Ultragenyx shares plunge as bone disease drug fails to reduce fracture rate

By Sneha S K

Dec 29 (Reuters) - Ultragenyx Pharmaceutical RARE.O said on Monday that late-stage studies showed its drug for a type of genetic bone disease failed to reduce the number of fractures per year, sending its shares plunging 43.5% to a record low.

The drugmaker was testing the experimental treatment, called setrusumab, in pediatric and young adult patients with osteogenesis imperfecta in two late-stage studies along with UK-based partner Mereo BioPharma MAH0y.F.

The condition, a group of genetic disorders impacting bone metabolism, can make bones more brittle, which contributes to a high rate of fractures. Symptoms can range from mild to severe.

The company said setrusumab failed to meet the main goal of significantly reducing annualized clinical fracture rate compared to placebo or bisphosphonates — a class of medications primarily used to treat conditions that affect bone density.

The drug, however, achieved the secondary goals of improvements in bone mineral density in both the late-stage studies, Ultragenyx said.

"We are surprised and disappointed by these results given the promising data from our Phase 2 study and the lack of approved treatment options available to patients with osteogenesis imperfecta," said CEO Emil Kakkis.

Joon Lee, an analyst at Truist, said the brokerage has been skeptical of setrusumab to treat the condition despite the mid-stage results.

Ultragenyx will analyze data across both studies, including on other bone health and clinical endpoints beyond fractures, to assess the next steps, it said.

It is also evaluating its planned operations to cut costs significantly. The cost-cutting plan implied sunsetting of the osteogenesis imperfecta program, Lee said.

Setrusumab is designed to block sclerostin, a negative regulator of bone formation, and thus increase new bone formation, bone mineral density and bone strength in patients with the disorder.