FDA approves rare-disease gene therapy, buoying producer Ultragenyx and others

Shares of small-cap biotech Ultragenyx Pharmaceutical surged almost 13% on the Nasdaq on Thursday. The company said the U.S. Food and Drug Administration had approved its gene therapy for a rare inherited disease that causes patients to progressively lose their abilities and ultimately die.

Ultragenyx shares jumped 12.6% on Thursday to $14.50 apiece. The stock continued to push higher in Friday's premarket trading. The market was reacting to the company’s announcement that the FDA had approved its drug Fayuvi, the world’s first gene therapy for Sanfilippo syndrome Type A. The rare disease is caused by an inherited deficiency of an enzyme responsible for breaking down complex sugars. As a result, they accumulate in cells, causing progressive damage to the central nervous system, loss of cognitive, language, and motor function, and ultimately early death.

Fayuvi was not developed by Ultragenyx. The company acquired global rights to the treatment, then known as ABO-102, from small cap Abeona Therapeutics, which could not continue its clinical development because of financial difficulties. Ultragenyx agreed to complete the trials and seek approval for the therapy, while Abeona became entitled to royalties of up to 10% on net sales. Following the approval, Abeona stock also jumped, gaining 4% on Thursday and another 4% in premarket trading on Friday as of this writing.

The new treatment is administered as a one-time intravenous infusion. It uses an adeno-associated viral vector to deliver a functional copy of the deficient gene. This is a type of delivery system derived from a virus that carries healthy genes into cells. Abeona licensed the system from Regenxbio, whose shares also rose 3% on Thursday and were advancing on Friday. The same system was used to develop one of the world’s most expensive drugs, Novartis’ Zolgensma treatment for spinal muscular atrophy.

Following the approval of Fayuvi, its second approved gene therapy, Ultragenyx received a priority review voucher, according to the press release. This is an FDA incentive program: the regulator awards vouchers to companies that successfully develop drugs for rare pediatric diseases, tropical diseases, or medical countermeasures against bioterrorism.

Vouchers can be used to accelerate the review of another drug candidate or sold. Pharma companies can receive $150-300 million for one. Jazz Pharmaceuticals, for example, sold its voucher this year for $200 million, while Fortress Biotech sold one for $205 million. The highest price recorded as of 2025 was paid in 2015, when pharma giant AbbVie acquired a voucher from United Therapeutics for $350 million.

Ultragenyx is off 37% year to date. Most of the selloff came in early September, when the company reported that a phase III clinical trial of its experimental Angelman syndrome therapy had failed. The disorder is also caused by a genetic mutation and is characterized by cognitive impairment, movement disorders, balance problems, and debilitating seizures.

Wall Street is divided on Ultragenyx's prospects: the stock has 10 “buy” calls versus 10 “hold” ratings. A month ago, before the Angelman syndrome therapy failed, it had 18 “buy” recommendations versus only two “hold.” Still, the average target price is $25.74 per share, implying almost 78% upside from the last close.