Amicus Therapeutics: A Rare Find In Biotechnology – Seeking Alpha

Amicus Therapeutics (NASDAQ:FOLD) is a global biotherapeutics company focused on rare genetic devastating diseases. The company has advanced its precision medicine, Galafold (migalastat), in treating patients in Europe with Fabry disease (alpha galactosidase A deficiency), a rare X-linked genetic lysosomal disorder in which sphingolipids are not metabolized properly. Galafold, an orally administered drug, is the first medicine approved (EMA but not yet FDA) for treatment of Fabry disease. Other goals for 2017 include submitting a J-NDA (Japan) for migalastat, establishing a clinical plan for ATB200/AT2221 in Pompe disease, completion of phase 3 clinical trial in epidermolysis bullosa.

FOLD announced its regulatory plan with FDA for U.S. treatment with Galafold in advancing it's Fabry disease program including two phase 3 trials in late 2016. As previously mentioned, the EMA approved use of Galafold for treatment of Fabry disease. The company published data from its pivotal trial in the New England Journal of Medicine. A statistically significant benefit was conferred by Galafold in 50 patients with treatable mutant galactosidase alleles. However, a closer look at the trial endpoints reveals that the study failed to reach its primary endpoints including greater than 50% reduction in GL-3 inclusions per kidney, and if all 67 patients were included in the study (including mutant alleles that are not expected to benefit by Galafold). More studies are needed for FDA going forward. It could be well worth the company's investment, as the market for Fabry's disease is estimated to be in excess of $1.2 billion by 2024.

December 2016, FOLD announced positive early phase 1/2 data for Pompe disease, a rare genetic disorder leading to the buildup of glycogen in the body, particularly the muscles, which become impaired in function. The study showed a positive safety profile with no serious adverse events and generally showed musculatoprotection as shown by biomarkers of muscle damage. The study is divided into three cohorts: non-ambulatory ERT-switch, ERT-switch, and ERT-naive. Creatine kinase, alanine aminotransferase, and aspartate aminotransferase levels showed a trend towards improvement in half the patients and were stable in all. ATB200/AT2221 has a unique mechanism of treatment that uses ATB200, a recombinant functional alpha-glucosidase enzyme carrying mannose-6 phosphate moieties designed to increase uptake. AT2221 is a pharmacological chaperone co-treated to stabilize the compound. The company believes that its Pompe program (with market of $1.2 billion) will be a driver in its growth with 12% CAGR as a world's leading rare disease company. Key study readout dates include Q2 and Q3 2017.

SD-101 is currently in phase 3 studies as a topical for Epidermolysis Bullosa, and FOLD believes it will be the first-to-market therapy for the rare indication. The inherited disease is characterized by blistering of keratinized outer skin, wet skin (such as mouth), and internal organs. Serious complications include infection, pain, and even death. The company was granted FDA Breakthrough Therapy Designation in 2013 based on results from its phase 2a study, having demonstrated wound closure in all disease types. Strong Bio has previously written about the impacts of FDA Breakthrough Therapy Designation on biotechnology stocks, and if you are an investor and have not perused the article, now might be a good time, as it is a part of the investment plan for FOLD. Phase 3 top-line data for the 160 patient study in which 95% of the patients elected to continue the open-label extension is due Q3 2017. This statement could be the company's way of saying they find it likely it will have clinical benefit for patients. Since it has been observed that FDA breakthrough therapy status stocks get volatile late in stage 3, any sharp drops may indicate stock manipulation that interested investors might jump on with a small position. Strong Bio regards FOLD as a nice investment prospect for any unexplainable late Q2 early Q3 pullbacks. With significant market potential of $1 billion, severe symptoms, and 30,000 sufferers in the U.S. alone, its worth watching for that pullback. One competitor, RegeneRx (OTCQB:RGRX) has initiated phase 3 trials for RGX-137 (active ingredient thymosin beta 4 wound healing gel) in the condition as well.

Cash burn was $55 million in first quarter 2017. Cash on hand at end Q1 was $280 million. The current runway is expected to last through the second half of 2018. Seven analysts average about $12 per share for FOLD, which is currently trading at about $8, which may be a slight pullback from fair value. Strong Bio will look for dips in price below $6 for no a brainer initial position. If all three drugs get FDA approval, this stock could be off to the races. Strong Bio has learned a lesson from Amicus. Rare diseases may have surprisingly large markets!

Risk factors for FOLD could include dilution (which may be yet another entry opportunity). Risks also include FDA approval and/or regulatory delays for all three major indications. Clinical trial design will be key, because FDA wants a clear metric upon which to agree with FOLD to approve these rare disease therapies. Large scale GMP-compliant manufacturing for U.S. application will also be a significant but manageable obstacle. Because the company has a market cap over $1.1 billion dollars, SD-101 key readout will be very important in terms of valuation for FOLD stock. If approved by FDA, the stock could easily triple in value over the next year. With ATB200/AT2221 being regarded as a key driver in value by the company, 2017 is going to be a pivotal year for FOLD. With three candidates all on the verge of pivotal data, this is a must-watch!

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Amicus Therapeutics: A Rare Find In Biotechnology - Seeking Alpha