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Standing on a Ledge Once Again, Amicus Holds Breath for Latest Study

When a biotech’s lead drug candidate fails in a clinical trial, it’s often the death knell for the company. But Cranbury, NJ-based Amicus Therapeutics has eluded the biotech version of the Grim Reaper not just once, but twice, with two different drugs. With each failure, Amicus had to keep things together, downsize, conserve cash, and survive.

But it has survived. And now, after figuring how to resurrect its second drug candidate by reinterpreting its original failed trial, Amicus (NASDAQ: FOLD) could be on the verge of actual success. It all depends on the results, expected any day now, of the second Phase 3 trial of the drug, migalastat, which treats Fabry Disease, a rare, often-fatal genetic disorder. “It has been a journey and I think it’s been a real lesson in persistence,” says CEO John Crowley (pictured above).

“What they’re trying to do with [migalastat] is a little bit daunting, but the upside is huge if it works and if they can figure out a way to thread the needle,” says Joseph Schwartz, an analyst following Amicus at Leerink Partners, noting that investors he’s talked to are “split” as to whether the company will succeed.

Amicus was founded in 2002 to develop drugs for inherited diseases like Fabry, Gaucher, and Pompe. These diseases are caused by mutations in the genetic instructions for key enzymes, so that the enzymes are defective or missing. Fabry patients, for example, lack a fully functioning enzyme for breaking down a fatty substance called globotriaosylceramide (or GL-3) inside the cell’s lysosome, the structure that serves as a recycling center. The resulting build-up of GL-3 can lead to kidney failure, heart attacks, and other serious medical problems.

There are no cures for these disorders. But sometimes they can be treated by replacing the defective enzymes with genetically engineered, working ones that are infused every few weeks. In fact, Crowley himself played a major role—immortalized in a book called The Cure and in a 2010 film, Extraordinary Measures, starring Harrison Ford—in developing such a replacement enzyme drug for Pompe disease, a disorder in which sugar builds up in the cells, impairing muscle function. After two of Crowley’s three children were born with Pompe, Crowley left a career in financial consulting for biotech—first a management job at Bristol-Myers Squibb, and then the head seat at an Oklahoma City-based startup called Novazyme that was working on a drug for Pompe, alglucosidase alfa (Myozyme). In 2001, Cambridge, MA-based Genzyme shelled out $137.5 million for Novazyme. Genzyme won FDA approval of the treatment five years later. Crowley’s own children take the drug to this day.

Similar enzyme-replacement therapies (ERTs) have been developed for Gaucher and Fabry (though only one treatment for Fabry, Sanofi/Genzyme’s Fabrazyme, is available in the U.S.). But these ERTs aren’t a panacea. Many patients can’t tolerate them. Others see their condition get worse even with treatment. The kidney function of Fabry patients, for instance, tends to slowly decline even with treatment with an ERT.

That’s why Amicus has taken a completely different approach to treating these diseases. The basic idea: Instead of replacing the defective enzymes, fix them so they work. The mutated enzymes typically fail to do their job because they don’t have the right three-dimensional shape. As a result, the cell machinery can’t ferry them to the proper locations, such as the lysosome, to do their job. Building on technology from New York’s Mount Sinai School of Medicine, Amicus aimed to create small molecule drugs that grab onto a misfolded enzyme, force it into the correct shape, and ensure that the enzyme gets transported to the right place. The company calls these drugs “pharmacological chaperones.”

With an Amicus chaperone drug, in theory, some patients wouldn’t need an ERT at all. Others might supplement the biologics with an Amicus drug if their bodies didn’t make enough of the enzymes.

That theory, however, has been exceedingly difficult to turn into reality, even after Crowley joined the company as CEO in 2005 to speed development of the idea. Amicus raised some $170 million in venture cash and went public in 2007, and seven years, a few clinical setbacks and restructurings, and a whole bunch of burned cash later, is still trying to get its first drug to market.

The company’s first prospect was afegostat tartrate (Plicera), for Gaucher disease. That candidate, however, flopped terribly in a mid-stage trial in October 2009. Just one of 18 patients who completed the study had a clinically-meaningful improvement in their condition. Amicus’s shares were trading up over $10 apiece leading up to the data (Amicus’s all-time highs of around $18 per share came in late 2007), and were hammered when the bad news came in. Amicus soon abandoned … Next Page »

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