Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) shares plunged 42% on Monday after the company and partner Mereo BioPharma Group plc (NASDAQ:MREO) disclosed disappointing late-stage data for their rare bone disease program.
Mereo BioPharma Group plc and Ultragenyx revealed results from the Phase 3 Orbit and Cosmic studies for setrusumab (UX143) in Osteogenesis Imperfecta (OI).
The companies said that neither study achieved statistical significance against the primary endpoints of reduction in annualized clinical fracture rate compared to placebo or bisphosphonates, respectively.
Both studies achieved the secondary endpoints of improvements in bone mineral density (BMD) against comparators. There was no change in the safety profile observed.
Analyst Take
William Blair on Monday said they were disappointed and surprised by the news given setrusumab’s efficacy in the Phase 2 portion of the Orbit study and the increased enrollment of patients with severe disease subtypes in the Phase 3 study, which the analyst thought would have led to a higher annualized fracture rate (AFR) in the placebo arm compared to the Phase 2 study.
Analyst Sami Corwin is hesitant about the future of setrusumab.
Corwin notes there are still several unknowns around the data, given the limited information provided in the press release, including whether a larger effect size was seen in pediatric patients in the Orbit study, patient-reported outcomes, and why the AFR in the placebo arm was low.
Following the news, the company is now trading at about the cumulative value of its approved products. William Blair maintains an Outperform rating for the stock.
William Blair sees there is still upside that can be garnered in the next 12 months, specifically with the pivotal Angelman syndrome readout in the third quarter of 2026 and the potential approval of two gene therapies that are also eligible for priority review vouchers.
Price Action: Ultragenyx Pharmaceutical shares were up 1.42% at $20.00 at the time of publication on Tuesday, according to Benzinga Pro data. Mereo BioPharma Group shares were up 3.89%.
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