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Amicus Therapeutics (FOLD)

Today, The Cheap Investor Editor Bill Mathews recommends a low-priced, development-stage pharmaceutical company that is appropriate for speculative investors.

Amicus Therapeutics (FOLD)

Amicus Therapeutics, a biopharmaceutical company, focuses on the discovery, development, and commercialization of small molecule drugs known as pharmacological chaperones. ... The stock was a high flyer, trading at $7.30...

Today, The Cheap Investor Editor Bill Mathews recommends a low-priced, development-stage pharmaceutical company that is appropriate for speculative investors.

Amicus Therapeutics (FOLD)

Amicus Therapeutics, a biopharmaceutical company, focuses on the discovery, development, and commercialization of small molecule drugs known as pharmacological chaperones. ... The stock was a high flyer, trading at $7.30 in February 2012. In fact, GlaxoSmithKline (GSK) thought Amicus was a good investment in July 2012, and it purchased almost three million shares at $6.30 per share for a total investment of $18.6 million.

Insiders own 35% of the 49.6 million total shares outstanding and 87 institutions own 60% of the float (shares in public hands). In March 2013, two insiders bought 43,500 shares at prices ranging from $3.40 to $3.49 per share. For the quarter ended March 31, 2013, institutions sold about 1.4 million more shares than they bought.

Amicus is a typical development-stage biotech with no revenues and a big loss of $17.5 million for the quarter ended March 31. In addition, the price has been in a downward trend. However, the company has a good balance sheet with $84.7 million ($1.71 per share) in cash, book value of $1.08 per share and virtually no debt. ...

Amicus, in collaboration with GSK, is developing the investigational pharmacological chaperone migalastat HCl for the treatment of Fabry disease. Amicus has commercial rights to all Fabry products in the United States and GSK has commercial rights to all of these products in the rest of world.

On June 17, the company announced that it won’t be able to file for approval of its drug migalastat until more late-stage testing is completed. Amicus is studying migalastat as a treatment for a rare enzyme disorder called Fabry disease, caused by the buildup of a type of fat in the body’s cells. The fat can cause pain and damage the kidneys and nervous system, among other problems.

The company said the drug did not meet its main or secondary goals in a late-stage trial. Amicus is running an extension of that trial and has proposed doing additional statistical analysis. After a meeting with the Food and Drug Administration, Amicus said the FDA has decided the additional analysis is not enough to support a filing for marketing approval. Amicus is currently running another late-stage trial of migalastat. The company said it will continue its current and extension studies but does not plan to start any new trials. This news caused the stock to fall 25% to a new 52-week low of $2.06.

Outside the collaboration agreement with GSK, Amicus owns exclusive rights to the rest of its pipeline and applications of its CHART platform technology. The current CHART programs for Pompe disease are investigating the pharmacological chaperone AT2220 in combination with human recombinant GAA (rhGAA) enzymes.

These next-generation therapies have the potential to increase enzyme activity in muscle and other disease-relevant tissues, improve glycogen reduction, and mitigate immunogenicity compared to rhGAA alone. Amicus is also developing a proprietary rhGAA enzyme co-formulated with AT2220 as a next-generation therapy for Pompe disease.

This small biotech has several products in various stages of FDA trials, and a major partnership with GlaxoSmithKline. With almost $85 million in cash, the company has enough cash to fund operations through the first half of 2014. We think the stock could move 50% over the next year. If it releases positive FDA news or licensing agreements with major pharmaceutical companies, the price could move substantially higher. Buy Recommendation.

Bill Mathews, The Cheap Investor, www.thecheapinvestor.com, 847-697-5666, August 2013