on IPR&D assets between book and tax basis as well as the relating to the assembled workforce and expanded market opportunities when integrating Dimension’s research with the Company. The goodwill balance is not deductible for U.S. income tax purposes. The assumed notes payable of $4.9 million, along with the outstanding interest was repaid in December 2017. In connection with the acquisition, the Company recognized transaction costs of $6.0 million as selling, general and administrative expense. There were no purchase price adjustments subsequent to the acquisition. Pro Forma Financial Information The Company's consolidated statement of operations from November 7, 2017 through December 31, 2017 includes Dimension total revenue of $2.1 million and a net loss of $7.5 million. The following supplemental unaudited pro forma information presents the financial results as if the acquisition had occurred on January 1, 2016 (in thousands):   For the year ended December 31,     2017     2016   Total revenues $ 18,528     $ 12,684   Net loss   341,737       306,596   The unaudited pro forma financial information include pro forma adjustments that assume the acquisition occurred on January 1, 2016. These items include adjustments to remove the impact of transaction costs related to the acquisition of $9.6 million for the year ended December 31, 2017 and to record the amortization of definite-lived intangible assets of $1.8 million and $11.1 million for the years ended December 31, 2017 and 2016, respectively. Other adjustments include reduction of interest income, amounts related to severance of certain employees, acceleration of certain equity awards, and adjustments to conform to the Company’s accounting policies on revenue. These unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the acquisition had occurred at the beginning of the period presented, nor are they indicative of future results of operations. F-14F-15 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued)   4.3.       Fair Value Measurements Financial assets and liabilities are recorded at fair value. The carrying amount of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. Assets and liabilities recorded at fair value on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. Fair value is defined as the exchange price that would be received for an asset or an exit price that would be paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows: Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; Level 2—Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and Level 3—Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data. The Company’s financial instruments consist of Level 1, Level 2, and Level 23 assets. Where quoted prices are available in an active market, securities are classified as Level 1. Money market funds and U.S. Government treasury bills are classified as Level 1. Level 2 assets consist primarily of corporate bonds, asset backed securities, commercial paper and U.S. Government agency securities based upon quoted market prices for similar movements in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third party data providers, including but not limited to, benchmark yields, interest rate curves, reported trades, broker/dealer quotes and reference data. The Company determines the fair value of its equity investments in Arcturus and Solid by using the quoted market prices, which are Level 1 fair value measurements. The fair value of the option to purchase additional shares of Arcturus common stock was based on unobservable inputs that are significant to the measurement of the fair value of the asset and is supported by little or no market data; accordingly, the fair value of the option is considered a Level 3 financial asset. The Company measures the Level 3 financial asset by applying the Black-Scholes option pricing method and utilizes the following inputs: stock price, strike price, volatility, risk free interest rate, and expected term. The expected term is the Company’s estimated period to purchase additional stock. The option was exercised in May 2020 and converted to Arcturus common stock. F-15 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) The following table sets forth the fair value of the Company’s financial assets and liabilities remeasured on a recurring basis based on the three-tier fair value hierarchy (in thousands):       December 31, 2018   December 31, 2020             Gross Unrealized           Level 1     Level 2     Level 3     Total   Fair Value Hierarchy Amortized Cost     Gains     Losses     Estimated Fair Value   Financial Assets:                               Money market funds Level 1 $ 72,999     $ —     $ —     $ 72,999   $ 598,392     $ —     $ —     $ 598,392   Time deposits Level 2   10,000       —       —       10,000     —       10,000       —       10,000   Corporate bonds Level 2   180,167       —       (241 )     179,926     —       193,802       —       193,802   Commercial paper Level 2   50,198       —       —       50,198     —       173,859       —       173,859   Asset-backed securities Level 2   22,597       —       (10 )     22,587     —       11,225       —       11,225   U.S. Government Treasury and agency securities Level 2   99,087       2       (55 )     99,034     167,967       17,661       —       185,628   Investments in Arcturus and Solid common stock   154,756       —       —       154,756   Total   $ 435,048     $ 2     $ (306 )   $ 434,744   $ 921,115     $ 406,547     $ —     $ 1,327,662   F-16 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued)   December 31, 2019     Level 1     Level 2     Level 3     Total   Financial Assets:                               Money market funds $ 293,309     $ —     $ —     $ 293,309   Repurchase agreements   —       100,000       —       100,000   Time deposits   —       10,000       —       10,000   Corporate bonds   —       77,026       —       77,026   Commercial paper   —       80,119       —       80,119   Asset-backed securities   —       30,406       —       30,406   U.S. Government Treasury and agency securities   96,329       53,979       —       150,308   Equity investment in Arcturus   26,088       —       1,664       27,752   Total $ 415,726     $ 351,530     $ 1,664     $ 768,920   In July 2020, the Company invested $2.5 million in a private diagnostic company in the form of a convertible promissory note that matures in two years, if not converted earlier. The Company was also issued a warrant to purchase up to $1.0 million of the entity’s preferred stock. The fair value of the warrant to purchase shares of the entity was based on unobservable inputs that are significant to the measurement of the fair value of the asset and is supported by little or no market data; accordingly, the warrant is considered a Level 3 financial asset and is remeasured on a nonrecurring basis. The Company measured the fair value of the warrant by applying the Black-Scholes option pricing method and utilizing the following inputs: stock price, strike price, volatility, risk-free interest rate, and expected term. The Company will recognize interest income on the convertible promissory note based on the effective interest rate method over the life of the note. As of December 31, 2020, the balance of the convertible promissory note was $2.1 million, including $0.2 million in interest receivable, and was recorded in other assets, and the allocated fair value of the warrant was $0.6 million and was recorded in equity investments. In December 2020, the Company invested $1.4 million in Mazi Therapeutics, Inc. (Mazi), a private pharmaceutical company founded by a current employee of the Company, in the form of a convertible promissory note that matures in two years, if not converted earlier. 4.       Balance Sheet Components Cash Equivalents and Marketable Debt Securities The fair values of cash equivalents and marketable debt securities classified as available-for-sale securities consisted of the following (in thousands):   December 31, 2020             Gross Unrealized             Amortized Cost     Gains     Losses     Estimated Fair Value   Money market funds $ 598,392     $ —     $ —     $ 598,392   Time deposits   10,000       —       —       10,000   Corporate bonds   193,610       209       (17 )     193,802   Commercial paper   173,859       —       —       173,859   Asset-backed securities   11,224       1       —       11,225   U.S. Government Treasury and agency securities   185,561       67       —       185,628   Total $ 1,172,646     $ 277     $ (17 )   $ 1,172,906   F-17 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued)         December 31, 2017   December 31, 2019             Gross Unrealized                   Gross Unrealized           Fair Value Hierarchy Amortized Cost     Gains     Losses     Estimated Fair Value   Amortized Cost     Gains     Losses     Estimated Fair Value   Money market funds Level 1 $ 79,670     $ —     $ —     $ 79,670   $ 293,309     $ —     $ —     $ 293,309   Repurchase agreements   100,000       —       —       100,000   Time deposits   10,000       —       —       10,000   Corporate bonds Level 2   39,330       —       (90 )     39,240     77,022       17       (13 )     77,026   Commercial paper   80,119       —       —       80,119   Asset-backed securities   30,375       31       —       30,406   U.S. Government Treasury and agency securities Level 2   105,031       —       (292 )     104,739     150,184       124       —       150,308   Total   $ 224,031     $ —     $ (382 )   $ 223,649   $ 741,009     $ 172     $ (13 )   $ 741,168   At December 31, 2018,2020, the remaining contractual maturities of available-for-sale securities were less than one year.two years. There have been no0 significant realized gains or losses on available-for-sale securities for the periods presented. All marketable securities with unrealized losses at December 31, 20182020 have been in a loss position for less than twelve months or the loss is not material and were temporary in nature. We do not intend to sell the investments that are in an unrealized loss position before recovery of their amortized cost basis. 5.       Balance Sheet Components Inventory Inventory consists of the following (in thousands):     December 31,     December 31,     2018     2017     2020     2019   Work-in-process   $ 5,384     $ 737     $ 7,184     $ 8,191   Finished goods     1,681       20       5,864       3,355   Total inventory   $ 7,065     $ 757   Total   $ 13,048     $ 11,546   Property, Plant, and Equipment, net Property, plant, and equipment, net consists of the following (in thousands):     December 31,     December 31,     2018     2017     2020     2019   Leasehold improvements   $ 15,705     $ 15,085     $ 39,356     $ 16,871   Research and development equipment     9,856       7,696       28,394       17,881   Furniture and office equipment     3,379       2,873       5,051       3,496   Computer equipment and software     7,342       6,745       8,181       7,817   Land     11,722       —   Construction-in-progress     1,970       429       17,649       24,271   Property and equipment, gross     38,252       32,828   Other     554       —   Property, plant, and equipment, gross     110,907       70,336   Less accumulated depreciation     (18,206 )     (10,991 )     (37,392 )     (25,988 ) Property and equipment, net   $ 20,046     $ 21,837   Property, plant, and equipment, net   $ 73,515     $ 44,348     F-16 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) Depreciation expense for the years ended December 31, 2020, 2019 and 2018 2017 and 2016 was $7.2$12.1 million, $4.8$8.3 million and $3.4$7.2 million respectively. Amortization of leasehold improvements and software is included in depreciation expense. The construction-in-progress balance primarily relates to the construction costs for the gene therapy manufacturing plant in Bedford, Massachusetts. F-18 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) Accrued Liabilities Accrued liabilities consists of the following (in thousands):     December 31,     December 31,     2018     2017     2020     2019   Research, clinical study, and manufacturing expenses   $ 16,912     $ 17,141     $ 25,875     $ 22,894   Payroll and related expenses     36,443       26,527       58,176       41,324   Repayment liability under collaboration agreement     —       3,681   Contract liability     —       5,986   Other     9,095       8,793       24,440       18,976   Total accrued liabilities   $ 62,450     $ 62,128   Total   $ 108,491     $ 83,194   6.5.      