RARE 10-K & 10-Q changes, risk factors and insider trading
Ultragenyx Pharmaceutical Inc. · Nasdaq · Pharmaceutical Preparations · CIK 1515673 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “Our future financial performance depends on the successful commercialization of our products and product candidates.”
New heading “Regulatory standards are subject to change over time, making it difficult to accurately predict the likelihood of marketing approval even when clinical trials meet their endpoints.”
New heading “Increasing use of social media could give rise to liability and result in harm to our business.”
New heading “We may experience difficulties, delays or unexpected costs and not achieve anticipated benefits and savings from our recently initiated strategic restructuring plan.”
Removed heading “We have limited experience in generating revenue from product sales.”
Removed heading “We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers.”
Removed heading “Changes to healthcare and FDA laws, regulations, and policies may have a material adverse effect on our business and results of operations.”
Removed heading “Our employees or consultants may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.”
Removed heading “If we are unable to maintain effective internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our stock may decrease.”
Largest changes
“We are exposed to the risk of employee fraud or other misconduct, including intentional failures to comply with FDA regulations or similar regulations of comparable foreign regulatory authorities, provide accurate information to the FDA or comparable foreign regulatory authorities, comply with manufacturing standards, comply with federal and state healthcare fraud and abuse laws and regulations and similar laws and regulations established and enforced by comparable foreign regulatory authorities, report financial information or data accurately or disclose unauthorized activities to us. …”see in full comparison
Cybersecurity incidents, including phishing attacks and attempts to misappropriate or compromise confidential or proprietary information or personal information or sabotage enterprise ITsee in full comparisonsystemssystems, are becoming increasingly frequent and more sophisticated. Cybersecurity incidents increasingly involve the use of AI and machine learning to launch more automated, targeted and coordinated attacks ontargets.targets, and the use of AI by us or the third parties on which we depend to operate our business may create new cybersecurity vulnerabilities, including those which may not be recognized at this time. The information and data processed and stored in our technology systems, and those of our strategic partners, CROs, contract manufacturers, suppliers, distributors or other third partiesforon which we depend to operate our business, may be vulnerable to loss, damage, denial-of-service, unauthorized access or misappropriation. Data security breaches can occur as a result of malware, hacking, business email compromise, ransomware attacks, phishing or other cyberattacks directed by third parties. We, and certain of the third partiesforon which we dependonto operate our business, have experienced cybersecurity incidents, includingthird partyunauthorized access to and misappropriation of financial information and clinical data, and may experience similar incidents in the future. Further, risks of unauthorized access andcyber-attackscyberattacks have increased as most of our personnel, and the personnel of many third parties with which we do business, have adopted hybrid working arrangements. Improper or inadvertent behavior by employees, contractors and others with permitted access to our systems, including through the use of generative AI technologies, pose a risk that sensitive data may be exposed to unauthorized persons or to the public. A system failure or security breach that interrupts our operations or the operations at one of our third-party vendors or partners could result in intellectualproperty andproperty, other proprietary or confidential information or personal information being lost or stolen or a material disruption of our drug development programs and commercial operations. For example, the loss of clinical trial data from ongoing or planned clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach results in a loss of or damage to our data or applications,lossunauthorized access, use or disclosure of tradesecretssecrets,or inappropriate disclosure ofother confidential or proprietary information,includingprotected health information, or other personalinformationinformation,of employees or former employees,unauthorized access to our clinical data, or disruption of the manufacturing process, we could incur liability and the further development of our drug candidates could be delayed. Further, we could incur significant costs to investigate and mitigate such cybersecurity incidents. In addition, there can be no assurance that our insurance coverage will be sufficient to cover the financial, legal, business or reputational losses that may result from a cybersecurity incident. A security breach that results in the unauthorized access, use or disclosure of personal information may alsorequiresrequire us to notify individuals, governmental authorities, credit reporting agencies, or other parties, as applicable, pursuant to privacy and security laws and regulations or other obligations. Such a security breach could harm our reputation, erode confidence in our information security measures,andlead to regulatoryscrutinyscrutiny, and result in penalties, fines, indemnification claims,litigationlitigation, and potential civil or criminal liability.
“We may experience difficulties, delays or unexpected costs and not achieve anticipated benefits and savings from our recently initiated strategic restructuring plan.”see in full comparison
“The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures. In particular, we are required to perform system and process evaluation and testing of our internal controls over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting, as required by Section 404(a) of the Sarbanes-Oxley Act. Section 404(b) of the Sarbanes-Oxley Act also requires our independent auditors to attest to, and report on, this management assessment. …”see in full comparison
Our business strategy includes international expansion. We currently conduct clinical studies and regulatory activities and we also commercialize products outside of the U.S. An increasing portion of our revenues are based on our international operations, which exposes us to increased financial risks such as longer payment cycles, additional or more burdensome regulatory requirements of financial institutions outside of the U.S. and exposure to foreign currency exchange rate. We may implement currency hedges intended to reduce our exposure to changes in certain foreign currency exchange rates. However, our hedging strategies, if implemented, may not be successful, and any of our unhedged foreign exchange exposures will continue to be subject to market fluctuations. Further, we sell products in countries that face economic volatility and weakness. Although we have historically collected receivables from customers in those countries, continued weakness or additional deterioration of the local economies and currencies may cause customers in those countries to be unable to pay for our products. Additionally, if one or more of these countries were unable to purchase our products, our revenues would be adversely affected. Changes in policy with respect to sanctions or tariffs, including tariffs imposed by the U.S. on imports from most countries, and related retaliatory tariffs on U.S. goods, could also increase our costs or adversely impact our revenues. For instance, the current Presidential Administration has imposed tariffs on pharmaceutical products from certain countries, such as those imposed in the U.S. and E.U. trade agreement announced in July 2025. In September 2025, the Administration announced that future tariffs of up to 100% could be implemented affecting branded or patented pharmaceutical products coming into the U.S., unless the importing company is building U.S. manufacturing capacity. It is not yet clear whether these tariffs would apply to the importation of active pharmaceutical ingredients and possibly bulk drug products that are intended for use in clinical trials and not for commercial sale, which could increase the costs of materials for our clinical trials. There can be no assurance that future tariffs, trade agreements or other governmental actions will not impact pharmaceutical products from other countries, include the active ingredients or materials used in such products, or impose tariffs at a higher level than contemplated in previously announced trade agreements, any of which could significantly and adversely impact our operations and revenue.see in full comparison
In particular, our operations are directly, and indirectly through our customers, subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, the federal False Claims Act, and physician sunshine laws and regulations;see in full comparisonandpatient and non-patient privacy laws and regulations, including the European General Data Protection Regulation (EU) 2016/679, or GDPR, in the EEA, the GDPR as incorporated into UK law pursuant to the European Union (Withdrawal) Act 2018, or the UK GDPR, in the UK, the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, the California Consumer PrivacyAct,Act of 2018, or CCPA,includingasamendmentsamendedfromby the California Privacy RightsAct,Act of 2020, or CPRA, and California’s Confidentiality of Medical Information Act; and the evolving global landscape for AI-related laws and regulations, which may impose obligations on companies developing and using AI and include U.S. federal and state laws and regulations and the EU Artificial Intelligence Act, as described above in “Item 1. Business – Government Regulation”. Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws.For instance, one of our programs for sponsored genetic testing to help patients receive an accurate diagnosis was previously the subject of review by applicable governmental authorities of compliance with various fraud and abuse laws. We settled the matter with the governmental authorities for an immaterial settlement amount and without any admission of legal liability.We cannot assure that our other operations or programs will not be subject to review by governmental authorities or found to violate such laws.
Full comparison: every changed paragraph (156)
Our future financial performance depends on the successful commercialization of our products and product candidates.
We have limited experience in generating revenue from product sales.
We may experience delays in commercialization of our products and other adverse effects if we do not achieve our projected development goals in the time frames we announce and expect.goals.
The regulatory approval processes of the FDA and comparable foreign authorities are lengthy and inherently unpredictable.
Our products remainare subject to regulatory scrutinyscrutiny, even if we obtain regulatoryafter approval.
We are dependent on KKC for the supply and commercialization of Crysvita in certain major markets, including the U.S. and Canada, and for our supply of Crysvita in our markets.
The loss of, or failure to supply by, any ofby any of our single-source suppliers for our drug substance and drug product could adversely affect our business.
Our revenue may be adversely affected if the market opportunities for our products and product candidates are smaller than expected.
We may face competition from biosimilars of our biologics products and product candidates or from generic versions of our small-molecule products and product candidates, which may result in a material decline in sales of affected products.candidates.
We may become involved in lawsuits to protect or enforce our patents or the patents of our licensors, or be subject to claims that challenge the inventorship or ownership of our patents.licensors.
Changes to patent laws in the U.S. and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.general.
Changing regulatory standards may make it difficult to accurately predict the likelihood of obtaining marketing approval.
Increasing use of social media could give rise to additional liability;
Our employees or consultants may engage in misconduct which could cause significant liability for us.
We may experience unexpected costs or not achieve our anticipated savings from our recently announced strategic restructuring plan.
We face general risks related to our ability to maintain effective internal controls over financial reporting, additional tax liabilities related to our operations, our ability to use our net operating loss carryforwards, costs of litigation, stockholder activism and increased scrutiny regarding our ESG practices and disclosures.
Since inception, we have been engaged in substantial research and development and capital investments, and we have operated at an operating loss each year and expect to continue doing so in the near term. While we currently expect to achieve profitability for the yearin 2027, our expectations are based on a variety of assumptions, and actual results, including whether we achieve profitability on our expected timeline or at all, may materially differ from our expectations. Our operating results, including our ability to achieve profitability, will depend, in part, on non-recurring events, our ability to obtain regulatory and marketing approval of our product candidates and within our anticipated timeframes, the success of our commercialization efforts, and the rate of our future expenditures. We anticipate that our expenses willcould increase substantially if and as wewe, among other things:
continue to establish or grow a marketing and distribution infrastructure and field force to commercialize our products and any product candidates for which we may obtain marketing approval;
continue to manage our international subsidiaries and establish new ones;
continue to operate as a public company and comply with legal, accounting and other regulatory requirements;
seek to maintain, protect, and expand our intellectual property portfolio;
seek to attract and retain skilled personnel;
Our future financial performance depends on the successful commercialization of our products and product candidates.
We have limited experience in generating revenue from product sales.
developing a sustainable and scalable manufacturing process for our products and any approved product candidates and establishing and maintaining supply and manufacturing relationships with third parties that can conduct the processes and provide adequate (in amount and quality) product supply to support market demand for our products and product candidates, if approved;
launching and commercializing our products and product candidates for which we obtain regulatory and marketing approval, either directly or with a collaborator or distributor;
obtaining market acceptance of our products and product candidates as viable treatment options;
negotiating favorable terms, including commercial rights, in any collaboration, licensing, or other arrangements into which we may enter, any amendments thereto or extensions thereof;
negotiating favorable terms, including commercial rights, in collaboration, licensing, or other arrangements; and maintaining, protecting, and expanding our portfolio of intellectual property rights, including patents, trade secrets, and know-how; and attracting, hiring, and retaining qualified personnel.know-how.
