Ultragenyx Stumbles as Bone Disease Drug Fails in Phase 3 Trials

NOVATO, CA – December 29, 2025 – Ultragenyx Pharmaceutical Inc. delivered a stunning blow to the Osteogenesis Imperfecta (OI) community and its investors today, announcing that its highly anticipated drug, setrusumab, failed to meet its primary goal in two pivotal Phase 3 studies. The news sent the company's stock plummeting by over 40% and triggered plans for significant corporate restructuring, casting a pall over a drug that once held immense promise for patients with the rare and debilitating brittle bone disease.

The company revealed that neither the Orbit study in patients aged 5 to 25 nor the pediatric Cosmic study achieved their primary endpoint of a statistically significant reduction in the annualized rate of clinical fractures compared to placebo or existing off-label treatments, respectively. The failure marks a significant clinical setback and a stark reminder of the perilous path of rare disease drug development.

“We are surprised and disappointed by these results given the promising data from our Phase 2 study and the lack of approved treatment options available to patients with OI who live with significant pain, disability, and disease burden,” said Emil Kakkis, M.D., Ph.D., chief executive officer and president of Ultragenyx, in a statement. “We continue to explore the data to gain deeper understanding of the findings.”

A Promising Drug's Unexpected Fall

The disappointment is amplified by the stark contrast with earlier, highly encouraging results. In June 2024, Ultragenyx reported that the Phase 2 portion of the Orbit study showed a remarkable 67% reduction in annualized fracture rates. Those results, which also demonstrated significant improvements in bone mineral density (BMD), led the U.S. Food and Drug Administration (FDA) to grant setrusumab Breakthrough Therapy Designation in October 2024, fueling widespread optimism.

Setrusumab, a monoclonal antibody that inhibits sclerostin to promote new bone formation, was designed to directly address the bone fragility that defines OI. The Phase 3 trials did confirm the drug’s biological activity, showing statistically significant improvements in the secondary endpoint of BMD. However, this increase in bone density did not translate into the hoped-for reduction in fractures.

According to the company, a key factor in the Orbit study's failure was an unexpectedly low fracture rate in the placebo group, which made it statistically challenging to demonstrate the drug's benefit. In the pediatric Cosmic study, which enrolled younger patients with a higher baseline fracture rate, a reduction in fractures was observed in the setrusumab group compared to those receiving bisphosphonates, but the difference was not large enough to be statistically significant.

Market Reacts and Company Restructures

The financial repercussions were immediate and severe. In the wake of the announcement, shares of Ultragenyx (NASDAQ: RARE) plunged more than 44%, wiping out over $1 billion in market capitalization in a single trading session. The fallout also hit Ultragenyx’s European partner, Mereo BioPharma, whose shares collapsed by nearly 90%.

In response to the trial failures, Ultragenyx announced it will “promptly define and implement significant expense reductions.” While details are forthcoming, the move signals a strategic retreat from the costly late-stage development and pre-commercialization activities associated with the setrusumab program. This financial discipline is intended to preserve capital and refocus resources on more promising assets within its portfolio.

Despite the negative news, some market analysts suggested the dramatic stock sell-off might be an overreaction. They noted that setrusumab represented only a fraction of the company's total valuation in their models and reiterated confidence in Ultragenyx’s diversified pipeline. The company has recently shored up its finances by monetizing a portion of its royalty interest in its approved drug Crysvita for $400 million, providing a crucial cash buffer as it navigates this setback.

A Continued Search for the OI Community

Beyond the financial markets, the news lands as a profound disappointment for the estimated 60,000 people in commercially accessible regions living with Osteogenesis Imperfecta. Characterized by bones that break easily, often from little or no trauma, OI can lead to hundreds of fractures over a lifetime, chronic pain, mobility issues, and bone deformities. With no globally approved treatments specifically for OI, patients and their families rely on a combination of physical therapy, surgical interventions, and the off-label use of drugs like bisphosphonates.

The failure of setrusumab, which represented one of the most advanced investigational therapies for OI, leaves a significant void. The patient community, which had followed the drug’s progress with hope, must now look to other research efforts. The current landscape includes trials for other drugs like romosozumab and research into novel approaches such as mesenchymal stem cells and gene therapy, though these remain in earlier stages of development.

Ultragenyx Pivots to Gene Therapy and Angelman Syndrome

While grappling with the setrusumab results, Ultragenyx leadership is shifting the narrative to the strength and potential of its remaining pipeline. Dr. Kakkis emphasized that the company is preparing for a “transformational year ahead with potentially two near-term gene therapy launches and a pivotal Phase 3 readout in Angelman syndrome.”

This strategic pivot places a spotlight on several key late-stage assets:

• Gene Therapies: The company recently completed its submission to the FDA for DTX401, a gene therapy for Glycogen Storage Disease Type Ia (GSDIa), and plans to resubmit its application for UX111 for Sanfilippo Syndrome Type A (MPS IIIA). Approvals for both could come in the second half of 2026, positioning Ultragenyx as a major player in the gene therapy space.

• Angelman Syndrome: Perhaps the most critical upcoming catalyst is GTX-102 for Angelman syndrome. The Phase 3 ASPIRE study for this neurological disorder is fully enrolled, with topline results anticipated in the second half of 2026. Positive data from this trial could significantly reshape the company's future and restore investor confidence.

Backed by revenue from four currently approved products, Ultragenyx aims to weather this storm and achieve profitability by 2027. The failure of setrusumab is a painful chapter, but the company is betting its future on a diversified portfolio of high-impact therapies for other rare diseases with profound unmet needs.