Ultragenyx Pharmaceutical shares fell 47 percent in pre-market trading Thursday after its experimental Angelman syndrome therapy apazunersen failed a Phase 3 trial, marking the company's second consecutive late-stage setback. The drug showed no benefit over placebo on cognitive or overall response measures, prompting at least five brokerages to cut price targets and the company to plan significant expense reductions.
Ultragenyx Pharmaceutical shares plunged 47 percent in pre-market trading after its Angelman syndrome drug apazunersen failed a Phase 3 trial.
"The outcome is unambiguously negative and likely to further erode street confidence," Maury Raycroft, analyst at Jefferies, said.
Apazunersen (GTX-102) failed to meet its primary goal of improving cognitive skills and its secondary goals of overall patient response in participants with Angelman syndrome, a rare neurodevelopmental condition that impairs brain development in childhood. Ultragenyx said there were no differences between patients receiving the treatment and those on placebo, prompting a review of the program's future. The failure marks the company's second consecutive late-stage trial miss.
The setback removes a key growth driver for Ultragenyx, which had been counting on the Angelman drug as its path to profitability. At least five brokerages cut their price targets on the stock, and the company said it will implement "significant expense reductions" to manage high operating costs.
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."
Leerink Partners analyst Joseph Schwartz said the investment case "has changed shape," arguing that Ultragenyx is now "a commercial and expense story rather than a pipeline execution story."
The trial outcome also raises risk for competitors developing similar Angelman syndrome treatments, including Ionis Pharmaceuticals and Oak Hill Bio, according to Jefferies. There are currently no approved disease-modifying therapies for the condition, which causes severe intellectual disabilities, developmental delays, and seizures in affected children.
Ultragenyx, which markets multiple approved medicines for ultra-rare diseases, had a market value of $2.62 billion as of Wednesday's close, with shares up 15.4 percent year-to-date, according to LSEG data. The company had counted on apazunersen as its largest growth opportunity after the drug showed powerful results in earlier-stage trials, raising hopes among families affected by the condition.
The trial failure shifts Ultragenyx's investment case from pipeline growth to commercial execution and cost discipline. Investors will watch for details on the expense reduction plan and any decision on the apazunersen program's future.
This article is for informational purposes only and does not constitute investment advice.