As of December 31, 2024,2025, our available cash, cash equivalents, and marketable debt securities were $745.0$737 million. We may need additional capital to continue to commercialize our products, and to develop, obtain regulatory approval for, and to commercialize, all of our product candidates. In addition, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. OurSee future“Item 7. Management’s Discussion and Analysis of Financial Condition and Results Of Operations—Funding Requirements” for additional information on the factors affecting our funding requirements will depend on many factors, including but not limited to:requirements.
the scope, rate of progress, results, and cost of our clinical studies, nonclinical testing, and other related activities;
the cost of manufacturing clinical and commercial supplies of our products and product candidates;
the cost of creating additional infrastructure, including facilities and systems, such as systems in our GMP gene therapy manufacturing facility;
the cost of operating and maintaining our gene therapy manufacturing facility;
the number and characteristics of the product candidates that we pursue;
the cost, timing, and outcomes of regulatory approvals;
the cost and timing of establishing and operating our international subsidiaries;
the cost and timing of establishing and operating field forces, marketing, and distribution capabilities;
the cost and timing of other activities needed to commercialize our products; and the terms and timing of any collaborative, licensing, acquisition, and other arrangements that we may establish, including any required milestone, royalty, and reimbursements or other payments thereunder.
Any additional fundraising efforts may divert our management’s attention from their day-to-day activities, which can adversely affect our ability to develop our product candidates and commercialize our products. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all, particularlywhich are often impacted by changes in light of the current macroeconomic conditions, including changing interest ratesrates, inflation and inflation.market instability arising from political and trade tensions (including government shutdowns). The terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities by us, whether equity or debt, or the possibility of such issuance, may cause the market price of our shares to decline. The sale of additional equity or convertible securities would dilute all of our stockholders. If we incur debt, it could result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell, or license intellectual property rights, and other operating restrictions that could adversely impact our ability to conduct our business. We have in the past sought and may in the future seek funds through a sale of future royalty payments similar to our transactions with Royalty Pharma and OMERS or through collaborative partnerships, strategic alliances, and licensing or other arrangements, such as our transaction with Daiichi Sankyo Co., Ltd., or Daiichi Sankyo,Ltd. and we may be required to relinquish rights to some of our technologies or product candidates, future revenue streams, research programs, and other product candidates or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results, and prospects. Even if we believe we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.
Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical studies to demonstrate the safety and efficacy of the product candidates in humans. Clinical testing is expensive, complex, time consuming, and uncertain as to outcome. We cannot guarantee that any clinical studies will be conducted as planned or completed on schedule, if at all. We have also had difficulties in recruiting clinical site investigators and clinical staff for our studies, and may continue to experience such difficulties. Additionally, a failure of one or more clinical studies can occur at any stage of testing, and our future clinical studies may not be successful. Product candidates that have shown promising results in early-stage clinical studies may still suffer significant setbacks or fail in subsequent clinical studies. The safety or efficacy results generated to date in clinical studies do not ensure that later clinical studies will demonstrate similar results. Further,For example, in December 2025, we announced that our UX143 Phase 3 Orbit and Cosmic studies did not achieve their primary endpoints despite promising Phase 2 results, and as a result, we are implementing significant expense reductions. In addition, we have reported and expect to continue to report preliminary or interim data from our clinical trials. Preliminary or interim data from our clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and/or more patient data become available. Such data may show initial evidence of clinical benefit, but as patients continue to be assessed and more patient data become available, there is a risk that any therapeutic effects are no longer durable in patients and/or decrease over time or cease entirely. As a result, preliminary or interim data should be considered carefully and with caution until the final data are available. Results from investigator-sponsored studies or compassionate-use studies may not be confirmed in company-sponsored studies or may negatively impact the prospects for our programs. Additionally, given the nature of the rare diseases we are seeking to treat, we often devise newly-defined endpoints to be tested in our studies, which can lead to subjectivity in interpreting study results and could result in regulatory agencies not agreeing with the validity of our endpoints, or our interpretation of the clinical data, and therefore delaying or denying approval. Given the illness of the patients in our studies and the nature of their rare diseases, we have also been required to, or have chosen to, conduct certain studies on an open-label basis. We have in the past, and may in the future, elect to review interim clinical data at multiple time points during the studies, which could introduce bias into the study results and potentially result in denial of approval.
imposition of a clinical hold by regulatory agencies;
imposition of a clinical hold by regulatory agencies after review of an IND application or amendment, another equivalent application or amendment, or an inspection of our clinical study operations or study sites;
Our future success is dependent on our ability to successfully develop, obtain regulatory approval for, and commercialize our products. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities. We have only obtained regulatory approval for three products that we have developed, and it is possible that none of our existing product candidates or any future product candidates will ever obtain regulatory approval. Further, as the clinical trial requirements and criteria of regulatory authorities vary substantially according to the type, complexity, novelty and intended use and market of the product candidates, the regulatory approval process for novel product candidates, such as our gene therapy product candidates, can be more expensive and take longer than for other product candidates, leading to fewer product approvals. To date, very few gene therapy products have received regulatory approval in the U.S. or Europe. The regulatory framework and oversight over development of gene therapy products has evolved and may continue to evolve in the future. For more information, see “Item 1. Business – Government Regulation” above.
Our future success is dependent on our ability to successfully commercialize our products and develop, obtain regulatory approval for, and then successfully commercialize one or more product candidates. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities. We have only obtained regulatory approval for three products that we have developed, and it is possible that none of our existing product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval. Further, as the clinical trial requirements of regulatory authorities and the criteria these regulators use to determine the safety and efficacy of a product candidate vary substantially according to the type, complexity, novelty and intended use and market of the product candidates, the regulatory approval process for novel product candidates, such as our gene therapy product candidates, can be more expensive and take longer than for other product candidates, leading to fewer product approvals. To date, very few gene therapy products have received regulatory approval in the U.S. or Europe. The regulatory framework and oversight over development of gene therapy products has evolved and may continue to evolve in the future. Within the FDA, the Center for Biologics Evaluation and Research, or CBER, regulates gene therapy products. Within the CBER, the review of gene therapy and related products is consolidated in the Office of Cellular, Tissue and Gene Therapies, and the FDA has established the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its reviews. The CBER works closely with the National Institutes of Health, or NIH. The FDA and the NIH have published guidance with respect to the development and submission of gene therapy protocols. For example, in January 2020, the FDA issued final guidance to set forth the framework for the development, review and approval of gene therapies. The final guidance pertains to the development of gene therapies for the treatment of specific disease categories, including rare diseases, and to manufacturing and long-term follow up issues relevant to gene therapy, among other topics. At the same time the FDA issued guidance describing the FDA’s approach for determining whether two gene therapy products were the same or different for the purpose of assessing orphan drug exclusivity. Within the European Medicines Agency, or EMA, special rules apply to gene therapy and related products as they are considered advanced therapy medicinal products, or ATMPs. Pursuant to the ATMP Regulation, the Committee on Advanced Therapies, or CAT, is responsible in conjunction with the Committee for Medicinal Products for Human Use, or CHMP, for the evaluation of ATMPs. The CHMP and CAT are also responsible for providing guidelines on ATMPs. These guidelines provide additional guidance on the factors that the EMA will consider in relation to the development and evaluation of ATMPs and include, among other things, the preclinical studies required to characterize ATMPs. The manufacturing and control information that should be submitted in a MAA; and post-approval measures required to monitor patients and evaluate the long-term efficacy and potential adverse reactions of ATMPs. Although such guidelines are not legally binding, compliance with them is often necessary to gain and maintain approval for product candidates. In addition to the mandatory risk-management plan, or RMP, the holder of a marketing authorization for an ATMP must put in place and maintain a system to ensure that each individual product and its starting and raw materials, including all substances coming into contact with the cells or tissues it may contain, can be traced through the sourcing, manufacturing, packaging, storage, transport, and delivery to the relevant healthcare institution where the product is used.
To obtain regulatory approval in the U.S. and other jurisdictions, we must comply with numerous and varying requirements regarding safety, efficacy, chemistry, manufacturing and controls, clinical studies (including good clinical practices), commercial sales, pricing, and distribution of our product candidates, as described above in “Item 1. Business – Government Regulation”. of this Annual Report. Even if we are successful in obtaining approval in one jurisdiction, we cannot ensure that we will obtain approval in any other jurisdictions. In addition, approval policies, regulations, positions of the regulatory agencies on study design and/or endpoints, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development, which may cause delays in the approval or the decision not to approve an application. Communications with the regulatory agencies during the approval process are also unpredictable; favorable communications early in the process do not ensure that approval will be obtained and unfavorable communications early on do not guarantee that approval will be denied. Applications for our product candidates could fail to receive regulatory approval, or could be delayed in receiving regulatory approval, for many reasons, including but not limited to the following:
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel, accept the payment of user fees, and statutory, regulatory and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of other government agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable. Changes in the leadership of the FDA and other federal agencies under the current administration, including return-to-office policy, hiring freeze, and other policies, may lead to changes in the operations of the FDA, which may have a material impact on the industry and our clinical development plans. There have been widespread layoffs across various governmental agencies, including at the FDA, and other employees, including senior leaders at certain agencies, have resigned in response to the reforms, the full impact of which is unclear at this time. In addition, there is uncertainty around the funding, functioning and policy priorities of various governmental agencies, including the FDA. Disruptions or changes in how the FDA operates due to these policies could result in delays in FDA review or approval of our product candidate applications. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.
Further, applications for our product candidates could fail to receive regulatory approval, or could be delayed in receiving regulatory approval, for several other reasons, including but not limited to the following:
regulatory authorities may disagree with the design, implementation, or conduct of our clinical studies;
regulatory authorities may change their guidance or requirements for a development program for a product candidate;
the data collected from clinical studies of our product candidates may not be sufficient to support the submission of an NDA, or biologics license application, or BLA, or other submission or to obtain regulatory approval;
regulatory authorities may fail to approve the manufacturing processes, test procedures and specifications, or facilities used to manufacture our clinical and commercial supplies;
the U.S. government may be shut down, which could delay the FDA;
the FDA may be delayed in responding to our applications or submissions due to competing priorities or limited resources, including as a result of the lack of FDA funding or personnel;
failure of our nonclinical or clinical development to comply with an agreed upon Pediatric Investigational Plan, or PIP,PIP which details the designs and completion timelines for nonclinical and clinical studies and is a condition of marketing authorization in the EU; and the approval policies or regulations of regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
As described in “Item 1. Business – Government Regulation”, we seek Fast Track, Breakthrough Therapy designation, RMAT designation, PRIME scheme access or Priority Review designation for our product candidates if supported by the results of clinical trials. Designation as a Fast Track product, Breakthrough Therapy, RMAT, PRIME, or Priority Review productsuch is within the discretion of the relevant regulatory agency. Accordingly, even if we believe one of our product candidates meets the criteria for designationone asof athese Fast Track product, Breakthrough Therapy, RMAT, PRIME, or Priority Review product,designations, the agency may disagree and instead determine not to make such designation. The receipt of such a designation for a product candidate also may not result in a faster development process, review or approval compared to drugs considered for approval under conventional regulatory procedures and does not assure that the product will ultimately be approved by the regulatory authority. In addition, regarding Fast Track products and Breakthrough Therapies, the FDA may later decide that the products no longer meet the conditions for qualification as either a Fast Track product, RMAT, or a Breakthrough Therapy or, for Priority Review products, decide that period for FDA review or approval will not be shortened. Furthermore, with respect to PRIME designation by the EMA, PRIME eligibility does not change the standards for product approval, and there is no assurance that any such designation or eligibility will result in expedited review or approval.
