Why Ultragenyx Pharmaceutical Stock Is Sinking Today

Shares of the rare-disease drugmaker Ultragenyx Pharmaceutical (NASDAQ: RARE) are under pressure today after the company announced that its late-stage study assessing aceneuramic acid extended release (Ace-ER) in patients with the genetically inherited muscle-wasting disorder GNE myopathy failed to meet its primary endpoint of improving upper-extremity muscle strength compared to placebo. The study also failed to meet its secondary endpoints. As of 2:20 p.m. EDT, Ultragenyx's shares are down by over 13% as a result of this significant clinical setback.

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Besides being one of Ultragenyx's most advanced clinical candidates, Ace-ER was forecast to have blockbuster potential as a treatment for this rare but severe muscle-wasting disorder. More broadly, drugs that target so-called orphan indications, or diseases with extremely small patient populations, like Ace-ER are highly valued commodities within the pharmaceutical space, because they tend to come with certain tax benefits, shortened review times, and extended periods of exclusivity. In short, this double-digit pullback is arguably an appropriate reaction by the market now that Ace-ER appears to be a dead end.

Source: Fool.com