Investing in biotech stocks might seem compelling, but it might be a high-risk, high-reward strategy, especially if these companies are in the pre-revenue stage. However, according to scientists, we are in the golden age of biotechnology, making the sector extremely attractive to investors.
A number of biotech companies have drugs targeting multiple diseases in the pipeline, which, if they are approved by regulators, should allow them to deliver outsized gains. One such biotech stock is Ultragenyx Pharmaceutical (RARE), which is valued at $3.44 billion by market cap.
Down 76% from all-time highs, Ultragenyx is focused on the development and commercialization of therapies for serious rare genetic diseases.
Let’s see why analysts are bullish on this biotech stock right now.
Is Ultragenyx Pharma Stock a Good Buy?
In Q1 of 2024, Ultragenyx reported revenue of $108.83 million, higher than revenue of $100.49 million in the year-ago period. The company continues to see revenue growth in international markets, with steady progress across its four commercial products. It also completed the Phase 3 program in osteogenesis imperfecta, which has received an encouraging response from physicians and patients.
Ultragenyx reported a net loss of $171 million, or $2.03 per share, in Q1, compared to its prior-year loss of $164 million, or $2.33 per share. Its operating cash outflow stood at $191 million, and it ended the quarter with a cash balance of $569 million. Ultragenyx forecasts to end 2024 with revenue between $500 million and $530 million, and estimates operating cash outflow at less than $400 million for the year.
The company stated that the Phase 3 portion of the Orbit study has completed enrollment with 158 patients. Orbit is a randomized placebo-controlled study that evaluates the effect of setrusumab compared to placebo on the rate of annualized clinical fractures in patients aged between five and 25. Moreover, longer-term safety and efficacy data from the Phase 2 portion of the Orbit study are expected in the second half of 2024.
Ultragenyx also stated the Phase 3 Cosmic study completed enrollment with 66 patients. This is an active-controlled study evaluating the effect of setrusumab compared to intravenous bisphosphonate therapy on annualized total fracture rate in patients aged 2 to <7 years.
Goldman Sachs is Bullish on RARE Stock
Last week, Goldman Sachs (GS) upgraded Ultragenyx Pharmaceutical to “buy” from “neutral,” due to its rising confidence in setrusumab.
Goldman Sachs has a 12-month price target of $67, indicating an upside potential of over 38%. Analyst Salveen Richter explained Goldman views the phase 2 data on setrusumab positively, based on discussions with experts. Additionally, Richter expects Ultragenyx to achieve GAAP profitability in 2027.
What is the Target Price for RARE Stock?
Out of the 21 analysts covering RARE stock, 19 recommend “strong buy,” one recommends “moderate buy,” and one recommends “hold.”
The average target price for RARE stock is $91.40, indicating an upside potential of more than 100% from current levels.
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.