With few competitors vying for market share and typically high drug prices, rare diseases have become increasingly attractive to drug developers like Amicus Therapeutics (NASDAQ:FOLD), an emerging biotech company that is developing a novel therapy for the treatment of Fabry Disease.
Following a recent meeting with regulators in Europe and the United States, it appears that Amicus' Fabry Disease monotherapy migalastat HCI could hit the market soon. If so, it would likely mean that Amicus' shares are going to become more valuable in the coming year.
First some background
Fabry disease is a rare genetic disease that is more common in men than in women. Globally, it is estimated that there are 5,000 to 10,000 people living with Fabry disease.
If Fabry disease is left untreated, it can result in cell damage that can cause kidney failure or cardiovascular events, including strokes. While there aren't any cures for Fabry disease, the standard of care is typically enzyme replacement therapy, or ERT, using Sanofi's Fabrazyme or Shire's Replagal.
Both of these drugs attempt to reduce the effects of Fabry disease by replacing the alpha-GAL enzyme that is either missing or at low levels in Fabry patients. Since the alpha-GAL enzyme is responsible for reducing levels of a fatty substance in cells, ERT therapy can help keep that substance from building up, damaging cells, and causing life-threatening kidney and cardiovascular disease.
While ERT therapy can help Fabry patients, Amicus believes that it has created a better approach.
Since ERT's benefits can drop if the enzyme being replaced becomes damaged, either as it's being infused or within the body, Amicus has created migalastat HCI.
In patients who can still produce some alpha-GAL enzyme, migalastat HCI helps usher it to cells, increasing the enzyme's effectiveness at keeping cells from being damaged. Amicus estimates that between 30% and 50% of Fabry disease patients could benefit from taking migalastat HCI.
In phase 3 trials, people taking migalastat HCI monotherapy, including patients who had previously taken ERTs like Fabrazyme, saw reductions in disease substrate, stability of kidney function, and reduction in cardiac mass. All three of those findings appear to be acceptable endpoints for both EU and U.S. regulators.
After pre-filing meetings in Europe and with the FDA, Amicus reports that it is moving up its plans for an EU submission from the middle of this year to the second quarter. It also plans to file for FDA approval in the second half of this year. In both regions, the company expects to file for an accelerated approval that could allow it to reach the market faster.
Valuing the opportunity
Fabry disease is rare, but treatments are expensive, and as a result, the market opportunity for Amicus and its shareholders is significant.
For example, at current euro to dollar exchange rates, Sanofi's Fabrazyme sales totaled $490 million last year, up 23% year-over-year. Also, sales of Shire's Replagal grew 7% year-over-year to $500 million.
At first, Amicus is pursuing approval of migalastat HCI as a monotherapy, so it's unknown whether or not doctors will prescribe it over Fabrazyme and Replagal in the patient population it addresses. However, promising mid stage trial results have Amicus also planning to launch late stage studies to evaluate migalastat HCI alongside the use of ERTs. If those studies succeed, then migalastat HCI could become part of a standard of care for all Fabry patients. If so, then migalastat HCI sales could total in the hundreds of millions of dollars a year for Amicus -- a pretty hefty sum for a company that has a market cap of just about $1 billion.
There's no guarantee that the positive pre-filing meetings will lead to EU and U.S. approvals for migalastat HCI, or that late stage studies evaluating migalastat HCI plus ERTs like Fabrazyme and Replagal will confirm earlier findings. For that reason, Amicus is a risky stock. However, for investors willing to take on that risk, Amicus does appear to offer a pretty compelling opportunity.