An inherited neurological disorder that typically becomes fatal in a child’s teenage years now has an FDA-approved treatment, a gene therapy developed by Ultragenyx Pharmaceutical. It’s the second FDA nod for an Ultragenyx gene therapy in the past month, each of them the first approved treatment for an ultra-rare disease. But sandwiched between the two approvals is the Phase 3 failure of a rare disease drug that carried most of the financial expectations for the company.
The trial failure sank Ultragenyx’s outlook and its stock price. Details of what the company calls “significant expense reductions” are still forthcoming. The two new approved gene therapies won’t avoid those cuts, but they do add to what is a growing Ultragenyx product portfolio. They also bring financial opportunities that could help ease the rare disease specialist’s cash concerns.
The FDA approval announced after Thursday’s market close is for Fayuvi, a gene therapy developed for children born with mucopolysaccharidosis type IIIA (MPS IIIA), also known as Sanfilippo syndrome type A. This disease is caused by an inherited deficiency of sulfamidase, an enzyme needed to break down a type of sugar molecule called heparan sulfate substrate.
Without the key enzyme, the sugar molecule accumulates in cells, leading to central nervous system damage. Patients experience a range of neurodevelopmental problems that start in early childhood and worsen with age. Treatment for Sanfilippo has been symptom management and supportive care. Death typically comes from organ failure or severe infections.
Targeting Sanfilippo’s Root Cause
Fayuvi employs an engineered virus to deliver to cells a working copy of the gene that codes for the key enzyme. Administered as a single intravenous infusion, Fayuvi is a one-time treatment. Ultragenyx’s submission for the gene therapy was based on an open-label, single-arm study that enrolled children with Sanfilippo. Results showed that the treated patients between the ages of 2 and 5 maintained or improved their cognitive scores compared to the natural history of untreated patients that plateau or decline in this age range.
The FDA decision does not make Fayuvi eligibility contingent on formal assessments measuring infant and toddler development. Instead, the label states the therapy is indicated for children with preserved neurodevelopmental function. Speaking during a Thursday evening conference call, Ultragenyx CEO Emil Kakkis said this language allows treatment of a wide range of Sanfilippo patients, leaving the decision up to a patient’s physician and family.
Ultragenyx estimates that the Sanfilippo community spans 3,000 to 5,000 patients in commercially addressable markets; these patients have a median life expectancy of 15 years. By the time a child with Sanfilippo reaches 10 or 11, the disease may have progressed too far for Fayuvi to help. Kakkis said he expects the average age of those who receive the gene therapy will be 5 years old, though earlier treatment could lead to better outcomes.
“I think we’d all agree that someone who is at end-stage disease is not a good candidate for gene therapy and the goal is to treat as young as possible,” Kakkis said. “This issue is more of an issue at the start because as time goes on, we should be newborn screening and treating kids before they’re age 2 or even age 1. We’ve had some kids treated at six months [who] have done really well. I think that’s what we’ve got to get to.”
Ultragenyx had applied for accelerated FDA approval. The agency ended up awarding the therapy full approval, which Chief Medical Officer Eric Crombez said speaks to the strength of the clinical data. The company said Fayuvi will carry a wholesale price of $3.95 million before any rebates or discounts. For some context, Ultragenyx estimates that the lifetime cost of treating a Sanfilippo patient can top $8 million.
FDA approval of Fayuvi follows a 2025 rejection due to manufacturing issues. This therapy will be manufactured at an Ultragenyx site in Bedford, Massachusetts and by contractor Andelyn Biosciences in Ohio. The first shipments are expected in 30 to 60 days. It will be marketed by the same salesforce selling some of the company’s other products, including Genglycos, the gene therapy awarded accelerated FDA approval in August for the ultra-rare enzyme deficiency glycogen storage disease type Ia.
Two Approvals, Two Priority Review Vouchers
Still looming over Ultragenyx is the disappointing trial outcome for apazunersen, which the company and many industry observers expected would become the first FDA-approved treatment for Angelman syndrome, an inherited enzyme deficiency that leads to central nervous system problems. Ultragenyx’s stock price fell about 45% after the Phase 3 failure, sparking the company’s announcement of coming cost cuts. Kakkis acknowledged the Angelman drug during the conference call, but said he would reserve discussion of that program for the company’s next call to discuss quarterly financial results.
In a note sent to investors, Leerink Partners analyst Joseph Schwartz reiterated that the bank’s conclusion following the Angelman trial failure still stands: Ultragenyx is now about commercial sales rather than drug pipeline execution. But he added that the stock market reaction to the Angelman outcome may have been too strong.
“Two approvals in small indications were not going to rebuild the Angelman value, yet the positive after-hours reaction to a full approval, real pricing, and a leveraged launch says the platform discount applied over the past two weeks was too indiscriminate,” Schwartz said.
William Blair estimates that Fayuvi could reach $325 million in peak sales, shy of the $362 million in peak sales that the bank models for Genglycos. While it will take time to grow revenue for both products, a different financial benefit could come sooner. Approval of each gene therapy came with a rare pediatric disease priority review voucher. Chief Financial Officer Howard Horn said the company plans to sell both of them. Demand has pushed voucher prices higher and recent sales have been around $200 million.
Fayuvi was initially developed by Abeona Therapeutics, where it was known as UX111. Financial challenges led the cell and gene therapy biotech to look for someone else to continue the Sanfilippo program’s development. In 2022, Ultragenyx licensed rights to the therapy. Abeona is now in line to receive royalties and commercial milestone payments tied to Fayuvi sales. Horn said Abeona is not eligible for proceeds from a sale of the priority review voucher.
Photo: Sundry Photography, via Getty Images
