1-Star Stocks Poised to Plunge: Amicus Therapeutics?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical company Amicus Therapeutics (Nasdaq: FOLD  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Amicus' business and see what CAPS investors are saying about the stock right now.

Amicus facts

Headquarters (Founded) Cranbury, N.J. (2002)
Market Cap $219.7
Industry Biotechnology
Trailing-12-Month Revenue $21.4 million
Management Chairman/CEO John Crowley
CFO Daphne Quimi
Return on Equity (Average, Past 3 Years) (58.9%)
Cash/Debt $69.5 million / $1.4 million
Competitors Actelion
Genzyme
Shire

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 32% of the 57 members who have rated Amicus believe the stock will underperform the S&P 500 going forward.

Just last week, one of those Fools, All-Star zzlangerhans, summed up the bear case for our community:

The critical catalyst for Amicus is topline data from study 11 of Amigal, now expected in Q3 2012 after multiple postponements. Aside from the delays, which are never a good sign, traders with long memories will remember that four years ago the stock fell from grace after the company reported phase II data for Amigal that did not bode well for competitiveness against Fabrazyme. ...

Amicus has a new partner in [GlaxoSmithKline] and phase II studies in progress for Amigal and AT2220 co-administered with enzyme replacement therapy, so study 11 isn't exactly do or die for the company. But with 56M in cash, there's a high likelihood of a large dilutive financing prior to the study 11 data readout, and also a substantial risk of trial failure. If the stock flirts with [$2.00] once again after that, I might take a renewed interest in a long position.

What do you think about Amicus, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Want to see how well (or not so well) the stocks in this series are performing? Follow the new TrackPoisedTo CAPS account.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of GlaxoSmithKline. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


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