Ultragenyx Shares Sink 46% After Angelman Syndrome Drug Fails Phase 3 Trial

Shares of Ultragenyx Pharmaceutical lost nearly half their value this week after the Novato, California, biotech disclosed that its closely watched experimental treatment for Angelman syndrome failed the late-stage trial investors had been counting on to deliver the company's next major approval. The stock, which closed at $26.53 on Tuesday, fell more than 40% in after-hours trading once the results crossed the wire and was down roughly 46%, to around $14, in Wednesday's session, erasing more than $1 billion in market value in a single day.

The drug, an antisense oligonucleotide called apazunersen (also known as GTX-102), was being tested in the Phase 3 Aspire study, a randomized, sham-controlled trial in roughly 130 children and adolescents with deletion-type Angelman syndrome, a rare neurodevelopmental disorder that causes severe intellectual disability, seizures and loss of speech. According to the company's filing with securities regulators, the trial missed both its primary endpoint, a measure of cognitive improvement, and its key secondary endpoints assessing clinical function, with no statistically significant separation from placebo on either.

Ultragenyx said in the disclosure filed with the Securities and Exchange Commission that it would "assess its planned operations" and pursue "significant expense reductions" as it shifts emphasis toward its existing commercial portfolio of approved rare-disease therapies, without specifying whether layoffs are planned. A separate, earlier-stage study of apazunersen in a broader group of neurodevelopmental disorders is still enrolling patients, but data from that trial are not expected before the end of the decade, leaving the company with a thinner near-term pipeline than it had going into the week.

Wall Street's reaction was swift. BioSpace reported that Evercore ISI cut its rating on the stock and slashed its price target to $16, while analysts at William Blair, who had called apazunersen a "high-risk, high-reward" bet, warned the failure "robs the biotech of any meaningful near-term milestones." Baird also downgraded the shares, according to STAT News, which noted the setback ends years of anticipation for a therapy that would have been among the first approved treatments targeting the underlying genetics of Angelman syndrome rather than just its symptoms. Not every analyst turned negative: Jefferies pointed to the silver lining of improved capital efficiency now that the costly late-stage program has concluded, with the company's approved commercial franchise still intact.

The company still has other near-term catalysts on the calendar, including a Food and Drug Administration decision expected September 19 on a separate gene therapy for Sanfilippo syndrome, another rare genetic disorder, which analysts said would take on outsized importance now that apazunersen's Angelman program has stalled. Apazunersen had been one of the most closely tracked programs among biotechs developing genetically targeted medicines for rare pediatric neurodevelopmental disorders, and Wednesday's roughly $1 billion swing in market value ranks among the sharper single-day biotech losses of the year. Ultragenyx, whose stock trades on the Nasdaq Global Select Market under the ticker RARE, still markets several approved therapies for other rare diseases, and executives are expected to lay out a fuller picture of the company's revised strategy and cost structure on its next quarterly earnings call.