The FDA Rare Pediatric Disease Priority Review Voucher Program, or PRV Voucher Program, awards Priority Review Vouchers, or PRVs, to sponsors of rare pediatric product applications that meet certain criteria. Under the program, a company that receives an approval for a product for a rare pediatric disease (as determined by the applicable regulations) may qualify for a PRV that can be redeemed to receive Priority Review of a subsequent marketing application for a different product. PRVs may also be sold by the company to third parties. We received PRVs under the PRV Voucher Program in connection with the approval of Mepsevii and Crysvita in 2018 and subsequently sold these two PRVs to third parties for an average amount of $105.3 million for each PRV. The PRV Voucher Program began to sunset on December 20, 2024 such that the FDA may only award a PRV for a product application if a company received the rare pediatric disease designation from the FDA for the product candidate by December 20, 2024 and the FDA will cease awarding PRVs after September 30, 2026. Renewal of the PRV Voucher Program is subject to approval by Congress and it is currently uncertain whether the program will be renewed and whether any such renewal will be retroactively effective. If the PRV program is not renewed by Congress and our qualifying product candidates are approved by the FDA after the deadline of September 30, 2026, we will not be eligible to receive additional PRVs for our product candidates and accordingly, we would be unable to use such PRV for Priority Review for another one of our programs or to sell such PRV, which sale has the potential to generate significant proceeds.
Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay, or halt clinical studies or further development, and could result in a more restrictive label, the delay or denial of regulatory approval by the FDA or other comparable foreign authorities, or a Risk Evaluation and Mitigation Strategy, or REMS, plan, which could include a medication guide outlining the risks of such side effects for distribution to patients, restricted distribution, a communication plan for healthcare providers, and/or other elements to assure safe use. Our product candidates are in development and the safety profile has not been established. Further, as one of the goals of Phase 1 and/or Phase 2 clinical trials is to identify the highest dose of treatment that can be safely provided to study participants, adverse side effects, including serious adverse effects, have occurred in certain studies as a result of changes to the dosing regimen during such studies and may occur in future studies. Results of our studies or investigator-sponsored trials couldthat reveal a high and unacceptable severity and prevalence of theseadverse side effects can lead to suspension or other side effects. In such an event, our studies could be suspended or terminated,termination, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny or withdraw approval of our product candidates for any or all targeted indications.
The manufacturing process used to produce our gene therapy product candidates is novel, complex, and has not been validated for commercial use. Several factors could cause production interruptions, including equipment malfunctions, malfunctions of internal information technology systems, regulatory inspections, facility contamination, raw material shortages or contamination, natural disasters, geopolitical instability, disruption in utility services, human error or disruptions in the operations of our suppliers. Further, given that cGMP gene therapy manufacturing is a nascent industry, thereThere are only a small number of CMOs with the experience necessary to manufacture our gene therapy product candidates and we may have difficulty finding or maintaining relationships with such CMOs or hiring experts for internal manufacturing and accordingly, our production capacity may be limited.
Our gene therapy product candidates require processing steps that are more complex than those required for most small molecule drugs. Moreover, unlike small molecules, the physical and chemical properties of a biologic such as gene therapy product candidates generally cannot be fully characterized. As a result, assays of the finished product candidate may not be sufficient to ensure that the product candidate is consistent from lot to lot or will perform in the intended manner. Accordingly, we employ multiple steps to control the manufacturing process to assure that the process works reproducibly, and the product candidate is made strictly and consistently in compliance with the process. Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects or manufacturing failures that result in lot failures, noncompliance with regulatory requirements, product recalls, product liability claims or insufficient inventory. We may encounter problems achieving adequate quantities and quality of clinical-grade materials that meet FDA, the EMA or other applicable standards or specifications with consistent and acceptable production yields and costs.
Management's Discussion & Analysis (MD&A)
New heading “Research and Development Expenses (dollars in millions)”
New heading “Non-cash Interest Expense on Liabilities for Sales of Future Royalties (dollars in millions)”
New heading “Recently Enacted Tax Legislation”
Removed heading “Accrued Research and Development, and Research and Development Expenses”
Removed heading “Collaboration, License and Royalty Revenue”
Removed heading “Stock-Based Compensation”
Removed heading “Cost of Sales (dollars in thousands)”
Removed heading “Interest Income (dollars in thousands)”
Removed heading “Change in Fair Value of Equity Investments (dollars in thousands)”
Removed heading “Non-cash Interest Expense on Liabilities for Sales of Future Royalties (dollars in thousands)”
Removed heading “Other Expense (dollars in thousands)”
Largest changes
“Non-cash Interest Expense on Liabilities for Sales of Future Royalties (dollars in thousands)”see in full comparison
“Non-cash Interest Expense on Liabilities for Sales of Future Royalties (dollars in millions)”see in full comparison
“The non-cash interest expense on liabilities for sales of future royalties decreased for the year ended December 31, 2025, compared to the same period in 2024, primarily due to a change in estimate related to the timing of future royalty payments from our collaboration partner, KKC. The decrease was partially offset by interest expense from the sale of future royalties to OMERS in November 2025. …”see in full comparison
“The non-cash interest expense on liabilities for sales of future royalties decreased by $3.0 million for the year ended December 31, 2024, compared to the same period in 2023, primarily due to a reduction in total royalty obligation balances as a result of increased royalties generated from our collaboration partner, KKC. To the extent the royalty payments are greater or less than our initial estimates or the timing of such payments is materially different than our original estimates, we prospectively adjust the effective interest rate.”see in full comparison
“Accrued Research and Development, and Research and Development Expenses”see in full comparison
Full comparison: every changed paragraph (100)
Ultragenyx Pharmaceutical Inc., we or the Company, is a biopharmaceutical company committed to bringing novel products to patients for the treatment of serious rare and ultrarareultra-rare genetic diseases. We have built a diverse portfolio of approved therapies and product candidates aimed at addressing diseases with high unmet medical need and clear biology for treatment, for which there are typically no approved therapies treating the underlying disease. Our strategy is predicated upon time- and cost-efficient drug development, with the goal of delivering safe and effective therapies to patients with the utmost urgency.
As of December 31, 2024,2025, we had $745.0$737 million in available cash, cash equivalents and marketable debt securities.
Accrued Research and Development, and Research and Development Expenses
As part of the process of preparing consolidated financial statements, we are required to estimate and accrue expenses, the largest of which is related to accrued research and development expenses. This process involves reviewing contracts and purchase orders, identifying services that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual costs.
We record accruals for estimated costs of research, preclinical and clinical studies, and manufacturing development. These costs are a significant component of our research and development expenses. A substantial portion of our ongoing research and development activities is conducted by third-party service providers. We accrue the costs incurred under our agreements with these third parties based on actual work completed in accordance with agreements established with these third parties. We determine the actual costs through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. We make judgments and estimates in determining the accrual balance in each reporting period. As actual costs become known, we adjust our accruals. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and could result in us reporting amounts that are too high or too low in any particular period. Our accrual is dependent, in part, upon the receipt of timely and accurate reporting from clinical research organizations and other third-party vendors.
Research and development costs are expensed as incurred and consist of salaries and benefits, stock-based compensation, lab supplies, materials and facility costs, as well as fees paid to other nonemployees and entities that conduct certain research and development activities on our behalf. Amounts incurred in connection with collaboration and license agreements are also included in research and development expense. Payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.
To date, there have been no material differences from our accrued estimated expenses to the actual clinical trial expenses; however, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical studies and other research activities.
Revenue RecognitionReserves
Product Sales
We sell our approved products through a limited number of distributors. Under Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers, revenue from product sales is recognized at the point in time when control is transferred to these distributors. We also recognize revenue from sales of certain products on a “named patient” basis, which are allowed in certain countries prior to the commercial approval of the product. Prior to recognizing revenue, we make estimates of the transaction price, including any variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. Product sales are recorded net of estimated government-mandated rebates and chargebacks, estimated product returns, and other deductions.
Provisions for returns and other adjustments are provided for in the period the related revenue is recorded, as estimated by management. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are reviewed periodically and adjusted as necessary. Our estimates of government mandated rebates, chargebacks, estimated product returns, and other deductions dependsdepend on the identification of key customer contract terms and conditions, negotiated pricing, as well as estimates of sales volumes to different classes of payors. If actual results vary, we may need to adjust these estimates, which could have a material effect on earnings in the period of the adjustment.
We sold our right to receive certain royalty payments from net sales of Crysvita in certain territories to RPI Finance Trust (an affiliate of Royalty Pharma) and OCM LS23 Holdings LP (an investment vehicle for Ontario Municipal Employees Retirement System, or OMERS. At inception, we recorded a liability based upon estimated future cash flows discounted at a market rate. We amortize this liability using the effective interest method over the estimated life of the applicable arrangement. To determine the amortization of the liability, we estimate the total amount of future royalty payments to be received by us and paid to RPI and OMERS. Any estimated royalty payments in excess of the initial liability are recorded as non-cash interest expense. Consequently, we estimate imputed interest on the unamortized portion of the liabilities and record as interest expense based on the estimated term of the arrangements.
We periodically assesses the expected royalty payments using a combination of historical results, internal projections and forecasts from external sources. To the extent such payments are greater or less than our initial estimates or the timing of such payments is materially different than our original estimates, we employ the prospective method to adjust the amortization of the liabilities and the effective interest rate.
Collaboration, License and Royalty Revenue
We have certain license and collaboration agreements that are within the scope of ASC 808, Collaborative Agreements, which provides guidance on the presentation and disclosure of collaborative arrangements. Generally, the classification of the transactions under the collaborative arrangements is determined based on the nature of contractual terms of the arrangement, along with the nature of the operations of the participants. We record our share of collaboration revenue, net of transfer pricing related to net sales in the period in which such sales occur, if we are considered as an agent in the arrangement. We are considered an agent when the collaboration partner controls the product before transfer to the customers and has the ability to direct the use of and obtain substantially all of the remaining benefits from the product. Funding received related to research and development services and commercialization costs is generally classified as a reduction of research and development expenses and selling, general and administrative expenses, respectively, in the Consolidated Statement of Operations, because the provision of such services for collaborative partners are not considered to be part of our ongoing major or central operations.
