Ultragenyx's Bone Disease Drug Unsuccessful in Late-Stage Trials

• The drug failed to reduce annualized clinical fracture rates compared to placebo or bisphosphonates in two late-stage studies, despite promising Phase 2 results
• Ultragenyx plans to implement significant cost-cutting measures, potentially discontinuing the osteogenesis imperfecta program
• Secondary goals showed improvements in bone mineral density, but this was insufficient without fracture reduction in a condition that makes bones brittle

Ultragenyx's Setrusumab Fails Phase 3 Trials for Osteogenesis Imperfecta

Ultragenyx Pharmaceutical's stock plummeted Monday after announcing its experimental drug setrusumab failed to meet primary endpoints in two late-stage trials for osteogenesis imperfecta, a genetic bone disorder causing brittle bones and frequent fractures. The drug, developed with UK partner Mereo BioPharma, did not significantly reduce annualized clinical fracture rates compared to placebo or bisphosphonates in pediatric and young adult patients.

Despite achieving secondary goals of improved bone mineral density in both studies, the primary efficacy failure marks a major setback. CEO Emil Kakkis expressed surprise and disappointment, citing promising Phase 2 data and the lack of approved treatments for the condition.

Setrusumab works by blocking sclerostin, a protein that inhibits bone formation, theoretically increasing bone density and strength. However, Truist analyst Joon Lee noted skepticism about the drug's potential despite earlier positive results.

The failure has immediate financial implications for Ultragenyx, which announced plans to evaluate operations and implement significant cost-cutting measures. Lee suggests these cuts likely include discontinuing the osteogenesis imperfecta program entirely.

Ultragenyx will conduct further data analysis across both studies to examine other bone health endpoints beyond fracture rates before determining next steps. The company faces difficult decisions about resource allocation following this costly clinical failure.

This development highlights the challenges in developing treatments for rare genetic disorders, where promising early-stage results don't always translate to late-stage success. For investors, it underscores the high-risk nature of biotechnology investments, particularly in orphan disease therapeutics where patient populations are small and clinical endpoints can be difficult to achieve.