Amicus Therapeutics Inc

Amicus Therapeutics Inc (NASDAQ: FOLD) is a biotechnology company focused on discovering, developing, and delivering medicines for people living with rare metabolic diseases. Currently, the company is focused on treating Fabry Disease with its treatment Galafold and developing additional therapies for Fabry patients.

Key highlights 

• Healthy Guidance for 2021: The Company anticipates total Galafold revenue of at least USD 300 - 315 million in 2021. Double-digit revenue growth in 2021 is expected to be driven by continued operational growth and commercial execution across all major markets, including the U.S., EU, U.K. and Japan. Furthermore, the company says that Galafold can drive annual revenue of more than USD 1 billion at the peak, which is a key positive.

Source: Company

• AT-GTX-501 got fast track designation: FDA granted fast track designation to the CLN6 Batten disease gene therapy, AT-GTX-501. The Fast-Track program facilitates the development and accelerates the review of new drugs for severe conditions, potentially addressing unmet medical needs. A drug development program with Fast Track designation is afforded greater access to the FDA to expedite the drug's development, review and potential approval. 

• Healthy Liquidity: The company exited FY2020, with cash equivalents and marketable securities of USD 483.3 million, compared to USD 452.7 million in the previous corresponding period. Further, the management says that the cash position is sufficient to achieve self-sustainability without any future dilutive financing.

Financial overview of FY2020 

Source: Company 

• Net Product Sales. Net product sales increased by USD 78.6 million to USD 260.9 million during the year ended December 31, 2020, compared to the same period in the prior year. The increase was primarily due to continued growth in the Europe, U.S. and Japan markets.
• The cost of goods sold as a percentage of net product sales was 11.9% during the year ended December 31, 2020, compared to 12.1% during the same period in the prior year, primarily due to the proportion of sales in countries subject to a higher royalty burden.
• The company minimized its operating loss to USD 247 million in FY2020 from USD 304 million in 2019.
• In 2020, the company posted a net loss of USD 277 million against a loss of USD 356 million in pcp. 

Risks associated with investment

The company invested a significant portion of its efforts and financial resources in the development of Galafold to treat Fabry disease and rely upon sales of Galafold primarily in Europe and growing sales in the U.S. and Japan. If they are unable to commercialize Galafold successfully or experience significant delays in doing so, its business could be materially harmed. 

Valuation Methodology (Illustrative): EV to Sales 

Note: All forecasted figures and peers have been taken from Thomson Reuters

Stock recommendation

During 2020, the company remained resilient on its journey to become a leading global rare disease biotechnology company. Despite the challenges of COVID-19, it emerged as a better and stronger company organizationally, strategically, scientifically, and financially. The global revenues from its prime product “Galafold” in 2020 stood at USD 260.9 million, represented a growth of 43%. Galafold performance was driven mainly by strong patient demand. Moreover, the Company anticipates total Galafold revenue of at least USD 300 - 315 million in 2021, driven by continued operational growth and commercial execution across all major markets, including the U.S., EU, U.K. and Japan. Therefore, based on the above rationale, risk factor and valuation, we recommend a “Speculative Buy” rating at the closing price of USD 10.80 on March 15, 2021. We have considered Ultragenyx Pharmaceutical Inc, Alnylam Pharmaceuticals Inc, Sangamo Therapeutics Inc, etc. as a peer group for the comparison.

1-Year Price Chart (as on March 15, 2021). Source: Refinitiv (Thomson Reuters)

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