The recent FDA approval of Fayuvi for a rare, childhood neurodegenerative disease was “particularly special” for Ultragenyx CEO Emil Kakkis. It could also, along with an August nod for another gene therapy, help offset recent challenges brought on by two asset failures.
The last month at Ultragenyx has been, to paraphrase Charles Dickens, the best of times and the worst of times. The rare disease biotech notched two key approvals—one for its first gene therapy and the other a first-ever treatment for Sanfilippo syndrome. But sandwiched in between was a Phase 3 failure in Angelman syndrome that has the company assessing its resources.
“When you fail on a big program like that, we’ve got to manage cost structure,” Ultragenyx CEO Emil Kakkis told BioSpace of the decisions now being made.
The FDA nod for Fayuvi in Sanfilippo syndrome type A was “particularly special” for Kakkis. He has worked on this class of diseases—known as mucopolysaccharidosis (MPS)—since the beginning of his career, founding Ultragenyx in 2010 to develop treatments for these ultrarare, progressive neurological conditions. The company won its first-ever approval in 2017 for Mepsevii for a different type of MPS.
The Fayuvi greenlight closely followed another, for Ultragenyx’s first gene therapy Genglycos for glycogen storage disease type Ia. Each approval came with a valuable priority review voucher (PRV)—which can be kept for a future treatment or sold, with the price as high as $200 million.
But the regulatory wins bookended Ultragenyx’s second costly failure in a year. Earlier this month, in the Phase 3 Aspire trial, the antisense oligonucleotide therapy apazunersen failed to improve cognition in patients with another devastating rare disorder called Angelman syndrome. The biotech’s stock crashed nearly 50% on the news.
Ultragenyx at the time said it would evaluate the apazunersen program, which William Blair called a “high-risk/high-reward” play for the biotech, and “assess its planned operations to define and implement significant expense reductions, while supporting its growing commercial business.”
A breakthrough decades in the making
Kakkis has a long history with Sanfilippo syndrome. In 1991, he attended his first MPS meeting, which included scientists, physicians and parents and children living with the diseases. The meeting’s organizer warned him that there would be kids with Sanfilippo running around during the conference, with parents chasing them, he recalled in an interview with BioSpace.
“I couldn’t understand what she was talking about until I saw frantic moms chasing their kids who suddenly start screaming and running through the crowd and the audience,” Kakkis said. This was during the “hyperactivity” phase of the disease, he explained.
But that hyperactivity soon gives way to neuronal damage that eventually confines patients to a wheelchair. Ultimately, most patients live only into their teens.
“I could see in her eyes that she knew what was coming,” Kakkis said of the mother trying to corral her child. “She was chasing the life of her kid, in a sense.”
A quarter century later, Kakkis told a much happier story of a little girl named Eliza O’Neill who was treated with Fayuvi at the age of 5.
“Normally, by the time she’s a teenager, she’d be bedridden, but she’s still running around” eight years after treatment, Kakkis said, “jumping on trampolines.” She can’t speak, he added, “but she communicates with the family, she feeds herself. She’s part of their family.”
Kakkis hopes to have Sanfilippo syndrome added to newborn screening panels. This, he said, could result in children being treated at six months old, “so that by the time they’re school age, they’re in normal school.”
The CEO offered an example of one such child—the last to be treated in Fayuvi’s Phase 1/2/3 Gene Transfer pivotal trial. Now 4 years old, the patient attended a recent international meeting, and “no one could guess this child had Sanfilippo syndrome,” Kakkis said.
When the Fayuvi approval arrived, Ultragenyx was still celebrating the recent approval of Genglycos, which offered the first targeted option for glycogen storage disease type Ia, a rare disease caused by the accumulation of the complex sugar in cells.
This accelerated approval was “a key milestone, as it marks the first gene therapy approval for the company (validating years of investment in this platform),” TD Cowen analysts said in an Aug. 19 note to investors.
Both products demonstrate that “AAV gene therapy can be used and be effective,” Kakkis said. The challenge, he continued, is not just getting them approved, but also making them commercially viable. The gene therapies that will succeed, he said, are the ones developed for rare diseases where there is a particularly high unmet need.
“My hope,” he said, “is these two approvals will lead to success commercially and recognition that even though they’re not giant blockbusters, these are important products that are worthwhile investing in.”
Tough decisions
Despite the recent success, it’s a tenuous time for Ultragenyx.
Apazunersen wasn’t the company’s first big miss in the past 12 months. The biotech shed $1 billion in value in January after another high-profile asset, the Mereo BioPharma–partnered setrusumab, failed to reduce the fracture rate in patients with osteogenesis imperfecta (OI)—a rare genetic bone disorder—in two Phase 3 studies. Trial participants in both studies did experience improvements in bone mineral density, however, meeting a key secondary outcome.
Setrusumab has not reached the end of its story, according to Kakkis. “We still believe in the osteogenesis imperfecta product. We are keeping that one,” he said. Ultragenyx should have “more understanding with the FDA” regarding next steps for this program by the end of the year.
“I think they appreciate what we see,” Kakkis said of the regulator. “They’re working with us on how to assess the disease in a way that makes it more tractable.”
Unfortunately, that decision could spell the end of the Angelman program, Kakkis lamented. “We couldn’t do both Angelman and [OI] again, so we’ll have to cut expenses.” He said the company will provide more detail at a business meeting in November.
“It’s sad. I think the technology in Angelman works. I think we have several dramatic results, but Phase 3 failed, and we just can’t keep going at that moment,” he said. “We could come back at some time, but right now we have to set it aside in order to get our financial house in order as we move forward.”
Ultragenyx currently has four marketed products. In its second quarter earnings report, the company reaffirmed full year 2026 guidance of between $730 million and $760 million in revenue, excluding any generated by potential new product launches. Ultragenyx had $436 million in cash, cash equivalents and marketable securities on hand as of June 30.
William Blair believes the sale of the PRVs for Fayuvi and Genglycos will “significantly bolster the company’s balance sheet given the market rate for PRVs is ~$200 million.”
While William Blair said in its Sept. 18 note that “there is a lack of key value inflection points for the company in the next 12 months,” Kakkis expressed confidence that with the recent approvals, Ultragenyx “can be a profitable company.”
