Business Overview

Ultragenyx Pharmaceutical Inc. (RARE) is a biopharmaceutical company on the cusp of transforming into a leading rare disease player, backed by its growing commercial portfolio, robust clinical pipeline, and shrewd strategic positioning. With four approved products already generating meaningful revenue and a deep late-stage development program, Ultragenyx has established itself as a rare disease innovator capable of bringing novel therapies to patients in need.

Ultragenyx was incorporated in Delaware in April 2010 by Dr. Emil Kakkis, the company's current President and CEO, with the mission of identifying, acquiring, and developing treatments for serious rare and ultra-rare genetic diseases. Dr. Kakkis brought extensive experience in rare disease drug development to the company, which has been instrumental in its growth and success.

Since its inception, Ultragenyx has built a diverse portfolio of approved therapies and product candidates, with a focus on diseases with high unmet medical need and clear biology for treatment. The company's first commercially approved product was Crysvita (burosumab), a treatment for X-linked hypophosphatemia (XLH) and tumor-induced osteomalacia (TIO), which received approval in both the U.S. and EU in 2018. Crysvita was developed through a collaboration and license agreement with Kyowa Kirin Co., Ltd.

In the same year, Ultragenyx received approval for its second product, Mepsevii (vestronidase alfa), a treatment for mucopolysaccharidosis VII (MPS VII), also known as Sly syndrome, in the U.S., EU, and certain other regions. Mepsevii was developed under a license agreement with Saint Louis University.

The company continued to expand its commercial portfolio with the approval of Dojolvi (triheptanoin) for the treatment of long-chain fatty acid oxidation disorders (LC-FAOD) in 2020. Dojolvi was developed under a license agreement with Baylor Research Institute. In 2022, Ultragenyx added Evkeeza (evinacumab) to its portfolio for the treatment of homozygous familial hypercholesterolemia (HoFH), which was in-licensed from Regeneron Pharmaceuticals.

Throughout its history, Ultragenyx has successfully navigated challenges common to rare disease-focused biopharmaceutical companies, such as identifying and enrolling patients in clinical studies, navigating the regulatory approval process, and establishing commercial infrastructure and operations to support global product launches. The company's ability to overcome these obstacles has positioned it as a leader in the rare disease field.

Ultragenyx's current approved products include Crysvita for the treatment of X-linked hypophosphatemia (XLH) and tumor-induced osteomalacia (TIO), Mepsevii for mucopolysaccharidosis VII (MPS VII), Dojolvi for long-chain fatty acid oxidation disorders (LC-FAOD), and Evkeeza for homozygous familial hypercholesterolemia (HoFH). These products generated total revenues of $560.23 million in 2024, representing a 29% increase over the prior year.

In addition to its commercial portfolio, Ultragenyx has an extensive clinical pipeline featuring several promising late-stage product candidates, including:

• UX143 (setrusumab) for the treatment of osteogenesis imperfecta (OI)

• GTX-102 for Angelman syndrome
• UX111 for Sanfilippo syndrome type A (MPS IIIA)
• DTX401 for glycogen storage disease type Ia (GSDIa)
• DTX301 for ornithine transcarbamylase (OTC) deficiency

The company's strategic focus on rare diseases with high unmet need and clear biological targets has allowed it to establish a differentiated product portfolio and pipeline, positioning Ultragenyx for long-term success.

Financial Performance and Outlook

Ultragenyx's financial performance in 2024 exceeded expectations, with total revenues reaching $560.23 million, up 29% from the prior year. This growth was driven by increased demand for the company's approved products, particularly Crysvita, which generated $410 million in revenue, a 25% year-over-year increase.

Other key financial metrics for 2024 include:

• Net loss of $569.18 million, or $6.29 per share

• Research and development expenses of $697.87 million
• Selling, general, and administrative expenses of $321.61 million
• Cash, cash equivalents, and marketable securities of $745 million as of December 31, 2024

For 2025, Ultragenyx provided the following financial guidance:

• Total revenue between $640 million and $670 million, representing 14-20% growth

• Crysvita revenue between $460 million and $480 million, a 12-17% increase
• Dojolvi revenue between $90 million and $100 million, a 2-14% increase

This guidance reflects the company's confidence in its ability to drive continued growth across its commercial portfolio while advancing its late-stage pipeline.