We also record royalty revenues under certain of our license or collaboration agreements in exchange for license of intellectual property.
We utilize certain information from our collaboration partners to record collaboration revenue, including revenue from the sale of the product, associated reserves on revenue, and costs incurred for development and sales activities. For the periods covered in the financial statements presented, there have been no material changes to prior period estimates of revenues and expenses.
We sold the right to receive certain royalty payments from net sales of Crysvita in certain territories to RPI Finance Trust, or RPI, an affiliate of Royalty Pharma, and to OCM LS23 Holdings LP, an investment vehicle for Ontario Municipal Employees Retirement System, or OMERS, as further described in “Liabilities for Sales of Future Royalties” below.
We record the royalty revenue from the net sales of Crysvita in the applicable territories on a prospective basis as non-cash royalty revenue in the Consolidated Statements of Operations over the term of the applicable arrangement.
The terms of our collaboration and license agreements may contain multiple performance obligations, which may include licenses and research and development activities. We evaluate these agreements under ASC 606, Revenue from Contracts with Customers, to determine the distinct performance obligations. We analogize to ASC 606 for the accounting for distinct performance obligations for which there is a customer relationship. Prior to recognizing revenue, we make estimates of the transaction price, including variable consideration that is subject to a constraint. Amounts of variable consideration are included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. Total consideration may include nonrefundable upfront license fees, payments for research and development activities, reimbursement of certain third-party costs, payments based upon the achievement of specified milestones, and royalty payments based on product sales derived from the collaboration.
If there are multiple distinct performance obligations, we allocate the transaction price to each distinct performance obligation based on our relative standalone selling price. The standalone selling price is generally determined based on the prices charged to customers or using expected cost-plus margin. We estimate the efforts needed to complete the performance obligations and recognize revenue by measuring the progress towards complete satisfaction of the performance obligations using input measures.
We expense costs associated with the manufacture of our products prior to regulatory approval. Typically, capitalization of such costs begins when we have received the regulatory approval of the product. Prior to the approval of our products by the U.S. Food and Drug Administration, or FDA, manufacturing and related costs are expensed. As of December 31, 2024, we do not hold a material amount of previously expensed inventory for our approved products.
Inventory that is manufactured after regulatory approval is valued at the lower of cost and net realizable value and cost is determined using the average-cost method.
We periodically review our inventories for excess amounts or obsolescence and write down obsolete or otherwise unmarketable inventory to the estimated net realizable value.
In December 2019, we entered into a Royalty Purchase Agreement with RPI. Pursuant to the agreement, RPI paid us $320.0 million in consideration for our right to receive royalty payments on the net sales of Crysvita in the European Union, or the EU, the UK, and Switzerland, effective January 1, 2020, under the terms of our Collaboration and License Agreement with Kyowa Kirin Co., Ltd., or KKC. The agreement with RPI will automatically terminate, and the payment of royalties to RPI will cease, in the event aggregate royalty payments received by RPI are equal to or greater than the capped amount of $608.0 million prior to December 31, 2030, or in the event aggregate royalty payments received by RPI are less than $608.0 million prior to December 31, 2030, when aggregate royalty payments received by RPI are equal to $800.0 million.
In July 2022, we entered into a Royalty Purchase Agreement with OMERS. Pursuant to the agreement, OMERS paid $500.0 million to us in consideration for the right to receive 30% of the future royalty payments due to us from KKC based on net sales of Crysvita in the U.S. and Canada under the terms of the KKC Collaboration Agreement. The calculation of royalty payments to OMERS is based on net sales of Crysvita beginning in April 2023 and continuing until expiration, which is the earlier of the date on which aggregate payments received by OMERS equals $725.0 million or the date the final royalty payment is made to us under the KKC Collaboration Agreement. Proceeds from these transactions were recorded as liabilities (specifically, liabilities for sales of future royalties on the Consolidated Balance Sheets). We are amortizing $320.0 million and $500.0 million, net of transaction costs of $5.8 million and $9.1 million for RPI and OMERS, respectively.
We record the royalty revenue arising from the net sales of Crysvita in the applicable territories as non-cash royalty revenue in the Consolidated Statements of Operations over the term of the arrangements. Our effective annual interest rates were 6.2% and 7.5%, for RPI and OMERS, respectively, as of December 31, 2024.
There are a number of factors that could materially affect the amount and timing of royalty payments from KKC in the applicable territories, most of which are not within our control. Such factors include, but are not limited to, the success of KKC’s sales and promotion of Crysvita, changing standards of care, macroeconomic and inflationary pressures, the introduction of competing products, pricing for reimbursement in various territories, manufacturing or other delays, intellectual property matters, adverse events that result in governmental health authority imposed restrictions on the use of Crysvita, significant changes in foreign exchange rates as the royalty payments are made in U.S. dollars, or USD, while significant portions of the underlying sales of Crysvita are made in currencies other than USD, and other events or circumstances that could result in reduced royalty payments from sales of Crysvita, all of which would result in a reduction of non-cash royalty revenue and the non-cash interest expense over the life of the arrangement. Conversely, if sales of Crysvita in the relevant territories are morehigher than expected, the non-cash royalty revenue and the non-cash interest expense recorded by us would be greater over the term of the arrangements.
Stock-Based Compensation
Stock-based compensation costs related to equity awards granted to employees are measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures. We estimate the grant date fair value of options, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model. The grant date fair value of the stock-based awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the respective awards. We expect to continue to grant equity awards in the future, and to the extent that we do, our actual stock-based compensation expense will likely increase. The Black-Scholes option-pricing model requires the use of certain subjective assumptions which determine the estimated fair value of stock-based awards.
Expected Term — The expected term represents the period that the stock-based awards are expected to be outstanding and is determined using the simplified method (based on the midpoint between the vesting date and the end of the contractual term).
Expected Volatility— The expected volatility is based on historical volatility over the look-back period corresponding to the expected term.
Strike price for options, including performance stock options, or PSOs, is equal to the closing market value of our common stock on the date of grant.
In addition to the assumptions used in the Black-Scholes option-pricing model, we also estimate a forfeiture rate to calculate the stock-based compensation for our awards. We will continue to use judgment in evaluating the expected volatility, expected terms, and forfeiture rates utilized for our stock-based compensation calculations on a prospective basis and will revise in subsequent periods, if actual forfeitures differ from those estimates.
For restricted stock units, or RSUs, and performance stock units, or PSUs, the fair value is based on the market value of our common stock on the date of grant, except for certain PSUs with a market vesting condition, for which fair value is estimated using a Monte Carlo simulation model. Stock-based compensation expense for RSUs is recognized on a straight-line basis over the requisite service period. PSUs are subject to vest only if certain specified criteria are achieved and the employees’ continued service with the Company. For certain PSUs, the number of PSUs that may vest are also subject to the achievement of certain specified criteria, including both performance conditions and market conditions. Compensation expense for PSUs is recognized only after the achievement of the specified criteria is considered probable and recognized on a straight-line basis between the grant date and the expected vest date, with a catch-up for previously unrecognized expense, if any, recognized in the period the achievement criteria is deemed probable.
For the years ended December 31, 2024, 2023, and 2022, stock-based compensation expense was $158.1 million, $135.2 million, and $130.4 million, respectively. As of December 31, 2024, we had $256.8 million of total unrecognized stock-based compensation costs, net of estimated forfeitures, which we expect to recognize over a weighted-average period of 2 years.
Revenues (dollars in thousandsmillions)
Our product sales increased $105.0 million for the year ended December 31, 2024,2025, compared to the same period in 2023.2024. The increase was primarily due to an increase inincreased demand for Crysvita in Latin America resulting from an increase in the number of patients on therapy, ongoingcontinued progress of the launch of Evkeeza in Japanseveral markets in EMEA and in Europe, Middle EastJapan, and Africa territories, or EMEA, andthe continued increase in demand for our other approved products.
Our Crysvita royalty revenue and collaboration revenue in the Profit-Share Territory increased by a net $22.5 million for the year ended December 31, 2024, compared to the same period in 2023; this increase in Crysvita revenue is primarily due to an increase in the number of patients on therapy. We transitioned commercial responsibilities to KKC in the Profit-Share Territory in April 2023. Post transition, we recognize our revenue share for Crysvita sales in the Profit-Share Territory as royalty revenue, which was recorded as collaboration revenue prior to the transition.
Other revenue decreased by $1.5 million for the year ended December 31, 2024, compared to the same period in 2023. The decrease was due to the completion of the technology transfer and the technology transfer period related to the Daiichi Sankyo agreement as of March 31, 2023.
Cost of Sales (dollars in thousands)
CostOur ofCrysvita salesroyalty revenue increased by $31.5 million for the year ended December 31, 2024,2025, compared to the same period in 2023.2024. TheThis increase in costCrysvita of salesrevenue was primarily due to an increase in demandthe fornumber ourof approvedpatients products,on primarily Crysvita in Latin America and Evkeeza in EMEA and Japan.therapy.
ResearchCost andof Development ExpensesSales (dollars in thousandsmillions)
Cost of sales increased for the year ended December 31, 2025, compared to the same period in 2024. The increase in cost of sales was primarily due to an increase in demand for Crysvita in Latin America, Evkeeza in EMEA and Japan, and the continued increase in demand for our other approved products.
Research and Development Expenses (dollars in millions)
Total research and development expenses increased $49.4 million for the year ended December 31, 20242025 compared to the same period in 2023.2024. The change in research and development expenses was primarily due to:
for gene therapy programs, an increase primarily due to an increase in UX111 manufacturing costs in preparation for commercial launch, partially offset by the timing of the DTX401 and DTX301 manufacturing runs for which costs were incurred during the year ended December 31, 2024, which did not recur for the year ended December 31, 2025;
for gene therapy programs, an increase of $25.5 million, primarily related to BLA filing activities for UX111, and continued clinical progress of the other programs, combined with the transition of certain programs to in-house manufacturing which resulted in a decrease in CMC costs and an increase in internal manufacturing costs;
for biologic and nucleic acid programs, an increase of $31.3 million, primarily relateddue to manufacturing costs for UX143 combined with the continued clinical progressconduct of the UX143 and GTX102 programs and associated clinical development and manufacturing expenses, partially offset by a reduction in development expense on UX053 for the treatment of Glycogen Storage Disease Type III due to cessation of development activities for the programexpenses;
for translational research, a decrease of $26.1 million, primarily relateddue to decreases in manufacturing and headcount expense for early stage and IND-stage projects;
for upfront license, acquisition, and milestone fees, ancosts increase of $21.5 million, primarily related to thefor achievement of a clinical enrollment milestone on the GTX-102 program during the year ended December 31, 2024 that did not recur during the year ended December 31, 2025;
for approved products, a decrease of $18.0 million, primarily due to reduced reimbursement of Regeneron collaboration expenses with the completion of the pediatric and open label extension trials for Evkeeza and reduced operating expenses for Crysvita post-marketing studies;
for infrastructure, an increase of $2.1 million, primarily related to depreciation of the gene therapy manufacturing facility, depreciation of laboratory-related leasehold improvements and equipment, and IT-related expenses;
for stock-based compensation an increase of $12.1 million, primarily related to the increase in total value of stock-based awards granted to employees; and for other research and development expenses, ana increase of $1.2 million,decrease primarily relateddue to increaseddecreased staffing and cost efficiencies to support internal manufacturing, and administrative and general support.
