Chardan's Amusa Is Downgrading Amicus Therapeutics: Here's Why

• Amicus Therapeutics, Inc. FOLD shares have jumped 109 percent year-to-date, and are trading close to the higher end of their 52-week range of $5.13 - $18.83.
• Chardan Capital Markets’ Gbola Amusa downgraded the company from Buy to Neutral, with a price target of $17.50.
• With Amicus’ shares having significantly outperformed the NBI, Amusa believes there is limited scope of the shares being boosted by standalone fundamentals.

Amicus’ shares have appreciated 119 percent since the end of 2014. The company’s shares have climbed 101 year-to-date, significantly outperforming the Nasdaq Biotechnology Index, or NBI, which rose 18 percent during the same period.

Analyst Gbola Amusa pointed out that Amicus’ shares are now near record highs, adding, “we see less scope for outperformance in the near-term based on Amicus standalone fundamentals.”

“Ahead of the CHMP opinion on Galafold in November or December, we do not model an M&A premium in our valuation, exposing the risk that our downgrade is premature,” Amusa wrote. Amicus could be an “interesting target” for Sanofi SA SNY and Shire PLC SHPG, since Galafold could pose a threat to the Fabry disease franchise of these companies.

Amusa added, however, “in the absence of thorough Galafold (migalastat) data publications in peer-reviewed journals, it is our preference to await confirmation that Galafold is coming to at least one major market prior to building an M&A premium in our valuation.”

CHMP may give a positive opinion for Galafold in November or December and an EU approval is likely by February 2016. “We believe the chances of Amicus getting acquired increase after a potential Galafold European (and/or US) approval,” Amusa said.