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Why Is Amicus Therapeutics (FOLD) Down 18.9% Since Last Earnings Report?

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A month has gone by since the last earnings report for Amicus Therapeutics (FOLD - Free Report) . Shares have lost about 18.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Amicus Therapeutics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Amicus Q2 Earnings Match, Weak Q3 View

Amicus reported loss of 34 cents per share in the second quarter of 2019 (excluding loss due to exchange of convertible notes), in line with the Zacks Consensus Estimate but wider than the year-ago loss of 33 cents.

Total revenues in the reported quarter were $44.1 million, skyrocketing almost 107% from $21.3 million in the year-ago quarter. The figure also surpassed the Zacks Consensus Estimate of $41 million. The company realized revenues from the commercial sales of its only marketed drug Galafold (migalastat).

Sales of Galafold surged 30% sequentially, largely driven by new patients in the second quarter along with higher-than-anticipated prescriptions in the EU, Japan and the United States.

Galafold won an accelerated nod from the FDA last August for the treatment of adults with a confirmed diagnosis of Fabry disease and an amenable galactosidase alpha gene (GLA) variant.

Earlier this month, Amicus received a marketing approval for Galafold in Argentina. The company is preparing to launch the drug in the first-ever Latin American market, which should drive global sales.

2019 Guidance

For 2019, Amicus expects Galafold to generate revenues of $160-$180 million with more than 1,000 Fabry patients by the end of this year. The view is unchanged from the previous estimate. Consistent with Galafold’s adoption trends and ordering patterns seen in the past years, Amicus expects flat-to-moderate revenue growth in the third quarter and higher revenue growth in the fourth.

Expectation for insignificant growth in Galafold sales during the third quarter after an impressive second-quarter sequential sales growth probably hurt investor sentiments and prompted the share price decline.

The company expects to end 2019 with approximately $400 million of cash in hand. The current cash position is anticipated to be enough to fund the ongoing operations through 2021.

Pipeline Update

The lead pipeline candidate in Amicus’ portfolio is AT-GAA, a differentiated biologic for Pompe disease. The company expects to complete enrollment in pivotal PROPEL study on AT-GAA for Pompe disease by 2019 end.

Amicus has two gene-therapy programs in pipeline for two different types of Batten disease. Earlier this month, the company announced positive interim results from the phase I/II study on its CLN6 Batten disease gene therapy program. In it, the candidate showed a positive impact on motor and language function in seven of eight patients compared with a natural history dataset as well as in comparisons to sibling pairs.

Meanwhile, Amicus expects to complete enrollment in the ongoing CLN3 Batten disease phase I/II study by this year-end. The company also plans to achieve preclinical proof of concept for Fabry and Pompe gene therapies in 2019.

Additionally, Amicus entered into an agreement with Ultragenyx to in-license exclusive Japanese rights to the latter's Mepsevii for Mucopolysaccharidosis type VII (MPS VII) syndrome, a rare lysosomal disorder in Japan. The company plans to use the existing Mepsevii data package and results from an ongoing study to submit a regulatory filing in Japan.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

VGM Scores

At this time, Amicus Therapeutics has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Amicus Therapeutics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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