Ultragenyx shares crater after Angelman syndrome drug fails late-stage trial

The trial outcome is a major blow to the company and the patient community, as there are currently no approved disease-modifying treatments for the condition.

It also marks Ultragenyx's second consecutive late-stage trial failure, a setback Jefferies analyst Maury Raycroft called "unambiguously negative" and likely to "further erode street confidence".

Ultragenyx shares tumbled 47.6% to a record low of $13.89 in early morning trading, on track to wipe out $1.25 billion from its market value if losses hold.

Following the trial results, at least 10 brokerages slashed their price targets on the stock.

Shares of Ultragenyx Pharmaceutical RARE.O plunged on Thursday after its neurodevelopmental disorder treatment failed a closely watched late-stage trial, dealing a major blow to one of its biggest growth bets.

The drug, apazunersen, failed to meet both its main goal of improving cognitive skills and its secondary goals of overall patient response in participants with Angelman syndrome, a rare condition that affects the nervous system and impairs typical brain development in childhood.

Ultragenyx said late on Wednesday there were no differences between patients receiving the treatment and those on placebo, prompting a review of the program's future.

TD Cowen analysts said the failure "removes a key growth driver," while Cantor Fitzgerald analyst Kristen Kluska warned that Ultragenyx "truly has to lower its spend substantially for investors to want to even consider building a position".

Ultragenyx said it will implement "significant expense reductions" to manage its high operating costs.