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Amicus Therapeutics Closes In on a 9-Figure Opportunity

By Todd Campbell - Apr 1, 2016 at 8:29PM

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European regulators are recommending the approval of its novel therapy for the treatment of Fabry disease.

SOURCE: FLICKR USER STOCKMONKEYS.COM.

Following news that the European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) is recommending EU approval for Amicus Therapeutics' (FOLD 2.32%) lead product candidate, shares of the company moved higher on Friday.

A new treatment approach
The clinical-stage biotech is developing therapies for rare diseases, and Galafold, a therapy for Fabry disease, has the potential to become its first commercial drug.

SOURCE: AMICUS THERAPEUTICS.

Currently, Fabry disease is treated with enzyme-replacement therapies (ERT) that replace an enzyme, alpha-gal A, that is missing or damaged in patients with Fabry disease. Because missing or malformed alpha-gal A causes the buildup of a fatty substance known as GL-3 in vital organs, including the kidneys, Fabry disease patients face significant risks, including kidney failure, stroke, and heart attack.

As of today, Shire's (NASDAQ: SHPG) ERT, Replagal, is approved in Europe, and Sanofi's (SNY 1.89%) ERT, Fabrazyme, is approved for use in Europe and the United States. Soon, however, Galafold could offer patients in the EU a new treatment option.

Instead of replacing the missing enzyme like ERTs do, Galafold acts as a chaperone drug that stabilizes alpha-gal A in patients who still produce some of it, thus allowing alpha-gal A in these patients to more effectively clear GL-3, prevening its buildup and damage to organs. Unlike Replagal and Fabrazyme, Galafold is dosed orally in the form of a pill, rather than dosed via infusion.

Tapping a market opportunity
There are up to 10,000 people worldwide with Fabry disease, and the market for Fabry disease is currently valued at $1.2 billion annually. Although there's no timeline for a potential U.S. filing for approval of Galafold, Amicus Therapeutics estimates that an EU approval opens up roughly 70% of the Fabry disease market to Galafold.

That's potentially big news given that Replagal and Fabrazyme cost roughly $200,000 per year. Amicus Therapeutics hasn't disclosed exact pricing for Galafold yet, but if it prices Galafold similarly, then the drug could represent a major market opportunity. Because Amicus Therapeutics estimates that up to half of Fabry disease patients could benefit from Galafold therapy, pricing Galafold similarly to Replagal and Fabrazyme could generate hundreds of millions of dollars in sales for the company every year. 

On Friday, Amicus Therapeutics' management indicated that discussions with payers suggest they support pricing parity with Replagal and Fabrazyme. If that's true, then Replagal, which, like Galafold, isn't approved in the U.S., may be the best proxy for Galafold's peak sales potential. Last year, sales of Replagal totaled $441 million.

Looking ahead
An official EU green light usually comes 60 days after a positive CHMP ruling; therefore, patients in select EU countries could begin using Galafold by the end of the second quarter. However, investors should remember that EU member countries typically negotiate prices for medicine independently of one another, so a rollout of Galafold will likely take some time as agreements are put in place.

Nevertheless, since Amicus Therapeutics' market cap is just $1.1 billion, and Galafold could start producing significant revenue for the company soon, this rare-disease drugmaker might be worthy of the attention of investors.

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Stocks Mentioned

Sanofi Stock Quote
Sanofi
SNY
$55.43 (1.89%) $1.03
Amicus Therapeutics, Inc. Stock Quote
Amicus Therapeutics, Inc.
FOLD
$7.94 (2.32%) $0.18

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