Event – Glaxo endorsement puts focus on Amicus phase III result and more

GlaxoSmithKline’s repeated financial backing of Amicus Therapeutics sets the stage for the long-awaited announcement within the next three months of data from a phase III US registration study of Amicus’s Fabry disease project Amigal.

Amigal is by far the most important driver for Amicus, and because Glaxo’s interest in the company lies squarely on Fabry disease some investors might be hoping that positive data quickly followed by a regulatory filing could prompt a more permanent union between the two companies. But while Glaxo’s 20% equity stake might serve as a prelude to a takeover it could just as well turn out merely to be a defensive move to prevent anyone else getting their hands on Amicus - a strategy the pharma giant recently employed to a successful conclusion with Human Genome Sciences.

While the US biotech firm’s pipeline comprises other assets, the clear near-term focus for investors is Amigal. According to EvaluatePharma the project, a molecular chaperone, has a risk-adjusted NPV of $310m – slightly more than its originator’s market cap.

Company Amicus Therapeutics
Product Amigal (migalastat)
Market cap $302m
Product NPV £310m
% of market cap 103%
Event type Phase III data
Date Q3

But the timeline of the phase III study has slipped - the trial had initially been due to yield results leading to a possible filing at the end of 2011 – and recruitment of 67 Fabry disease patients was finally completed last December. Data are now due during the current quarter.

This double-blind, placebo-controlled trial will measure change in kidney globotriaosylceramide (GL-3) as a surrogate primary endpoint. It has recruited patients who have never received enzyme-replacement therapies (ERTs) such as Sanofi’s Fabrazyme and Shire’s Replagal, which currently dominate the market.

A second phase III study, which will support an EU filing, is set to complete enrolment of 50 patients in the fourth quarter. This trial has an open-label design comparing Amigal to ERT, and will measure renal function by glomerular filtration rate. Although the comparison with the established ERTs in efficacy terms is important, an obvious advantage for Amigal could be the convenience of oral dosing. A phase II study of Amigal in combination with ERT yielded positive data in January.

Takeover scenario

Glaxo’s interest in Amicus dates back to late 2010, when the UK group underlined its entry into rare diseases with a $30m payment for rights to Amigal and $31m for a 19.9% equity stake (Amicus’ second wind signals confidence from Glaxo, October 29, 2010).

A fundraising in March resulted in Glaxo’s stake being diluted to around 14%, and the extension of the companies’ deal announced on Tuesday takes the UK firm’s equity interest back up to 19.9% at a cost of $18.6m.

Given that Amigal appears to be the focus of Glaxo’s rare disease effort, the takeover scenario might have some legs. But history shows that the UK company is rather cautious in this respect, holding or having held significant minority stakes in businesses including Targacept, Genmab and Theravance without pulling the M&A trigger.

Instead, perhaps, such holdings have served to deter other acquirers while giving Glaxo an effective right of first-refusal. Most recently, for instance, Glaxo snagged Human Genome Sciences, but only after the target’s share price had slumped and it became clear that no other buyers were going to come forward (Game of hardball wins Human Genome for Glaxo, July 17, 2012).

This is not a great precedent for holders of either Amicus or Japan’s JCR Pharmaceuticals, with which Glaxo has a separate rare disease alliance and of which it owns around 17%. A combination of Amigal and JCR’s own enzyme-replacement, alpha-Gal A, could enter the clinic next year.

Still, the potential of a Fabry disease powerhouse should eventually be reflected in the junior partners’ share prices, even if the effort is built around alliances rather than acquisitions. For investors, that would be no bad thing.

Trial ID NCT00925301

To contact the writer of this story email Jacob Plieth in London at [email protected]

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