Ultragenyx Faces Lawsuits Over Trial Data as UX111 Gene Therapy Advances

Ultragenyx Pharmaceutical is facing multiple shareholder class action lawsuits tied to allegations of misleading disclosures about Phase III clinical trial data. The lawsuits follow the company's announcement of failed Phase III trials for setrusumab alongside a broad restructuring plan that includes layoffs.

At the same time, Ultragenyx reported positive long-term data for its investigational gene therapy UX111 and advanced regulatory submissions. The company focuses on therapies for rare and ultra-rare diseases, an area where clinical outcomes and regulatory decisions can have a major impact on a company's prospects.

The company is cutting about 10% of its workforce and reallocating spend to what it calls its largest value drivers, while still reporting higher revenues for 2025 and guiding to further revenue growth in 2026. The positive long-term UX111 data and resubmitted FDA filing suggest Ultragenyx is still leaning into gene therapy, a space shared with players like Biomarin and Sarepta, where clinical data quality and regulator trust are crucial.

The BLA resubmission for UX111 includes extended clinical data showing sustained neurologic benefits and biomarker improvements. The filing also includes an adequate safety profile for Sanfilippo syndrome type A, which does not have any approved therapies. The FDA review is expected through the 2026 decision window.

Revenue reached $673 million for 2025, with management guiding to $730 million to $760 million for 2026. Ongoing net losses of $129 million in Q4 2025 and $575 million for the full year keep funding needs and potential dilution on the table if revenue growth or cost controls fall short. Management reiterates a 2027 profitability goal.

Multiple shareholder class actions tied to the setrusumab trials add legal and reputational risk, and could distract management at a time when regulatory execution on UX111 and other programs is critical. The company is refocusing on fewer, higher priority programs such as UX111 and other late-stage assets including DTX401 and GTX-102.

The price target on Ultragenyx Pharmaceutical was set to $60, which leads to a promising upside potential of more than 155% from the prevailing level. Ultragenyx Pharmaceutical was also assigned an Overweight rating with a target price of $44, which yields more than 87% upside potential.

Ultragenyx Pharmaceutical develops novel therapies, with a focus on identifying, acquiring, and commercializing products for rare and ultra-rare genetic diseases. It places strong emphasis on gene therapy and covers the various stages of clinical trials. The company is currently experiencing high cash burn, with the aim of becoming profitable from 2027 onward.