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UPDATED: Amicus shares tank on PhIII failure for Fabry drug partnered with GlaxoSmithKline

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Amicus Therapeutics ($FOLD) and its partner GlaxoSmithKline ($GSK) have stumbled in their journey to develop a new oral drug for a rare genetic disease. The companies reported late Wednesday that the first of two Phase III studies of Amigal--or migalastat HCL--failed to reach the primary efficacy goal in patients with the lysosomal storage disorder called Fabry disease.

The companies plan to continue with the ongoing second late-stage study, but the failure in the first Phase III trial for Amigal is an obvious setback for both parties. As the London-based drug giant seeks growth in the lucrative rare-disease drug market, Glaxo paid $60 million upfront in its partnership with Amicus to distribute the compound outside the U.S. and in July tacked on an $18.6 million investment in Amicus to expand their relationship. Amigal is the lead treatment in Cranbury, NJ-based Amicus' pipeline, making the program hugely important to the company's commercial future.

Amicus' share price fell fast after news of the Phase III failure. The price was down 43.41% to $3.27 per share as of 10:27 am ET on Thursday.

After 6 months of treatment in Study 011, biopsies showed that 41% or 13 of 32 patients on Amigal reached at least a 50% reduction in a lipid substrate called GL3 that accumulates in the kidneys of Fabry patients because of an enzyme deficiency. Twenty-eight percent of patients on placebo, or 9 of 32, hit the same mark. The difference fell short of statistical significance, falling squarely in the failure category. Amicus plans to announce data from 12 months of treatment in the first half of 2012.

The company's second late-stage study, dubbed Study 012, will compare Amigal to enzyme replacement therapy, which is the current treatment for patients with the inherited disease. This month the developers wrapped up enrollment in the study, and results of the trial are expected in 2014.

"GSK and Amicus are committed to advancing migalastat HCl as a monotherapy in Fabry patients with amenable mutations," Marc Dunoyer, global head of GSK Rare Diseases, said in a statement. "While these 6-month data are encouraging, there is additional work to be done. We continue to analyze the 6-month results and look forward to receiving the 12-month results from this study. In addition the results of Study 012, our second Phase 3 Fabry monotherapy study, will add to the totality of our data and give us a more complete picture of the clinical effect of migalastat HCl."

Analysts saw a silver lining in yesterday's news as well. "Historical data from both migalastat studies and enzyme replacement therapy (ERT) studies have demonstrated that prolonged treatment leads to an improved therapeutic effect in Fabry patients," Cowen analyst Edward Nash wrote in a note to investors. "Therefore, we believe that the positive trend will likely become more pronounced after the 6-month follow-up treatment period."

Leerink Swann analysts stuck to their expections about success of Amigal in combination with ERT, saying in a note that they give the combo a 50% chance of success. That is a flip of the coin, but not bad given the wicked odds of success in drug development.

- here's the release

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