Ultragenyx (RARE) Down 31.1% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Ultragenyx (RARE). Shares have lost about 31.1% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ultragenyx due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Ultragenyx Reports Wider-Than-Expected Loss in Q4

Ultragenyx reported a loss per share of $1.62 in the fourth quarter of 2019. The loss includes an unrealized gain of $1.4 million from the fair value adjustment on the investment in Arcturus equity. However, excluding this, the adjusted loss was $1.64 per share, narrower than a loss of $1.73 in the year-ago quarter and wider than the Zacks Consensus Estimate of a loss of $1.61.

For the fourth quarter, Ultragenyx reported $35.6 million in total revenues, up from $16.3 million in the year-ago quarter. Revenues beat the Zacks Consensus Estimate of $32 million.

Crysvita revenues were $29.9 million, which included $26.1 million of collaboration revenues in the North American profit share territory and $2.2 million of royalty revenues in the European territory from the collaboration and license agreement with Japanese partner, Kyowa Hakko Kirin. Net product sales for the drug in other regions were $1.6 million. Revenues also included $0.1 million received from Bayer (DE:BAYGN) regarding Ultragenyx’s research agreement with the former to develop adeno-associated virus gene therapies. Mepsevii product revenues were $4.4 million and UX007 revenues were $1.2 million.

Though UX007 is not an approved product, the company recognizes sales from the candidate on a “named patient” basis. This is allowed in certain countries prior to the commercial approval of a product.

Crysvita is approved in the United States for the treatment of X-linked hypophosphatemia in patients aged one year or above. The drug continues to deliver a strong performance in the United States.

Pipeline Updates

Ultragenyx submitted a supplemental Biologics License Application (sBLA) to the FDA for the treatment of Tumor-Induced Osteomalacia (TIO). The company expects a response from the FDA in February 2020.

The new drug application (NDA) for UX007 for the treatment of long-chain fatty acid oxidation disorders (LC-FAOD) was accepted by the FDA and the agency set an action date of Jul 31, 2020.

An investigational new drug (IND) application for UX701 is expected by the end of 2020 for a new gene therapy for Wilson disease — a larger, rare metabolic disease.

2019 Results

Ultragenyx’s adjusted loss came in at $6.89 per share compared with a loss of $3.97 in 2018.

The company’s revenues were $103.7 million, up from $51.5 million in 2018.

2020 Guidance

Ultragenyx expects Crysvita revenues from its territories between $125 million and $140 million, which excludes European territory revenues.

The company also expects a more than 20% reduction in net cash burn in 2020 compared with 2019.

How Have Estimates Been Moving Since Then?

Estimates revision followed a downward path over the past two months.

VGM Scores

Currently, Ultragenyx has a poor Growth Score of F, however its Momentum Score is doing a lot better with a C. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Ultragenyx has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.