Intangible Assets, net In connection withSubsequent to the acquisition as describedof Dimension Therapeutics, Inc. (Dimension) in Note 3 “Dimension Acquisition"November 2017, the Company recognized IPR&D assets of $129.0 million and a contract asset of $13.5 million. The estimated fair value of these intangible assets was measured using Level 3 inputs as of the acquisition date. IPR&D assets represent the fair value of acquired programs to develop an AAV gene therapy for OTC deficiency and to develop an AAV gene therapy for glycogen storage disease type Ia. The fair value of IPR&D assets acquired was determined based on the discounted present value of each research project’s projected cash flows using an income approach, including the application of probability factors related to the likelihood of success of the program reaching final development and commercialization. Additionally, the projections consider the relevant market sizes and growth factors, estimated future cash flows from product sales resulting from completed products and in-process projects and timing and costs to complete the in-process projects. The rates utilized to discount the net cash flows to their present value are commensurate with the stage of development of the projects and uncertainties in the economic estimates used in the projections. IPR&D assets are considered to be indefinite-life until the completion or abandonment of the associated research and development efforts.efforts. The contract asset representsrepresented the fair value of the agreement with Bayer HealthCare LLC to research, develop, and commercialize AAV gene therapy products for treatment of hemophilia A. The fair value of the contract asset was determined based on the discounted present value of the estimated net future income and is beingwas amortized to research and development expense over the research term which is expected to be completewas completed in 2019. Subsequent to the FDA approval of Dojolvi for the treatment of LC-FAOD in June 2020, the Company recorded $2.3 million from contractual payments for the achievement of regulatory milestones to certain collaboration partners as intangible assets, which is being amortized over its useful life of seven years. The Company recorded research and development expense of $12.3$0.2 million, $0.2 million, and $1.0$12.3 million for the years ended December 31, 20182020, 2019, and 2017,2018, respectively, related to the amortization of the asset. As of December 31, 2018, the remaining value of the contract asset is $0.2 million and the estimated future amortization expense associated with the contract asset is $0.2 million in 2019.intangible assets. The Company tests the intangible assets for impairment annually during its fourth quarter. NoNaN impairment charges have been recognized on intangible assets. 7.6.      Revenue The following table disaggregates total revenues from external customers by collaboration and license revenue and product sales (in thousands): Year Ended December 31,   Year Ended December 31,   2018     2017     2016   2020     2019     2018   Collaboration and license revenue:                                             KHK (Crysvita) $ 18,226     $ 9     $ —   Crysvita collaboration revenue in profit-share territory $ 128,597     $ 74,869     $ 15,334   Crysvita royalty revenue in European territory   1,498       8,120       2,892   Daiichi Sankyo   89,220       —       —   Bayer   23,467       2,127       —     —       504       23,467   Total collaboration and license revenue   41,693       2,136       —     219,315       83,493       41,693   Product sales:                                             Crysvita   644       —       —     10,350       4,286       644   Mepsevii   7,903       476       133     15,342       12,634       7,903   UX007   1,255       —       —   Dojolvi   13,028       3,301       1,255   Total product sales   9,802       476       133     38,720       20,221       9,802   Crysvita non-cash collaboration royalty revenue   12,995       —       —   Total revenues $ 51,495     $ 2,612     $ 133   $ 271,030     $ 103,714     $ 51,495   F-17F-19 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued)   The following table disaggregates total revenues based on geographic location (in thousands): Year Ended December 31,   Year Ended December 31,   2018     2017     2016   2020     2019     2018   United States $ 45,339     $ 2,289     $ —   North America $ 237,666     $ 86,442     $ 45,339   Europe   5,293       323       133     21,318       12,085       5,293   All other   863       —       —     12,046       5,187       863   Total revenues $ 51,495     $ 2,612     $ 133   $ 271,030     $ 103,714     $ 51,495   The following table presents the activity and ending balances for sales-related accruals and allowances (in thousands):     Product sales reserves   December 31, 2016   $ —   Provisions     41   December 31, 2017     41   Provisions     2,466   Payments and adjustments     (1,267 ) December 31, 2018   $ 1,240     December 31,     2020         2019         2018   Balance of product sales reserve at beginning of year $ 1,818         $ 1,240         $ 41   Provisions   5,763           3,846           2,148   Payments   (2,785 )         (2,739 )         (949 ) Adjustments   (883 )         (529 )         —   Balance of product sales reserve at end of year $ 3,913         $ 1,818         $ 1,240   The following table presents changes in the contract assets (liabilities) for the years ended December 31, 20182020 and 20172019 (in thousands):   December 31,     2018     2017   Balance of contract assets (liabilities) at beginning of year $ (5,986 )   $ —   Contract liability assumed at acquisition   —       (2,526 ) Additions   24,055       4,658   Deductions   (15,090 )     (8,118 ) Balance of contract assets (liabilities) at end of year $ 2,979     $ (5,986 )   December 31,     2020     2019   Balance of contract assets at beginning of period $ —     $ 2,979   Additions   (155,788 )     504   Deductions   89,220       (3,483 ) Balance of contract liabilities at end of period, net $ (66,568 )   $ —   See Note 7 for additional details on contract assets (liabilities) activities. The Company’s largest accounts receivable balance was 88%from a collaboration partner and was 71% and 87% of the December 31, 2018 total accounts receivable balance and was due from a collaboration partner, as compared to 97% as of December 31, 2017 for a different collaboration partner.2020 and 2019, respectively. 8.7.      License and Research Agreements Kyowa Hakko Kirin Co., Ltd. Collaboration and License Agreement In August 2013, the Company entered into a collaboration and license agreement with Kyowa Kirin Co., Ltd. (KKC or formerly Kyowa Hakko Kirin Co., Ltd. (KHK)or KHK). Under the terms of this collaboration and license agreement, as amended, the Company and KHK willKKC collaborate on the development and commercialization of Crysvita in the field of orphan diseases in the United States and Canada, or the profit shareprofit-share territory, and in the European Union, United Kingdom, and Switzerland, or the European territory, and the Company will havehas the right to develop and commercialize such products in the field of orphan diseases in Mexico and Central and South America, or Latin America. Development Activities In the field of orphan diseases, and except for ongoing studies being conducted by KHK,KKC, the Company will beis the lead party for development activities in the profit shareprofit-share territory and in the European territory until the applicable transition dates;date; the Company willis also be the lead party for core development activities conducted in Japan and Korea, for which the core development plan is limited to clinical trials mutually agreed to by the Company and KHK.KKC. The Company will shareshares the costs for development activities in the profit shareprofit-share territory and the European territory conducted pursuant to the development plan before the applicable transition date equally with KHK, and KHK shall beKKC. KKC is responsible for 100% of the costs for development activities in Japan and Korea. OnIn April 2023, which is the transition date for the profit-share territory, and on the applicable transition dates in the profit share territory anddate for the European territory, KHKKKC will become the lead party and be responsible for the costs of the development activities. However, the Company will continue to share the costs of the studies commenced prior to the applicable transition date equally with KHK.KKC. Crysvita was approved in the European Union and United Kingdom in February 2018 and was approved by the FDA in April 2018. The collaboration and license agreements are within the scope of ASC 808, which provides guidance on the presentation and disclosure of collaborative arrangements. Collaboration revenue related to sales in profit share territory F-18F-20 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued)   Collaboration revenue related to sales in profit-share territory The Company and KHKKKC share commercial responsibilities and profits in the profit shareprofit-share territory until the applicable transition date.April 2023. Under the collaboration agreement, KHK will manufactureKKC manufactures and supplysupplies Crysvita for commercial use in the profit share territory.profit-share territory and charges the Company the transfer price of 35% of net sales through December 31, 2022, and 30% thereafter. The remaining profit or loss after supply costs from commercializing products in the profit-share territory until the applicable transition date, are shared between the Company and KHKKKC on a 50/50 basis.basis until April 2023. Thereafter, the Company will be entitled to receive a tiered double-digit revenue share in the mid-to-high 20% range. The CompanyAs KKC is considered the agentprincipal in the profit share territory as KHK controlssale transaction with the product before transfer tocustomer, the customers and has the ability to direct the use of and obtain substantially all of the remaining benefits from the product. The Company recognizes a pro-rata share of collaboration revenue, net of supply costs,transfer pricing, in the period the sale occurs. The Company concluded that its portion of KHK’sKKC’s sales in the profit shareprofit-share territory is analogous to a royalty and therefore recorded $15.3 millionits share as collaboration revenue, similar to a royalty, during the year ended December 31, 2018.  royalty. Royalty revenue related to sales in European territory KHKKKC has the commercial responsibility for Crysvita in the European territory. TheIn December 2019, the Company receivessold its right to receive royalty payments based on sales in the European territory to Royalty Pharma, effective January 1, 2020, as further described in “Note 10. Liability Related to the Sale of Future Royalties.” Prior to the Company’s sale of the royalty, the Company received a royalty of up to 10% on net sales in the European territory, which iswas recognized as the underlying sales occur. Beginning in 2020, the Company records the royalty revenue as non-cash royalty revenues. During the year ended December 31, 2020, there was a change in estimate of the revenue reserves related to sales made prior to January 1, 2020, as a result of which, the Company recorded $1.5 million as royalty revenue in European territory. The Company’s share of collaboration and royalty revenue related to Crysvita was as follows (in thousands): Year Ended December 31,   Year Ended December 31,   2018     2017     2016   2020     2019     2018   Company's share of collaboration revenue in profit share territory $ 15,334     $ —     $ —   Company's share of revenue in profit-share territory $ 128,597     $ 74,869     $ 15,334   Royalty revenue in European territory   2,892       9       —     1,498       8,120       2,892   Non-cash royalty revenue in European territory   12,995       —       —   Total $ 18,226     $ 9     $ —   $ 143,090     $ 82,989     $ 18,226   Product revenue related to sales in other territories The Company is responsible for commercializing Crysvita in Latin America.America and Turkey. The Company is considered the principal in the arrangementthese territoriesas the Company controls the product before it is transferred to the customer. Accordingly, the Company records revenue on a gross basis related to the sale of Crysvita once the product is delivered and the risk and title of the product is transferred to the distributor. For the year ended December 31, 2018, theThe Company recorded product sales of $10.4 million, $4.3 million, and $0.6 million for the years ended December 31, 2020, 2019, and 2018, respectively, net of estimated product returns and other deductions. Under the collaboration agreement, KHK manufactures and supplies