We expect a decrease in research and development expenses in the near term. This expected decline is primarily driven by the expected completion of several Phase 3 clinical programs and a strategic restructuring of our workforce and expenditures to better match our current pipeline requirements.
We expect our annual research and development expenses to moderate in the future as we advance our product candidates through clinical development. The timing and amount of expenses incurred will depend largely upon the outcomes of current or future clinical studies for our product candidates as well as the related regulatory requirements, manufacturing costs, and any costs associated with the advancement of our preclinical programs.
Selling, General and Administrative Expenses (dollars in thousandsmillions)
Selling, general and administrative expenses increased $11.8 million for the year ended December 31, 2024, compared to the same period in 2023.
We expect annual selling, general and administrative expenses to increase in the future as we continue to support our existing approved products, multiple clinical-stage product candidates, and planned launches of additional products.
Interest Income (dollars in thousands)
What changed in the latest 10-Q
Risk Factors
Largest changes
We acquire most of the drug substances and drug products for our products and product candidates from single sources. If any single source supplier breaches an agreement with us, or terminates the agreement in response to an alleged breach by us, ceases operations, is acquired, enters into exclusive arrangements with a competitor or otherwise becomes unable or unwilling to fulfill its supply obligations, we would not be able to manufacture and distribute the product or product candidate until a qualified alternative supplier is identified, which could significantly impair our ability to commercialize such product or delay the development of such product candidate. For example, the drug substance and drug product for Crysvita and Evkeeza are made, respectively, by KKC pursuant to a license and collaboration agreement and supply agreements and Regeneron pursuant to a supply agreement. Further, single source suppliers are also used for our gene therapy programs and for Dojolvi. We cannot provide assurances that qualifying alternate sources, if available at all, for any of our drug substances and drug products, and establishing relationships with such sources would not result in significant expense, supply disruptions or delay in the commercialization of our products or the development of our product candidates. Additionally, we may not be able to enter into supply arrangements with an alternative supplier on commercially reasonable terms or at all. The terms of any new agreement may also be less favorable or more costly than the terms we have with our current supplier. A delay in the commercialization of our products or the development of our product candidates or having to enter into a new agreement with a different third-party on less favorable terms than we have with our current suppliers could have a material adverse impact upon on our business. In addition, disruptions at a single-source supplier could require time-consuming investigations and remediation, and changes in suppliers, sites, materials, methods, or processes may require regulatory submissions, comparability assessments, additional testing, or validation activities that could delay product supply or development timelines and increase costs. Furthermore, geopolitical tensions withsee in full comparisonChina,Chinaincludingand implementation of therecentlyBIOSECUREenactedAct could disrupt biotechnology supply chains. The BIOSECUREAct,Actwhich,establishesamongrestrictionsotheronthings,theprohibitsuseU.S.offederal funding in connection withcertain biotechnology equipment or services produced or provided bycertaindesignated“‘biotechnology companies ofconcern”concern’asindeterminedconnectionbywiththecertainOfficeU.S.offederalManagementcontracts, grants, andBudgetloans,could leadsubject toourphasedcompetitorsimplementation, designation procedures, transition periods, waivers, andotherimplementing regulations. As companiesmovingin our industry evaluate and transition away from suppliers that are or may become subject tosupplierssuchoutsiderestrictions,ofalternativeChina,suppliers, includingtoour currentsuppliers.orSignificant increases in business at ourpotential single sourcesupplierssuppliers,resultingmayfromexperiencesuchincreasedactivities could adversely limitdemand, capacityat such suppliers to manufacture our products or result inconstraints, price increases,interruptionsor delays. Any such developments could disrupt our supply chain, increase our costs ordelaysotherwiseofadversely affect ourproducts.ability to manufacture, source, or obtain equipment, services, materials, or components on acceptable timelines or terms.
“goods, could also increase our costs or adversely impact our revenues. For instance, the current Presidential Administration has imposed tariffs on pharmaceutical products from certain countries, such as those imposed in the U.S. and E.U. trade agreement announced in July 2025. In September 2025, the Administration announced that future tariffs of up to 100% could be implemented affecting branded or patented pharmaceutical products coming into the U.S., unless the importing company is building U.S. …”see in full comparison
Our business strategy includes international expansion. We currently conduct clinical studies and regulatory activities and we also commercialize products outside of the U.S. An increasing portion of our revenues are based on our international operations, which exposes us to increased financial risks such as longer payment cycles, additional or more burdensome regulatory requirements of financial institutions outside of the U.S. and exposure to foreign currency exchange rate. We may implement currency hedges intended to reduce our exposure to changes in certain foreign currency exchange rates. However, our hedging strategies, if implemented, may not be successful, and any of our unhedged foreign exchange exposures will continue to be subject to market fluctuations. Further, we sell products in countries that face economic volatility and weakness. Although we have historically collected receivables from customers in those countries, continued weakness or additional deterioration of the local economies and currencies may cause customers in those countries to be unable to pay for our products. Additionally, if one or more of these countries were unable to purchase our products, our revenues would be adversely affected. Changes in policy with respect to sanctions or tariffs, including tariffs imposed by the U.S. on imports from most countries, and related retaliatory tariffs on U.S.see in full comparisongoods, could also increase our costs or adversely impact our revenues. For instance, the current Presidential Administration has imposed tariffs on pharmaceutical products from certain countries, such as those imposed in the U.S. and E.U. trade agreement announced in July 2025. In September 2025, the Administration announced that future tariffs of up to 100% could be implemented affecting branded or patented pharmaceutical products coming into the U.S., unless the importing company is building U.S. manufacturing capacity and in April 2026, the Administration issued a Proclamation regarding the imposition of such tariffs. There remains substantial uncertainty as to the implementation and potential impacts of such tariffs. We continue to monitor the scope and implementation of the tariffs, including the availability and conditions of exemptions. The tariffs, and any changes to the tariff rates, exemptions, or enforcement mechanisms, could increase our cost of goods sold, disrupt our supply chain, delay product availability, or require us to modify our sourcing or manufacturing strategies, any of which could have a material adverse effect on our business, financial condition, and results of operations. It is currently unclear whether and to what extent all of these measures will be fully implemented as announced and what impact any such implementation could have on our business.
Moreover, increasing efforts by governmental and third-party payors in the U.S. and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for new products and, as a result, they may not cover or provide adequate payment for our products. We expect to experience pricing pressures in connection with the sale of any of our products due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, additional legislative changes, including the impact from the Inflation Reduction Act of 2022 (including, among other things, the potential for Medicare price negotiation and related changes that could affect net pricing and reimbursement dynamics for certain products over time), and statements and actions by elected officials. In addition, in May 2025, the Trump Administration issued an executive order entitled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients”, which, among other things, directs the HHS and other agencies to communicate most-favored-nation price, or MFN, targets to pharmaceutical manufacturers to bring prices for U.S. patients in line with comparably developed nations and to facilitate direct-to-consumer purchasing programs. The HHS subsequently issued guidance indicating the MFN target price will be the lowest price paid in an Organisation for Economic Co-operation and Development country with a gross domestic product, or GDP, per capita of at least 60% of the U.S. GDP per capital. CMS also announced plans to extend MFN pricing to state Medicaid programs in exchange for those programs adopting uniform coverage criteria. It is currently unclear whether and to what extent these measures will be implemented and what impact any such implementation would have on oursee in full comparisonbusinessbusiness. Recent developments, including CMS rulemaking to codify the Medicare Drug Price Negotiation Program beginning with continued implementation of negotiated prices and inflation rebate requirements, the inclusion of Part B drugs in future negotiation cycles, and proposed or potential most-favored-nation or international reference pricing models for Medicare or Medicaid, may increase pricing pressure even for products that are not currently selected for negotiation. Although orphan drug exclusions and other statutory or policy protections may reduce the near-term applicability of certain drug pricing measures to some of our products, those exclusions are subject to interpretation, may not apply to products with additional indications or changed approval status, and may not prevent future federal or state pricing, reimbursement, rebate or access restrictions from affecting our revenues. Further, there can be no assurance that the current administration or future administrations will not pursue different or additional measures that could impact drug pricing in the U.S. The downward pressure on healthcare costs in general, and with respect to prescription drugs, surgical procedures, and other treatments in particular, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.
In February 2026, we initiated a strategic restructuring plan, which includes a 10% workforce reduction of approximately 130 employees across the Company. The workforce reduction was substantially completed during the first quarter of 2026 and all expected cash payments related to the restructuring were completed during the six months ended June 30, 2026. Our workforce reduction may cause disruptions to our business operations. For example, the workforce reduction has resulted in the loss of a number of long-term employees, the loss of institutional knowledge and expertise and the reallocation and combination of certain roles and responsibilities across the organization, all of which could adversely affect employee morale and our operations. In addition, we may not be able to achieve the anticipated benefits or effectively realize all the cost savings anticipated from the reduction in force and we may incur unanticipated charges or make additional cash payments as a result of such initiatives that were not previously contemplated which could result in an adverse effect on our business or results of operations.see in full comparison
During the year ended December 31, 2024, Navinta, Aurobindo, and Esjay filed ANDAs seeking FDA approval to market generic versions of Dojolvi. We filed a patent infringement suit under the Hatch-Waxman Act against Navinta, Aurobindo and Esjay in the United States District Court for the District of New Jersey in response to the notices.see in full comparisonInWeFebruaryfiled2026,similarwepatentreceivedinfringementnoticesuitsthatin the same court in April 2026 and July 2026 against Somerset Therapeutics LLC (Somerset)filed an ANDA for a generic version of Dojolvi,andweSunsubsequentlyPharmaceuticalfiledIndustriesaLtd.similar(SunpatentPharma),infringement suit against Somerset in the same court.respectively. See “Item 1. Legal Proceedings” above for a description of these actions. We cannot predict the outcome of our suits, nor can we predict whether there will be additional ANDA filings for Dojolvi.
Full comparison: every changed paragraph (14)
As of MarchJune 31,30, 2026, our available cash, cash equivalents, and marketable securities were $534$436 million. We may need additional capital to continue to commercialize our products, and to develop, obtain regulatory approval for, and to commercialize, all of our product candidates. In addition, our operating plans may change as a result of many factors that may currently be unknown to us, and we may need to seek additional funds sooner than planned. See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results Of Operations—Funding Requirements” of this Quarterly Report for additional information on the factors affecting our funding requirements.
