Mereo BioPharma 5, Inc.

iStock, Anton Vierietin The FDA cited manufacturing issues but did not flag problems with Ultragenyx’s data package for UX111, with the biotech noting that the regulator found its neurodevelopmental findings for the gene therapy to be “robust.” The FDA declined to approve Ultragenyx’s investigational in vivo gene therapy UX111, being proposed for the treatment of Sanfilippo syndrome type A. The decision, announced Friday, capped off a tough week for the California biotech, which had just announced disappointing results for another asset on Wednesday. Ultragenyx plunged nearly 26% as the week closed. The company was trading at less than $30 as markets closed on Friday, versus nearly $40 when it opened on July 7. In a note to investors on Monday morning, analysts at William Blair called the rejection an “unfortunate sentiment hit” for Ultragenyx, however noting that while the exact timeline for the application’s resubmission remains “unclear,” the FDA’s concerns around UX111 “could ultimately be resolved in a timely manner.” The FDA’s complete response letter was focused on manufacturing issues “not directly related to the quality of the product,” Ultragenyx announced on Friday. The regulator is seeking more information regarding “improvements” in “certain aspects” of chemistry, manufacturing and controls related to UX111. “The company believes that these observations are readily addressable,” Ultragenyx said on Friday, noting that the company will work to resolve these issues in “the next few months.” Ultragenyx plans to resubmit an approval application and anticipates another six-month review period for UX111. Ultragenyx emphasized on Friday that the FDA did not cite problems with its data package for UX111. “The FDA has acknowledged that the neurodevelopmental outcome data provided to date are robust and the biomarker data provide additional supportive evidence,” according to the biotetch. Also known as mucopolysaccharidosis type III,  Sanfilippo syndrome is a rare and genetic metabolic disorder that typically involves a wide variety of manifestations. Patients can suffer from a broad range of neurological symptoms, including language delays, developmental delays and progressive intellectual disability. Sanfilippo syndrome symptoms grow worse over time, ultimately leading to death. Sanfilippo syndrome affects around 1 in every 50,000 to 250,000 people worldwide, of which type A is the most common. Ultragenyx’s gene therapy UX111 works by delivering a functioning copy of the SGSH gene, which in Sanfilippo syndrome is pathologically mutated. UX111 was originally developed by Abeona Therapeutics but was bought by Ultragenyx in May 2022 in exchange for up to 10% of tiered royalties and commercial milestones. The asset’s FDA rejection came just two days after Ultragenyx released seemingly negative news for its asset UX143, a monoclonal antibody, designed in collaboration with Mereo BioPharma, to boost bone formation. The Phase II/III Orbit trial in osteogenesis imperfecta will proceed to its final analysis, suggesting that the study failed to meet an efficacy threshold that would have otherwise warranted its early termination, according to William Blair analysts at the time. Compounding Ultragenyx’s troubles, securities litigation firm Levi & Korsinsky launched an investigation into the company over “possible violations of federal securities laws,” according to a news release on Thursday . The firm has not yet revealed what these alleged violations could be.

William Blair analysts described the market reaction to the lack of an early phase 3 win in brittle bone disease as “severely overdone.”\n Analysts are keeping the faith in Ultragenyx’s brittle bone disease medicines despite the monoclonal antibody failing to score an early outright win in an ongoing phase 3 trial.Ultragenyx and Mereo BioPharma are evaluating UX143, also known as setrusumab, in the phase 3 Orbit study of 159 pediatric and young patients with osteogenesis imperfecta. The study’s data monitoring committee informed the companies that setrusumab “demonstrates an acceptable safety profile and the company should continue the study to the final analysis,” Ultragenyx explained in a July 9 post-market release.“Based on the feedback we hear from investigators and families who participated in the studies, we are confident that increasing bone mass leads to stronger bone, less fractures, and improved physical abilities,” Ultragenyx CEO Emil Kakkis, M.D., Ph.D., said in the release. “While we had hoped to be able to stop the study early, we look forward to having results from [Orbit] around the end of this year.”William Blair analysts said the biopharma’s statement implied that the second interim analysis of the trial had not met the efficacy threshold for ending the study early.Investors appeared to infer the same meaning, sending Ultragenyx’s stock down 23% to $31.96 in pre-market trading Thursday from a Wednesday closing price of $41.44.But this market reaction was “severely overdone,” according to William Blair analysts in their same July 10 note.“While it is unfortunate that the Orbit study did not achieve its statistical significance threshold at the second interim analysis, we … still believe there is a high likelihood that the final analysis in the fourth quarter will be positive given there will be a longer duration of follow-up and a lower threshold for statistical significance,” the analysts added. Two years ago, phase 2 data from setrusumab showed that the antibody reduced bone fractures by 67% among 24 patients who had at least six months of follow-up.Ultragenyx paid Mereo $50 million upfront for the ex-Europe rights to the therapy, which inhibits a negative regulator of bone formation called sclerostin, back in 2020. 