Crysvita, which is purchased by the Company for sales in the Latin America territory. The Company also pays to KHK a low single-digit royalty on net sales. In May 2017, the Company signed an agreement with a wholly-owned subsidiary of KHK pursuant to which the Company was granted the right to commercialize Crysvita in Turkey. KHK’s subsidiary KKC has the option to assume responsibility for commercialization efforts in Turkey from the Company, after a certain minimum period. Under the collaboration agreement, KKC manufactures and supplies Crysvita, which is purchased by the Company for sales in the above territories, and is based on 35% of the net sales through December 31, 2022 and 30% thereafter. The Company is considered the principalalso pays to KKC a low single-digit royalty on net sales in the arrangementas the Company controls the product before it is transferred to the customer; accordingly, the Company will record revenue on a gross basis for sales made in Turkey, including named patient sales, until KHK’s subsidiary assumes responsibility for commercialization efforts.Latin America. Cost sharing payments Under the collaboration agreement, KHKKKC and the Company share certain development and commercialization costs. As a result, the Company was reimbursed for these costs and operating expenses were reduced as follows (in thousands): Year Ended December 31,   Year Ended December 31,   2018     2017     2016   2020     2019     2018   Research and development $ 32,240     $ 31,165     $ 25,356   $ 21,476     $ 27,309     $ 32,240   Selling, general and administrative   14,228       4,466       1,532     25,186       21,828       14,228   Total $ 46,468     $ 35,631     $ 26,888   $ 46,662     $ 49,137     $ 46,468   Collaboration receivable and payable The Company had accounts receivable from KHKKKC in the amount of $11.2$16.4 million and $9 thousand,$28.5 million from profit shareprofit-share revenue and royalties and other receivables recorded in prepaid and other current assets of $11.1$9.6 million and $10.3$17.8 million and accrued liabilities of $2.4 million and $0.9 million from commercial and development activity reimbursements, as of December 31, 20182020 and December 31, 2017,2019, respectively. F-19F-21 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued)   Saint Louis University License Agreement In November 2010, the Company entered into a license agreement with Saint Louis University (SLU). Under the terms of this license agreement, SLU granted the Company an exclusive worldwide license to make, have made, use, import, offer for sale, and sell therapeutics related to SLU’s beta-glucuronidase product for use in the treatment of human diseases. The Company made a milestone payment of $0.1 million upon approval of Mepsevii for treatment of MPS 7. The Company is required to pay to SLU a low single-digit royalty on net sales of the licensed products in any country or region, upon reaching a certain level of cumulative worldwide sales of the product. Baylor Research Institute License Agreement In September 2012, the Company entered into a license agreement with Baylor Research Institute (BRI). Under the terms of this license agreement, BRI exclusively licensed to the Company its territories for certain intellectual property related to triheptanoin (UX007).Dojolvi (triheptanoin) for the treatment of LC-FAOD. For the years ended December 31, 2020 and 2019, the Company paid $2.0 million and $0.8 million, respectively, for the attainment of various development milestones related to the development of LC-FAOD. The Company may be obligated to make additional future payments of up to $5.3$2.5 million contingent upon attainment of various development milestones relating to the development of LC-FAOD and $7.5 million contingent upon attainment of various sales milestones. Additionally, the Company will pay tois paying BRI a mid-single digitmid-single-digit royalty on net sales of the licensed product in the licensed territories, if such product sales are ever achieved.territories. REGENXBIO, Inc. The Company has a license agreement with REGENX, for an exclusive, sublicensable, worldwide commercial license under certain intellectual property for preclinical and clinical research and development, and commercialization of drug therapies using REGENX 's licensed patents for the treatment of hemophilia A, OTC deficiency, GSD1a, and one other preclinical indication.GSD1a. The Company will pay an annual fee and certain milestone fees per disease indication, low to mid single-digitmid-single-digit royalty percentages on net sales of licensed products, and milestone and sublicense fees owed by REGENX to its licensors, contingent upon the attainment of certain development activities as outlined in the agreement. The Company also has an option and license agreement with REGENX under which the Company has an exclusive, sublicensable, worldwide license to make, have made, use, import, sell, and offer for sale licensed products with respect to threetreat Wilson disease indications, subject to certain exclusions and has an option for another disease indication. In October 2018, the Company exercised its remaining option with REGENX for the additionalCDKL5 deficiency. For each disease indication, and paid a $1.0 million fee for the exercise of the option. Each exercised option carries an annual maintenance fee of $0.1 million. In addition, for each option exercised, the Company is obligated to pay an annual maintenance fee of $0.1 million and up to $9.0 million upon achievement of various milestones, as well as mid to high single-digit royalties on net sales of licensed products and mid single-digitmid-single-digit to low double-digit percentage sublicenses fees, if any. In March 2020, the Company entered into a license agreement with REGENX, for an exclusive, sublicensable, worldwide license to REGENX’s NAV AAV8 and AAV9 vectors for the development and commercialization of gene therapy treatments for a rare metabolic disorder. In return for these rights, the Company made an upfront payment of $7.0 million, which was recorded as an in-process research and development expense during the year ended December 31, 2020. The Company will pay certain annual fees of $0.1 million, milestone payments of up to $14.0 million, and royalties on any net sales of products incorporating the licensed intellectual property that range from a high single-digit to low double-digit royalty.   Bayer HealthCare LLC The Company has an agreement with Bayer Healthcare LLC (Bayer) to research, develop and commercialize AAV gene therapy products for the treatment of hemophilia A (DTX 201). Under this agreement, Bayer has been granted an exclusive license to develop and commercialize one or more novel gene therapies for hemophilia A. The Company is responsible for the development of DTX201 under the agreement through a proof-of-concept (POC) clinical trial, in accordance with the mutually agreed upon research budget. Upon the successful demonstration of clinical POC, the agreement requires that Bayer use commercially reasonable efforts to manageconduct and fund a proof-of-concept (POC) clinical trial and any subsequent clinical trials and commercialization of gene therapy products for treatment of hemophilia A. Bayer will have worldwide rights to commercialize the potential future product. Bayer is responsible to fundfor funding certain research and development services performed by the Company in the performance of its obligations under the annual research plan and budget. Under the terms of the agreement with Bayer, the Company is eligible to receive development and commercialization milestone payments of up to $232.0 million, as well as, royalty payments ranging in the high single-digit to low double-digit percentages, not exceeding the mid-teens, of net sales of licensed products. The Company achieved the first milestone in December 2017, the second milestone in April 2018, and has received $15.0 million for such milestones to date. As of the acquisition date of Dimension on November 7, 2017, the Company valued the contract under ASC 805 and recorded an intangible asset of $13.5 million. The intangible asset is beingwas amortized to research and development expense over the research term which is expected to be completeand was completed in 2019. The Company recorded research and development expense of $12.3$0.2 million and $1.0$12.3 million for the years ended December 31, 20182019 and 2017,2018, respectively, for the amortization of the intangible asset. F-22 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) The Company evaluated the agreement under ASC 606 and recorded a contract liability as of November 7, 2017 of $2.5 million. It was determined that the performance obligations under the agreement includesinclude (i) research and development services to be provided over the research term, (ii) a development and commercialization license, and (iii) the Company’s participation in certain F-20 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) committees. It was determined that these performance obligations are not distinct in the context of the contract and therefore are a single performance obligation. The Company calculated the transaction price by including the unconstrained milestones along with the estimated payments for research and development services and recorded $23.5$0.5 million and $2.1$23.5 million as collaboration and license revenue for the years ended December 31, 20182019 and 2017,2018, respectively, by measuring the progress toward complete satisfaction of the performance obligation using an input measure. The performance obligation under the contract is expected to be substantially complete by end of 2019. As of December 31, 2018 and 2017, the Company had a $3.0 million contract asset and a $5.4 million contract liability associated with the performance obligation, respectively. University of Pennsylvania The Company has an agreement with University of Pennsylvania School of Medicine (Penn) to sponsor certain research related to liver and hemophilia gene therapy. In consideration for funding such research, Penn granted the Company an option to obtain a worldwide, non-exclusive or exclusive, royalty-bearing license, with the right to sublicense, under certain patent rights conceived, created or reduced to practice in the conduct of the research. The Company is required to reimburse Penn for filing, prosecuting and maintaining such patent rights unless and until the Company declines to exercise its option. Penn provides the Company with task-based, scientific reports of progress and results of the research, and granted the Company a royalty-free, nontransferable, non-exclusive right to copy and distribute any research reports furnished to the Company for any reasonable purpose, provided the results are not made publicly available until certain conditions are met, and the right to use, disclose and otherwise exploit the research results for any reasonable purpose, subject to similar restrictions on our public disclosure of the research results. Otherwise, the sponsored research agreement contains customary confidentiality provisions. The Company also has a research, collaboration, and license agreement with Penn, which provides the terms for the Company and Penn to collaborate with respect to the pre-clinical development of gene therapy products for the treatment of certain indications. Under the agreement, Penn granted the Company an exclusive, worldwide license to certain patent rights arising out of the research program, subject to certain retained rights, and a non-exclusive, worldwide license to certain Penn intellectual property, in each case to research, develop, make, have made, use, sell, offer for sale, commercialize and import licensed products in each indication for the term of the agreement. The Company will fund the cost of the research program in accordance with a mutually agreed-upon research budget and will be responsible for clinical development, manufacturing and commercialization of each indication. The Company willmay be obligated to make milestone payments of up to $5.0 million for each indication, if certain development milestones are achieved over time, as well as low to mid-single digitmid-single-digit royalties on net sales of each licensed product. The Company willmay also be obligated to make milestone payments of up to $25.0 million per approved product if certain commercial milestones are achieved. Takeda License and Collaboration and Purchase Agreements In June 2016, the Company executed a collaboration and license agreement with Takeda Pharmaceutical Company Limited (Takeda). Pursuant to the agreement, which became effective