NicolasMcComber
In my previous coverage in May, I wrote the following desultory text:
Amicus Therapeutics, Inc. (NASDAQ:FOLD) stock is not able to get to its proper potential despite the company’s excellence in running its business. Every time I revisit the company, I am astounded by the compelling thesis, the value-market mismatch, and the ensuing opportunity – and yet the stock fails to deliver.
I am happy to report that the stock is up 50% since then, despite the FDA extending the review period “by 90 days for the Biologics License Application (BLA) for cipaglucosidase alfa and the New Drug Application (NDA) for miglustat, the two components of AT-GAA.”
The AT-GAA BLA is fraught with risk because the trial backing the BLA actually failed to meet the primary endpoint. However, here’s what I said before about the PROPEL trial:
…although PROPEL missed statistical significance in the combined population of patients for motor function, it achieved stat sig for lung function or FVC, which is the more critical symptom… The funny thing about both the COMET and PROPEL trials is that COMET’s primary endpoint was FVC, and 6MWT was its secondary endpoint; in PROPEL, it was the other way round. 6MWT was the primary, and FVC was the secondary endpoint. The funny thing, as I was saying, is that COMET missed the FVC primary endpoint but did better with 6MWT; and PROPEL missed the 6MWT primary endpoint but did better with FVC.
Now, Sanofi got an approval from the COMET trial, although it failed its primary endpoint. So I expect AT-GAA to be approved as well.
More importantly, COMET failed FVC but got approval on secondary endpoint 6MWT. However, as I noted before, FVC is the more important cause of mortality in Pompe patients. Here, PROPEL met stat sig in FVC, despite failing in 6MWT, its primary endpoint. Thus, its chances of approval seem more than Sanofi’s Nexviazyme.
So why was the PDUFA delayed by 3 months? According to the press brief, they released on May 10:
The FDA extended the PDUFA dates to allow additional time to review information submitted by the Company as part of its ongoing reviews. The extension of the review timeline was not related to requests for any additional clinical data. The Company also expects that the additional time will allow for the completion of the pre-license approval inspections necessary at the WuXi Biologics manufacturing site in China.
The new dates are August 29, 2022 and October 29, 2022 for the NDA and the BLA respectively.
However, note that the FDA needs to inspect their WuXi facility if there’s going to be no further delay. As the co says in their earnings call:
However, as of today, they have not yet conducted their inspection. And if the FDA inspection does not take place in the appropriate time, it goes without saying that it could impact the timing of approval.
The company expects European approval later this year; the EMA does not require an inspection of the WuXi facility as a precondition of approval.
Financials
FOLD has a market cap of $3.5bn and a cash reserve of $386mn. This past quarter, the company saw revenue of $80.7mn, which missed estimates by $5.18mn (due to exposure to foreign currencies). For the full-year 2022, the company guided for total Galafold revenue of $350 million to $365 million. Non-GAAP operating expense guidance for the full-year 2022 is $470 million to $485 million. That means, given the revenue stream, that the company is in a sound financial position for the time being. The company expects non-GAAP profitability in 2023. They also expect Galafold to get to $500mn in revenues soon, based on three factors: “first, continuing to penetrate into existing markets; second, expanding into new geographies; and third, broadening the labels.” I should add that many ERT-switch patients remain to be introduced to the medicine.
Bottom Line
FOLD is up considerably and, given the slight risk of a CRL and of delay, I think people should take profits at this time. However, I will continue to hold until at least the approval.
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