Analyst Sees Ultragenyx Shares Range Bound Despite Positive Data

Ultragenyx Pharmaceutical Inc RARE announced positive data from a late-stage study of burosumab in adults with X-linked hypophosphatemia.

The randomized, double-blind, placebo-controlled study showed that burosumab, or KRN23 demonstrated a statistically significant improvement in serum phosphorus levels, with 94 percent of patients achieving normal levels compared to 8 percent on placebo.

Despite the positive results, H.C. Wainwright said it believes shares will be range bound between $60 and $80 for the foreseeable future. Accordingly, the firm downgraded its rating of Ultragenyx from Buy to Neutral and lowered its price target from $88 to $72.

Other Points Prompting the Downgrade:

• The only value driving milestone expected this year being the pivotal result of Ace-ER in GNE myopathy in 2H17
• Consensus earnings and revenue estimates being higher than the firm's estimates
• Increased scrutiny on drug pricing and additional information required for orphan disease program, raising the risk to investors

"Therefore we prefer to stay on the sidelines until there is better clarity on the three leading programs KRN23, rhGUS, and Ace-ER," the firm said.

Analyst Carol Ann Werther, however, believes the robust KRN23 and XLH trial results support a pediatric/adult BLA filing in the second half of 2017. The analysts also said there is no change to her opinion that Ultragenyx is on a successful path with KRN23 and rhGUS.

Related Links:

Ultragenyx Has Multiple Catalysts This Year, Says H.C. Wainwright

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