Financials

Ultragenyx's financial performance has shown consistent improvement over the years, with revenue growth outpacing increases in expenses. The company's focus on rare diseases has allowed it to command premium pricing for its approved therapies, contributing to its strong revenue growth. However, significant investments in research and development, as well as ongoing commercialization efforts, have resulted in continued net losses.

In the most recent fiscal year (2024), Ultragenyx reported:

• Revenue: $560.23 million
• Net Income: -$569.18 million
• Operating Cash Flow: -$414.19 million
• Free Cash Flow: -$434.18 million

For the most recent quarter (Q4 2024), the company reported:

• Revenue: $164.88 million, up 29% year-over-year
• Net Income: -$133.39 million

Geographically, Ultragenyx has a global presence, with product sales and royalties from North America, Latin America, Europe, Middle East, Africa, and Asia-Pacific. In 2024, 49% of total revenues were generated from the company's collaboration partner Kyowa Kirin Co., Ltd. in North America. The company's team led the commercial operations in Latin America, where Crysvita revenues grew 78% in 2024 compared to 2023.

Liquidity

As of December 31, 2024, Ultragenyx maintained a strong liquidity position with $745 million in cash, cash equivalents, and marketable securities. This substantial cash reserve provides the company with the financial flexibility to continue investing in its clinical pipeline, support ongoing commercialization efforts, and pursue strategic opportunities as they arise.

Other key liquidity metrics include:

• Debt/Equity Ratio: 0.158
• Current Ratio: 2.37
• Quick Ratio: 2.24

The company expects reduced net cash used in operations in 2025 compared to 2024, as the first quarter of 2025 will include $45 million in milestone payments that were achieved in Q4 2024.

Robust Clinical Pipeline and Upcoming Milestones

Ultragenyx's clinical pipeline is a key driver of the company's long-term growth prospects. The pipeline consists of several late-stage product candidates targeting rare and ultra-rare genetic diseases, each with significant market potential.

UX143 (setrusumab) for Osteogenesis Imperfecta (OI) Ultragenyx's lead clinical program is UX143 (setrusumab), a monoclonal antibody in Phase 3 development for the treatment of OI. The company is conducting the Orbit and Cosmic studies, which are evaluating setrusumab's ability to reduce annualized fracture rates in patients with OI. The Phase 3 Orbit study is expected to reach a key second interim analysis milestone in mid-2025, with the potential for full study results by the end of the year.

GTX-102 for Angelman Syndrome Another key program in Ultragenyx's pipeline is GTX-102, an antisense oligonucleotide in Phase 3 development for the treatment of Angelman syndrome, a rare neurogenetic disorder. The company is expected to complete enrollment in the Phase 3 Aspire study in the second half of 2025, with data readouts to follow.

UX111 for Sanfilippo Syndrome Type A (MPS IIIA) Ultragenyx recently filed a Biologics License Application (BLA) with the FDA for UX111, an AAV gene therapy for the treatment of Sanfilippo syndrome type A (MPS IIIA). The FDA has granted the BLA Priority Review with a target action date of August 18, 2025, underscoring the potential of this transformative therapy.

DTX401 for Glycogen Storage Disease Type Ia (GSDIa) Ultragenyx is also advancing DTX401, an AAV gene therapy candidate for the treatment of GSDIa. The company plans to submit a BLA for DTX401 to the FDA in mid-2025, following positive topline results from the Phase 3 GlucoGene study.

DTX301 for Ornithine Transcarbamylase (OTC) Deficiency Rounding out Ultragenyx's late-stage pipeline is DTX301, an AAV gene therapy in Phase 3 development for the treatment of OTC deficiency, the most common urea cycle disorder. Enrollment in the Phase 3 study has been completed, with data expected in the coming years.

