Ultragenyx Pharmaceutical (NASDAQ: RARE) saw its stock price plummet 13.68% in Tuesday's trading session following the announcement of a significant royalty sale agreement. The biopharmaceutical company, which specializes in developing treatments for rare genetic diseases, disclosed that it had sold an additional 25% of its future North American royalties on Crysvita® (burosumab) to OMERS, a Canadian pension plan, for $400 million.

The deal, set to take effect in January 2028, grants OMERS an increased share of the royalties from Crysvita sales in the United States and Canada. This arrangement extends a previous agreement between the two parties. While Ultragenyx framed the transaction as a means to strengthen its balance sheet with non-dilutive capital, investors appeared concerned about the long-term implications of relinquishing a larger portion of future revenues from one of the company's key products.

Howard Horn, Ultragenyx's CFO, emphasized that the proceeds would fund four expected product launches and support the company's path to full-year GAAP profitability in 2027. However, the market's negative reaction suggests that investors are worried about the company's immediate cash needs and the potential impact on future earnings. The sharp stock decline indicates that shareholders are reassessing the value of Ultragenyx's future revenue streams in light of this royalty sale, despite management's assurances of strategic benefits. The company's reaffirmation of its 2025 revenue guidance of $640 million to $670 million did little to assuage investor concerns in the face of this significant financial maneuver.