Pursuant to the terms of our collaboration and license agreement with KKC, or the collaboration agreement, commercialization responsibilities for Crysvita in the U.S. and Canada transitioned from us to KKC in April 2023. KKC also has the sole right to commercialize Crysvita in Europe and, at certain specified times, in Türkiye, subject to certain rights retained. A substantial portion of our total revenue has been based on revenue from Crysvita, including royalty revenue we receive from KKC for sales of the product in the U.S. and Canada. For the three and six months ended MarchJune 31,30, 2026, 35%48% and 43%, respectively, of our total revenue consisted of royalty revenue from KKC in the U.S., Canada and the European territory. The commercial success of Crysvita in territories in which KKC owns commercialization responsibilities, such as in the U.S. and Canada depends on, among other things, the efforts and allocation of resources of KKC in those territories, which we do not control. KKC has no obligation under the collaboration agreement to use diligent efforts to commercialize Crysvita in those territories. Our partnership with KKC may not be successful, and we may not realize the expected benefits from such partnership, due to a number of important factors, including but not limited to the following:
We acquire most of the drug substances and drug products for our products and product candidates from single sources. If any single source supplier breaches an agreement with us, or terminates the agreement in response to an alleged breach by us, ceases operations, is acquired, enters into exclusive arrangements with a competitor or otherwise becomes unable or unwilling to fulfill its supply obligations, we would not be able to manufacture and distribute the product or product candidate until a qualified alternative supplier is identified, which could significantly impair our ability to commercialize such product or delay the development of such product candidate. For example, the drug substance and drug product for Crysvita and Evkeeza are made, respectively, by KKC pursuant to a license and collaboration agreement and supply agreements and Regeneron pursuant to a supply agreement. Further, single source suppliers are also used for our gene therapy programs and for Dojolvi. We cannot provide assurances that qualifying alternate sources, if available at all, for any of our drug substances and drug products, and establishing relationships with such sources would not result in significant expense, supply disruptions or delay in the commercialization of our products or the development of our product candidates. Additionally, we may not be able to enter into supply arrangements with an alternative supplier on commercially reasonable terms or at all. The terms of any new agreement may also be less favorable or more costly than the terms we have with our current supplier. A delay in the commercialization of our products or the development of our product candidates or having to enter into a new agreement with a different third-party on less favorable terms than we have with our current suppliers could have a material adverse impact upon on our business. In addition, disruptions at a single-source supplier could require time-consuming investigations and remediation, and changes in suppliers, sites, materials, methods, or processes may require regulatory submissions, comparability assessments, additional testing, or validation activities that could delay product supply or development timelines and increase costs. Furthermore, geopolitical tensions with China,China includingand implementation of the recentlyBIOSECURE enactedAct could disrupt biotechnology supply chains. The BIOSECURE Act,Act which,establishes amongrestrictions otheron things,the prohibitsuse U.S.of federal funding in connection withcertain biotechnology equipment or services produced or provided by certain designated “‘biotechnology companies of concern”concern’ asin determinedconnection bywith thecertain OfficeU.S. offederal Managementcontracts, grants, and Budgetloans, could leadsubject to ourphased competitorsimplementation, designation procedures, transition periods, waivers, and otherimplementing regulations. As companies movingin our industry evaluate and transition away from suppliers that are or may become subject to supplierssuch outsiderestrictions, ofalternative China,suppliers, including to our current suppliers.or Significant increases in business at ourpotential single source supplierssuppliers, resultingmay fromexperience suchincreased activities could adversely limitdemand, capacity at such suppliers to manufacture our products or result inconstraints, price increases, interruptionsor delays. Any such developments could disrupt our supply chain, increase our costs or delaysotherwise ofadversely affect our products.ability to manufacture, source, or obtain equipment, services, materials, or components on acceptable timelines or terms.
Moreover, increasing efforts by governmental and third-party payors in the U.S. and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for new products and, as a result, they may not cover or provide adequate payment for our products. We expect to experience pricing pressures in connection with the sale of any of our products due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, additional legislative changes, including the impact from the Inflation Reduction Act of 2022 (including, among other things, the potential for Medicare price negotiation and related changes that could affect net pricing and reimbursement dynamics for certain products over time), and statements and actions by elected officials. In addition, in May 2025, the Trump Administration issued an executive order entitled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients”, which, among other things, directs the HHS and other agencies to communicate most-favored-nation price, or MFN, targets to pharmaceutical manufacturers to bring prices for U.S. patients in line with comparably developed nations and to facilitate direct-to-consumer purchasing programs. The HHS subsequently issued guidance indicating the MFN target price will be the lowest price paid in an Organisation for Economic Co-operation and Development country with a gross domestic product, or GDP, per capita of at least 60% of the U.S. GDP per capital. CMS also announced plans to extend MFN pricing to state Medicaid programs in exchange for those programs adopting uniform coverage criteria. It is currently unclear whether and to what extent these measures will be implemented and what impact any such implementation would have on our businessbusiness. Recent developments, including CMS rulemaking to codify the Medicare Drug Price Negotiation Program beginning with continued implementation of negotiated prices and inflation rebate requirements, the inclusion of Part B drugs in future negotiation cycles, and proposed or potential most-favored-nation or international reference pricing models for Medicare or Medicaid, may increase pricing pressure even for products that are not currently selected for negotiation. Although orphan drug exclusions and other statutory or policy protections may reduce the near-term applicability of certain drug pricing measures to some of our products, those exclusions are subject to interpretation, may not apply to products with additional indications or changed approval status, and may not prevent future federal or state pricing, reimbursement, rebate or access restrictions from affecting our revenues. Further, there can be no assurance that the current administration or future administrations will not pursue different or additional measures that could impact drug pricing in the U.S. The downward pressure on healthcare costs in general, and with respect to prescription drugs, surgical procedures, and other treatments in particular, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.
During the year ended December 31, 2024, Navinta, Aurobindo, and Esjay filed ANDAs seeking FDA approval to market generic versions of Dojolvi. We filed a patent infringement suit under the Hatch-Waxman Act against Navinta, Aurobindo and Esjay in the United States District Court for the District of New Jersey in response to the notices. InWe Februaryfiled 2026,similar wepatent receivedinfringement noticesuits thatin the same court in April 2026 and July 2026 against Somerset Therapeutics LLC (Somerset) filed an ANDA for a generic version of Dojolvi, and weSun subsequentlyPharmaceutical filedIndustries aLtd. similar(Sun patentPharma), infringement suit against Somerset in the same court.respectively. See “Item 1. Legal Proceedings” above for a description of these actions. We cannot predict the outcome of our suits, nor can we predict whether there will be additional ANDA filings for Dojolvi.
Competitors may infringe our patents or the patents of our licensors. If we or one of our licensing partners were to initiate legal proceedings against a third party to enforce a patent covering our products or one of our product candidates, the defendant could counterclaim that the patent covering our product or product candidate is invalid and/or unenforceable. For example, in September 2024, we filed a patent infringement suit under the Hatch-Waxman Act against Navinta, Aurobindo, and Esjay. In April 2026, weWe filed a similar patent infringement suitsuits in April 2026 and July 2026 against Somerset.Somerset and Sun Pharma, respectively. See “Item 1. Legal Proceedings” above for more information regarding our suit. In patent litigation in the U.S., defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
Even though we have orphan drug designation for UX111, UX143, DTX301, DTX401 and UX701 in the U.S. and Europe and for GTX 102GTX-102 in the U.S., we may not be the first to obtain marketing approval for any particular orphan indication due to the uncertainties associated with developing pharmaceutical products. Further, even if we obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active moieties can be approved for the same condition or the same drug can be approved for a different indication unless there are other exclusivities such as new chemical entity exclusivity preventing such approval. Even after an orphan drug is approved, the FDA or EMA can subsequently approve the same drug with the same active moiety for the same condition if the FDA or EMA concludes that the later drug is safer, more effective, or makes a major contribution to patient care. Orphan drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process. Additionally, there may be future healthcare reform measures that reduce the exclusivity protections provided to already approved biological products.
We have recorded on our Condensed Consolidated Balance Sheets intangible assets for in-process research and development, or IPR&D, related to DTX301 and DTX401 as a result of the accounting for our acquisition of Dimension Therapeutics. We also recorded intangible assets related to our licenses for Dojolvi and Evkeeza. We test the intangible assets for impairment annually during the fourth quarter and more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. If the associated research and development effort is abandoned, the related assets will be written-off and we will record a noncash impairment loss on our Consolidated Statement of Operations. We have not recorded any impairments related to our intangible assets through MarchJune 31,30, 2026.
Our business strategy includes international expansion. We currently conduct clinical studies and regulatory activities and we also commercialize products outside of the U.S. An increasing portion of our revenues are based on our international operations, which exposes us to increased financial risks such as longer payment cycles, additional or more burdensome regulatory requirements of financial institutions outside of the U.S. and exposure to foreign currency exchange rate. We may implement currency hedges intended to reduce our exposure to changes in certain foreign currency exchange rates. However, our hedging strategies, if implemented, may not be successful, and any of our unhedged foreign exchange exposures will continue to be subject to market fluctuations. Further, we sell products in countries that face economic volatility and weakness. Although we have historically collected receivables from customers in those countries, continued weakness or additional deterioration of the local economies and currencies may cause customers in those countries to be unable to pay for our products. Additionally, if one or more of these countries were unable to purchase our products, our revenues would be adversely affected. Changes in policy with respect to sanctions or tariffs, including tariffs imposed by the U.S. on imports from most countries, and related retaliatory tariffs on U.S. goods, could also increase our costs or adversely impact our revenues. For instance, the current Presidential Administration has imposed tariffs on pharmaceutical products from certain countries, such as those imposed in the U.S. and E.U. trade agreement announced in July 2025. In September 2025, the Administration announced that future tariffs of up to 100% could be implemented affecting branded or patented pharmaceutical products coming into the U.S., unless the importing company is building U.S. manufacturing capacity and in April 2026, the Administration issued a Proclamation regarding the imposition of such tariffs. There remains substantial uncertainty as to the implementation and potential impacts of such tariffs. We continue to monitor the scope and implementation of the tariffs, including the availability and conditions of exemptions. The tariffs, and any changes to the tariff rates, exemptions, or enforcement mechanisms, could increase our cost of goods sold, disrupt our supply chain, delay product availability, or require us to modify our sourcing or manufacturing strategies, any of which could have a material adverse effect on our business, financial condition, and results of operations. It is currently unclear whether and to what extent all of these measures will be fully implemented as announced and what impact any such implementation could have on our business.
goods, could also increase our costs or adversely impact our revenues. For instance, the current Presidential Administration has imposed tariffs on pharmaceutical products from certain countries, such as those imposed in the U.S. and E.U. trade agreement announced in July 2025. In September 2025, the Administration announced that future tariffs of up to 100% could be implemented affecting branded or patented pharmaceutical products coming into the U.S., unless the importing company is building U.S. manufacturing capacity and in April 2026, the Administration issued a Proclamation imposing tariffs on imports of certain branded or patented pharmaceutical products and pharmaceutical ingredients. Certain tariff exemptions or zero-rate treatment may be available for products where all approved indications are designated as orphan, as well as for certain cell and gene therapies and other specialty pharmaceutical products, subject to applicable determinations, conditions and implementation guidance. As such, there remains substantial uncertainty as to the implementation and potential impacts of such tariffs. We continue to monitor the scope and implementation of the tariffs, including the availability and conditions of exemptions. The tariffs, and any changes to the tariff rates, exemptions, or enforcement mechanisms, could increase our cost of goods sold, disrupt our supply chain, delay product availability, or require us to modify our sourcing or manufacturing strategies, any of which could have a material adverse effect on our business, financial condition, and results of operations. It is currently unclear whether and to what extent all of these measures will be fully implemented as announced and what impact any such implementation could have on our business.
