On Friday, Canaccord Genuity adjusted its outlook on Ultragenyx Pharmaceutical (NASDAQ:RARE) Inc. shares (NASDAQ:RARE), raising the price target to $111 from the previous $109 while sustaining a Buy rating on the stock.
The adjustment follows the announcement that Ultragenyx's DTX401 met its primary endpoint in a Phase 3 trial, demonstrating a statistically significant reduction in daily cornstarch intake at week 48. The successful outcome is seen as a strong indicator of the therapy's approvability, with a Biologics License Application (BLA) filing anticipated next year.
The Canaccord Genuity analyst noted that discussions regarding the magnitude of benefit observed in the Phase 3 trial compared to earlier phases were addressed by Ultragenyx's management. They explained that the blinded nature of the trial likely affected the titration of cornstarch and that the duration of follow-up varied. These factors were considered reasonable in explaining the trial's results.
The therapy, designed to treat a rare metabolic disorder, is expected to be adopted due to the significant burden of the disease and the current treatment regime. Although the market for this treatment is relatively small, with an estimated 6,000 patients worldwide, the analyst pointed out that it does not necessitate significant additional sales, general, and administrative (SG&A) infrastructure. Moreover, the current stock levels do not yet reflect this potential market.
Moreover, Canaccord Genuity believes that the successful trial results will facilitate the logistics of future gene therapy launches by Ultragenyx, particularly as the company prepares for larger opportunities in the years ahead.
The positive outcome is also seen as maintaining the momentum of good news as the company heads into a busy second half of the year. The firm reiterated its Buy rating, signaling confidence in Ultragenyx's prospects.
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