Amicus Therapeutics: Here's The Good News

Shares of Amicus Therapeutics, Inc. FOLD plunged more than 22 percent on news that the FDA seeks a pivotal "cross-over" study of Galafold (migalastat) in treatment-naive Fabry disease patients with gastrointestinal (GI) symptoms to approve the drug.

FDA Requests Additional Research

This additional study would delay the launch of Galafold in the United States to at least mid-2020. Galafold is already being sold in the EU for Fabry disease, and the company believes the U.S. market for the drug is estimated to be approximately 25 percent of the global opportunity.

But, Chardan analysts say the development is positive, as it would enhance the drug launch probability. The brokerage maintains its Buy rating on the stock.

Rating And Justification

“Although the need for an additional US pivotal trial pushes our Galafold launch in the US from 2H18E to 2H20E, the improved visibility on a path for Galafold approval in the US increases our launch probability from 40 percent to 55 percent,” analyst Gbola Amusa wrote in a note.

Although the additional study will burn cash, Amusa believes the costs will be relatively modest given the small 35-patient cohort. In fact, the analyst noted that the upcoming cash burn may be balanced by revenues ramping post the launch of Galafold in ex-U.S. markets.

As such, Amusa raised price target by 6 percent to $16, implying potential upside of 92 percent over November 28 closing price.

At last check, shares of Amicus were down 21.87 percent to $6.50.