The U.S. Food and Drug Administration has declined to approve Ultragenyx Pharmaceutical's experimental gene therapy UX111 for treating Sanfilippo syndrome, dealing another blow to the California-based biotech company already facing challenges with its rare disease pipeline.
The FDA issued a complete response letter citing concerns related to chemistry, manufacturing and controls, specifically focusing on production processes and facilities rather than the therapy's clinical efficacy. The regulatory decision came more than a month ahead of the previously announced action date of August 18.
Manufacturing Issues Drive Rejection
According to Ultragenyx, the FDA's observations are "related to facilities and processes, rather than the drug itself" and are considered addressable. The company stated that many of the identified issues have already been resolved, and importantly, the FDA did not cite any review issues related to the clinical data submitted as part of the marketing application.
"It looks like this is a speed bump to approval, rather than a roadblock," said Leerink Partners analyst Joseph Schwartz in a client note, emphasizing that the problems are resolvable and not directly related to the therapy's quality.
Clinical Promise for Rare Genetic Disorder
UX111 was developed to treat Sanfilippo syndrome type A, a common form of a group of genetic conditions that begin in early childhood, causing severe brain damage and early death. In this rare inherited disorder, the body cannot break down specific sugars, leading to toxic buildup in various tissues and organs and resulting in progressive neurological damage.
The company's application was based on trial data demonstrating that the gene therapy significantly reduced toxic buildup in the brain and improved cognitive and communication skills in children with Sanfilippo syndrome type A. Currently, there are no approved disease-modifying medicines for this condition, with treatment limited to managing symptoms.
Financial Implications and Market Impact
The rejection has broader implications for Ultragenyx's financial strategy, particularly regarding priority review vouchers (PRVs). The company had planned to monetize three priority review vouchers - awarded after FDA approvals of UX111, DTX401, and setrusumab - for approximately $150 million each.
However, the timing proves challenging as the FDA's priority review voucher program is set to sunset on September 30, 2026, creating pressure for the company to secure approvals before this deadline. Wedbush analyst Laura Chico noted that existing revenue drove 80% to 85% of Ultragenyx's guidance to reach profitability by 2027.
The market responded negatively to the news, with Ultragenyx shares falling 5.4% in extended trading following the announcement. This decline adds to recent stock pressure, including a 25%-plus drop following disappointing results from the company's brittle bone disease treatment setrusumab.
Path Forward
Ultragenyx plans to resubmit updated clinical data from current patients after resolving the FDA's manufacturing concerns. The company anticipates that a new review could take up to six months once the revised application is filed.
Chico lowered her price target on Ultragenyx to $34 from $35 while maintaining a neutral rating, citing risks to the company's PRV monetization strategy should additional delays occur. She noted that while UX111's revenue contribution would be minimal, there are longer-term expense considerations that could impact the company's path to profitability.