in July 2016, the Company obtained an exclusive license for a pre-clinical compound from Takeda in a pre-determined field of use. The Company was responsible for the development costs for the pre-clinical compound and the identified option product pursuant to the initial development plan which was completed as of June 30, 2018. A significant portion of the work under the initial development plan was performed by Takeda, and as a result, the Company paid $10.6 million to Takeda for performance of their services. The Company concluded that the payments to Takeda were not in return for a distinct service that Takeda had transferred to the Company; therefore, the payments made to Takeda were accounted for as a reduction in the total transaction price of $14.3 million. The remaining $3.7 million of the transaction price was allocated to the distinct performance obligations on a relative standalone selling price basis. The Company recorded $1.2 million and $2.5 million for the years ended December 31, 2018 and 2017, respectively, as a reduction of research and development expenses by measuring the progress toward complete satisfaction of the individual performance obligation using an input measure. Costs incurred by the Company associated with co-development activities performed under this collaboration are included in research and development expense in the accompanying consolidated statements of operations. The Company had no repayment liability as of December 31, 2018, a $3.7 million repayment liability as of December 31, 2017, no contract liability as of December 31, 2018, and a $0.6 million contract liability as of December 31, 2017. Arcturus Research Collaboration and License Agreement In October 2015, the Company entered into a Research Collaboration and License Agreement with Arcturus Therapeutics, Inc. (Arcturus).Arcturus. The Company and Arcturus are collaborating on the research and development of therapies for select rare diseases. As consideration for entering into the arrangement, the Company paid Arcturus an upfront fee of $10.0 million. Arcturus has the primary responsibilitywas responsible for conducting certain research services, funded by the Company, and the Company will bewas responsible for development and commercialization costs. Pursuant to the agreement, the Company incurred $0.4 million, $0.8 million, and $1.9 million for the years ended December 31, 2020, 2019, and 2018, respectively, in research and development expense for the funding of certain research services received from Arcturus. In June 2019, the Company entered into an Equity Purchase Agreement and an amendment to the Research Collaboration and License Agreement to expand the field of use and increase the number of disease targets to include mRNA, DNA and siRNA therapeutics for up to 12 rare diseases. Pursuant to the agreements, the Company paid $6.0 million in cash upfront to Arcturus and purchased 2,400,000 shares of Arcturus’ common stock at a stated value of $10.00 per share, resulting in a total of $30.0 million of consideration paid at the close of the transaction. As a result, the Company received expanded license rights; the Arcturus common stock; an option to purchase an additional 600,000 shares of Arcturus’ common stock at $16.00 per share. The Company also received the right to nominate one member to the Arcturus Board of Directors as well as one Board observer. In May 2020, the Company exercised the option to purchase 600,000 shares for a total purchase price of $9.6 million. Under the amended license agreement, certain early-stage milestone payments are reduced and the total potential milestone payments are increased due to the expanded number of targets. Arcturus is also entitled to reimbursement of related research expenses and royalties on commercial sales. F-21The Company recorded the common stock investment at $13.9 million on the transaction date, which was based on the quoted market price on the closing date. The Company elected to apply the fair value option to account for the equity investment in Arcturus. The Company also accounted for the option to purchase additional shares of Arcturus common stock at fair value, which was recorded at $0.5 million on the transaction date based on the Black-Scholes option pricing method. The remaining $15.6 million of the total $30.0 million paid as consideration was attributed to the additional license rights obtained and was recorded as in-process research and development expense. In December 2020, the Company sold 800,000 shares of Arcturus’ common stock at a weighted-average price of $100.81 per share and net proceeds of $79.8 million. F-23 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued)   The changes in the fair value of the Company’s equity investment in Arcturus were as follows (in thousands):   Arcturus common stock   Option to purchase additional shares of Arcturus common stock   Total   Acquisition of equity investment in     Arcturus in June 2019 $ 13,872   $ 467   $ 14,339   Change in fair value   12,216     1,197     13,413   December 31, 2019   26,088     1,664     27,752   Change in fair value   113,978     23,948     137,926   Transfer of value upon option exercise   35,212     (25,612 )   9,600   Sale of shares   (79,842 )   —     (79,842 ) December 31, 2020 $ 95,436   $ —   $ 95,436   GeneTx In August 2019, the Company entered into a Program Agreement and a Unitholder Option Agreement with GeneTx to collaborate on the development of GeneTx’s GTX-102, an ASO for the treatment of Angelman syndrome. Pursuant to the terms of the Unitholder Option Agreement, the Company made an upfront payment of $20.0 million for an exclusive option to acquire GeneTx, which was exercisable any time prior to 30 days following FDA acceptance of the IND for GTX-102. Pursuant to the agreement, upon acceptance of the IND, which occurred in January 2020, the Company elected to extend the option period by paying an option extension payment of $25.0 million (option extension premium) during the year ended December 31, 2020. The Company has a right to acquire GeneTx for a payment of $125.0 million, at any time, until the earlier of 30 months from the first dosing of a patient in a planned Phase 1/2 study (subject to extensions) or 90 days after results are available from that study. This exclusive option to acquire GeneTx can be extended under certain circumstances, by up to 4 additional three-month periods, by paying an additional extension fee for each three-month period. During the exclusive option period, GeneTx is responsible for conducting the program based on the development plan agreed between the parties and, subject to the terms in the Program Agreement, has the decision-making authority on all matters in connection with the research, development, manufacturing and regulatory activities with respect to the Program. The Company will provide support, at its discretion, including strategic guidance and clinical expertise. The Company and GeneTx will collaborate on the management of the Phase 1/2 study in patients with Angelman syndrome. If the Company acquires GeneTx, the Company will then be responsible for all development and commercialization activities from the date of acquisition. The Company would also be required to make payments upon achievement of certain development and commercial milestones, as well as royalties, depending upon the success of the program. Although GeneTx is a variable interest entity, the Company is not the primary beneficiary as it currently does not have the power to direct the activities that would most significantly impact the economic performance of GeneTx. Prior to product regulatory approval, all consideration paid to GeneTx represents rights to potential future benefits associated with GeneTx’s in-process research and development activities, which have not reached technological feasibility and have no alternative future use. Accordingly, for the years ended December 31, 2020 and 2019, the Company recorded the option extension payment of $25.0 million and $20.0 million upfront payment as an in-process research and development expense, respectively. Daiichi Sankyo In March 2020, the Company entered into a License and Technology Access Agreement (the License Agreement) with Daiichi Sankyo Co., Ltd. (Daiichi Sankyo). Pursuant to the License Agreement, the Company granted Daiichi Sankyo a non-exclusive license to intellectual property, including know-how and patent applications, with respect to its HeLa producer cell line (PCL) and HEK293 transient transfection manufacturing technology platforms for AAV-based gene therapy products. The Company retains the exclusive right to use the manufacturing technology for its current target indications and additional indications identified now and in the future. The Company will provide certain technical assistance and technology transfer services during the technology transfer period of three years to enable Daiichi Sankyo to use the technologies for its internal gene therapy programs. Daiichi Sankyo has an option to extend the technology transfer period including know-how improvements by two additional one-year periods by paying a fixed amount for each additional year. Daiichi Sankyo will be responsible for the manufacturing, development, and commercialization of products manufactured with the licensed technology; however, the Company has the option to co-develop and co-commercialize rare disease products at the IND stage. Ultragenyx may also provide strategic consultation to Daiichi Sankyo on the development of both AAV-based gene therapy products and other products for rare diseases. F-24 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) Under the terms of the License Agreement, Daiichi Sankyo made an upfront payment of $125.0 million and will pay an additional $25.0 million upon completion of the technology transfer of the HeLa PCL and HEK293 platforms, as well as single-digit royalties on net sales of products manufactured in either system. Daiichi Sankyo will reimburse the Company for all costs associated with the transfer of the manufacturing technology. The Company also entered into a Stock Purchase Agreement with Daiichi Sankyo, pursuant to which Daiichi Sankyo purchased 1,243,913 shares of the Company’s common stock in exchange for $75.0 million in cash during the first quarter of 2020. The fair market value of the common stock issued to Daiichi Sankyo was $55.3 million based on the stock price of $44.43 per share on the date of issuance, resulting in a $19.7 million premium on the Stock Purchase Agreement. Daiichi Sankyo is also subject to a three-year standstill and restrictions on sale of the shares (subject to customary exceptions or release). In June 2020, the Company executed a subsequent license agreement (the Sublicense Agreement) with Daiichi Sankyo for transfer of certain technology in consideration for an upfront payment of $8.0 million and annual maintenance fees,milestone payments, and royalties on any net sales of products incorporating the licensed intellectual property. The License Agreement, the Sublicense Agreement, and the Stock Purchase Agreement are being accounted for as one arrangement because they were entered into at or near the same time and negotiated in contemplation of one another. The Company evaluated the License Agreement and the Sublicense Agreement under ASC 606 and determined that the performance obligations under the agreements are (i) intellectual property with respect to its HeLa PCL and HEK293 transient transfection manufacturing technology platforms together with the initial technical assistance and technology transfer services, which are expected to be completed in the fourth quarter of 2021, and (ii) the transfer of any know-how and improvements after the completion of the initial technology transfer through the end of the three year technology transfer period ending March 2023. The Company determined that the total transaction price of the License Agreement was $183.7 million which was comprised of the $19.7 million premium from the Stock Purchase Agreement, the $125.0 million upfront payment, the $25.0 million in unconstrained milestone payments, $8.0 million from the Sublicense Agreement, and the $6.0 million estimated reimbursement amount for delivering the license and technology services.   