After announcing that a new trial will be necessary before it can file for FDA approval of its Fabry disease drug, shares of Amicus Therapeutics (NASDAQ:FOLD) are tumbling 21.8% at 12:00 p.m. EST Tuesday.
Amicus Therapeutics already markets its Fabry disease drug -- Galafold -- in Europe, and until now it had hoped that the FDA would consider approving Galafold without requiring additional studies. Unfortunately, management disclosed after the bell Monday night that U.S. regulators will require more evidence before issuing a green light.
Management plans to initiate a trial to collect data on gastrointestinal symptoms in Galafold patients in 2017 and trial data should be available in 2019. Based on that timeline, the earliest Galafold is likely to win approval for use in the U.S. is likely 2020.
Fabry disease is a progressive disease that can negatively impact the kidneys. Currently, patients are treated with infusions of enzyme replacement therapies that can cost hundreds of thousands of dollars per year. In Europe, Shire sells the ERT Replagel and in the U.S. and Europe Sanofi markets the ERT Fabrazyme. Last quarter, Replagel and Fabrazyme's sales totaled $118.9 million and $187 million, respectively.
Amicus Therapeutics entered this market earlier this year when EU regulators approved Galafold for use in its member countries. Galafold, an oral therapy that can help a subset of Fabry disease patients who still produce limited amounts of the enzyme causing this disease, has secured reimbursement in five EU member countries. In the third quarter, Galafold's sales were $2.3 million.
Galafold's sales should continue building as deals are inked in more EU member countries, but sales may not grow fast enough to make the company profitable anytime soon. Management expects expenses will cause them to burn through at least $135 million in net cash this year.
Clearly, a sooner-rather-than-later approval in the U.S. could have improved that burn rate, but investors might not want to dismiss the company outright on this news. Fabry disease is rare, but it's still an important indication that offers nine-figure peak sales potential outside of America. Management believes that Galafold's EU approval allows them to target roughly two-thirds of the global Fabry disease market.