Ultragenyx Pharmaceutical (NASDAQ: RARE) and Mereo BioPharma Group (NASDAQ: MREO) may be wishing for a happy new year in 2026 after the companies ended 2025 by announcing bad news—namely, the failures of their brittle bone disease candidate setrusumab (UX143) in a pair of late-phase clinical trials. Both companies said that setrusumab missed the primary endpoints of the Phase III portion of the Phase II/III Orbit trial (NCT05125809) in children and young adults ages 5–25, and the Phase III Cosmic trial (NCT05768854) in children ages 2–6, by failing to achieve statistical significant reduction in annualized clinical fracture rate (AFR) compared to placebo or bisphosphonates, respectively. Ultragenyx and Mereo added, however, that the Orbit and Cosmic trials achieved the secondary endpoints of improvements in bone mineral density against comparators. Setrusumab is a fully human monoclonal antibody that works by inhibiting sclerostin, a negative regulator of bone formation. Ultragenys and Mereo have reasoned that by blocking sclerostin, they can increase new bone formation, bone mineral density (BMD), and bone strength in brittle bone disease, an inherited genetic disorder also known as osteogenesis imperfecta (OI). Anti-sclerostin antibodies have been shown in mouse models to increase bone formation, improve bone mass to normal levels, and increase bone strength against fracture force testing to normal levels. In the Orbit trial, Ultragenyx said, patients showed “statistically significant and substantial” improvements in BMD vs. placebo at levels consistent with the study’s Phase II portion—but the BMD changes did not accompany a corresponding reduction in AFRs, and the fracture…