Ultragenyx Pharmaceutical, Inc. RARE reported earnings per share of 41 cents for the second quarter of 2020 against a loss of $1.72 in the year-ago quarter. However, the second-quarter 2020 loss included an unrealized gain of $95.2 million. Excluding this gain, the loss came in at $1.15 in the second quarter compared with a loss of $1.89 in the year-ago quarter. The Zacks Consensus Estimate was pegged at a loss of $1.56.

For the second quarter, Ultragenyx reported $61.7 million in total revenues, up from $24.1 million in the year-ago quarter. Revenues surpassed the Zacks Consensus Estimate of $40 million.

Shares of Ultragenyx have surged 81.7% this year so far compared with the industry‘s growth of 5.2%.

Ultragenyx markets two drugs, Crysvita and Mepsevii. While Crysvita is approved for the treatment of X-linked hypophosphatemia, an inherited disorder due to the excessive loss of phosphate, Mepsevii is approved to treat Mucopolysaccharidosis VII (MPS VII), also known as Sly syndrome.

Crysvita total revenues were $32.4 million, which included $29.8 million of collaboration revenues in the North American profit share territory (the United States and Canada) and $2.5 million of net product sales for the drug in other regions (Latin America, Turkey). Total royalty revenues related to European Crysvita sales were $5 million, which includes $1.5 million realizedfromsales generated prior to Jan 1, 2020. Ultragenyx sold its rights to Crysvita in the European territory to Royalty Pharma in December 2019.

The company saw continued strong demand for Crysvita in North America with more than 80% of patients receiving the drug through at-home nurse administration, which reduced the impact of COVID-19-related disruptions. However, the company expects to face challenges innew patient starts for Crysvita.

Mepsevii product revenues were $4.2 million and UX007 revenues were $1.3 million. Though UX007 is not an approved product, the company recognizes sales from the candidate on a “named patient” basis. This is allowed in certain countries prior to the commercial approval of a product.Revenues for the second quarter also include $18.9 million of revenues related to the collaboration and license agreement with Daiichi Sankyo, which was executed in March 2020.

The company said that it has not seen any disruption in the supply/distribution of its medicines amid the COVID-19 pandemic. However, there has been some impact onpreclinical manufacturing, clinical study site conduct and regulatory interactions. The company is adapting clinical and commercial strategies to ensure continuity of clinical and commercial programs during this unprecedented time.

Total operating costs in the quarter were $124.8 million, up 8.6% year over year.

2020 Guidance

The company maintained its previously issued guidance.

Ultragenyx expects Crysvita revenues from its territories between $125 million and $140 million, which excludes European territory revenues. The company,however,will continue to monitor the COVID-19 situation.

FDA Approvals

During the second quarter, the FDA approved Dojolvi (UX007) for the treatment of pediatric and adult patients withanyform of Long-Chain Fatty Acid Oxidation Disorders (LC-FAOD) with a molecularly-confirmed diagnosis. Dojolvi is the first FDA-approved therapy for these lifelong and life-threatening genetic disorders and is now available to patients in the United States.

In June 2020, the FDA approved Crysvita for the treatment of fibroblast growth factor 23 (FGF23)-related hypophosphatemia in tumor-induced osteomalacia (TIO) associated with phosphaturic mesenchymal tumors that cannot be curatively resected or localized in adults and pediatric patients 2 years of age and older. This is the second FDA approval for Crysvita.

Pipeline Updates.

In Europe, Crysvita received a positive opinion from the CHMP for the use of Crysvita for the treatment of XLH in adolescents and adults. A formal decision from the European Commission (EC) is expected in the second half of 2020.

Zacks Rank & Stocks to Consider

Ultragenyx is a Zacks Rank #3 (Hold) stock.

Some better-ranked stocks in the biotech sector are Emergent BioSolutions Inc. EBS, BioMarin Pharmaceutical Inc. BMRN and Applied Therapeutics Inc. APLT, all carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Emergent’s earnings per share estimates have increased from $3.14 to $4.23 for 2020 and from $3.35 to $4.63 for 2021 in the past 60 days.

BioMarin’s earnings per share estimates have increased from $1.51 to $1.57 for 2020 and from $2.46 to $2.80 for 2021 in the past 60 days.

Applied Therapeutics’ loss per share estimates have narrowed from $3.02 to $2.73 for 2020 and from $3.41 to $3.28 in the past 60 days.

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