RARE Stock Climbs This Week As Investors Look Past Trial Failure To Gene Therapy Launches, Trial Results

• On September 17, the FDA granted full approval to Fayuvi, the first therapy for Sanfilippo syndrome Type A, a rare and fatal childhood brain disease.
• Near-term focus now shifts from FDA approval to execution: the first Fayuvi and Genglycos shipments, any sale of the two vouchers it received with the two therapy approvals, and more.
• Ultragenyx is slated to announce data from its pivotal study of UX701 in Wilson disease in the fourth quarter.

Ultragenyx Pharmaceutical (RARE) is rallying this week as investors digest last Thursday’s FDA approval of Fayuvi and a round of higher Wall Street price targets, even as it awaits future catalysts, including shipments of its two recently approved therapies and results from a Wilson disease trial.

Shares jumped about 13% on September 17 and continued the rally this week. That is a rebound from the $12.73 low hit earlier this month, though the stock remains far below its pre-crash level near $26.

The stock has gained 9% this week, as of writing.

First Treatment For Sanfilippo Syndrome

On September 17, the FDA granted full approval to Fayuvi, the first therapy for Sanfilippo syndrome Type A, a rare and fatal childhood brain disease. The one-time gene therapy is for children who still have some developmental function.

Ultragenyx also received a Priority Review Voucher with the decision. The product is expected to ship to specialized treatment centers in 30 to 60 days, at a list price of about $3.95 million. The approval is Ultragenyx’s second gene therapy clearance in a month, after Genglycos was approved in August.

What Comes Next

Near-term focus now shifts from the FDA approval to execution: the first Fayuvi and Genglycos shipments, any sale of the two vouchers it received with the two therapy approvals, fourth-quarter data from UX701 in Wilson disease, and November earnings for launch details and cost cuts.

Ultragenyx has said that it plans to sell the priority review vouchers for cash. The vouchers sell for about $200 million each, giving Ultragenyx the possibility of $400 million in cash.

Further, Ultragenyx is slated to announce data from its pivotal study of UX701 in Wilson disease in the fourth quarter. Positive higher-dose data would reopen a growth narrative after the Angelman miss.

Angelman Setback Still Defines The Chart

On September 2, Ultragenyx said its late-stage Aspire trial of GTX-102 in Angelman syndrome missed both its main goals. Shares fell about 44% the next day. The company has since said it will discontinue the program and cut costs. That miss erased what many investors had treated as the company’s clearest path to a much larger market.

Analysts Lift Targets, With Caveats

Earlier this week, Barclays raised its target to $35 from $32 on RARE and kept an Overweight rating. The Angelman miss hurt sentiment, the firm said, but Ultragenyx’s roughly $1.4 billion market cap undervalues the existing business and the new gene therapy launches.

Morgan Stanley raised its target to $20 from $18 and kept Equal Weight. Fayuvi’s full approval is “a positive,” the firm said, but it wants to see actual launch numbers and a reset of the pipeline.

Cantor Fitzgerald lifted its target to $39 from $33 and kept Overweight, calling Fayuvi a “much-needed win.”

How Did RARE Retail Traders React?

On Stocktwits, retail sentiment around RARE stock stayed in ‘extremely bullish’ territory over the past 24 hours, while message volume remained ‘extremely high.’

“Six approved therapies, two new gene therapies, 2 PRVs, $436M cash, a Phase 3 asset, and only about a $1.4B market cap — this is why the market is starting to reprice RARE,” a Stocktwits user opined.

RARE stock has fallen 31% year-to-date. 

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