Amicus: Another Day, Another Delay, Pretty Much The Same Silly Reason (NASDAQ:FOLD)

An NDA from Amicus Therapeutics (NASDAQ:FOLD) for AT-GAA (ATB200) in Pompe disease has been delayed again. The delay continues as the FDA is unable to inspect the company’s WuXi manufacturing site located in China. Before we discuss that, let me quickly recap the Amicus story.

Amicus has two drugs, and they filed a Biologics License Application (BLA) for cipaglucosidase alfa and a New Drug Application (NDA) for migalastat, the two components of AT-GAA. Migalastat is already approved as Galafold by the FDA for Fabry Disease, from which the company earns a small but steady revenue stream. The new indication is Pompe Disease, and here the company ran a trial called PROPEL which had six-minute walk test or 6MWT as the primary endpoint and lung function test or FVC as a secondary endpoint. The PROPEL trial failed the primary endpoint but saw stat sig in FVC, which I consider more important for Pompe patients because it causes more numbers of fatalities.

Now here’s the interesting thing; Amicus’ closest competitor is Sanofi’s (SNY) Nexviazyme, and it ran a trial called COMET, whose primary endpoint was FVC, and 6MWT was the secondary endpoint. COMET failed FVC, but it was approved because it passed the 6MWT. So, not only did COMET fail the primary endpoint, but it failed the more critical marker of Pompe disease. Yet it got approved – so PROPEL looks like a slam dunk at the FDA, right?

And yet, here we are, 3 months after the original PDUFA date of July 29 for the BLA, and we are again looking at another delay for exactly the same reason – the FDA cannot get tickets for a flight to China.

From every angle we look, PROPEL looks like it should be approved. The drug combo works, the drug combo is safe, and one of its components, migalastat, has been approved for 2+ years and is steadily making money. Last year, I noted it made $300mn plus for a relatively rare disease like Fabry. If Pompe were approved, that figure could easily double. The market currently has Nexviazyme, which from all reports looks like a second-best drug. Yet patients are unable to get Amicus’ drug combo because of a reduction in American tourism to China.

I cannot easily specify which WuXi facility is being used to produce ATB200. They have sites in Shanghai, WuXi, Suzhou and Hangzhou, and new sites have been planned at other places. Since the original Amicus-WuXi deal is almost a decade old, I am guessing the manufacturing site is WuXi, an ancient historical city northwest of Shanghai. Whatever it might be, Jinping seems to have taken the coronavirus as a personal affront, and his zero-Covid policy is wrecking the country economically when the rest of the world has opened up. Even the conspiracy theorists and chronically paranoid Covid specialists have stopped talking about the disease and have started focusing on more important things – like whether Musk will reinstate Trump’s Twitter account. However, China’s Covid restrictions seem to have no end in sight.

That doesn’t bode well for Amicus. In Europe, where they do not have a preapproval inspection as a condition of approval, ATB200 will probably get approved by the end of this year. However, the FDA is more bureaucratic in these matters, and there have been instances during the Covid years of major delays in facility inspections. One just didn’t expect this today.

I was checking simple Covid numbers in and around Shanghai and here’s what I see: there was a major spike in April-May, more than 3500 cases per day at peak for a brief period. But that was a long time ago; today, and for nearly the entire half year since May, the Covid situation is about 5-6 new cases per day. And yet the Disney Park in Shanghai, a major local attraction, was shut down yesterday – with visitors trapped inside! – because of a Covid outbreak. This is the situation the FDA is facing, and we can see how they wouldn’t want their officials trapped in Shanghai’s Disneyland when out inspecting WuXi’s manufacturing facility.

So, where does this leave Amicus investors? First, the company is not hurting for cash. Indeed, I have no updated information since my last article because they haven’t released earnings since. Second, Xi Jinping just recently “secured a norm-breaking third term as general secretary of the Communist Party at the recently concluded congress, and also introduced a core team packed with loyalists.” Breaking such norms is easier when the population is under lockdown, so we can see why the zero-Covid policy was so strongly enforced while the congress was ongoing. Now that those festivities are over, the Premier himself is traveling overseas, and the economy is getting wrecked, it stands to reason that the policy will be phased out. Or the FDA could simply give up on the inspection – but big nations have big bureaucracies, the US and China alike – and I don’t see that sort of flexibility happening either.

So I think I can safely say that we should see the drug approved before mid-2023 at the latest. This is just a year’s delay, and it will enable Sanofi to make a few more hundred million dollars, richly deserved.

About the TPT service

Thanks for reading. At the Total Pharma Tracker, we offer the following:-

Our Android app and website features a set of tools for DIY investors, including a work-in-progress software where you can enter any ticker and get extensive curated research material.

For investors requiring hands-on support, our in-house experts go through our tools and find the best investible stocks, complete with buy/sell strategies and alerts.

Sign up now for our free trial, request access to our tools, and find out, at no cost to you, what we can do for you.