Ultragenyx Pharmaceutical stock was hit with a flurry of downgrades after the biotech's rare-disease drug candidate, GTX-102, failed to meet its main goal in a late-stage trial. Still, some analysts believe the drugmaker has plenty of potential left in its pipeline.

Ultragenyx develops drugs for genetic disorders that typically have no approved treatments and high unmet need. The candidate in question was being evaluated in patients with Angelman syndrome, a rare disorder affecting the nervous system that causes developmental delays and balance issues, with symptoms beginning early in childhood.

The trial failure triggered downgrades at major firms including Evercore, William Blair, and J.P. Morgan. Baird analyst Jack Allen, who cut his rating on the stock to Neutral from Outperform, described the trial as "a complete whiff" due to the miss on both primary and secondary endpoints.

Shares cratered 47% to $14 in premarket trading Thursday. Despite what the market reaction may suggest, Wall Street isn't turning its back on Ultragenyx just yet.

Jefferies analyst Maury Raycroft conceded that the outcome was "surprising," given positive data in earlier-stage trials. Yet Raycroft believes the drugmaker's commercial potential remains intact, citing upcoming gene therapy launches that could go better than expected.

The accelerated approval for Ultragenyx's one-time gene therapy, Genglycos, in August signals potential success for UX111 later this month. Regulators must complete their review of UX111, which targets Sanfilippo syndrome type A, by Sept. 19.

Citi analyst Yigal Nochomovitz agreed, maintaining a Buy rating on the shares. Genglycos "represents an important launch opportunity" at roughly $2 million in net revenue per treated patient, he wrote. Moreover, the approval of UX111 is "meaningfully derisked" following Genclycos approval from the same manufacturing facility.

Cantor analyst Kristen Kluska remains Overweight-rated on the stock for now, writing that while analysts understood the study was high-risk, "we were hopeful for better results." The result Ultragenyx's second consecutive critical trial failure, a trend she believes will heighten investor skepticism surrounding its pipeline

Investors also have expressed frustration over the drugmaker's high operating expenses, Kluska wrote. "In order for the company to receive more credit for its base commercial business, we believe the company will need to substantially reduce spending," she added.

Still, the analyst remains bullish for now, viewing the stock as fairly valued while cautioning that "the favorable rating still comes with substantial risk as a result of the high spend."

Ultragenyx CEO Emil Kakkis said the company would look to reduce expenses following the trial miss. At the same time, he emphasized that Ultragenyx remains focused on its growing commercial operations, including new revenue streams from the recent approval of Genglycos. It seems the biotech's story isn't over just yet.