RARE, MREO Tank as Osteogenesis Study Fails to Meet Primary Endpoint

Shares of Ultragenyx Pharmaceutical RARE and Mereo BioPharma MREO plunged 42.3% and 87.6%, respectively, on Dec. 29 after the companies announced disappointing data from the phase III Orbit and Cosmic studies, which evaluated setrusumab (UX143) for the treatment of osteogenesis imperfecta (OI) in pediatric and young adult patients.

Both the Orbit and Cosmic studies failed to achieve statistical significance against the primary endpoints of reduction in annualized clinical fracture rate versus placebo or bisphosphonates, respectively.

However, both studies showed improvements in bone mineral density (BMD) with strong statistical significance on the secondary endpoint, with no changes observed in the safety profile.

Ultragenyx is now reviewing its planned operations and will promptly determine and implement significant cost-reduction measures.

RARE & MREO’s Stock Price Performance

In the past six months, shares of Ultragenyx Pharmaceuticals have declined 45.7%, and Mereo BioPharma has plunged 89.7% against the industry’s increase of 25.9%.

RARE & MREO’s Phase III Setrusumab Development Program

Setrusumab is a fully human monoclonal antibody that targets and inhibits sclerostin, a key negative regulator of bone formation.

Ultragenyx Pharmaceutical and Mereo BioPharma are evaluating setrusumab in the phase II/III Orbit and phase III Cosmic studies for treating pediatric and young adult patients across OI sub-types I, III and IV.

OI is a group of genetic disorders impacting bone metabolism that affects about 60,000 people in commercially accessible geographies, for which there is currently no approved treatment.

In the Orbit study, participants demonstrated statistically significant and meaningful improvements in BMD versus placebo. However, the BMD changes did not translate into a corresponding reduction in annualized fracture rates, and the placebo group experienced a low fracture rate.

Patients in the pediatric Cosmic study had higher baseline fracture rates than those in the Orbit study. In this younger patient population, BMD improvements with setrusumab were associated with lower annualized fracture rates versus bisphosphonates, though the reduction was not statistically significant.

Ultragenyx is performing additional analyses on the data across both studies, including evaluations of other bone health and clinical endpoints beyond fractures, to determine next steps for the program.

RARE & MREO’s Zacks Rank and Stocks to Consider

Ultragenyx Pharmaceuticals and Mereo BioPharma carry a Zacks Rank #3 (Hold) each at present.

Some better-ranked stocks in the biotech sector are CorMedix CRMD and Castle Biosciences CSTL, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for CorMedix’s 2025 earnings per share (EPS) have increased from $1.85 to $2.87. EPS estimates for 2026 have moved up from $2.49 to $2.88 during the same period. CRMD stock has increased 8% in the past six months.

CorMedix’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 27.04%.

In the past 60 days, estimates for Castle Biosciences’ loss per share have narrowed from 64 cents to 34 cents for 2025. During the same time, loss per share estimates for 2026 have narrowed from $1.82 to $1.06. In the past six months, shares of CSTL have rallied 93.1%.

Castle Biosciences’ earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, the average surprise being 66.11%.

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This article originally published on Zacks Investment Research (zacks.com).

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