Ultragenyx shares crater after Angelman syndrome drug fails late-stage trial

By Kamal Choudhury

Sept 3 (Reuters) – Shares of Ultragenyx Pharmaceutical plunged on Thursday after its neurodevelopmental disorder treatment failed a closely watched late-stage trial, dealing a major ​blow to one of its biggest growth bets.

The drug, ‌apazunersen, failed to meet both its main goal of improving cognitive skills and its secondary goals of overall patient response in participants with Angelman syndrome, a rare condition that affects the nervous system and ‌impairs ​typical brain development in childhood.

Ultragenyx said, late ⁠on Wednesday, there were ⁠no differences between patients receiving the treatment and those on placebo, prompting a review of the program’s future.

The trial outcome is a major blow to the company and ​the patient community, as there are currently no approved disease-modifying treatments for the condition.

It also marks Ultragenyx’s second consecutive ⁠late-stage trial failure, a setback Jefferies ⁠analyst Maury Raycroft called “unambiguously negative” and likely to “further ​erode street confidence”.

Ultragenyx shares tumbled 47.6% to a record low ​of $13.89 in the early morning trading, on track to ‌wipe out $1.25 billion from its market value, if losses hold.

Following the trial results, at least 10 brokerages slashed their price targets on the stock.

TD Cowen analysts said the failure “removes a ⁠key growth driver,” while Cantor Fitzgerald analyst Kristen Kluska warned that Ultragenyx “truly has to lower its spend substantially for investors to want ⁠to even consider ‌building a position”.

Ultragenyx said it will implement “significant ⁠expense reductions” to manage its high operating ​costs.

Jefferies noted ‌Ultragenyx’s trial failure “raises risk for competitors” like ​Ionis Pharmaceuticals ⁠and Oak Hill Bio who are developing similar treatments.

“The investment case has changed shape,” Leerink Partners analyst Joseph Schwartz said, arguing that Ultragenyx is now “a commercial and expense story rather than a pipeline execution story.”

(Reporting by Kamal Choudhury in Bengaluru; Editing ​by Vijay Kishore)