A Big Step for This Tiny Biotech That's Targeting Rare Diseases

Source: Amicus Therapeutics.

Amicus Therapeutics, Inc. (FOLD -1.02%) has filed for EU marketing approval of migalastat for the treatment of Fabry disease, a rare genetic disorder that affects between 5,000 and 10,000 people worldwide, which has a significant need for new treatment options. If approved, migalastat, which will be sold under the brand name Galafold, will join Shire Plc's (NASDAQ: SHPG) Replagal and Sanofi SA's (SNY 1.15%) Fabrazyme as a new treatment option for Europeans facing this challenging disease.

What is Fabry disease?
Fabry disease is an x-linked lysosomal storage disorder that is caused by limited or non-existent production of the alpha-galactosidase A (alpha-Gal A) enzyme, which breaks down lipids, including GL-3. Because patients with Fabry disease are unable to break down this lipid, GL-3 can accumulate in the central nervous system, heart, and kidneys, causing pain, kidney failure (that can lead to transplant), and cardiovascular events such as heart attack and stroke.

Innovating treatment
Overall, cardiovascular disease is the most common cause of death for Fabry disease patients, and given that the life expectancy of males affected by this disease is 58.2 years versus 74.7 years for the average U.S. male, there's a significant need for new medicines like Galafold. Galafold was initially developed under a collaboration deal with GlaxoSmithKline; however, a high-profile phase 3 trial failure led to GlaxoSmithKline walking away from Galafold and foregoing potential royalties, leaving Amicus Therapeutics with global rights to the drug.

After crunching trial data, Amicus Therapeutics determined that Galafold successfully treats a subset of Fabry disease patients having a specific amendable genetic makeup. That finding is particularly intriguing given that Galafold works differently than the currently-approved enzyme replacement therapies Replagel and Fabrazyme.

Instead of replacing the enzyme like those two drugs do, Galafold binds to and stabilizes the enzyme in patients who still produce limited quantities of it, and improves the ability for the enzyme to reach its target and break down GL-3.

Potential moneymaker
Overall, Amicus believes that roughly half of all Fabry disease patients could benefit from Galafold therapy. That could mean that Galafold will end up generating global sales that eventually reach into the hundreds of millions of dollars per year.

Currently, Replagal, which is approved for use in the EU, but not in the U.S., and Fabrazyme, which is approved in both regions, generated combined revenue of $990 million last year, at current exchange rates. Despite a small patient pool, they were able to produce that revenue because of the premium pricing commanded by treatments for rare diseases like Fabry disease. Both Replagal and Fabrazyme can cost roughly $200,000 per year.

If Amicus wins EU approval, and that approval is followed up later with an approval in the U.S., then it stands to reason that Galafold's peak sales potential could be big; but it could be even larger if studies evaluating Galafold as an adjunct therapy for use alongside Replagal and Fabrazyme pan out. If they do, then Galafold could end up being prescribed to virtually all patients with Fabry disease, either alone, or as part of a combination regimen.

Looking forward
There's no guarantee that the EU will approve Galafold, or that if the EU does give it the green light, the FDA will follow suit. Since Amicus Therapeutics filed for EU approval under the accelerated assessment pathway, the advisory committee that acts as an advisor to the EU's regulatory body could review Galafold in 150 days, rather than the 210 day standard.

Following that committee's review, an official go-no-go decision for use in the EU would be announced within roughly three months. Based on that time line, Amicus Therapeutics could have Galafold on the market in as little as eight months in Europe -- depending on price negotiations with individual member countries. In the U.S., Amicus Therapeutics' discussions with the FDA lead it to believe that it could file for FDA approval sometime in the second half of this year, which suggests that Galafold could be available in America sometime next year.

If so, then investors might want to pay close attention to Amicus Therapeutics. The company has a $1.18 billion market cap that could arguably be undervaluing Galafold's peak revenue potential, or the potential that a suitor approaches Amicus Therapeutics to get its hands on Galafold and Amics Therapeutics' pipeline for other rare diseases, such as Pompe disease.