Ultragenyx still hopes for a rare victory
Ultragenyx's credibility has taken another blow with confirmation that its phase III GNE myopathy candidate, Ace-ER, is a dud.
True, expectations for the project had been low, with the focus on more valuable assets in the shape of burosumab and triheptanoin, but data on these are mixed (see table). With important events for these two assets looming, the company’s track record of pushing on with projects that might have been better consigned to the scrap heap does not inspire confidence.
The sellside seems to have already shrugged off the news of Ace-ER’s demise and shifted its attention to the US filing and EU approval decision on burosumab, both due by the end of the year. But investors were rattled enough to send Ultragenyx’s stock down 12% this morning.
Hit and miss
While analysts were keen to highlight the slump as a buying opportunity, Ultragenyx is already attracting short sellers – around 13% of the company's stock is already held in short positions.
These pessimists might have a point. A lot is riding on burosumab which, with a net present value of $1.4bn according to EvaluatePharma, is worth more than half of Ultragenyx’s $2.5bn market cap.
However, the phase III trial in X-linked hypophosphataemia was not a slam dunk – it met its primary endpoint but missed a key secondary pain endpoint, raising doubts about the project’s approval prospects (Ultragenyx bounces back, but painful questions remain, April 19, 2017).
|Product||Indication||Mechanism of action||2022e sales ($m)||NPV ($m)|
|Burosumab/KRN23||X-linked hypophosphataemia||Anti-fibroblast growth factor (FGF) MAb||331||1,387|
|rhGUS/vestronidase alpha||Mucopolysaccharidosis VII||Lysosome enzyme therapy||63||206|
|Triheptanoin/UX007||Glucose transporter type 1 deficiency syndrome||Synthetic triglyceride||253||744|
|Ace-ER||GNE myopathy||Musculoskeletal agent||89||119|
Success for Ultragenyx’s second-biggest hope, triheptanoin, is also not assured. The project had already progressed into phase III in movement disorders caused by glucose transporter type 1 deficiency syndrome (Glut1 DS) when news came of a phase II miss in a similar indication, seizures associated with Glut1 DS (Ultragenyx looks ahead after triheptanoin failure, March 23, 2017).
This might not be the end of the world – the phase III data in movement disorders, due next year, could be enough for a filing, and the seizure trial had been intended to support a label expansion.
But another late-stage failure could raise questions about why Ultragenyx chose to move triheptanoin into phase III before full phase II results were available. The negative data have already hurt confidence in the project: earlier this year it was billed as Ultragenyx’s most valuable pipeline asset, but its consensus sales forecast has slumped in recent months.
Ultragenyx now looks like it showed questionable judgement in persevering with Ace-ER after completing a phase II trial that had a small sample size, no primary endpoint, and a prespecified unblinding halfway through the treatment.
Nonetheless, the company used the study as the basis for a filing in Europe – but withdrew this last November, citing concerns about the limited data package. By this point, Ultragenyx had moved Ace-ER into phase III, when a more robust phase II trial might have allowed an earlier go/no-go decision.
As it was, the pivotal trial failed to meet its primary endpoint of improving upper extremity muscle strength versus placebo, and Ultragenyx said yesterday that it would discontinue the programme.
With $457.5m in the bank as of the end of June, perhaps the company feels it has nothing to lose by taking all of its pipeline projects to their conclusion. But even if the bar for approval is lower in rare diseases, investors will ulitmately punish poor R&D decisions.
If burosumab fails to gain approval, Ultragenyx’s ticker symbol, RARE, could become an appropriate description of the group's chances of getting a product to market.
|Ace-ER||Phase III trial in GNE myopathy||NCT02377921|
|Triheptanoin||Phase III trial in movement disorders caused by Glut1 DS||NCT02960217|