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Ultragenyx's (RARE) XLH Drug Positive in Phase II Study

Ultragenyx Pharmaceutical Inc. RARE and its Japanese partner Kyowa Kirin International plc recently announced positive 64-week data from a pediatric phase II study, evaluating its investigational candidate burosumab (KRN23). It is being developed for the treatment of X-linked hypophosphatemia (XLH) in children aged five to twelve years of age.

The multicentre, open-label, dose-finding phase II study (n=52) showed improvement in serum phosphorus levels, rickets, growth rates and other functional outcomes with use of KRN23, sustained through 64 weeks of treatment.

Additionally, a separate phase II study (n=13) evaluating KRN23 patients aged one to five years demonstrated that KRN23 increased serum phosphorus levels in the low normal range.

Ultragenyx’s share price movement shows that the stock has significantly underperformed the Zacks classified Medical-Biomedical/Genetics industry so far this year. Specifically, the stock lost 16.4% during this period compared with the industry’s increase of 2.8%.



Currently, KRN23 is being evaluated in a phase III study in adults with XLH. Data from the study are expected to be out in the first half of 2017. A biologics license application (BLA) for KRN23 for the above indication is expected to be filed in the U.S. in the second half of 2017.

In Jan 2017, European Medicines Agency (EMA) accepted the company’s Marketing Authorization Application (MAA) for KRN23 for the treatment of XLH in adults for review. The company expects an opinion from the EMA’s Committee for Medicinal Products for Human Use (CHMP) in the second half of this year.

We remind investors that in Jun 2016, the FDA had granted breakthrough therapy designation to KRN23 for the treatment of XLH in pediatric patients aged one year and above.

KRN23 is also being developed in a phase II study for the treatment of tumor-induced osteomalacia (TIO).

We note that Ultragenyx is making impressive progress with its pipeline candidates. The company expects to submit regulatory filings for rhGUS (UX003) for the treatment of mucopolysaccharidosis 7 (MPS 7) in both the U.S. and the EU in the first half of 2017.

Going forward, we expect investor focus to remain on the CHMP’s opinion on KRN23 and the company’s regulatory filing for rhGUS.

Zacks Rank & Key Picks

Ultragenyx currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Heska Corporation HSKA, Galena Biopharma, Inc. GALE and Infinity Pharmaceuticals, Inc. INFI. Each of these stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Heska’s earnings per share estimates increased from $1.53 to $1.65 for 2017 and from $1.90 to $2.01 for 2018, over the last 60 days. The company posted positive surprises in three of the four trailing quarters with an average beat of 291.54%.

Galena’s loss per share estimates narrowed from $2.03 to 58 cents for 2017, over the last 30 days. The company posted positive earnings surprises in two of the four trailing quarters, with an average beat of 53.83%.

Infinity Pharma’s loss per share estimates narrowed from $1.43 to $1.03 for 2017 and from $1.75 to $1.52 for 2018, over the last 30 days. The company posted positive earnings surprises in two of the four trailing quarters, with an average beat of 36.64%.

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