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Ultragenyx (RARE) Down 7.2% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Ultragenyx (RARE - Free Report) . Shares have lost about 7.2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ultragenyx due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Ultragenyx Posts Narrower-Than-Expected Loss in Q3

Ultragenyx reported loss per share of $1.74 in the third quarter of 2018, which was narrower than the loss of $1.87 in the year-ago quarter. Loss was also narrower than the Zacks Consensus Estimate loss of $1.94.

For the third quarter, Ultragenyx reported $11.8 million in total revenues. Revenues beat the Zacks Consensus Estimate of $11.2 million.

Total revenues included $3.6 million received from Bayer in relation to Ultragenyx’s research agreement with the former to develop adeno-associated virus gene therapies. Ultragenyx recognized $5.4 million in profit sharing and royalty revenues from Japanese collaboration partner Kyowa Hakko Kirin for Crysvita. Mepsevii product revenues were $2.1 million, and UX007 revenues were $0.4 million.

Please note that though UX007 is not an approved product, the company recognizes sales from the candidate on a “named patient” basis. This is allowed in certain countries, prior to the commercial approval of a product.

We remind investors that the FDA approved Crysvita in April for the treatment of X-linked hypophosphatemia (XLH) in adult and pediatric patients aged one year or older. Further, Mepsevii, an enzyme replacement therapy, is the first and the only medicine approved for the treatment of children and adults with mucopolysaccharidosis VII (MPS VII) in the United States.




 

Pipeline Updates

The company submitted regulatory filings in Canada, Brazil and Colombia for Crysvita, for the treatment of XLH. Regulatory decisions in these markets are expected in 2019. 

The company is in discussions with the FDA regarding the regulatory pathway for Crysvita, for the treatment of Tumor-Induced Osteomalacia (TIO).

The European Commission (EC) approved the Marketing Authorization Application (MAA) for Mepsevii, under exceptional circumstances for the treatment of non-neurological manifestations of MPS VII. Mepsevii is now approved for use in all 28 EU countries along with Iceland, Liechtenstein and Norway. The drug has also been launched in Germany.

The FDA accepted Ultragenyx’s proposal to submit a new drug application (NDA) for UX007, for the treatment of long-chain fatty acid oxidation disorders (LC-FAOD) based on currently available data. The company will provide further details following a pre-NDA meeting, which is scheduled to take place by the end of 2018. Additionally, discussions are progressing with the European Medicines Agency, regarding a potential conditional marketing authorization in Europe.

In October 2018, Ultragenyx announced that the phase III study, evaluating UX007 in patients with Glut1 DS, did not achieve its primary endpoint compared to placebo. The company plans to discontinue further Glut1 DS clinical development for UX007, and expects no impact on plans for the LC-FAOD indication.

Positive top-line data from the first two dose cohorts of the phase I/II study of DTX301 gene therapy in ornithine transcarbamylase (OTC) deficiency showed normalization of ureagenesis in two patients and further support proof-of-concept.The first patient in cohort 3 has been dosed.  Data from higher dose cohort 3 are expected in mid-2019.

Ultragenyx exercised its option with REGENXBIO Inc. to develop a gene therapy to treat patients with CDKL5 Deficiency Disorder (CDD), using REGENXBIO’s adeno-associated virus (AAV) vectors including AAV9.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 10.93% due to these changes.

VGM Scores

Currently, Ultragenyx has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Ultragenyx has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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