In February 2026, we initiated a strategic restructuring plan, which includes a 10% workforce reduction of approximately 130 employees across the Company. The workforce reduction was substantially completed during the first quarter of 2026 and all expected cash payments related to the restructuring were completed during the six months ended June 30, 2026. Our workforce reduction may cause disruptions to our business operations. For example, the workforce reduction has resulted in the loss of a number of long-term employees, the loss of institutional knowledge and expertise and the reallocation and combination of certain roles and responsibilities across the organization, all of which could adversely affect employee morale and our operations. In addition, we may not be able to achieve the anticipated benefits or effectively realize all the cost savings anticipated from the reduction in force and we may incur unanticipated charges or make additional cash payments as a result of such initiatives that were not previously contemplated which could result in an adverse effect on our business or results of operations.
Pursuant to our 2023 Incentive Plan, as amended, or the 2023 Plan, our management is authorized to grant stock options and other equity-based awards to our employees, directors, and consultants. At MarchJune 31,30, 2026, there were 8.56.5 million shares available for future grants under the 2023 Plan.
Pursuant to our 2014 Employee Stock Purchase Plan, as amended, or the A&R ESPP, eligible employees can acquire shares of our common stock at a discount to the prevailing market price. At MarchJune 31,30, 2026, there were 6.26.1 million shares available for issuance under the A&R ESPP.
Our board of directors has adopted an Employment Inducement Plan, which was subsequently amended, or the Inducement Plan. At MarchJune 31,30, 2026, there were 0.30.6 million shares available for issuance under the Inducement Plan. If our board of directors elects to increase the number of shares available for future grant under the 2023 Plan, the A&R ESPP, or the Inducement Plan, our stockholders may experience additional dilution, which could cause our stock price to fall.
Management's Discussion & Analysis (MD&A)
New heading “Milestones and Upcoming Catalysts”
New heading “Dojolvi for the treatment of LC-FAOD”
New heading “Cash Provided by Financing Activities”
Removed heading “Recent Program Updates”
Largest changes
“In March 2026, we announced that the FDA cleared our Investigational New Drug, or IND, application for UX016, an investigational small molecule prodrug of sialic acid, or SA, that is being evaluated as a substrate replacement therapy for GNE myopathy. The UX016 program is funded through clinical proof-of-concept by an external venture philanthropy agreement with a patient group, which includes the Phase 1/2 study that is expected to begin enrolling in the second half of 2026.”see in full comparison
“In March 2026, we announced that the FDA cleared our Investigational New Drug (IND) application for UX016, an investigational small molecule prodrug of sialic acid (SA), that is being evaluated as a substrate replacement therapy for GNE myopathy. The UX016 program is funded through clinical proof-of-concept by an external venture philanthropy agreement with a patient group, which includes the Phase 1/2 study that is expected to begin enrolling in the second half of 2026.”see in full comparison
Full comparison: every changed paragraph (43)
Dojolvi is a highly purified, synthetic, 7-carbon fatty acid triglyceride administered orally, designed to provide medium-chain, odd-carbon fatty acids as an energy source and metabolite replacement, developed for people with LC-FAOD. LC-FAOD represents a set of rare metabolic diseases that prevents the conversion of fat into energy and can cause low blood sugar, muscle rupture, and heart and liver disease. Dojolvi is approved in the U.S.U.S., Japan, and certain other regions as a source of calories and fatty acids for the treatment of pediatric and adult patients with molecularly confirmed LC-FAOD. There are approximately 8,000 to 14,000 patients in the developed world with LC-FAOD.
Milestones and Upcoming Catalysts
Dojolvi for the treatment of LC-FAOD
In May 2026, we announced that Dojolvi was listed on the National Health Insurance (NHI) drug price list and was officially launched in Japan following the receipt of manufacturing and marketing approval under the Conditional Approval System for Pharmaceuticals on March 23, 2026.
Recent Program Updates
In February 2026, we announced that the FDA has accepted for review the BLABiologics License Application, or BLA, seeking approval of DTX401 for the treatment of Glycogen Storage Disease Type Ia (GSDIa). The FDA granted the BLA Priority Review and assigned a Prescription Drug User Fee Act (PDUFA) action date of August 23, 2026. The FDA previously informed the CompanyCompany, in April 2026, that an Advisory Committee meeting iswas not anticipated at this time.anticipated.
In April 2026, we announced that the FDA had accepted our resubmitted BLA seeking accelerated approval for UX111 as a treatment for patients with Sanfilippo syndrome Type A. The submission included substantial longer-term data that was presented at the WORLDSymposium™ 2026, which demonstrated up to eight years of follow-up and showed further clinical improvement relative to the decline observed in natural history, and a durable treatment effect across clinical evaluations and multiple biomarkers, while maintaining an acceptable safety profile. In February 2025, the FDA granted the BLA Priority Review and, in April 2026,and assigned a PDUFA action date of September 19, 2026.
In May 2026, we provided an update on the Phase 1/2 data as of a March 2026 cut-off date. At that time, a total of 74 patients had been treated with GTX-102, with 66 patients continuing follow-up in the long-term extension (LTE) study. Phase 1/2 patients have been on continuous therapy for an average of more than three years and some patients are in their fifth year of treatment , with patients generally receiving the 14 mg quarterly, maintenance dose. As of the data cut-off date, GTX-102 maintained a consistent safety profile, even after multiple years of chronic treatment, demonstrating no new cases of transient lower extremity weakness nor any other recurring drug-related serious adverse events. We plan to present the updated Phase 1/2 long-term efficacy and safety data at a future scientific meeting.
In July 2025, we announced that all patients have been enrolled in the 48-week Phase 3 Aspire study, our pivotal study evaluating patients with Angelman syndrome. In total, 129 patients, between four and 17 years of age, with a full maternal UBE3A gene deletion were enrolled and randomized 1:1 to the GTX-102 or the sham comparator group. Data from this study are expected in the secondSeptember halfor ofOctober 2026.2026 timeframe.
In October 2025, we announced enrollment had begun in the Phase 2/3 Aurora study, which evaluates GTX-102 in other Angelman syndrome genotypes and ages. Enrollment in the study continued to progress during the first quarterhalf of 2026 and is expected to be completed in the second half of 2026.
In September 2025, we completed enrollment of five patients in Cohort 4 in the ongoing, dose-finding, stage of the pivotal Cyprus2+ study of UX701 for the treatment of Wilson disease. During Stage 1, the safety and efficacy of UX701 is being evaluated across four, sequential dosing cohorts (Cohort 1; 5.0 x 10^12 GC/kg; Cohort 2: 1.0 x 10^13 GC/kg: Cohort 3; 2.0 x 10^13 GC/kg and Cohort 4; 4.0 x 10^13 GC/kg). Data from Stage 1 of this study are expected in the fourth quarter of 2026.
In March 2026, we announced that the FDA cleared our Investigational New Drug, or IND, application for UX016, an investigational small molecule prodrug of sialic acid, or SA, that is being evaluated as a substrate replacement therapy for GNE myopathy. The UX016 program is funded through clinical proof-of-concept by an external venture philanthropy agreement with a patient group, which includes the Phase 1/2 study that is expected to begin enrolling in the second half of 2026.
The Phase 3 Enh3ance study continues with patients in both treatment and placebo-crossover groups progressing through 64 weeks of follow-up. Data from the second primary endpoint, which evaluates reduction in treatment burden, including use of ammonia scavengers and dietary management, across both the treatment and placebo-crossover groups following treatment with DTX301, are expected in the first half of 2027.
In March 2026, we announced positive results from the Phase 3 Enh3ance study of DTX301. At Week 36 in the randomized, double-blind placebo-controlled period of the trial, DTX301 patients (n=18) demonstrated a statistically significant and clinically meaningful 18% (p=0.018) reduction in 24-hour plasma ammonia (AUC0-24) into the normal range compared to placebo (n=19). Eight of nine patients with abnormal ammonia AUC0-24 at baseline also reached normal ammonia levels rapidly, which were generally maintained during this treatment period. At Week 24, patient global impression scale (PGIC) for overall OTC symptoms (n=15) showed 71% of DTX301 patients were much improved (equivalent to +3), compared to 0% of placebo patients. DTX301 was well tolerated with an acceptable safety profile.
In September 2025, we completed enrollment of five patients in Cohort 4 in the ongoing, dose-finding, stage of the pivotal Cyprus2+ study of UX701 for the treatment of Wilson disease. During Stage 1, the safety and efficacy of UX701 is being evaluated across four, sequential dosing cohorts (Cohort 1; 5.0 x 10^12 GC/kg; Cohort 2: 1.0 x 10^13 GC/kg: Cohort 3; 2.0 x 10^13 GC/kg and Cohort 4; 4.0 x 10^13 GC/kg). Data from Stage 1 of this study are expected in 2026.
In March 2026, we announced that the FDA cleared our Investigational New Drug (IND) application for UX016, an investigational small molecule prodrug of sialic acid (SA), that is being evaluated as a substrate replacement therapy for GNE myopathy. The UX016 program is funded through clinical proof-of-concept by an external venture philanthropy agreement with a patient group, which includes the Phase 1/2 study that is expected to begin enrolling in the second half of 2026.
In January 2026, topline safety and efficacy data from both studies were presented and included data on bone mineral density, vertebral fractures, and patient reported outcomes on pain and physical function. BasedWe on our analysis ofbelieve the data across the two global Phase 3 studies,studies wesuggest believethat theresetrusumab ishas a basismeaningful effect on bone disease in OI. We will continue to engage regulatory agencies to determine the necessary data to support a regulatory filing and if there is a potential path forward for UX143.
