Ultragenyx Cuts 10% of Workforce After FDA Rejects Gene Therapy Application
Ultragenyx will lay off 130 employees as part of restructuring aimed at profitability by 2027. The FDA rejected the company's gene therapy application for Sanfilippo syndrome due to manufacturing concerns.
Ultragenyx said Thursday it will cut 130 jobs, or 10% of its workforce, as part of a corporate restructuring intended to support profitability in 2027, driven by revenue growth from its portfolio of rare disease drugs. The company also disclosed that the Food and Drug Administration has once again rejected its approval application for a gene therapy for a rare degenerative disorder based on manufacturing concerns.
The restructuring will keep expenses flat or slightly down in 2026 compared with 2025, which will include around $50 million in restructuring charges. Expenses in 2027 are expected to drop 15% compared to 2025, the company said. Executives said they are projecting a revenue increase this year of between 8 and 13 percent.
The gene therapy called UX111 for the neurodegenerative disorder Sanfilippo syndrome Type A was rejected due to manufacturing concerns, and executives disclosed its response submitted last month was judged "incomplete" by the FDA. The agency asked for "additional supportive documentation," the company said.
Ultragenyx has proven itself successful when it comes to getting rare disease treatments to the market — four to date. It hasn't, however, been able to convert that development success into profit. It recorded a net loss of $575 million on full-year revenue of $673 million.
Company executives have set a goal of turning a profit in 2027. Recent setbacks have changed revenue growth expectations, however. A drug it was co-developing with Mereo Biopharma failed a Phase 3 trial in the uncommon bone disorder osteogenesis imperfecta.
Upon approval of UX111, Ultragenyx could receive a "priority review voucher" that it could potentially sell to another company, providing an additional source of revenue.
Should the company maintain 2025 expense levels of $1.2 billion, it will still lose more than $400 million if it hits its revenue guidance of $730 million to $760 million. However, Ultragenyx expects a steep decrease in research and development costs in 2027 — by 38% or $280 million — as multiple late-stage trials conclude and early-stage research efforts shrink.
Marketing costs are expected to rise, though, as the company works to support the launches of several new products. Shares fell by as much as 11% Friday morning.