Ultragenyx Pharmaceutical Inc. (NASDAQ: RARE), which targets rare and ultra-rare genetic diseases, is finding itself in a “rare” situation of its own. The biotech outfit just hit a 52-week low. Analysts also have slashed and burned their price target expectations. This is after its late-stage trial in patients with GNE myopathy (GNEM) did not live up to expectations.

The company was conducting its Phase 3 study evaluating aceneuramic acid extended release (Ace-ER). The study did not achieve its primary endpoint of demonstrating a statistically significant difference in the upper extremity muscle strength composite score compared to placebo, and it also failed to meet its key secondary endpoints.

While we covered the details of the study failure in depth, the end-result of this is that company plans to terminate the development program based on these results and will be working with investigators and patients on a reasonable transition plan for patients still on Ace-ER.

Analysts on Wall Street have slashed their expectations. Some of the target price cuts were massive and some were moderate.

Jefferies lowered its price target to $62 from $69, and Wedbush lowered its price target to $62 from $75.

Morgan Stanley lowered its target price to $69 from $80, while SunTrust Robinson Humphrey lowered its target price handily to $55 from $105.

At least some analysts are still calling for significant upside ahead. JPMorgan cut its price target on Ultragenyx to $76 from $87, Raymond James lowered its price target to $74 from $91 and Stifel lowered its target price to $85 from $95.

Before investors completely write off this company, note the detailed pipeline in biologic and small molecule treatments. Even after shares have fallen 12% to $51.58 on Wednesday, the stock still has a market cap of almost $2.2 billion.

Dr. Emil D. Kakkis, CEO and president of Ultragenyx, said of the trial:

We are disappointed by these results, as we had hoped that Ace-ER would offer a new option for GNEM patients. We would like to thank the patients, caregivers, and investigators involved in the Ace-ER development program. This outcome does not affect our overall strategy, as the company moves forward with multiple preclinical and clinical programs and regulatory filings.

It is important to realize that the company is currently pre-revenue, and revenue was not really expected until 2019 and 2020. Thomson Reuters had estimates of $46 million in 2018 revenues, followed by $120 million in 2019 and $250 million in 2020. It is expected to generate significant losses through at least 2020.

Ultragenyx shares hit a 52-week low of $50.50 on Wednesday, down from a 52-week high of $91.35.

For whatever this is worth, Ultragenyx came public at $21 per share in January 2014. after its target price range had been raised and effectively doubled to $42 or so on its debut.

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