The Company allocated the total transaction price to the two performance obligations on a relative stand-alone selling price basis. Revenue allocated to the intellectual property and the technology transfer services will be recognized over an initial period which is estimated to end in the fourth quarter of 2021, measuring the progress toward complete satisfaction of the individual performance obligation using an input measure. Revenue for know-how and improvements after the completion of technology transfer will be recognized on a straight-line basis over the remaining technology transfer period, which ends in March 2023, as it is expected that Daiichi Sankyo will receive and consume the benefits consistently throughout the period. The estimated period to complete the technology transfer services and the related milestones payments, if any, are subject to revised estimates which could be impacted by limitations or delays from the COVID-19 pandemic, successful scale-up of the manufacturing, and other changes that may impact timing. Royalties from commercial sales will be accounted for as revenue upon achievement of such sales, assuming all other revenue recognition criteria are met. For the year ended December 31, 2020, the Company recognized $89.2 million in revenue related to this arrangement. Accordingly, the Company had recorded $66.6 million as contract liabilities, net, as of December 31, 2020.The Company recorded an accounts receivable related to the License Agreement of $1.2 million as of December 31, 2020. Solid Biosciences, Inc. In October 2020, the Company entered into a strategic Collaboration and License Agreement with Solid Biosciences Inc., or Solid, and received an exclusive license for any pharmaceutical product that expresses Solid’s proprietary microdystrophin construct from AAV8 and variants thereof in clade E for use in the treatment of Duchenne muscular dystrophy and other diseases resulting from lack of functional dystrophin, including Becker muscular dystrophy. The Company will collaborate to develop products that combine Solid’s differentiated microdystrophin construct, the Company’s HeLa PCL manufacturing platform, and the Company’s AAV8 variants. Solid will also provide development support and was granted an exclusive option to co-invest in products the Company develops for profit share participation in certain territories. On a product-by-product basis, the Company may be obligated to make development milestone payments of up to $25.0 million, regulatory milestone payments of up to $65.0 million, and commercial milestone payments of up to $165.0 million, if such milestones are achieved, as well as royalties on any net sales of products incorporating the licensed intellectual property that range from a low to mid-double-digit percentage. The royalty rate changes to mid to high double-digit percentage if Solid decides to co-invest in the product. F-25 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) The Company also entered into a Stock Purchase Agreement and the Investor Agreement with Solid, pursuant to which, the Company purchased7,825,797 shares of Solid’s common stock for an aggregate purchase price of $40.0 million. Subject to the terms of the Investor Agreement, the Company is restricted from selling, transferring or otherwise disposing of the shares without the prior approval of Solid until the earlier of (i) 18 months following the closing of the transaction, (ii) the termination of the Collaboration and License Agreement and (iii) certain other specified events. The Company also agreed to customary standstill restrictions in accordance with the terms of the Investor Agreement until the earlier of (a) 24 months after the closing of the transaction and (b) certain specified events. The Company’s investment in Solid is being accounted at fair value, as the fair value is readily determinable. The Company recorded the common stock investment at $26.8 million on the transaction date, which was based on the quoted market price on the closing date.   Although Solid is a variable interest entity, the Company is not the primary beneficiary as it does not have the power to direct the activities that would most significantly impact the economic performance of Solid. Prior to the achievement of certain development milestones, all consideration paid to Solid represents rights to potential future benefits associated with Solid’s in-process research and development activities, which have not reached technological feasibility and have no alternative future use. Accordingly, the remaining $13.2 million of the total $40.0 million paid as consideration was attributed to the license rights obtained and was recorded as in-process research and development expense during the year ended December 31, 2020. The changes in the fair value of the Company’s investment in Solid’s common stock were as follows (in thousands):   Solid common stock   Acquisition of investment in Solid common stock in October 2020 $ 26,843   Change in fair value   32,477   December 31, 2020 $ 59,320   8.     Leases As described in “Note 2. Summary of Significant Accounting Policies”, the Company adopted Topic 842 as of January 1, 2019. Prior period amounts have not been adjusted and continue to be reported in accordance with historic accounting under Topic 840. The Company leases office space and research, testing and manufacturing laboratory space in various facilities in Novato and Brisbane, California, in Cambridge and Woburn, Massachusetts, and in certain foreign countries, under operating agreements expiring at various dates through 2028. Certain lease agreements include options for the Company to extend the lease for multiple renewal periods and also provide for annual minimum increases in rent, usually based on a consumer price index or annual minimum increases. None of these optional periods have been considered in the determination of the right-of-use lease asset or the lease liability for the leases as the Company did not consider it reasonably certain that it would exercise any such options. The Company recognizes lease expense on a straight-line basis over the non-cancelable term of its operating leases. The variable lease expense primarily consists of common area maintenance and other operating costs.   The Company recognizes rent expense on a straight-line basis over the noncancelable term of its operating leases. Prior to adoption of Topic 842, under Topic 840, rent expense was $6.4 million during the year ended December 31, 2018. The components of lease expense were as follows (in thousands):   Year Ended December 31,     2020   2019   Operating lease expense $ 10,164   $ 9,163   Variable lease expense   3,298     2,779   Financing:                 Amortization   158     —       Interest expense   40     —   Total $ 13,660   $ 11,942   Cash paid for amounts included in the measurement of operating lease liabilities for the year ended December 31, 2020 was $10.3 million and was included in net cash used in operating activities in the Consolidated Statements of Cash Flows. F-26 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) Future minimum lease payments under non-cancellable leases as of December 31, 2020 were as follows (in thousands): Year Ending December 31,   Operating   Financing   Total   2021   $ 11,418   $ 513   $ 11,931   2022     11,904     495     12,399   2023     12,148     237     12,385   2024     10,319     —     10,319   2025     6,247     —     6,247   Thereafter     3,456     —     3,456   Total future lease payments     55,492     1,245     56,737   Less: Amount representing interest     (8,426 )   (84 )   (8,510 ) Present value of future lease payments     47,066     1,161     48,227   Less: Lease liabilities, current     (8,516 )   (460 )   (8,976 ) Lease liabilities, non-current   $ 38,550   $ 701   $ 39,251   Lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. As of December 31, 2020, the weighted-average remaining operating and financing lease terms were 4.82 years and 4.51 years, respectively, and the weighted-average discount rates used to determine the lease liability for operating and financing leases were 6.70% and 5.58%, respectively. 9.     Gain from Sale of Priority Review Vouchers In January 2018, the Company completed the sale of a Rare Pediatric Disease Priority Review Voucher (PRV) it received in connection with the approval of Mepsevii for $130.0 million. In June 2018, the Company also completed the sale of the PRV it received in connection with the approval of Crysvita for $80.6 million, net, which was shared equally with KHK.KKC. As the PRVs did not have a carrying value, the gain recognized was equal to the net proceeds received. The Company recorded $170.3 million for its portion of the net proceeds for the year ended December 31, 2018, as a gain from the sale of the priority review vouchers. 10.      Equity At-the-Market OfferingsLiability Related to the Sale of Future Royalties In July 2016,December 2019, the Company entered into an At-The-Market (ATM)a Royalty Purchase Agreement with RPI and RPI paid $320.0 million to the Company in consideration for the right to receive royalty payments effective January 1, 2020, arising from the net sales of Crysvita in the European Union, the United Kingdom, and Switzerland under the terms of the Company’s Collaboration and License Agreement with KKC dated August 29, 2013, as amended. The agreement with CowenRPI will automatically terminate, and the payment of royalties to RPI will cease, in the event aggregate royalty payments received by RPI are equal to or greater than $608.0 million prior to December 31, 2030, or in the event aggregate royalty payments received by RPI are less than $608.0 million prior to December 31, 2030, when aggregate royalty payments received by RPI are equal to $800.0 million. Proceeds from the transaction were recorded as a liability (liability related to sale of future royalties on the Consolidated Balance Sheets). The Company LLC (Cowen), wherebyamortizes $320.0 million, net of transaction cost of $5.8 million using the effective interest method over the estimated life of the arrangement. In order to determine the amortization of the liability, the Company sold $150.0is required to estimate the total amount of future royalty payments to be received by the Company and paid to RPI, subject to the capped amount, over the life of the arrangement. The excess of future estimated royalty payments (subject to the capped amount), over the $314.2 million of net proceeds, is recorded as non-cash interest expense over the life of the arrangement. Consequently, the Company estimates an imputed interest on the unamortized portion of the liability and records interest expense relating to the transaction. The Company records the royalty revenue arising from the net sales of Crysvita in aggregate proceedsthe applicable European territories as non-cash royalty revenue in the Consolidated Statements of common stock, through Cowen as our sales agent. DuringOperations over the yearsterm of the arrangement. The Company periodically assesses the expected royalty payments using a combination of historical results, internal projections and forecasts from external sources. To the extent such payments are greater or less than the Company’s initial estimates or the timing of such payments is materially different than its original estimates, the Company will prospectively adjust the amortization of the liability and the effective interest rate. For the three months ended December 31, 20172020, the effective annual interest rate was approximately 9.8%. There are a number of factors that could materially affect the amount and 2016,timing of royalty payments from KKC in the applicable European territories, most of which are not within the Company’s control. Such factors include, but are not limited to, the success of KKC’s sales and promotion of Crysvita, changing standards of care, delays or disruptions related to the COVID-19 pandemic, the introduction of competing products, pricing for reimbursement in various European territories, manufacturing or other delays, intellectual property matters, adverse events that result in governmental health authority imposed restrictions on the use of Crysvita, significant changes in foreign exchange rates as the royalty payments are made in U.S. dollars (USD) while significant portions of the underlying European sales of Crysvita are made in currencies other than USD, and other events or circumstances that could result in reduced royalty payments from European sales of Crysvita, all of which would result in a reduction of non-cash royalty F-27 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) revenue and the non-cash interest expense over the life of the arrangement. Conversely, if sales of Crysvita in Europe are more than expected, the non-cash royalty revenue and the non-cash interest expense recorded by the Company sold 912,351 and 1,159,415 shareswould be greater over the term of common stock, resulting in net proceeds of approximately $67.6 million and $79.5 million, respectively, after commissions and other offering costs.the arrangement. The following table shows the activity within the liability account (in thousands):   Liability related to the sale of future royalties   Proceeds from sale of future royalties    in December 2019 $ 314,234   Non-cash interest expense   1,135   December 31, 2019   315,369   Non-cash collaboration royalty revenue   (12,995 ) Non-cash interest expense   33,291   December 31, 2020 $ 335,665   11.      