These late-stage programs, if successful, have the potential to significantly expand Ultragenyx's commercial footprint and solidify the company's position as a leader in rare disease drug development and commercialization.

Partnerships and Collaborations

Ultragenyx has forged several key partnerships and collaborations that have been instrumental in the development and commercialization of its products and product candidates.

Crysvita Collaboration with Kyowa Kirin The company's collaboration with Kyowa Kirin Co., Ltd. (KKC) has been pivotal for the development and commercialization of Crysvita. Under the terms of the agreement, KKC is responsible for commercializing Crysvita in the U.S., Canada, and Europe, while Ultragenyx retains the rights to commercialize the product in Latin America and Turkey.

Evkeeza Collaboration with Regeneron In 2022, Ultragenyx announced a collaboration with Regeneron Pharmaceuticals to commercialize Evkeeza, the company's treatment for homozygous familial hypercholesterolemia (HoFH), outside the U.S. This partnership has allowed Ultragenyx to expand the global reach of Evkeeza and generate additional revenue streams.

Setrusumab Collaboration with Mereo Ultragenyx's collaboration with Mereo BioPharma Group plc covers the development and commercialization of setrusumab (UX143) for the treatment of osteogenesis imperfecta. Under the agreement, Ultragenyx holds exclusive rights to develop and commercialize setrusumab in the U.S., Turkey, and the rest of the world, excluding Europe.

These strategic partnerships have been instrumental in Ultragenyx's ability to effectively develop, manufacture, and commercialize its products worldwide, leveraging the expertise and resources of its collaborators.

Risks and Challenges

While Ultragenyx has demonstrated impressive progress in building a rare disease-focused business, the company faces several risks and challenges that could impact its long-term success:

1. Clinical development risks: The company's pipeline of product candidates is subject to the inherent uncertainties and complexities of drug development, including the potential for delays, failures, or adverse safety events in clinical trials.

2. Regulatory approval and commercialization risks: Even if Ultragenyx's product candidates successfully complete clinical trials, there is no guarantee that they will receive regulatory approval or be successfully commercialized, which could limit the company's revenue and profitability.

3. Competitive landscape: Ultragenyx operates in a highly competitive rare disease space, with the potential for new therapies or technologies to emerge that could disrupt the company's market position.

4. Reliance on third-party manufacturers: The company's products and product candidates are manufactured by third-party contract manufacturing organizations, which introduces supply chain risks and potential production challenges.

5. Reimbursement and pricing pressures: Ultragenyx's ability to generate revenue from its products is dependent on securing favorable reimbursement and pricing policies, which can be challenging in the rare disease market.

6. Dependence on key personnel: The company's success is heavily reliant on the continued leadership and expertise of its management team, particularly Dr. Kakkis, the founder and CEO.

Ultragenyx's management team is well aware of these risks and has implemented strategies to mitigate them, but the company will need to continue to navigate these challenges effectively to achieve its long-term goals.

Industry Trends

The rare disease drug market is expected to grow at a compound annual growth rate (CAGR) of around 11% from 2021 to 2028. This growth is driven by increasing disease awareness, a favorable regulatory environment, and advancements in therapeutic approaches. Ultragenyx is well-positioned to capitalize on these trends with its diverse portfolio of approved products and robust pipeline of candidates targeting rare and ultra-rare genetic diseases.

Conclusion

Ultragenyx Pharmaceutical has firmly established itself as a rare disease powerhouse, with a growing commercial portfolio, a robust late-stage pipeline, and a proven track record of strategic execution. The company's focus on serious rare and ultra-rare genetic diseases, coupled with its ability to develop and commercialize novel therapies, positions it for continued success in the years to come.

As Ultragenyx continues to advance its clinical programs and expand its commercial footprint globally, the company is poised to transform into a leading rare disease player, delivering much-needed treatments to patients and generating sustainable value for its shareholders. With strong revenue growth, a solid liquidity position, and promising guidance for 2025, Ultragenyx is well-equipped to navigate the challenges of the rare disease market and capitalize on the opportunities that lie ahead.