02 Mar 7 Things to Know About Amicus Therapeutics
Shelving of Gene Therapy Spin Off
Amicus Therapeutics, Inc. (NASDAQ: FOLD), a biotechnology company developing cutting-edge therapeutics for treatment of rare metabolic diseases, announced that the proposed Business Combination Agreement with ARYA Sciences Acquisition Corp IV, a special purpose acquisition company has been mutually terminated owing to unfavorable market conditions currently prevailing. The transaction, which was originally entered into on September 29, 2021, was a means to advance a gene therapy spin-off with the aim to achieve a $400 million in net savings through 2026.
The move would have allowed the Company to bring down its outgoings and obtain a 36% stake in the new company, giving it a shot at profitability. Most importantly, the Company would not have to worry about the cost of developing the gene therapy pipeline, while profiting from the success of the spin-out. Though the merger has been terminated, neither companies will be paying a termination fee as the decision to shelve the spin-off was mutual.
Amicus Therapeutics, Inc. (NASDAQ: FOLD)
Market Cap: $2.30B; Current Share Price: 8.21 USD
Data by YCharts
A statement issued by the Company stated
“This decision results from unfavorable market conditions affecting IPOs, follow-on financings and SPACs in the biotech sector as well as an increasingly challenging environment for stand-alone gene therapy companies.”
Strategic Realignment and Prioritization of Pipeline
The Company is aiming for a realignment in its research and development efforts to prioritize its gene therapy pipeline that will help it achieve around $400M in net savings through 2026, similar to the savings that would have resulted from the business combination agreement and spin off.
The Company announced that it would be laying off 7% (35) of its employees, mostly in R&D, with a view to reorganize its team and keep its employee headcount under 500 for the time being. Furthermore, the Company has decided not to advance its gene therapies into the clinical stage for the next few years and has shelved its plans to build an internal gene therapy manufacturing facility, as disclosed by the CEO John Crowley on a conference call.
Amicus has also decided to discontinue CLN6 Batten disease gene therapy program after review data from a long-term extension study which showed that
“any initial stabilization of disease progression at the two-year time point was not maintained through the long-term extension study.”
Management Changes
The spinoff was to be led by Amicus CEO John Crowley, who was set to step down from his position to make way for Bradley Campbell on August 1, 2022. Mr. Campbell will become the Executive Chairman of Amicus for a two-year term effective from August 1, 2022 until August 1, 2024, after which he is expected to continue as the non-executive Chairman of the Board.
Galafold® (migalastat)
The Company’s first commercial product Galafold is intended for the treatment of adults with a confirmed diagnosis of Fabry disease and an amenable galactosidase alpha gene (GLA) variant based on in vitro assay data. As per the Company’s full-year 2021 financial estimates, the full year revenue for 2021 was $305.5 million, an increase of 17% from total revenue of $260.9 million in the full year of 2020. The growth was driven by strong new patient accruals and steady patient compliance and adherence rates.
Upcoming Catalyst
Upcoming catalysts for the Company include the U.S. Prescription Drug User Fee Act (PDUFA) action date of May 29, 2022 for AT-GAA for Pompe Disease and a potential BLA in July 2022. In addition, Amicus is also expecting an opinion from the EU Committee for Medicinal Products for Human Use (CHMP) in late 2022 for the candidate.
The Company is investing in readying the infrastructure necessary for the global launch of AT-GAA, including investments in additional personnel and launch inventory.
The Opportunity
Pompe disease is characterized by the build-up of complex sugars named glycogens in the body’s cell, due to the lack of an enzyme called acid alpha glucosidase (GAA), which is responsible for breaking down the sugars. This results in the breakdown of organs, muscles and tissues. The disease is classified into three type’s namely classic infantile onset, non-classic infantile onset and late-onset, depending on the age at which it manifests in the patients.
The disease is very rare and affects only 1 in 40,000 individuals in the U.S and is marked by the presence of muscle weakness, poor muscle tone, enlarged liver or heart, developmental difficulties, feeding issues, respiratory infections, motor disabilities and hearing impairment to name a few.
Pompe is usually diagnosed through blood and enzyme testing. Other testing tools include sleep tests, electromyography, breathing tests to measure lung capacity. Presently Enzyme replacement therapy is approved for the treatment for patients suffering from Pompe, along with symptom management and supportive care.
One of the limitations of using ERT is that though Cardiac muscle responds well to the treatment, its efficacy is limited in case of motor and respiratory functions. Myopathies persist despite being treated with ERT, therefore there is a pressing need to address these limitations and improve outcomes from the application of this therapy in treatment of Pompe.
2022 Financial Guidance
The Company expects the revenues from Galafold to be at least $350 million to $365 million, denoting a double-digit growth revenue growth of 15-20% in 2022, aided by robust demand, exploring newer geographic areas, and commercial execution in markets such as U.S., EU, U.K., and Japan.
Non-GAAP operating expense guidance is $470 million to $485 million, owing to global launch of Galafold, AT-GAA clinical studies and pre-launch activities and manufacturing costs.
Amicus had Cash, cash equivalents, and marketable securities worth over $482.5 million at December 31, 2021, compared to $483.3 million at December 31, 2020, which it believes is sufficient to fund its operations and clinical activities.
The Company aims to achieve profitability in 2023 and believes that the measures such as portfolio prioritization and expense control will help it reach its goals.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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References
https://www.ncbi.nlm.nih.gov/pubmed/26329149
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