Equity At-the-Market Offerings In July 2017, the Company entered into an additional ATM sales agreement with Cowen whereby the Company maycould sell up to $150.0 million in aggregate proceeds of common stock from time to time, through Cowen as its sales agent. During the years ended December 31, 20182020, 2019, and 2017,2018, the Company sold 640,257283,333, 468,685, and 1,338,866640,257 shares of common stock, respectively, resulting in net proceeds of approximately $38.1$20.4 million, $24.8 million, and $64.3$38.1 million, respectively, after commissions and other offering costs. Subsequent to December 31, 2018,As of June 30, 2020, the Company sold an additional 379,707 sharescompleted the sale of common stock resulting in net proceeds of $19.3 million, after commissions and offering costs.all available amounts under the ATM facility. Underwritten Public Offering In January 2018, the Company completed an underwritten public offering in which 5,043,860 shares of common stock were sold, which includes 657,895 shares purchased by the underwriters pursuant to an option granted to them in connection with the offering, at a public offering price of $57.00 per share. The total proceeds that the Company received from the offering were approximately $271.0 million, net of underwriting discounts and commissions. In February 2019, the Company completed an underwritten public offering in which 5,833,333 shares of common stock were sold, which included 760,869 shares purchased by the underwriters pursuant to an option granted to them in connection with the offering, at a public offering price of $60.00 per share. The total proceeds that the Company received from the offering were approximately $330.4 million, net of underwriting discounts and commissions. In October 2020, the Company completed an underwritten public offering in which 5,111,110 shares of common stock were sold, which included 666,666 shares purchased by the underwriters pursuant to an option granted to them in connection with the offering, at a public offering price of $90.00 per share. The total proceeds that the Company received from the offering were approximately $435.6 million, net of underwriting discounts and commissions. Common Stock Warrants As of December 31, 20182019 and 2017,2018, there was an aggregate of 149,700 of common stock warrants outstanding with exercise price of $3.01 and expiration dates in 2020 and 2021. In March 2020, all of the outstanding common stock warrants were exercised. 11.F-28 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) 12.      Stock-Based Awards Equity Plan Awards In 2011, the Company adopted the 2011 Equity Incentive Plan (the 2011 Plan). The 2011 Plan provides for the granting of stock-based awards to employees, directors, and consultants under terms and provisions established by the board of directors. In 2014, the Company adopted the 2014 Incentive Plan (the 2014 Plan). The 2014 Plan had 2,250,000 shares of common stock available for future issuance at the time of its inception, which included 655,038 shares available under the 2011 Plan, which were transferred to the 2014 Plan upon adoption. No further grants subsequent to the IPO were made under the 2011 Plan. The 2014 Plan provides for automatic annual increases in shares available for grant, beginning on January 1, 2015 through January 1, 2024. Under the terms of the 2014 Plan, awards may be granted at an exercise price not less than fair market value. For employees holding more than 10% of the voting rights of all classes of stock, the exercise prices for awards must be at least 110% of fair market of the common stock on the grant date, as determined by the board of directors. The term of an award granted under the 2014 Plan may not exceed ten years. Typically, the vesting schedule for option grants to the employees provides that 1/4 of the grant vests upon the first anniversary of the date of grant, with the remainder of the shares vesting monthly thereafter at a rate of 1/48 of the total shares subject to the option. TheTypically, the vesting schedule for RSU grants provides that 1/4 of the grant vests upon the annual anniversary of the date of grant over the period of four years. As part of the acquisition of Dimension, (discussed in Note 3 “Dimension Acquisition”), the Company assumed an equivalent 639,897 options to purchase shares of common stock of the Company from the equity plans of Dimension. No further grants subsequent to the acquisition are available under these equity plans. As of December 31, 2018,2020, an aggregate of 8,845,99010,878,499 shares of common stock have been authorized for issuance under the 2011 Plan, the 2014 Plan, and the assumed equity awards from the Dimension plans. F-22 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) Stock Option Activity The following table summarizes activity under the Company’s stock option plans, including the 2011 Plan, the 2014 Plan, the assumed equity awards from the Dimension plans and related information:     Options Outstanding     Options Outstanding     Number of Options     Weighted- Average Exercise Price     Weighted-Average Remaining Contractual Term (Years)     Aggregate Intrinsic Value     Number of Options     Weighted- Average Exercise Price     Weighted-Average Remaining Contractual Term (Years)     Aggregate Intrinsic Value                             (In thousands)                             (In thousands)   Outstanding — December 31, 2015     3,826,963     $ 56.36       8.58     $ 217,386   Options granted     1,435,995       67.00                   Options exercised     (425,922 )     21.21                   Options cancelled     (407,564 )     70.87                   Outstanding — December 31, 2016     4,429,472     $ 61.85       8.22     $ 79,135   Options granted     1,328,860       71.99                   Options assumed     639,897       27.97                   Options exercised     (478,470 )     16.25                   Options cancelled     (520,349 )     78.70                   Outstanding — December 31, 2017     5,399,410     $ 62.75       7.40     $ 37,687       5,399,410     $ 62.75       7.40     $ 37,687   Options granted     1,479,451       55.54                       1,479,451       55.54                   Options exercised     (713,263 )     36.21                       (713,263 )     36.21                   Options cancelled     (812,474 )     74.80                       (812,474 )     74.80                   Outstanding — December 31, 2018     5,353,124     $ 62.46       7.22     $ 23,243       5,353,124     $ 62.46       7.22     $ 23,243   Vested and exercisable — December 31, 2018     2,870,804     $ 62.10       6.09     $ 22,555   Vested and expected to vest — December 31, 2018     5,134,594     $ 62.53       7.16     $ 23,191   Options granted     1,762,075       63.03                   Options exercised     (235,678 )     32.87                   Options cancelled     (766,457 )     72.48                   Outstanding — December 31, 2019     6,113,064     $ 62.51       7.00     $ 18,989   Options granted     1,849,106       62.51                   Options exercised     (1,505,486 )     58.51                   Options cancelled     (452,081 )     69.38                   Outstanding — December 31, 2020     6,004,603     $ 62.99       7.21     $ 453,253   Vested and exercisable — December 31, 2020     2,989,891     $ 64.35       5.68     $ 221,488   Vested and expected to vest — December 31, 2020     5,699,638     $ 62.99       7.12     $ 430,243     The aggregate intrinsic values of options outstanding, vested and exercisable, and vested and expected to vest were calculated as the difference between the exercise price of the options and the fair value of the Company’s common stock. The total intrinsic value of options exercised during the years ended December 31, 2020, 2019, and 2018 2017, and 2016 was $22.9$56.9 million, $20.4$6.5 million and $22.2$22.9 million, respectively. Cash received from the exercise of options was $25.8$88.1 million, $7.8$7.7 million, and $9.0$25.8 million as of December 31, 2020, 2019, and 2018, 2017, and 2016, respectively. F-29 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) The weighted-average estimated fair value of stock options granted was $33.32, $44.20$35.22, $37.15 and $40.49$33.32 per share of the Company’s common stock during the years ended December 31, 2018, 2017,2020, 2019, and 2016,2018, respectively. The total estimated grant date fair value of options vested during the years ended December 31, 2020, 2019, and 2018 2017,was $45.4 million, $45.3 million, and 2016 was $51.7 million, $49.1 million, and $43.8 million, respectively. F-23 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) Restricted Stock Units The following table summarizes activity under the Company’s Restricted Stock Units (RSUs) from the 2014 Plan and related information: RSUs Outstanding   RSUs Outstanding   Number of Shares     Weighted- Average Grant Date Fair Value   Number of Shares     Weighted- Average Grant Date Fair Value   Unvested — December 31, 2015   197,151     $ 87.24   RSUs granted   477,816       66.83   RSUs released   (52,273 )     82.59   RSUs cancelled   (48,950 )     78.04   Unvested — December 31, 2016   573,744     $ 71.45   RSUs granted   516,161       71.58   RSUs released   (156,021 )     71.93   RSUs cancelled   (112,324 )     76.78   Unvested — December 31, 2017   821,560     $ 70.71     821,560     $ 70.71   RSUs granted   555,905       56.01     555,905       56.01   RSUs released   (235,913 )     71.01   RSUs vested   (235,913 )     71.01   RSUs cancelled   (187,475 )     65.37     (187,475 )     65.37   Unvested — December 31, 2018   954,077     $ 63.12     954,077     $ 63.12   RSUs granted   863,065       62.78   RSUs vested   (313,682 )     66.25   RSUs cancelled   (205,310 )     64.28   Unvested — December 31, 2019   1,298,150     $ 61.96   RSUs granted   967,310       64.36   RSUs vested   (434,153 )     62.65   RSUs cancelled   (150,140 )     61.42   Unvested — December 31, 2020   1,681,167     $ 63.21   The fair value of the RSUs is determined on the grant date based on the fair value of the Company’s common stock. The fair value of the RSUs is recognized as expense ratably over the vesting period of one to four years. The total grant date fair value of the 235,913 sharesRSUs vested during the years ended December 31, 2020, 2019, and 2018 was approximately$27.2 million, $20.8 million, and $16.8 million, with anrespectively. The aggregate intrinsic value of the shares of the RSUs vested during the years ended December 31, 2020, 2019, and 2018 was $29.5 million, $18.4 million, and $14.9 million.million, respectively. Performance Stock Units In December 2017, the Company began granting performance stock units (PSUs) to certain employees. The following table summarizes activity under the Company’s PSUs from the 2014 Plan and related information: PSUs Outstanding   PSUs Outstanding   Number of Shares     Weighted- Average Grant Date Fair Value   Number of Shares     Weighted- Average Grant Date Fair Value   Unvested — December 31, 2016   —     $ —   PSUs granted   508,850       48.03   Unvested — December 31, 2017   508,850     $ 48.03     508,850     $ 48.03   PSUs granted   71,725       59.67     71,725       59.67   PSUs cancelled   (97,375 )     48.58     (97,375 )     48.58   Unvested — December 31, 2018   483,200     $ 49.65     483,200     $ 49.65   PSUs granted   61,500       67.31   PSUs vested   (65,643 )     48.03   PSUs cancelled   (79,517 )     50.01   Unvested — December 31, 2019   399,540     $ 52.56   PSUs granted   47,600       56.08   PSUs vested   (200,867 )     51.21   PSUs cancelled   (33,707 )     52.48   Unvested — December 31, 2020   212,566     $ 54.64   These F-30 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) The fair value of the PSUs is determined on the grant date based on the fair value of the Company’s common stock. PSUs are subject to vest only if certain specified criteria are achieved and the employees’ continued service with the Company after achievement of the specified criteria. For certain PSUs, the number of PSUs that may vest are also subject to the achievement of certain specified criteria. As of December 31, 2018,2020, the specified criteria