Janney: Amicus Therapeutics Has Significant Upside From Gene Therapy Pipeline

Amicus Therapeutics, Inc. FOLD has an extensive portfolio of novel therapies for rare diseases with a focus on lysosomal storage disorders, according to Janney Montgomery Scott. 

The Analyst

Janney's Yun Zhong initiated coverage of Amicus Therapeutics with a Buy rating and $20 fair value estimate.

The Thesis

Galafold, a next-gen enzyme replacement therapy, is well-positioned to gain significant share of the expanding Fabry disease market, Zhong said in the Friday initiation note. 

While global ERT sales reached nearly $1.5 billion in 2018, a large number of patients are not receiving treatment — mainly due to the requirement of biweekly IV infusions, the analyst said. Against this backdrop, Galafold offers a highly favorable alternative treatment, as it offers oral dosing with comparable efficacy, he said. 

A large number of undiagnosed or misdiagnosed Fabry patients carry mutations, Zhong said, adding that such patients will be more amenable to Galafold treatment. 

Expressing optimism regarding the therapy's rapid penetration due to increased disease awareness and improved diagnostics, Zhong said that Amicus' $500-million estimate could prove highly conservative.

With the Celenex acquisition, Amicus gained access to one the broadest gene therapy pipelines in the industry, the analyst said. The acquisition, along with the UPenn collaboration and the company’s expertise, could help Amicus build a platform that will support its exponential growth in the coming years, he said. 

The company has another ERT in pivotal Phase III clinical development for Pompe disease. Given the strong Galafold launch trend and encouraging Pompe data to date, there seems to be limited downside risk for Amicus, according to Janney. 

Price Action

Shares of Amicus rose slightly to trade at $14.20 on Friday morning.

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