Ultragenyx Represents 'Intriguing Buying Opportunity,' Despite Recent Setbacks

HC Wainwright initiated coverage on Ultragenyx Pharmaceuticals (RARE) with a Buy rating and an $80 price target, viewing the stock's 35% YTD decline as an attractive entry point. The firm anticipates positive final results by year-end for the setrusumab (UX143) trial, despite prior interim disappointment, which should support a 2025 regulatory filing. This outlook, combined with the strong commercial potential of the Crysvita franchise (projected peak annual sales >$3B) and expected resubmission of the UX111 BLA, underpins their optimistic valuation, noting the current commercial portfolio alone supports a $35-$40 fair value.

Analysis

HC Wainwright's initiation of coverage on Ultragenyx Pharmaceuticals with a Buy rating and an $80 price target frames the stock as a compelling opportunity based on a perceived dislocation between its market valuation and fundamental outlook. The stock's 35% year-to-date underperformance relative to the XBI's 2.7% decline is attributed to investor disappointment with the interim data from the pivotal Orbit trial for setrusumab (UX143), which did not meet the threshold for an early stop. However, the analyst's core thesis is that the trial has not failed and that final data, expected by year-end, will likely be positive, supporting a U.S. regulatory filing in 2025. Crucially, the analysis provides a valuation floor, suggesting the existing commercial portfolio, led by the Crysvita franchise with its projected $3 billion in peak annual sales, justifies a fair value of $35-$40 per share alone. This implies the market is currently ascribing minimal value to the pipeline. Additionally, the firm views the recent FDA Complete Response Letter for the UX111 gene therapy as a manageable setback, anticipating a successful BLA resubmission later this year for a potential mid-2026 approval.

Key Decisions for Investors

• Investors may consider the substantial YTD stock decline as an attractive entry point, particularly as the analyst's valuation of the commercial portfolio alone ($35-$40) sits above the current trading price, suggesting a potential margin of safety.
• The primary catalyst to monitor is the final data readout from the setrusumab Orbit trial expected by year-end; a positive result could serve to significantly de-risk the pipeline and trigger a stock re-rating.
• Monitor the company's progress on resubmitting the Biologics License Application for UX111, as a timely resubmission and eventual approval would provide a secondary, long-term value driver and demonstrate regulatory execution.