Ultragenyx Pharmaceutical has reported the failure of a pair of late-phase brittle bone disease trials, prompting the biotech to prepare to significantly reduce its spending.
The studies tested the sclerostin-inhibiting antibody setrusumab in osteogenesis imperfecta, a group of genetic disorders impacting bone metabolism. The phase 2/3 Orbit trial compared setrusumab to placebo, while the phase 3 Cosmic study pitted the therapy against bisphosphonates. Neither study met the primary endpoint, which looked at the annualized fracture rate.
As in phase 2, Ultragenyx linked setrusumab to significant improvements in bone mineral density. Yet the effect failed to translate into a significant reduction in bone fractures. Ultragenyx said the fracture rate in the placebo arm was low, although the company is yet to share data from the studies.
William Blair analysts said in a note to investors that they were surprised by the failure given the phase 2 data and extra enrollment of people with severe disease in the pivotal program. Enrolling more people with severe disease should have led to a higher annualized fracture rate on placebo than in the phase 2 trial.
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The question of why the placebo fracture rate was low is one of several uncertainties the analysts want to clear up. They flagged the lack of data on whether setrusumab was more effective in children and absence of patient-reported outcome results as other gaps in the press release. Ultragenyx is continuing to analyze the data before deciding on the next steps for the program.
It means that the analysts are “hesitant about the future of setrusumab given the failed Orbit and Cosmic trials.” While the future of setrusumab is uncertain, it is already clear that the failures will have consequences. Ultragenyx said it is evaluating its planned operations and will promptly define and implement significant expense reductions.
Investors sent the biotech’s stock down 43% on the day of the news, although the shares rallied somewhat to end the year down 33% on their pre-flop price at $23.
Meanwhile, Mereo BioPharma, which retains the European rights to the program, suffered a bigger hit, with its shares falling almost 90% to 25 cents before rallying slightly. The company, which ended the third quarter with $48.7 million in the bank, said it will “tightly control costs” while conducting further analysis of the data to determine the best path forward.
