Ultragenyx stock holds Buy rating at BofA despite setrusumab trial delay

Investing.com - Ultragenyx Pharma (NASDAQ:RARE), currently trading at $41.44 with a market capitalization of $3.91 billion, maintained its Buy rating and $80 price target at BofA Securities despite a setback in its Phase 3 Orbit study for setrusumab in osteogenesis imperfecta (OI). According to InvestingPro data, seven analysts have recently revised their earnings expectations upward for the upcoming period.

The company announced that the study did not reach statistical significance at the second interim analysis, requiring a p-value below 0.01 for success. The trial will now continue to a third and final readout expected around year-end 2025. Despite the setback, the company maintains strong revenue growth of 33.46% over the last twelve months.

The Data Monitoring Committee informed Ultragenyx that setrusumab continues to demonstrate an acceptable safety profile, allowing the study to proceed to the final interim analysis when all patients have been on therapy for 18-26 months, with a revised success threshold of p-value below 0.04.

BofA Securities maintains its 60% probability of success for the program, noting that the extended study duration could actually increase the likelihood of success as more fracture events accrue and the effects of prior bisphosphonate treatments fully wash out.

The research firm highlighted that Ultragenyx’s base business contributes approximately $26 per share to its $80 price objective, with several other near-term pipeline opportunities supporting its investment thesis and selection of RARE as a top 2025 pick.

In other recent news, Ultragenyx Pharmaceutical (TADAWUL:2070) Inc. and Mereo BioPharma Group plc announced that their Phase 3 Orbit study for UX143 (setrusumab) in osteogenesis imperfecta is advancing to final analysis. The study did not meet the statistical significance threshold in its second interim analysis, prompting continuation to a final analysis expected by year-end 2025. Despite this, both Goldman Sachs and Citi have maintained their Buy ratings on Ultragenyx, with price targets of $82.00 and $110.00, respectively. Goldman Sachs anticipates potential peak global sales of $1.6 billion for Ultragenyx by 2033, while Citi estimates an 85% probability of the trial’s eventual success. Separately, Ultragenyx received Breakthrough Therapy Designation from the FDA for its Angelman syndrome drug, GTX-102, based on promising Phase 1/2 study results. This designation aims to expedite the drug’s development and review process. Ultragenyx has commenced enrollment for its global Phase 3 Aspire study and plans to launch the Aurora study in 2025 to explore GTX-102’s efficacy in additional genotypes and age groups.

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