Ultragenyx is laying off 20% of its workforce and axing drug development programs to cut its annual R&D budget to half of the amount it spent in 2025.
The biopharma teased the cuts back in February, when it forecast that the completion of phase 3 programs and the reduction of early-stage research would cause R&D spending in 2027 to fall 38% below the peak it hit in 2025. Aiming to be profitable in 2027, Ultragenyx disclosed deeper-than-expected cuts after the market closed on Tuesday.
The company ended last year with 1,371 employees, 916 of whom worked in R&D. The 10% workforce reduction that the biopharma implemented in February affected about 130 employees.
Ultragenyx now expects to employ about 1,000 staff following the 20% reduction, which it aims to largely complete this year. Shrinking the company’s real estate footprint forms another part of the cost-containment strategy.
The biopharma is laying off R&D staff as it shifts focus to growing sales of its six commercial products. Most of the $350 million R&D budget proposed for 2027 is earmarked for commercial products, including for monitoring programs and regulatory filings, Ultragenyx CEO Emil Kakkis, M.D., Ph.D., said on an earnings call Tuesday.
Recent R&D setbacks have trimmed Ultragenyx’s investigational drug pipeline. Following the September failure of a phase 3 Angelman syndrome trial, Ultragenyx is winding down all ongoing studies of GTX-102. The biopharma has yet to share data, but Kakkis provided an overview of why the pivotal study failed.
“There was too much variation within the control group to be able to tell or distinguish their change, and it was across multiple endpoints,” Kakkis said. “There’s just too much variability in the various endpoints to be able to distinctly prove an effect.”
The biopharma is also ending development of UX701 for Wilson disease in response to lackluster data. Too few patients had the targeted biochemical response and withdrew from standard of care to justify using the gene therapy, Kakkis said. Needing to manage expenses, Kakkis opted against spending the large sum needed to optimize the Wilson program.
Ultragenyx’s remaining programs include DTX301, which is due to deliver phase 3 results in ornithine transcarbamylase deficiency next year, and setrusumab, an antibody for the treatment of osteogenesis imperfecta. Setrusumab failed a pair of phase 3 trials late last year, but Ultragenyx is talking to regulators about the path to market.
Kakkis left the door open to running another trial to support approval, provided Ultragenyx can limit the costs to a level that makes its business profitable in 2027.
The profitability constraint shapes the biopharma’s approach to other programs. Ultragenyx aims to “maintain something like five programs a year,” Kakkis said. The CEO plans to create the pipeline from “measured” preclinical R&D spending, plus small deals.
“We're going to operate within our confines of being profitable. I wouldn't expect us to be doing large, costly deals,” Kakkis said. “These are going to be smart, intelligent choices of products that have high value, particularly where our expertise can unlock value that others might not be able to unlock.”
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