Ultragenyx Shares Collapse After Angelman Syndrome Drug Fails Late-Stage Trial
Shares in Ultragenyx Pharmaceutical (RARE) plunged nearly 48 per cent to a record low of $13.89 in early trading after its experimental treatment for Angelman syndrome failed a closely watched late-stage trial, wiping out approximately $1.25bn in market value and dealing a severe blow to one of the company's most important growth programs.
The drug, apazunersen, missed both its primary goal of improving cognitive function and secondary measures of overall patient response in participants with the rare neurodevelopmental disorder, which impairs typical brain development in childhood. Ultragenyx said late on Wednesday that there were no meaningful differences between patients receiving the treatment and those on placebo, prompting the company to review the program's future. No approved disease-modifying therapies for Angelman syndrome currently exist.
The result marks Ultragenyx's second consecutive late-stage failure, a run that Jefferies analyst Maury Raycroft described as "unambiguously negative" and likely to "further erode street confidence." At least ten brokerages cut their price targets on the stock following the data. TD Cowen said the failure "removes a key growth driver," while Cantor Fitzgerald analyst Kristen Kluska warned that the company "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 operating cost base.
The setback carries implications beyond Ultragenyx itself. Jefferies noted the trial result "raises risk for competitors" developing similar treatments, including Ionis Pharmaceuticals (IONS) and Oak Hill Bio.
Leerink Partners analyst Joseph Schwartz offered the sharpest reframing of the company's prospects, arguing that Ultragenyx is now "a commercial and expense story rather than a pipeline execution story" — a shift in investment thesis that underscores the difficulty of rebuilding credibility after successive clinical disappointments.