Amicus Therapeutics Upgraded To Outperform; Overhangs Are Removed With Catalysts Ahead

Baird has upgraded Amicus Therapeutics, Inc. FOLD to Outperform, driven by the removal of two key overhangs in the form of regulatory clarity for Galafold in the United States and strengthening of the balance sheet.

Further, the brokerage raised its target price by $3 to $10 on inclusion of United States/Japan Fabry sales as well as adding the Pompe program.

Regulations

In the United States, the regulatory path forward for Galafold is now clear with a GI study, expected to begin in 2017, supporting full approval, likely in 2020.

Galafold, an oral treatment for amenable patients with Fabry disease, was launched about seven months ago in Europe. The management guided to 300 patients on therapy by year-end 2017 (year-end run rate of $60 million–$75 million).

Other Upside Catalysts

Baird is also bullish on near-term upside potential from SD-101 in epidermolysis bullosa (EB), with Phase 3 data expected in mid-2017. The brokerage sees the market opportunity for SD-101 could be north of $1 billion and positive Phase 3 data would support meaningful upside (+$5–$6) with minimal downside at current levels.

“[E]ven assuming $500 million peak sales and using a conservative 30% risk adjustment, we derive a $1/share in valuation,” analyst Michael Ulz wrote in a note.

Ulz also counts the early-stage Pompe program as another future value-driver. A Phase 1/2 study of ATB200 (rhGAA) in combination with ABT2221 (chaperone) in Pompe disease is ongoing. The analyst expects additional updates from this study throughout 2017.

Shares of Amicus closed Monday’s trading at $5.34. In the pre-market hours Tuesday, the stock was seen up 7.68 percent to $5.75.