Ultragenyx Pharmaceutical Inc. (RARE): A Bull Case Theory

We came across a bullish thesis on Ultragenyx Pharmaceutical Inc. on Valueinvesting subreddit by bluespacecolombo. In this article, we will summarize the bulls’ thesis on RARE. Ultragenyx Pharmaceutical Inc.'s share was trading at $27.61 as of July 28^th.

Ultragenyx Pharmaceutical (RARE) has seen its share price halve in just two weeks, largely due to a halted trial and an FDA rejection, but the market appears to have overreacted. The company’s Phase 3 trial for setrusumab, a potential blockbuster therapy for a rare bone disease, failed to meet an early “stop-for-efficacy” milestone, yet the study remains on track, with safety intact and final results expected in late 2025 under less stringent endpoints.

Meanwhile, the FDA issued a complete response letter for another gene therapy candidate, citing manufacturing issues rather than safety or efficacy concerns. The program remains viable, with a resubmission expected once production adjustments are made. Despite these setbacks, Ultragenyx continues to generate meaningful revenue, posting $139 million in Q1 and guiding for over $640 million in 2025, and maintains a robust cash position of around $560 million, with management projecting lower cash burn.

Beyond setrusumab, the company’s pipeline is well diversified, featuring DTX401, a gene therapy for glycogen storage disease that met Phase 3 goals and is slated for FDA submission this year, as well as an advanced Angelman syndrome program in Phase 3. None of the recent regulatory or clinical updates involved failures of safety or efficacy, leaving the scientific foundation of the pipeline intact. Analysts’ average price targets remain near $100, implying a potential threefold upside from the current ~$26 level. With solid fundamentals, multiple near-term catalysts, and a temporarily depressed valuation, Ultragenyx represents a compelling contrarian opportunity as panic-driven selling unwinds.

Previously we covered a bullish thesis on Capricor Therapeutics, Inc. (CAPR) by androidmj in March 2025, which highlighted the upcoming FDA decision on Deramiocel, strong financial backing, and significant upside on approval. The company’s stock has depreciated about 46.32% since then as the thesis has yet to play out. The thesis still stands given CAPR’s cash runway and de-risked catalyst. bluespacecolombo shares a similar view on the biotech space but emphasizes Ultragenyx’s diversified pipeline, overreaction-driven selloff, and near-term catalysts.

Ultragenyx Pharmaceutical Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 55 hedge fund portfolios held RARE at the end of the first quarter which was 57 in the previous quarter. While we acknowledge the potential of RARE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.