were deemed probable of achievement or already achieved. Stock-based compensation for these PSUs is recognized over the service period beginning in the period the Company determines it is probable that the performance criteria will be achieved. The total grant date fair value of the PSUs vested during the years ended December 31, 2020 and 2019 was $10.3 million and $3.2 million, respectively, with an aggregate intrinsic value of the shares of $14.4 million and $4.2 million, respectively. Employee Stock Purchase Plan In January 2014, the Company adopted the 2014 Employee Stock Purchase Plan (ESPP) and reserved a total of 600,000 shares of common stock for issuance under the ESPP. The ESPP provides for automatic annual increases in shares available for grant, beginning on January 1, 2015 through January 1, 2024. Eligible employees may purchase common stock at 85% of the lesser of the fair market value of common stock on the offering date or the purchase date with a six-month look-back feature. ESPP purchases are settled with common stock from the ESPP’s previously authorized and available pool of shares. During the year ended December 31, 2018,2020, the Company issued 81,831112,857 shares of common stock under the ESPP. As of December 31, 2018,2020, an aggregate of 2,211,0753,248,367 shares of common stock have been authorized for future issuance on the ESPP. F-24 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) Stock-Based Compensation Expense Total stock-based compensation recognized was as follows (in thousands):     Year Ended December 31,     Year Ended December 31,     2018     2017     2016     2020     2019     2018   Cost of sales   $ 146     $ —     $ —     $ 827     $ 1,084     $ 146   Research and development     45,572       38,212       29,412       47,949       44,205       45,572   Selling, general and administrative     34,389       29,802       18,897       36,959       36,706       34,389   Total stock-based compensation expense   $ 80,107     $ 68,014     $ 48,309     $ 85,735     $ 81,995     $ 80,107   Stock-based compensation of $1.2 million, $1.4 million, and $1.1 million was capitalized into inventory for the year ended December 31, 2018. There was no stock-based compensation capitalized for the years ended December 31, 20172020, 2019, and 2016.2018, respectively. Capitalized stock-based compensation is recognized as cost of sales when the related product is sold. As of December 31, 2018,2020, the total unrecognized compensation expense related to unvested equity awards, net of estimated forfeitures, was $131.0$155.6 million, which the Company expects to recognize over an estimated weighted-average period of 2.362.48 years. In determining the estimated fair value of the stock options and ESPP, the Company uses the Black-Scholes option-pricing model and assumptions discussed below. Each of these inputs is subjective and generally requires significant judgment to determine. Expected Term—The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term). Expected Volatility—As the Company does not have sufficient historical stock price information from the Company to meet the expected life of the stock-based awards, our approach to estimatingThe Company’s expected volatility is based on historical volatility over the look-back period corresponding to phase in our own common stock trading history and supplement the remaining historical information with a blended volatility from the trading history for the common stock of a set of comparable publicly traded biopharmaceutical companies.expected term. Risk-Free Interest Rate—The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of option. Expected Dividend—The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero. The fair value of stock option awards granted was estimated at the date of grant using a Black-Scholes option-pricing model with the following weighted-average assumptions:     Year Ended December 31,     Year Ended December 31,     2018     2017     2016     2020     2019     2018   Expected term (years)   6.23     6.23     6.23     6.20     6.22     6.23   Expected volatility   62%     65%     65%     61%     61%     62%   Risk-free interest rate   2.7%     2.1%     1.5%     0.8%     2.4%     2.7%   Expected dividend rate   0.0%     0.0%     0.0%     0.0%     0.0%     0.0%     12.F-31 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) 13.       Defined Contribution Plan The Company sponsors a retirement plan in which substantially all of its full-time employees in the United States and certain other foreign countries are eligible to participate. Eligible participants may contribute a percentage of their annual compensation to this plan, subject to statutory limitations. The Company recorded $2.9$4.3 million, $2.1$3.6 million, and $1.5$2.9 million as contribution expenses for the years ended December 31, 2018, 2017,2020, 2019, and 2016,2018, respectively. 13.14.      Income Taxes The components of the Company’s loss before income taxes were as follows (in thousands):     Year Ended December 31,     Year Ended December 31,     2018     2017     2016     2020     2019     2018   Domestic   $ 205,440     $ 250,917     $ 192,287     $ 189,449     $ 399,709     $ 205,440   Foreign     (8,343 )     67,421       53,552       (4,090 )     (265 )     (8,343 ) Total loss before income taxes   $ 197,097     $ 318,338     $ 245,839     $ 185,359     $ 399,444     $ 197,097     F-25 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) The components of the Company’s income tax provision were as follows (in thousands):   Year Ended December 31,       Year Ended December 31,       2018     2017     2016       2020     2019     2018     Current provision for income taxes:                                                     Federal   $ —     $ —     $ —       $ —     $ —     $ —     State     14       5       —         15       51       14     International     500       42       35         1,192       1,092       500     Total current tax provision     514       47       35         1,207       1,143       514     Deferred tax benefit:                           Deferred tax provision:                           Federal     —       (16,243 )     —         —       —       —     State     —       (3 )     —         —       2,140       —     International     —       —       —         —       —       —     Total deferred tax benefit     —       (16,246 )     —     Total (benefit from) provision for income taxes   $ 514     $ (16,199 )   $ 35     Total deferred tax provision     —       2,140       —     Total provision for income taxes   $ 1,207     $ 3,283     $ 514     The Company has incurred net operating losses since inception. The Company has not reflected any benefit of such net operating loss carryforwards in the accompanying financial statements. The Company has established a full valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets. The effective tax rate of our provision for income taxes differs from the federal statutory rate as follows:     Year Ended December 31,       Year Ended December 31,       2018     2017     2016       2020     2019     2018     Federal statutory income tax rate     21.0   %   34.0   %   34.0   %     21.0   %   21.0   %   21.0   % State income taxes, net of federal benefit     —       —       1.3         —       (0.5 )     —     Federal tax credits     9.5       9.0       13.7         13.7       5.2       9.5     Other     (0.2 )     (0.9 )     (0.3 )       (0.5 )     (0.2 )     (0.2 )   Premium on equity issuance     2.2       —       —     Nondeductible permanent items     (0.8 )     —       —         (0.9 )     (0.4 )     (0.8 )   Stock-based compensation     (0.8 )     (0.6 )     (1.4 )       0.9       (1.0 )     (0.8 )   Uncertain tax positions     (1.9 )     (1.8 )     2.0         (2.7 )     (1.0 )     (1.9 )   Change in valuation allowance     (26.8 )     (32.5 )     (41.9 )       (33.9 )     (23.6 )     (26.8 )   Foreign rate differential     (0.3 )     (7.2 )     (7.4 )       (0.5 )     (0.3 )     (0.3 )   Change in federal tax rate     —       5       —     Provision for income taxes     (0.3 )     5.1       0.0         (0.7 ) %   (0.8 ) %   (0.3 ) % F-32 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued)   The tax effect of temporary differences that give rise to significant portions of the deferred tax assets is presented below (in thousands):   Year Ended December 31,       Year Ended December 31,       2018     2017       2020     2019     Deferred tax assets:                                     Loss carryforwards   $ 183,331     $ 154,949       $ 222,902     $ 185,892     Tax credits     137,019       119,542         184,961       158,791     Stock options     29,925       21,336         39,154       40,676     Accruals and reserves     7,418       5,939         24,922       19,622     Fixed assets and intangibles     2,820       1,194         7,242       3,870     Liability related to sale of future royalties     86,664       81,424     Other     1,189       1,286         28,642       4,183     Gross deferred tax assets     361,702       304,246         594,487       494,458     Valuation allowance     (361,702 )     (304,246 )       (561,139 )     (486,796 )   Total deferred tax assets     —       —         33,348       7,662     Deferred tax liabilities:                                     In-process research and development     (31,166 )     (31,166 )       (33,306 )     (33,306 )   Net deferred tax assets (liabilities)   $ (31,166 )   $ (31,166 )   Basis difference in equity investments     (23,019 )     —     Right-of-use lease assets     (10,329 )     (7,662 )   Gross deferred tax liabilities     (66,654 )     (40,968 )   Net deferred tax liabilities   $ (33,306 )   $ (33,306 )     F-26 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) As of December 31, 20182020 and 2017,2019, the Company had $558.3approximately $750.2 million and $422.3$549.9 million of federal net operating loss carryforwards available to reduce future taxable income that will begin to expire in 2030.2032. As of December 31, 20182020 and 2017,2019, the Company had $476.8approximately $616.8 million and $457.7$520.2 million of state net operating loss carryforwards available to reduce future taxable income that will begin to expire in 2030.2031. As of December 31, 20182020 and 2017,2019, the Company had federal research tax credit carryforwards of $7.5$17.7 million and $4.5$11.7 million available to reduce future tax liabilities that will begin to expire in 2030. As of December 31, 20182020 and 2017,2019, the Company had state research credit carryforwards of $17.3$34.5 million and $12.4$25.5 million available to reduce future tax liabilities that will be carried forward indefinitely. As of December 31, 20182020 and 2017,2019, the Company had federal Orphan Drug Credits of $143.5$179.8 million and $124.6$160.0 million available to reduce future tax liabilities that will begin to expire in 2031. The Company’s ability to use net operating loss and tax credit carryforwards to reduce future taxable income and liabilities may be subject to annual limitations pursuant to Internal Revenue Code Sections 382 and 383 as a result of ownership changes in the past and future. As a result of ownership changes in 2012 and 2011, $3.6 million of federal net operating loss carryforwards, $3.6 million of state net operating loss carryforwards, and $0.2 million of federal tax credits are permanently limited. Deferred tax assets for net operating losses and tax credits have been reduced and a corresponding adjustment to the valuation allowance has been recorded. On November 7, 2017, Based upon information available through the reporting date, the Company acquired Dimension (see Note 3 “Dimension Acquisition”). The Company recorded a $47.4 million deferred tax liability relating to the tax impactis not aware of future GAAP amortization or potential impairments associated with the identified intangible assets acquired, which are indefinitely lived assets and are not currently deductible for tax purposes. Due to the reductionany other changes in ownership that would result in material limitations under Section 382 as of the US corporate tax rate to 21% in the period subsequent to the acquisition, the Company recorded a net decrease to the deferred tax liability of $16.2 million with a corresponding benefit from income taxes of $16.2 million for the year ended December 31, 2017. During the year ended December 31, 2018, the Company did not amortize or impair such acquired IPR&D. Therefore, there is no change to the deferred tax liability balance generated from Dimension acquisition.2020. The valuation allowance increased by $57.5$74.3 million and $91.9$125.1 million during the year ended December 31, 20182020 and 2017,2019, respectively. