Amicus Soon To Release New Phase III Data

6:11:40 AM EDT, Friday, December 14, 2012 · by Brian L. Wilson / Bio-Wire

Amicus Therapeutics (NASDAQ: FOLD) has been trading in a very predictable range for the better part of this year, but we may see the stock take a more distinctive long-term direction with upcoming Phase III results for their flagship drug Migalastat HCl (also known as AT1001, and Amigal).
“Study 011″, the uncreative name for the study of migalatat hcl, studies the drug in the treatment of patients with a rare genetic mutation that causes something known as Fabry Disease.

AT1001 restores the function of an enzyme disabled by the Fabry Disease mutation. Study 011 will be a success if the drug manages to meet its primary endpoint (defined as improvement of enzyme functionality disabled by Fabry disease.)

Top-line results for Study 011 are due before the end of this year (which means that we could see the press release any day now). Because of the huge reaction that Wall Street had to other clinical trial data releases for orphan drugs this year, there is expectation that positive top-line results from Study 011 could cause a massive rally based on the notion that orphan drugs with successful Phase II/III results have extremely high chances of approval.

This was what caused Sarepta Therapeutics (NASDAQ: SRPT) to rally well over 200% in the beginning of October. One of the reasons the market loves orphan drugs is due to the fact that they get seven (instead of five) years of exclusivity according to PDUFA guidelines followed by the FDA. There is also the general notion that there is virtually no viable competition for new orphan drugs that demonstrate superior efficacy over older (or nonexistent) treatments on the market already.

Amicus’ Fabry disease treatment, Amigal, is classified as an orphan drug (and thus locks in two extra years of exclusivity potential) and has relatively weak competition for the Fabry disease treatment market. Fabry disease is currently treated by Fabrazyme and Replagal, but note that Amigal is being looked at as a combination therapy to the enzyme replacement therapy approach pursued by Fabrazyme and Replagal. The safety and interaction between Amigal and the two enzyme replacement drugs currently holding the market is being studied in “Study 012.” This study will supplement efficacy studies (like Study 011) to make a more compelling case for Amigal as it is used on top of traditional Fabry disease treatment.

Given that this does happen, expect the very real possibility that Amicus will move as high as $8/share. Not only would positive Phase III results seal a very likely FDA approval, they would put more attention on Amigal’s market potential after a hypothetical FDA approval. While Amicus has recently partnered with GlaxoSmithKline (NYSE: GSK) for the development and eventual marketing of Amigal, keep in mind that they have retained rights to the United States. The US market is generally the most coveted territory for biotech and pharmaceutical companies due to the high profit margins that can be generated in the region, and the fact that Amicus has kept Amigal’s potential in the US to itself is extremely beneficial to its shareholders in the long run.

The 011 Study, as mentioned earlier, will provide top-line results before the end of the year. Assuming that they are successful, they should pave the way for an NDA submission and big financial potential for Amicus later on. $200-300 million in sales by year 3 seems reasonable for a smooth launch and a widespread adaptation for Amigal in Fabry treatment.

Investors should also note that Amicus is quite cash-rich for a company in its stage of development, which is something mentioned by others who cover the company. I agree that the likelihood of share dilution is lower so long as the company stock remains so low. If top-line results from Study 011 are good enough, and if this causes a major rally in FOLD, I wouldn’t be surprised to see the company take advantage of the jump in share price with a share dilution. This would raise more cash for the company to have a successful launch of their drug after approval. Anyone who wants to buy Amicus with certainty on the Phase III results could consider waiting for the company to make this move in order to buy FOLD a bit cheaper.

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