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Amicus (FOLD) Stock Down on Q3 Earnings and Revenue Miss

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Amicus Therapeutics (FOLD - Free Report) reported a loss of 19 cents per share for third-quarter 2021, slightly wider than the Zacks Consensus Estimate of a loss of 18 cents but narrower than the year-ago loss of 22 cents.

Revenues increased 18% year over year to $79.5 million for the third quarter but missed the Zacks Consensus Estimate of $81 million. Revenues were entirely derived from sales of Galafold (migalastat), approved for Fabry disease.

Shares of the company were down 5.1% on Nov 9, following the earnings announcement. The stock has slumped 51% in the year so far compared with the industry’s 13.3% decline.

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Divestiture of Gene Therapy Business

Earlier in September, Amicus announced that it has entered into a definitive combination agreement with ARYA Sciences Acquisition Corp IV (ARYD - Free Report) to spin off its gene-therapy business and focus on the rare disease business. The separation of the gene therapy business will enable Amicus to focus on the rare disease business, primarily on Fabry disease and Pompe disease indications.

Following the acquisition, ARYA will be renamed Caritas Therapeutics, Inc. Caritas will be an independent entity trading in the NASDAQ. Amicus will be the largest shareholder of this new company, holding a 36% stake. Further, Amicus will retain co-development and commercialization rights to Fabry and Pompe gene therapy programs as well as negotiation rights on select future muscular dystrophy programs.

The company expects the deal to be completed by 2021-end or early 2022

Quarter in Detail

Revenues for the third quarter reflected increased patient demand and benefited from a continuing FX tailwind.

Operating expenses (adjusted basis) were $93.6 million, up 1.3% year over year.

As of Sep 30, 2021, the company had cash, cash equivalents and marketable securities of $557 million compared with $383.1 million on Jun 30, 2021.

Amicus expects cash resources and revenues to be enough to support operations and the ongoing research programs through self-sustainability. It anticipates achieving profitability by 2023.

2021 Guidance Maintained

The company expects total Galafold revenues within $300-$315 million, driven by persistent operational growth and commercial execution across all major markets including the United States, the EU, U.K., and Japan.

It anticipates operating expense (adjusted basis) within $410-$420 million, driven by continued investment in its pipeline.

Other Updates

The lead pipeline candidate in Amicus’ portfolio is AT-GAA, which is being evaluated for Pompe disease. Earlier this year in September, Amicus announced that the FDA has accepted the company’s biologics license application (BLA) and new drug application (NDA) for AT-GAA for the treatment of Pompe disease. The FDA has set PDUFA action dates of May 29, 2022 for the NDA and Jul 29, 2022 for the BLA.

In the EU, the company completed the marketing authorization application submissions for AT-GAA in fourth-quarter 2021. The submissions in the EU are based on data from phase I/II and phase III PROPEL studies as well as the long-term open-label extension study evaluating AT-GAA in Pompe disease.

Following label expansion by the European Commission in August, Galafold is the first and only oral therapy approved in the EU for use in adolescents with Fabry disease aged 12 to less than 16 years weighing at least 45 kg who have an amenable mutation.

The company has two gene-therapy programs in its pipeline for two different types of Batten disease i.e., CLN6 and CLN3, in their respective phase I/II studies. The company noted on its earnings call that two participants who were part of the CLN6 study passed away during the long-term follow-up extension period. The investigator of this study deemed that the deaths were due to disease complications and not related to the drug.

Zacks Rank & Other Stocks to Consider

Amicus currently carries a Zacks Rank #2 (Buy). A couple of better-ranked stocks in the same sector include Alkermes (ALKS - Free Report) and Regeneron (REGN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkermes’ earnings per share estimates for 2021 have increased from $0.61 to $0.68 in the past 60 days. The same for 2022 has risen from $1.06 to $1.11 in the past 60 days. The stock has rallied 24.5% in the year so far.

Regeneron’s earnings per share estimates for 2021 have increased from $55.31 to $63.43 in the past 60 days. The same for 2022 has risen from $44.84 to $47.11 over the same period. The stock has rallied 27.5% in the year so far.

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