Ultragenyx Pharmaceutical and Mereo BioPharma’s antibody for a rare bone disease failed a second interim analysis in its pivotal trial, the companies revealed late on Wednesday. The study will continue until its final analysis, which is expected at the end of this year. Investors had been expecting success. Ultragenyx’s stock $RARE was down 22% and Mereo’s $MREO value slipped 36% before trading opened Thursday. The Phase 3 portion of the Orbit study is testing setrusumab, formerly called UX143, in children and young adults with osteogenesis imperfecta, a genetic condition where collagen is missing or reduced, rendering patients’ bones weak and prone to fracture. The drug inhibits a protein called sclerostin, which negatively affects bone formation. The 159-patient Phase 3 is attempting to show that patients on setrusumab have fewer fractures than patients given placebo, although the primary endpoint excludes breaks of the fingers, toes, face and skull. The trial missed an earlier interim analysis in January, but that had been widely expected since patients had only been taking the drug for six to eight months, and the statistical threshold was very high at a p-value of 0.001. The threshold for the second analysis was much lower, at p=0.01, and trial subjects had been taking the drug for a further six months or so. But Orbit’s data monitoring committee said that while setrusumab’s safety was “acceptable,” significance had not been achieved at this point. The disappointment is all the greater considering setrusumab’s performance in the Phase 2 part of Orbit. The companies said then that the drug cut the median annualized rate of fractures by 67% in 24 patients after around 16 months, with a p-value of 0.0014. However, the Phase 2 portion did not have a placebo group . Instead, the comparator was the figure in the same patients in the two years before they started treatment. Comparisons with historical data are much less scientifically robust than using a placebo or other control group. Mereo previously said that a similar treatment effect as the mid-stage study would have supported the second Phase 3 interim analysis being met, Leerink analysts wrote in a Wednesday note. The companies attributed the miss to variability among the subjects, whose annualized fracture rate ranges from 0.5 to more than 3.0, they added. The age range of patients (5-25 years old) may also play a role. The interim analyses were added to the Phase 3 part of Orbit after the Phase 2 fracture rate was reported, in the hope of getting a significant improvement at an earlier time point, speeding up development. “At the time, this seemed like a prudent move; however, we now acknowledge that this has added an unnecessary level of complexity and raised expectations from an investor standpoint,” the Leerink analysts wrote. The p-value threshold for the final analysis is less stringent at 0.04, and the companies told the Leerink analysts that a fracture rate reduction of between 30% to 50% would be clinically meaningful. However, anything less than the 67% seen in Phase 2 might come as another disappointment to shareholders. According to Cowen analysts, the partners will likely miss out on a priority review voucher, as the drug would have to be approved by Sept. 30, 2026, to be eligible. Setrusumab is in another Phase 3 study, named Cosmic, which has enrolled 69 patients. This is comparing setrusumab to intravenous bisphosphonate therapy in children ages 2-7, and will report at a similar time to Orbit. Under its partnership with Ultragenyx, Mereo could receive additional milestone payments of up to $245 million, as well as royalties in Ultragenyx territories should the drug reach market. Mereo has kept EU and UK commercial rights and will pay Ultragenyx royalties in those areas. Editor’s note: The headline of this story was updated to reflect that the trial will continue to a final analysis.