What happened

After announcing an acquisition that could allow it to develop gene therapies for rare diseases, including Batten disease, shares in Amicus Therapeutics (NASDAQ:FOLD) are trading 10% higher at 11:30 am EDT on Thursday.

So what

Amicus Therapeutics is acquiring 10 clinical-stage and pre–clinical stage adeno-associated virus (AAV) programs in neurologic lysosomal storage disorders from Celenex. 

Two businessmen shaking hands.


In exchange for Celenex, which has licenses to the programs from Nationwide Children's Hospital, Amicus is paying Celenex shareholders $100 million in up-front cash, plus it's agreed to pay up to $15 million in development milestones and $262 million in regulatory submission and approval milestones. Over the next four years, Amicus "expects to pay no more than $75 million" in milestones.

If these programs are commercialized, Amicus will pay Celenex up to $75 million in tiered sales milestones, but it isn't on the hook to pay royalties. 

Amicus' costs, including "several years of related development" expenses, will be funded by a new $150 million debt facility it's secured from BioPharma Credit PLC. The $150 million loan requires interest-only payments through 2022 at a floating rate of LIBOR plus 7.5%, and it matures in 2023.

Now what

The programs address a variety of rare indications that collectively represent about 10,000 children. Because rare genetic disease therapies command six-figure prices, this acquisition could result in medicines that move the needle someday. However, there's no guarantee these programs will pan out, and competitors are also working on gene therapies for these indications. For example, Regenxbio (NASDAQ:RGNX) announced it's using its proprietary AAV vectors to create a gene therapy for Batten disease it hopes to usher into human trials next year.

Since it will be awhile before we have any data regarding efficacy and safety from these programs, investors will want to focus the bulk of their attention on Amicus Therapeutics' Galafold, a therapy for Fabry disease that's already on the market in Europe and that recently won FDA approval. In Q2, Galafold's sales were $21.3 million, but sales should grow meaningfully from here following the FDA's decision in August. In the U.S., Galafold is priced at $315,000 per year, and the addressable patient population totals 3,000, about half of whom could benefit from Galafold.

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