Biotech Buzz Post No. 16 - FOLD

Amicus Therapeutics (Nasdaq: FOLD) got some apparently equivocal data from a Fabry trial late last December. The stock has yet to recover.

Amicus Therapeutics (Nasdaq: FOLD) – Knowing when to fold ‘em.

“Our wretched species is so made that those who walk on the well-trodden path always throw stones at those who are showing a new road” – Voltaire (1694-1778).

One of the more inspirational works of non-fiction I have read in the last twelve months is Geeta Anand’s 2006 book The Cure: How a father raised $100 million – and bucked the medical establishment – in a quest to save his children. I picked it up because at the time I was doing a lot of research on Orphan drugs in order to understand Neuren Pharmaceuticals (ASX: NEU), and was intrigued to learn that Sanofi/Genzyme’s Myozyme product, for the treatment of Pompe’s disease, had become the basis for a 2010 Hollywood film called Extraordinary Measures starring Brendan Fraser and Harrison Ford. Moreover as a father, and as someone who’s helped raise well in excess of $100m in order to buck at least parts of the medical establishment, I figured I’d have a bit in common with the hero of Geeta Anand’s story, a man from New Jersey about my age named John Crowley.

Back in the late 1990s Crowley was living in the Bay Area and putting his newly minted Harvard MBA to good use as a securities analyst. Then his two children were diagnosed with Pompe’s disease, a rare lyosomal storage disorder that results in profound muscle weakness. Before Genzyme brought out Myozyme, an enzyme replacement therapy (ERT), kids with Pompe didn’t live much past the first few years of school. Now the prognosis is a little better, thanks in part to Crowley. Like Augusto Odone before him (you can learn his story from the 1992 film Lorenzo’s Oil, another inspirational drug development quest) Crowley took a decidedly activist approach to saving his children’s lives. He moved his family back to New Jersey and worked on the sales side of Bristol-Myers Squibb in order to be close to the doctors treating the kids. He started learning as much as he could about Pompe. And he started a foundation in order to fund Pompe research. Then things got really interesting. The foundation invested in a company called Novazyme Pharmaceuticals, which was developing an ERT, and Crowley became its CEO. He was such a bad one that at least one VC backing the company was ready to throw him out until that VC realised what a great corporate culture Crowley had created – one where everyone was motivated to do the best work possible because they had met kids with Pompe and their caregivers and understood that their company could actually change these people’s lives for the better. Novazyme’s investors ended up doing very well because Genzyme bought the company for US$120m in 2001, while it was still pre-clinical, in order to strengthen the suite of candidates from which the future Myozyme would be selected for further development. And Crowley was able to achieve his mission – a Pompe drug for his children - because even though his own candidate drug didn’t become Myozyme, Genzyme was able to gain FDA approval for its drug in 2006. In 2012 Sanofi enjoyed €462m in net sales from Myozyme.

Now fast forward several years beyond the close of Geeta Anand’s book. These days John Crowley knows a lot more about drug development than he did a decade and a half ago, and is putting that accumulated knowledge to excellent use as CEO of Amicus Therapeutics (Nasdaq: FOLD), from Cranbury, NJ. It isn’t the easiest job in the world – on 19 December last year Amicus stock came down 47% on the back of some equivocal, albeit early, data from a Phase III trial in Fabry disease, and the stock is today only capitalised at US$128m, which is tiny for an Orphan drug developer in Phase III – but the fact that Amicus has a strong partnership with GSK and just started collaborating with Biogen Idec suggests to me that there might be something worth taking a look at with this one. Knowing the Crowley story, it didn’t surprise me to learn that there’s a Next Generation therapy for Pompe in the Amicus pipeline behind the lead programme in Fabry.

As Amicus’s Nasdaq ticker of ‘FOLD’ may have suggested, Amicus’s beat is drugs to correct protein misfolding. One of the things you learn very early in biology is that a protein may be just a string of amino acids, but if that string doesn’t fold into the correct three-dimensional shape after it has been assembled, the resulting protein won’t do its job properly. Amicus’s small molecule ‘pharmacological chaperones’ are designed to bind to their target proteins and increase their stability so that they won’t unfold. The company’s lead product, Amigal (migalastat hydrochloride), is designed to stabilise α-galactosidase, the protein that is replaced in Fabry.  As we noted above, it’s now in Phase III. Duvoglustat hydrochloride is designed to stabilise α-glucosidase, the protein replaced in Pompe. It’s in Phase II. Behind these two products are pre-clinical programmes in Gaucher’s disease and Parkinson’s disease.

The reason Amicus stock crashed last December, and has yet to recover, is concern that Amigal won’t work in Fabry disease. Fabry, which afflicts perhaps 5,000-10,000 people globally, results from a deficiency of α-galactosidase, which means that another protein called globotriaosylceramide, or GL-3, builds up in various cells including those of the kidney, where it can contribute to kidney failure. Fabry is treated using Genzyme’s Fabrazyme ERT (€292m in 2012 net sales), as well as a competing ERT from Shire called Replagal (2012 net sales US$498m). However some Fabry patients are still able to make their own α-galactosidase, and Amicus’ thinking is that Amigal would be an excellent monotherapy for these patients as well as a great adjuvant product for patients on ERT. GSK has proven a big supporter of this treatment alternative. It initially paid US$30m and agreed to US$170m in milestones in an October 2010 partnering deal, when it also took a US$31m equity stake in Amicus. In July 2012 Amicus and GSK agreed to co-develop the drug (Amicus taking USA rights, GSK rest-of-world) and GSK put another US$18m into the company to raise its stake to 19.9%.

