Ultragenyx cuts 10% of staff after Phase 3 trial failures
Biotech restructuring follows failed setrusumab studies and FDA gene therapy delay, shares plunge 9.4%
Ultragenyx Pharmaceutical announced plans to reduce its workforce by 10%, affecting approximately 130 employees, as the biotechnology company grapples with recent clinical trial setbacks and regulatory delays that have battered investor confidence. The restructuring, unveiled alongside fourth-quarter earnings, will incur approximately $50 million in charges primarily related to employee severance and the termination of manufacturing agreements for its experimental setrusumab treatment.
The Novato, California-based company's shares fell 9.4% to $21.30 in Thursday trading, extending a steep decline from December when key Phase 3 trials for setrusumab, a treatment for osteogenesis imperfecta, failed to meet primary endpoints. The stock has now lost more than half its value since its 52-week high of $46.27 reached last year.
The restructuring follows disappointing results announced in December from the Orbit and Cosmic studies, which evaluated setrusumab in patients with the rare brittle bone disorder. Neither trial achieved statistical significance in reducing annualized clinical fracture rates — the primary goal of both studies. The Orbit study, comparing setrusumab to placebo in patients aged 5 to 25 years, was hampered by an unexpectedly low fracture rate in the placebo group. Similarly, the pediatric Cosmic study, which tested the therapy against bisphosphonates in children aged 2 to 7, also missed its primary endpoint despite showing improvements in bone mineral density.
"While both studies demonstrated statistically significant and substantial improvements in bone mineral density compared to their respective comparators, these gains did not translate into a corresponding reduction in fracture rates," Ultragenyx stated in a regulatory filing detailing the trial results.
The clinical setbacks come as the company navigates regulatory challenges for another key asset. In July, the FDA issued a Complete Response Letter for UX111, an investigational gene therapy for Sanfilippo syndrome type A, citing chemistry, manufacturing, and controls observations from facility inspections. Ultragenyx characterized the issues as readily addressable and related to facilities and processes rather than product quality. The company resubmitted its Biologics License Application in January and now anticipates a regulatory decision by the third quarter of 2026.
Despite the challenges, Ultragenyx reported stronger-than-expected revenue growth for the fourth quarter. Total revenues reached $207 million, a 25% increase year-over-year and above analyst estimates of approximately $203 million. However, the company posted a wider-than-expected loss of $1.29 per share, compared to the consensus estimate of a $1.20 loss. For the full year 2025, revenue grew 20% to $673 million, while the net loss narrowed to $5.83 per share from $6.29 in the prior year.
The restructuring aims to position the company to achieve profitability by 2027. Ultragenyx provided 2026 revenue guidance from current products between $730 million and $760 million, representing roughly 8% to 13% growth from 2025 levels.
Analysts remain broadly positive on the company despite recent setbacks. Among 21 analysts covering Ultragenyx, 20 rate the stock a buy or strong buy with none recommending sell, while the consensus price target stands at $64 — nearly triple Thursday's trading price. That bullish outlook reflects expectations for continued growth from the company's commercialized products for rare diseases, even as clinical development programs face headwinds.
The company's decision to cut costs and streamline operations marks a pivot for a biotech that has pursued multiple high-risk, high-reward programs targeting ultra-rare conditions. The restructuring charges will be primarily recognized in the first half of 2026, Ultragenyx said, as it seeks to balance investment in promising therapies with financial discipline following the clinical disappointments.