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 (FOLD -1.02%), 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 (SNY 1.15%) 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.