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The post-enactment items that have new impact to the 2018 tax accounting includes, but are not limited to, (1) global intangible low-taxed income (GILTI); (2) base erosion anti-abuse tax (BEAT); (3) foreign derived intangible income (FDII); (4) limitation on deductible interest expense, (5) certain non-deductible expenses, and (6) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017. On December 22, 2017, Staff Accounting Bulletin No. 118 (SAB 118) was issued to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, the Company recorded a provisional amount related to the remeasurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. It was a net decrease related to deferred tax assets and deferred tax liabilities of $70.5 million, with a corresponding net adjustment to benefit from income taxes of $16.1 million and offsetting change in valuation allowance of $86.6 million for the year ended December 31, 2017. As of December 22, 2018, the Company has completed its accounting for the remeasurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future. There have been no net benefit changes to the provisional estimates disclosed in the period of enactment under SAB 118. The Company recorded unrecognized tax benefits for uncertainties in income taxes. A reconciliation of the Company’s unrecognized tax benefits follows (in thousands):     December 31,     December 31,     2018     2017     2016     2020     2019     2018   Balance at beginning of year   $ 28,377     $ 13,505     $ 24,010     $ 39,954     $ 33,727     $ 28,377   Additions based on tax positions related to current year     4,750       9,338       6,777       6,950       5,575       4,750   Additions for tax positions of prior years     600       5,534       877       382       652       600   Reductions for tax positions of prior years     —       —       (18,159 )     (624 )     —       —   Balance at end of year   $ 33,727     $ 28,377     $ 13,505     $ 46,662     $ 39,954     $ 33,727   F-33 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued)   The entire amount of the unrecognized tax benefits would not impact the Company’s effective tax rate if recognized. The Company has elected to include interest and penalties as a component of tax expense. During the years ended December 31, 20182020 and 2017,2019, the Company did not0t recognize accrued interest and penalties related to unrecognized tax benefits. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease during the next year. F-27 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued) It is ourthe Company’s intention to reinvest the earnings of ourits non-U.S. subsidiaries in their operations. As of December 31, 2018,2020, the Company had not made a provision for U.S. income taxes orany incremental foreign withholding taxes on approximately $3.7$6.3 million of the excess of the amount of net income for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. If these earnings were repatriated to the U.S., the deferred tax liability associated with these temporary differences would result in a nominal amount of withholding taxes. The Company files income tax returns in the U.S. federal, California, and other state tax jurisdictions. The federal and state income tax returns from inception to December 31, 20182020 remain subject to examination.   14.15.       Commitments and Contingencies Facilities The Company leases office space and research, testing and manufacturing laboratory space in various facilities in Novato and Brisbane, California, in Cambridge and Woburn, Massachusetts, and in certain foreign countries, under operating agreements expiring at various dates through 2028. Certain of the leases provide for options by the Company to extend the lease for multiple five-year renewal periods and also provide for annual minimum increases in rent, usually based on a consumer price index or annual minimum increases. The Company recognizes rent expense on a straight-line basis over the noncancelable term of its operating leases. Rent expense was $6.4 million, $4.5 million, and $3.3 million during the years ended December 31, 2018, 2017, and 2016, respectively. Other Commitments The Company has various manufacturing, clinical, research, and other contracts with vendors in the conduct of the normal course of its business. Other than as noted below, contracts are terminable, with varying provisions regarding termination. If a contract with a specific vendor were to be terminated, the Company would only be obligated for the products or services that the Company had received at the time the termination became effective. As of December 31, 2018,2020, the aggregate future minimum lease payments under the noncancelable operating lease arrangements and future payments under contractually binding manufacturing and service agreements are as follows (in thousands):   Year Ending December 31,   Leases     Manufacturing and Services   2019   $ 5,965     $ 6,790   2020     4,588       62   2021     3,091       —   2022     2,831       —   2023     2,842       —   Thereafter     8,451       —       $ 27,768     $ 6,852       Year Ended December 31,       2021     2022   Manufacturing and Services   $ 4,330     $ 472   Land and Building Construction     26,078       382       Total   $ 30,408     $ 854   See “Note 8. Leases” for lease commitments. Contingencies While there are no material legal proceedings the Company is aware of, the Company may become party to various claims and complaints arising in the ordinary course of business. Management does not believe that any ultimate liability resulting from any of these claims will have a material adverse effect on its results of operations, financial position, or liquidity. However, management cannot give any assurance regarding the ultimate outcome of these claims, and their resolution could be material to operating results for any particular period, depending upon the level of income for the period. Guarantees and Indemnifications The Company indemnifies each of its directors and officers for certain events or occurrences, subject to certain limits, while the director is or was serving at the Company’s request in such capacity, as permitted under Delaware law and in accordance with its certificate of incorporation and bylaws. The term of the indemnification period lasts as long as a director may be subject to any proceeding arising out of acts or omissions of such director in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company currently holds director liability insurance. This insurance allows the transfer of risk associated with the Company’s exposure and may enable it to recover a portion of any future amounts paid. The Company believes that the fair value of these indemnification obligations is minimal. Accordingly, it has not recognized any liabilities relating to these obligations for any period presented.   F-28F-34 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued)   15.16.      Net Loss per Share The following table sets forth the computation of the basic and diluted net loss per share during the years ended December 31, 2018, 20172020, 2019, and 20162018 (in thousands, except share and per share data):     Year Ended December 31,     Year Ended December 31,     2018     2017     2016     2020     2019     2018   Numerator:                                                 Net loss   $ (197,611 )   $ (302,139 )   $ (245,874 )   $ (186,566 )   $ (402,727 )   $ (197,611 ) Denominator:                                                 Weighted-average shares used to compute net loss per share, basic and diluted     49,775,223       42,453,135       39,586,908       60,845,550       56,576,885       49,775,223   Net loss per share, basic and diluted   $ (3.97 )   $ (7.12 )   $ (6.21 )   $ (3.07 )   $ (7.12 )   $ (3.97 )    The following weighted-average outstanding common stock equivalents were excluded from the computation of diluted net loss per share for the periods presented because including them would have been antidilutive:     Year Ended December 31,     Year Ended December 31,     2018     2017     2016     2020     2019     2018   Options to purchase common stock, RSUs, and PSUs     7,301,431       5,862,784       4,699,111       8,532,236       7,978,666       7,301,431   Employee stock purchase plan     3,345       2,728       7,933       2,626       3,953       3,345   Common stock warrants     149,700       149,700       149,700       29,449       149,700       149,700       7,454,476       6,015,212       4,856,744       8,564,311       8,132,319       7,454,476     16.17.     Accumulated Other Comprehensive LossIncome (Loss) Total accumulated other comprehensive lossincome (loss) consisted of the following (in thousands):     Year Ended December 31,       2018     2017   Foreign currency translation adjustments   $ (329 )   $ (5,298 ) Unrealized loss on securities available-for-sale     (304 )     (382 )     Total accumulated other comprehensive loss   $ (633 )   $ (5,680 )     Year Ended December 31,       2020     2019   Cumulative foreign currency translation adjustment   $ 429     $ (306 ) Unrealized gain on securities available-for-sale     260       159       Total accumulated other comprehensive income         (loss)   $ 689     $ (147 ) 17. 18.     Quarterly Financial Data (unaudited) The following table presents certain unaudited quarterly financial information. This information has been prepared on the same basis as the audited financial statements and includes all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the unaudited quarterly results of operations set forth herein (in thousands, except per share data):     2018     2020     March 31,     June 30,     September 30,     December 31,     March 31,     June 30,     September 30,     December 31,   Revenue   $ 10,677     $ 12,794     $ 11,763     $ 16,261     $ 36,309     $ 61,709     $ 81,470     $ 91,542   Operating expenses   $ 107,164     $ 107,694     $ 101,409     $ 106,601     $ 156,974     $ 124,764     $ 131,785     $ 187,623   Change in fair value of equity investments   $ 7,668     $ 95,200     $ (11,520 )   $ 79,055   Net income (loss)   $ 30,253     $ (52,728 )   $ (87,310 )   $ (87,826 )   $ (119,025 )   $ 25,315     $ (68,845 )   $ (24,011 ) Net income (loss) per share, basic   $ 0.63     $ (1.06 )   $ (1.74 )   $ (1.73 )   $ (2.05 )   $ 0.42     $ (1.13 )   $ (0.37 ) Net income (loss) per share, diluted   $ 0.62     $ (1.06 )   $ (1.74 )   $ (1.73 )   $ (2.05 )   $ 0.41     $ (1.13 )   $ (0.37 )     2017     2019     March 31,     June 30,     September 30,     December 31,     March 31,     June 30,     September 30,     December 31,   Revenue   $ —     $ —     $ 198     $ 2,414     $ 18,172     $ 24,149     $ 25,800     $ 35,593   Operating expenses   $ 69,954     $ 78,441     $ 83,911     $ 99,248     $ 117,386     $ 136,623     $ 143,833     $ 130,045   Change in fair value of equity investments   $ —     $ 9,828     $ 2,166     $ 1,419   Net loss   $ (68,290 )   $ (72,891 )   $ (79,227 )   $ (81,731 )   $ (96,756 )   $ (99,172 )   $ (112,994 )   $ (93,805 ) Net loss per share, basic and diluted   $ (1.63 )   $ (1.72 )   $ (1.87 )   $ (1.89 )   $ (1.82 )   $ (1.72 )   $ (1.96 )   $ (1.62 ) F-35 ULTRAGENYX PHARMACEUTICAL INC. Notes to Consolidated Financial Statements (continued)     F-2919.     Subsequent Event In December 2020, the Company entered into a License and Collaboration Agreement with Mereo BioPharma 3 Limited (Mereo) to collaborate on the development of setrusumab. Under the terms of the agreement, the Company will lead future global development of setrusumab in both pediatric and adult patients with Osteogenesis Imperfecta, and was granted an exclusive license to develop and commercialize setrusumab in the U.S., Turkey, and the rest of the world, excluding the European Economic Area, United Kingdom, and Switzerland (the Mereo territory), where Mereo retains commercial rights. Each party will be responsible for post-marketing commitments and commercial supply in their respective territories. Upon the closing of the transaction under the agreement in January 2021, the Company made a payment of $50.0 million to Mereo and will be required to make payments of up to $254.0 million upon the achievement of certain clinical, regulatory, and commercial milestones. The Company will pay for all global development costs as well as tiered double-digit percentage royalties to Mereo on net sales in the U.S., Turkey, and the rest of the world, and Mereo will pay the Company a fixed double-digit percentage royalty on net sales in the Mereo Territory. F-36