Ultragenyx, Mereo Shares Dive As Brittle Bone Disease Drug Misses Early Win

Ultragenyx Pharmaceutical Inc. (NASDAQ:RARE) and Mereo BioPharma Group plc (NASDAQ:MREO) stocks are plunging on Thursday.

What Happened?

The companies on Wednesday announced that the randomized, placebo-controlled Phase 3 portion of the Orbit study evaluating UX143 (setrusumab) in pediatric and young adult patients with osteogenesis imperfecta (OI) is progressing toward a final analysis around the end of the year, consistent with the original plan.

OI, also known as brittle bone disease, is a group of genetic disorders that make bones abnormally fragile and prone to fractures.

Also Read: Analyst Bullish On Ultragenyx, Poised For Growth With Six Drug Approvals Expected By 2028

William Blair noted that the update implies the second interim analysis did not meet the minimal p-value threshold of p<0.01 to end the study early.

The Data Monitoring Committee (DMC) met and informed the company that UX143 demonstrates an acceptable safety profile, and the company should continue the study to the final analysis.

“While we had hoped to be able to stop the study early, we look forward to having results from both Orbit and Cosmic around the end of this year,” said Emil Kakkis, chief executive officer and president of Ultragenyx.

Consistent with the statistical analysis plan, data from the Cosmic study were not analyzed at this interim time point. The study is going well, and safety in this younger patient population is consistent with the safety profile of the other studies.

Patients will continue dosing in the ongoing Phase 3 Orbit and Cosmic clinical studies. The final analyses will be conducted after patients have been on therapy for at least 18 months.

The threshold for the Phase 3 Orbit final analysis is p<0.04, and for the Phase 3 Cosmic final analysis is p<0.05.

Analyst’s Take

William Blair acknowledged the disappointment that the Orbit study didn’t achieve statistical significance at the second interim analysis. However, they believe the market’s reaction is severely overdone. They anticipate a high likelihood of a positive outcome from the final analysis in the fourth quarter, citing the longer follow-up duration and a lower statistical significance threshold.

Analyst Sami Corwin from William Blair reiterated, “We continue to believe that the Phase II Orbit data support setrusumab as a clinically active molecule in OI, and we do not think this update impacts the top-line analyses’ probability of success.”

Price Action: RARE stock is trading lower by 26.2% to $30.60, and MREO stock is down 34.7% at $1.919 at last check Thursday.

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