Amicus: Multiple Catalysts For Promising Fabry Treatment

| About: Amicus Therapeutics, (FOLD)
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Summary

Amicus is planning to file for an NDA in 2015 for its Fabry drug Migalastat.

Migalastat HCI is the primary candidate of Amicus and it’s safe to say that the valuation of the company are currently tied to its success.

In the data released by the company for Study 012, the patients using Migalastat have shown a marked improvement in cardiac and kidney health.

Amicus (NASDAQ:FOLD) has just been added to the Nasdaq Biotechnology Index and has shown intent to file for the marketing approval of its Fabry treatment with the EMA and FDA. The shares have already rallied form below $2 to above $8 and have the capability to go even higher on important catalysts coming up in 2015.

The Business

Amicus Therapeutics is a U.S.-based biotechnology firm involved in the discovery, development and commercialization of treatments for rare and orphan diseases. It also is involved in developing monotheraphy treatments for Fabry and Parkinson disease using novel small molecules. The company currently has around five different compounds in various clinical stages for treatment of Fabry, Parkinson and Pompe.

Migalastat HCl

Migalastat HCI is the most important compound of Amicus and it's safe to say that the valuations of the company are currently tied to its success. The compound has been given novel status by the regulatory bodies of U.S., EU and Japan. Also known as AT1001 and GR1919413A, Migalastat is a pharmacological chaperone which selectively binds, stabilizes and increases cellular levels of α-Gal A. As opposed to standard of care treatments, the compound can be taken orally and is effective in reducing GL-3 tissue.

The company is developing the compound primarily for the treatment of Fabry patients with α-Gal mutations that are amenable to this Migalastat as a monotheraphy. The disease itself is a lysosomal storage disorder which is caused by the deficiency of α-galactosidase A enzyme (α-GAL). The deficiency of α-GAL results in the accumulation of specific lipids in lysosomes, such as including globotriaosylceramide (GL-3 or Gb3). The continuous accumulation of GL-3, without enough α-GAL to degrade it, results in the symptoms associated with Fabry disease. The standard of care treatment is to pump the body with enzymes (ERT-Enzyme Replacement Therapy) along with recombinant human α-Gal or gene-activated α-Gal. The oral use of Migalastat would be make life much easier for the patients with the required mutations. For Fabry patients who do not have the required mutation, the company is experimenting with a combination of Migalastat with ERT, using its own CHART (Chaperone Advanced Replacement Therapy) platform.

Migalastat HCI is currently being evaluated in three Phase 3 trials and two Phase 2 trials. The Phase 3 study 011 is a double blind and placebo controlled study. The study has around 67 patients with the required mutations to be eligible for Migalastat. The aim of Study 012 is to compare the effect of standard of care and Migalastat on 50 patients already on ERT for at least 12 months.

In the data released by the company for Study 012, the patients using Migalastat have shown a marked improvement in cardiac health. According to the data released by the company, the patients who shifted from ERT to Migalastat showed significant improvement in left ventricular mass index (LMVI). Fabry patients are susceptible to cardiac events and the improvements show a lower chance of risk of cardiac hypertrophy. Moreover, the study also showed positive results with regard to the compounds effect on renal function and kidneys. The patients shifted from ERT to Migalastat showed stability in renal function and met both co-primary endpoints of comparability to ERT on both key measures of kidney function.

Fundamentals

Small development stage biotechnology companies don't have much to write about when it comes to revenues and Amicus is no different. The company reported $293,000 in revenues last quarter and reported a loss of around $17 million. The Street was expecting EPS of $(0.21) but Amicus reported $(0.22), missing by 4.8%. The sell side is expecting revenues to rise to $4.63 million next year as the company begins marketing its Fabry treatment. Amicus can be considered cash rich with around $85 million in its cash pile. With quarterly cash burn of around $15 million (OCF), it has enough cash for around five quarters. It should also be taken into account that the company has just closed a successful share offering of around $103.5 million (gross proceeds). The net proceeds from this offering will be disclosed in the upcoming quarterly results. With an offering last month and solid cash balance, there seem to be little chances of dilution in the next couple of quarters.

Valuations

Around 1 in every 55,000 American males has Fabry disease. With around 151 million males in the United States, this would bring the target population to around 3,000 for the U.S. alone. We also have to note that the drug has received novel designation in Japan and EU as well. The sell side has a mean target price of $10.7 for Amicus with the high target price of $14. This is a 25% upside to current price levels. Of the three analysts covering the stock, all have a buy rating for Amicus.

Conclusion

Good things have been happening for Amicus in the last few months. The shares have risen from below $2 to above $8 in the last 6 months. The company was added to the Nasdaq Biotechnology Index (NBI) effective from 22nd December. More importantly for investors, the company is filling for European Marketing Application for Migalastat. The company announced that it had a successful pre-submission meeting with the EMA (European Medicine Agency) and is planning to submit its final application in mid-2015. The company also announced that it is planning to meet with the FDA in the first half of 2015 to discuss a regulatory path for approval of Migalastat.

I believe that 2015 will be an exciting year for Amicus investors. The company is gearing up to file an NDA with the FDA and EMA. The results from study 012 give a pretty strong indication that the drug will get approval. Any news of filling of an application and more clinical data can push the stock price even higher.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.