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Ultragenyx Pharmaceutical Inc. (RARE - Free Report) announced discouraging top-line data from a phase III study, evaluating its investigational Ace-ER (aceneuramic acid extended release) on patients with GNE Myopathy (GNEM), a progressive muscle-wasting disorder. As a result, the company plans to discontinue any further clinical development of the candidate.

Shares of Ultragenyx have underperformed the industry year to date. The stock has been dismally down 16.3% as against the industry’s 7.2% gain during the period.

The phase III study, conducted on 89 adults afflicted with GNEM, missed both the primary and secondary endpoints. Data from this trial did not demonstrate any statistically significant improvement in UEC (upper extremity muscle strength composite) score for patients treated with Ace-ER in comparison to placebo which was its primary endpoint. Also, there were three pre-specified key secondary endpoints none of which the study could meet.

We remind investors that in November 2016, Ultragenyx has also withdrawn its conditional filing application for Ace-ER’s regulatory approval in the EU for treatment of adult patients with GNEM. This conditional filing was withdrawn based on feedback from the Committee for Medicinal Products for Human Use (CHMP) indicating that the submitted phase II study results were not sufficient to support the approval.

However, the company clarified that the discontinuation of Ace-ER will not impact its overall strategies as it’s already on a progressing track with several developmental activities and regulatory filings lined up ahead.

Notably, in July 2016, Ultragenyx announced positive top-line data from a pivotal phase III study on recombinant human beta-glucuronidase (rhGUS) for treating mucopolysaccharidosis 7 (MPS 7). The candidate is presently under review in both the U.S. and EU with responses expected on Nov 16, 2017 and in the first half of 2018, respectively.

We expect investors’ focus to remain on further pipeline updates from the company.

Zacks Rank & Stocks to Consider

Ultragenyx currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the pharma sector are Aerie Pharmaceuticals, Inc. (AERI - Free Report) , Aduro Biotech, Inc. (ADRO - Free Report) and ACADIA Pharmaceuticals Inc. (ACAD - Free Report) , all three carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aerie’s loss per share estimates narrowed from $2.62 to $2.53 for 2017 over the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 0.64%. Its share price soared 39.5% so far this year.

Aduro Biotech’s loss per share estimates reduced from $1.46 to $1.32 for 2017 and from $1.41 to $1.24 over the last 30 days. The company delivered positive surprises in two of the trailing four quarters with an average beat of 2.53%.

ACADIA’s loss per share estimates narrowed from $2.82 to $2.59 for 2017 and from $2.07 to $1.92 for 2018 over the last 30 days. The company came up with positive earnings surprises in two of the last four quarters with an average beat of 7.97%.

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