When investors are keen on a sub-sector within biotech, as they have
been relatively recently for immuno-oncology, RNAi, and liver disease,
companies and their stocks often get the benefit of the doubt, with
gaudy sales forecasts and approval odds well in excess of historical
norms. On the flip side, and in a case like Amicus Therapeutics (FOLD), once investors have largely written off a company it can be very hard to regain their interest and confidence.
To
be very clear, I believe Amicus still has a difficult road ahead of it.
The data on lead compound migalastat are not clean and sufficient
evidence of efficacy to drive approval (and/or market adoption) is no
guarantee. Likewise, the company's 3-in-3 strategy to get three rare
disease enzyme replacement therapies (or ERTs) into the clinic over the
next three years is ambitious but high-risk. These shares do still
appear to be undervalued, but I can frankly understand why many
investors may conclude that there are better reward-to-risk
opportunities elsewhere in biotech.
Read more here:
Amicus Therapeutics Still A "Show Me" Story
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