Why Amicus Therapeutics, Inc. Stock Is Soaring Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Amicus Therapeutics (NASDAQ: FOLD  ) , a clinical-stage biotech, soared as high as 40% in premarket trading this morning after announcing positive late-stage results for migalastat as an orally administered treatment for Fabry disease. Fabry disease is a rare, yet often fatal, genetic disorder that causes fat to accumulate in various parts of the body. In a late-stage study, migalastat was found to be both a safe and effective treatment for certain types of Fabry disease patients when compared to enzyme replacement therapy. 

So what: Patients afflicted with Fabry disease presently have two treatment options: Fabrazyme from Sanofi (NYSE: SNY  ) and Replagal from Shire (NASDAQ: SHPG  ) . Migalastat's potential competitive advantage over existing therapies is that it comes in pill form -- whereas the currently available treatments are administered intravenously.

The peak sales estimates for migalastat that I've seen are around $200 million. Given that Amicus began the day with a market cap of under $400 million, a regulatory approval for migalastat could thus generate an intriguing valuation scenario going forward.  

Now what: Despite migalastat's oral formulation, it still might have a tough time gaining market share against either Fabrazyme or Replagal. According to the clinical trial data released today, migalastat is only effective in patients with a specific mutation. And that particular mutation has been estimated to occur in only about 30% to 50% of Fabry patients. 

I think the dosing advantage could be a plus, although how much of one is difficult to say for sure right now. That said, I think migalastat should gain enough market share, if approved, to warrant digging deeper into Amicus Therapeutics.

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