The equivocal December 2012 data came from Study 011, the first of two Phase III trials of Amigal as a monotherapy in patients making some α-galactosidase. The investigators wanted to show that Amigal would reduce the buildup of GL-3 in the kidneys, and that’s what the data seemed to show, with 41% of treated patients seeing a 50%-or-more reduction in GL-3 in the kidney interstitial capillaries at six months. Trouble is, the comparable rate for placebo was 28%, meaning that the outcome for Amigal patients was far from statistically significant. Overall the treated group had seen a 41% median reduction in GL-3 in the kidney interstitial capillaries versus only 6% of the controls, but the p value here was still a little high at 0.093. So does Amigal work to treat Fabry? The 12-month data is due out soon, and if it continues the trend seen with the six month data the market is likely to be encouraged. A post-hoc subgroup analysis reported in February showed that for patients with a higher baseline disease burden Amicus’s drug seems to work very well, with a 64% responder rate versus only 14% for placebo.

The news has been good for Amicus on other fronts. In February, at the Lysosomal Disease Network World Symposium in Orlando, Fl., Amicus was able to report on Phase II data showing that Amigal boosted enzyme activity in ERT compared to Fabrazyme and Replagal alone. It also had good Phase II data to report at that meeting on Duvoglustat in ERT for Pompe. Amicus announced in June that it was working on a chaperone-plus-ERT for Mucopolysaccharidosis Type I (MPI I), using a grant from a private donor. Then early this month Amicus announced that it was collaborating with Biogen Idec looking for new drugs for Parkinson’s disease.

The Parkinson’s collaboration is exciting because at the moment there’s nothing much out there that works for very long, even though Parkinson’s prevalence in the over-50s population is greater than 1% and patients can often live 10-20 years on therapy, making for a huge potential drug market. The thinking that guides the Amicus/Biogen collaboration is that Parkinson’s is partly the result of a protein called α-synuclein going wrong – the buildup of α-synuclein in so-called ‘Lewy bodies’ in the brain is a hallmark of Parkinson's disease. If you can stop that buildup happening by increasing activity of a lysosomal enzyme called glucocerobrosidase, you may have a new treatment. Amicus and Biogen Idec will be going after chaperones that target glucocerobrosidase. The fact that the collaborator is Biogen Idec, a company that prides itself on its CNS expertise, suggests that Amicus has something worth taking seriously. It’s also worth noting that only two years ago a group at Brigham and Women's Hospital in Boston figured out the correct structure of α-synuclein in healthy cells, which was a folded protein, not unfolded as everyone had previously thought (click here). This means that a good strategy for tackling Parkinson’s via α-synuclein is keeping the folded form of the protein stable, not preventing unfolded α-synuclein from aggregating. Keeping folded proteins stable is something right up Amicus’s alley.

So the Parkinson’s programme at Amicus is one to watch. However go back to the Fabry/Pompe angle, if you will. At the moment there’s a boom going on for companies with Orphan drugs in the works. Orphan drugs often sell for high prices due to the big difference they can make in patient outcomes, and they can have a short path to market compared to drugs for large market diseases. Throw in the benefits that came the Orphan Drug Act of 1983 like guaranteed market exclusivity for seven years regardless of patent protection, the fact that Big Pharma has become more interested in recent years, and the fact that the Orphan drug pioneers like BioMarin (Nasdaq: BMRN) are now established players, and a good Orphan story can attract a lot of investor attention. That magic, however, doesn’t seem to be working for Amicus at the moment even with the guy portrayed cinematically by Brendan Fraser in the CEO's chair. All of which could make it worth some homework.

Stuart Roberts, Australian Life Sciences consultant, with global focus
Nisi Dominus Frustra

+61 (0)447 247 909

sroberts2164@gmail.com

Twitter @Biotech_buzz

About Stuart Roberts. I started as an equities analyst at the Sydney-based Southern Cross Equities in April 2001, focused on the Life Sciences sector from February 2002. Southern Cross Equities was acquired by Bell Financial Group (ASX: BFG) in 2008 and I continued at Bell Potter Securities until June 2013. Over the twelve years to 2013 I built a reputation as one of Australia's leading biotech analysts. I am currently consulting to the Australian biotech industry. Before joining Southern Cross Equities I wrote for The Intelligent Investor, probably the most readable investment publication in Australia. I have a Masters Degree in Finance from Finsia. My hobbies are jazz, cinema, US politics and reading patent applications filed by biotechnology and medical device companies.

Previous Australian Biotechnology Buzz posts:
Advanced Cell Technology (OTCBB: ACTC), 4 September 2013
Alcobra Pharma (Nasdaq: ADHD), 17 September 2013
Amicus Therapeutics (Nasdaq: FOLD), 22 September 2013
Aradigm (OTCBB: ARDM), 8 September 2013
Cellular Dyamics (Nasdaq: ICEL), 3 September 2013
ImmunoCellular Therapeutics (NYSE MKT: IMUC), 27 August 2013
Immunomedics (Nasdaq: IMMU), 21 August 2013
Inovio Pharmaceuticals (NYSE MKT: INO), 24 August 2013
Merrimack Pharmcaceuticals (Nasdaq: MACK), 26 August 2013
Oncolytics Biotech (Nasdaq: ONCY),  22 August 2013
Pharmacyclics (Nasdaq: PCYC), 2 September 2013
Regulus Therapeutics (Nasdaq: RGLS), 23 August 2013
Sunshine Heart (Nasdaq: SSH), 28 August 2013
Synta Pharmaceuticals (Nasdaq: SNTA), 1 September 2013
TrovaGene (Nasdaq: TROV), 15 September 2013
Verastem (Nasdaq: VSTM), 5 September 2013

Disclaimer. This is commentary, not investment research. If you buy the stock of any biotech company in Australia, the US or wherever you need to do your own homework, and I mean, do your own homework. I'm not responsible if you lose money.