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What happened

Shares of Amicus Therapeutics (FOLD -2.08%), a biopharmaceutical company focused on the development of therapies primarily designed to treat ultra-rare and rare diseases, surged as much as 20% during Monday's trading session after reporting its third-quarter earnings results.

So what

For the quarter, Amicus generated $2.1 million in product revenue, which is up from zilch last year, when it had no products on pharmacy shelves, and a net loss of $46.7 million, or $0.33 per share. The loss was notably higher from the $37.8 million, or $0.32 per share, recorded in Q3 2015. The primary culprit was a 55% increase in research and development costs to $32.5 million. Comparatively, Wall Street was anticipating a slightly narrower loss of just $0.31 a share, meaning Amicus modestly missed the mark.

However, as if often the case with predominantly clinical-stage biotech companies, Wall Street tends to be forgiving of earnings misses if the future looks bright. Within Amicus' third-quarter report, shareholders were probably pleased to learn that the first 50 patients have now been dosed with Galafold (scientific name migalastat), an enzyme replacement therapy for Fabry disease. In total, five countries have commercial reimbursement plans in place, and 15 have reimbursement dossiers submitted. In other words, investors are finally cheering some progress on the recurring revenue front.

Furthermore, Amicus reaffirmed its year-end net cash spend guidance of between $135 million and $155 million, which is important because biotech stocks typically lose money, and Wall Street doesn't like surprises.

Also, Amicus anticipates releasing early data on ATB200-02 from a clinical study involving Pompe disease patients before the end of the year.

Now what

The simple fact that Amicus is finally seeing patients being dosed with its lead drug is pushing shares higher today, but this is just the first step of many Amicus will have to take to ensure that its enzyme replacement therapy reaches its full potential. Estimates from Wall Street pundits vary drastically, but most seem to believe that, at its peak, migalastat/Galafold can deliver $300 million to $400 million in annual sales, which should be more than enough to make Amicus a profitable company.

Unfortunately, Amicus isn't all that inexpensive anymore after today's leap, and it still has cash flow challenges that lie ahead, with losses expected for the next couple of years. Wall Street is likely going to need to see more from Amicus' pipeline in 2017 if a rally is going to be sustainable over the long run.