- Ultragenyx shares last traded down about 42% after the company reported Phase 3 setbacks for setrusumab
- The drug missed its main fracture-reduction goal in late-stage studies, prompting plans for expense cuts
- Analysts trimmed targets, with Citi cutting its price target to $50 while keeping a Buy rating
Ultragenyx Pharmaceutical Inc shares slid on Monday after the company said two late-stage studies of setrusumab for osteogenesis imperfecta missed their primary fracture-reduction goal, prompting plans for significant expense reductions. “We are surprised and disappointed by these results,” Chief Executive Emil Kakkis said. Shares last traded down 42.3% at $19.72 after the close, versus a prior close of $34.19, after swinging between $34.50 and $17.76 on volume of about 21.7 million shares. 1
The miss dents a key growth bet for Ultragenyx in a rare genetic bone disorder often called brittle-bone disease. Late-stage trial outcomes can quickly reshape expectations for a drug’s approval prospects and long-term revenue.
The selloff also shifts attention to Ultragenyx’s spending profile and the rest of its pipeline as the company weighs next steps for setrusumab. Investors will be watching for any signs that management narrows its focus to subgroups, or pulls back from the program.
Partner Mereo BioPharma said neither Phase 3 ORBIT nor COSMIC achieved the primary endpoint — the trial’s main yardstick — of reducing annualized clinical fracture rate, or fractures per year, versus placebo and bisphosphonates, respectively. (Bisphosphonates are drugs commonly used to treat conditions affecting bone density, such as osteoporosis.) ORBIT enrolled 159 patients aged 5 to 25, while COSMIC enrolled 69 patients aged 2 to under 7, and both studies posted strong bone mineral density gains with no change in safety, it said, adding the disorder has no globally approved treatments and affects about 60,000 people in commercially accessible geographies. 2
Bone mineral density is a scan-based estimate of how much mineral is packed into bone and is often used as a marker of bone strength. Investors, however, typically focus on fracture outcomes because they are harder clinical events that can drive regulatory and reimbursement decisions.
Ultragenyx describes setrusumab (UX143) as an anti-sclerostin antibody — targeting a protein that suppresses bone formation — with the goal of increasing new bone formation and bone strength. The company markets rare-disease drugs including Crysvita and Dojolvi and sells Regeneron’s Evkeeza outside the United States, according to its pipeline overview. Its development roster includes gene therapies and an antisense program such as GTX-102 for Angelman syndrome.
Truist analyst Joon Lee said the cost-cutting plan signaled Ultragenyx could sunset its osteogenesis imperfecta program after the surprise miss. Separately, Citi lowered its price target on Ultragenyx to $50 from $103 but kept a Buy rating, TheFly reported. 3
Before Tuesday’s session, investors will look for more detail on the timing and scope of expense reductions and whether Ultragenyx changes its development priorities. Traders will also be watching whether the stock holds the $20 area after Monday’s slide and avoids a retest of the $17.76 session low.
Ultragenyx has not announced a date for its next quarterly report. MarketBeat estimates the company will report on Feb. 12, based on past reporting schedules. 4
On Tuesday, traders will also sift through U.S. home-price data, the Chicago PMI business survey and Federal Reserve meeting minutes, according to TradingCharts’ economic calendar. U.S. markets are set to close for New Year’s Day on Jan. 1, which can thin liquidity and amplify moves around year-end. 5