We have incurred net losses in each year since inception. Our net losses were $185$92 million and $151$277 million for the three and six months ended MarchJune 31,30, 20262026, respectively and $115 million and $266 million for the three and six months ended June 30, 2025, respectively. Substantially all of our net losses have resulted from costs incurred in connection with our research and development programs and from selling, general and administrative costs associated with our operations.
Our total revenues were $136$214 million and $139$350 million for the three and six months ended MarchJune 31,30, 20262026, respectively, and $167 million and $306 million for the six months ended June 30, 2025, respectively. The decreaseincrease in revenue was largely driven by an increase in demand for our approved products, as well as timing of orders for Crysvita in Latin America.shipments.
In February 2026, we implemented a strategic restructuring plan designed to reduce operating expenses and focus resources on our highest value drivers, including a reduction in workforce of approximately 10% and the curtailment of certain operating activities, including UX143 manufacturing activities. During the three and six months ended MarchJune 31,30, 2026, we recognized total restructuring charges of nil and $28 millionmillion, respectively, in research and development expense and nil and $2 millionmillion, respectively in selling, general and administrative expenses in our Condensed Consolidated Statements of Operations. AsAll of March 31, 2026, $10 million of restructuring charges were included in accounts payable and accrued liabilities in our Condensed Consolidated Balance Sheet. We expect substantially all remainingexpected cash payments related to the restructuring towere be madecompleted during the firstsix halfmonths ofended June 30, 2026. See “Note 13. Restructuring Expense” to the financial statements for additional information.
As of MarchJune 31,30, 2026, we had $534$436 million in available cash, cash equivalents, and marketable securities.
Our management’s discussion and analysis of our financial condition and results of operations is based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these Condensed Consolidated Financial Statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses incurred during the reporting periods. Our estimates are based on our historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no material changes in our critical accounting policies during the three and six months ended MarchJune 31,30, 2026, as compared to those disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Significant Judgments and Estimates” in our Annual Report.
Comparison of the three and six months ended MarchJune 31,30, 2026 to the three and six months ended MarchJune 31,30, 2025:
Our product sales decreasedincreased for the three and six months ended MarchJune 31,30, 20262026, as compared to the same periodperiods in 2025. The decreaseincrease was largely due to a decrease in Crysvitaincreased product sales for Crysvita, primarily in LATAM territories due to timing of orders in Brazil, partially offset by an increase in Evkeezathe productnumber salesof duepatients toas well as timing of shipments, and the continued expansion inof patients and geographiesEvkeeza in severalterritories marketsoutside inof EMEA,the inUnited Japan and in Canada.States.
Our Crysvita royalty revenue increased for the three and six months ended June 30, 2026, as compared to the same periods in 2025. The increases were primarily due to an increase in the number of patients on therapy and timing of orders.
Cost of sales increased by a nominal amount for the three and six months ended MarchJune 31,30, 20262026, as compared to the same periodperiods in 2025.2025 primarily due to increased Crysvita product sales in LATAM and Evkeeza product sales in territories outside of the United States.
Total research and development expenses increased for the three and six months ended MarchJune 31,30, 20262026, compared to the same periodperiods in 2025. The increase in research and development expenses was primarily due to:
for gene therapy programs, an increase for the three and six months primarily due to UX111DTX401 and DTX401UX111 manufacturing costs in preparation for commercial launchlaunch, partially offset by timing of UX701 manufacturing runs;
for biologic and nucleic acid programs, a decrease for the three months and an increase for the six months, respectively, primarily related to UX143the closeout of existing manufacturing settlementscommitments for UX143 as well as the continued clinical progress of the GTX102GTX-102 program and associated clinical development and manufacturing expenses; and for stock-based compensation, a decrease for the three and six months, due to the timing of grants and lower expense from lower headcount associated with the restructuring plan.
for stock-based compensation, a decrease due to the timing of grants and lower expense for modified awards under the restructuring plan; and for other research and development expenses, a decrease primarily related lower internal manufacturing costs.
Selling, general and administrative expenses had a nominal increase for each of the three and six months ended MarchJune 31,30, 20262026, compared to the same periodperiods in 2025.
Interest income decreased for the three and six months ended MarchJune 31,30, 20262026, compared to the same periodperiods in 2025, primarily due to lower marketable securities balances.
The non-cash interest expense on liabilities for sales of future royalties increased for the three and six months ended MarchJune 31,30, 2026, compared to the same periodperiods in 2025, primarily due to additional interest expense from the sale of future royalties to OMERS in November 2025. To the extent the royalty payments are greater or less than our initial estimates or the timing of such payments is materially different than our original estimates, we prospectively adjust the effective interest rate.
As of MarchJune 31,30, 2026, we had $534$436 million in available cash, cash equivalents, and marketable securities. We believe that our existing capital resources will be sufficient to fund our projected operating requirements for at least the next 12 months. Our cash, cash equivalents, and marketable securities are held in a variety of deposit accounts, interest-bearing accounts, corporate bond securities, commercial paper, U.S. government securities, and money market funds. Cash in excess of immediate requirements is invested with a view toward liquidity and capital preservation, and we seek to minimize the potential effects of concentration and credit risk.
In February 2024, we entered into a Sales Agreement with Cowen and Company, LLC, or Cowen, pursuant to which the Company may offer and sell shares of the Company’s common stock having an aggregate offering proceeds up to $350 million, from time to time, in ATM offerings through Cowen. To date, we have sold 2.2 million shares under the ATM for net proceeds of $80 million. No shares were sold under the ATM during the three and six months ended MarchJune 31,30, 2026.
Cash used in operating activities for the threesix months ended MarchJune 31,30, 2026 was $197$294 million and primarily reflected a net loss of $185$277 million, partially offset by non-cash items of $39$63 million, net, which consisted primarily of stock-based compensation, amortization of discounts on marketable securities, depreciation and amortization, non-cash royalty revenue, and non-cash interest expense related to the sale of future royalties. The change in operating assets and liabilities also reflected a net use of cash of $51$80 million, primarily due to a net increase of accounts receivable related to timing of orders and collections, combined with a decrease in accounts payable, accrued and other liabilities primarily due to the payout of 2025 annual bonuses and decreases in accrued manufacturing due to payment or settlement of accrued costs related to stoppage of manufacturing for UX143,UX143 partiallyand offsetthe by a decrease in accounts receivable related to timingpayout of orders2025 andannual collections.bonuses.
Cash used in operating activities for the threesix months ended MarchJune 31,30, 2025 was $166$275 million and primarily reflected a net loss of $151$266 million, partially offset by non-cash items of $41$70 million, net, which consisted primarily of stock-based compensation, amortization of discounts on marketable debt securities, depreciation and amortization, non-cash royalty revenue, and non-cash interest expense related to the sale of future royalties. The change in operating assets and liabilities also reflected a net use of cash of $56$79 million, primarily due to a net decrease in accounts payable, accrued and other liabilities primarily due to the payout of the 2024 annual bonuses and decreases in accrued collaboration for payment of a milestone to a collaboration partner of $30 million as well asmillion, an increase in prepaid manufacturing expense, partially offset by a decrease in accounts receivable related to timing of orders and collections.expense.
Cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 was $49$5 million and was primarily related to $43 million from net activities in marketable securities, combined with the payment to a collaboration partner of $5 million for the achievement of a milestone under the collaboration agreement recorded as an intangible asset.
Cash provided by investing activities for the threesix months ended MarchJune 31,30, 2025 was $120$191 million and was primarily related to $137$210 million from net activities in marketable debt securities, partially offset by the payment to a collaboration partner of $15 million for the achievement of a milestone under the collaboration agreement recorded as an intangible asset.
Cash Provided by Financing Activities
Cash provided by financing activities for the six months ended June 30, 2026 was $3 million and was primarily related to net proceeds from the issuance of common stock under equity plans.
Cash provided by financing activities for the six months ended June 30, 2025 was $84 million and was primarily related to net proceeds from our ATM offering.
Future minimum lease payments under non-cancellable leases as of MarchJune 31,30, 2026, were approximately $40$36 million, of which $14$13 million is due within one year.
RARE insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 11 filings (6 insiders, 9 trade dates, 32,057 shares, about $816.5K; 8 of these filings say the sales were made under a Rule 10b5-1 trading plan). Net open-market shares: -32,057 (purchases minus sales); net value about -$816.5K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-15 | Huizenga Theodore Alan |
Open-market sale |
1,283 | $13.57 | $17.4K |
| 2026-09-03 | Huizenga Theodore Alan |
Open-market sale | 161 | $13.99 | $2.3K |
| 2026-08-03 | Parschauer Karah Herdman |
Open-market sale |
1,900 | $24.92 | $47.3K |
| 2026-08-03 | Horn Howard |
Open-market sale |
4,696 | $24.92 | $117.0K |
| 2026-07-01 | Horn Howard |
Open-market sale |
4,698 | $33.13 | $155.6K |
| 2026-06-15 | Sanders Corazon (Corsee) D. |
Open-market sale | 2,000 | $25.05 | $50.1K |
| 2026-06-15 | Parschauer Karah Herdman |
Open-market sale |
1,899 | $24.62 | $46.8K |
| 2026-06-01 | Horn Howard |
Open-market sale |
4,653 | $23.77 | $110.6K |
| 2026-05-18 | Suliman Shehnaaz |
Open-market sale |
5,740 | $25.12 | $144.2K |
| 2026-05-14 | Fust Matthew K |
Grant/award | 7,751 | — | — |
| 2026-05-14 | Suliman Shehnaaz |
Grant/award |
7,751 | — | — |
| 2026-05-14 | Ray Amrit |
Grant/award | 7,751 | — | — |
| 2026-05-14 | Sanders Corazon (Corsee) D. |
Grant/award | 7,751 | — | — |
| 2026-05-14 | Narachi Michael |
Grant/award | 7,751 | — | — |
| 2026-05-14 | Welch Daniel G |
Grant/award | 7,751 | — | — |
| 2026-05-14 | Dunsire Deborah |
Grant/award | 7,751 | — | — |
| 2026-05-05 | Crombez Eric |
Open-market sale | 344 | $24.96 | $8.6K |
| 2026-05-01 | Horn Howard |
Open-market sale |
4,683 | $24.90 | $116.6K |
| 2026-04-22 | Huizenga Theodore Alan |
Grant/award | 20,241 | — | — |
| 2026-04-16 | Kakkis Emil D |
Grant/award | 76,745 | — | — |
| 2026-04-16 | Huang Dennis Karl |
Grant/award | 23,116 | — | — |
| 2026-04-16 | Pinion John Richard |
Grant/award | 23,116 | — | — |
| 2026-04-16 | Parschauer Karah Herdman |
Grant/award | 28,895 | — | — |
| 2026-04-16 | Harris Erik |
Grant/award | 28,895 | — | — |
| 2026-04-16 | Crombez Eric |
Grant/award | 34,674 | — | — |
| 2026-04-16 | Horn Howard |
Grant/award | 34,674 | — | — |
Well-known investors holding RARE (13F)
None of the 59 investors we track reported a position in their latest 13F.