Epidermolysis bullosa is a rare, debilitating skin disease with no approved treatments, and unfortunately, that isn’t going to change anytime soon. Amicus Therapeutics reports this morning that an experimental drug it has been developing for the condition failed a Phase 3 trial. The Cranbury, NJ, company won’t invest in future studies.
Amicus (NASDAQ: [[ticker:FOLD]]) said that SD-101, a drug it acquired when it bought Durham, NC-based Scioderm, failed all of its primary and secondary goals in the 169-patient study. The drug actually fared worse than a placebo on a few different measures. It didn’t close up wounds in more patients than a placebo, or do a better job of closing them up within three months.
While Amicus said in a prepared statement that it will dig through the data further and “encouraging trends” were seen in certain patient subgroups, it has no plans at this point to pursue any future study.
Despite the failure, however, Amicus shares actually ticked up 1.6 percent in pre-market trading Wednesday. Leerink Partners analyst Joseph Schwartz wrote in a research note that investors were “already cautious” regarding the prospects of SD-101, and pointed to more significant upcoming catalysts, such as an FDA filing for Fabry disease pill migalastat (Galafold).
Epidermolysis bullosa, or EB, is a group of genetically triggered connective tissue disorders that result in a lack of collagen, a structural protein that attaches the skin’s various layers. Without collagen, patients with EB can easily suffer severe blisters or wounds; patients are sometimes called “butterfly children” because their skin is so delicate. The disease affects 30,000 in the U.S., and 500,000 worldwide, according to the Dystrophic Epidermolysis Bullosa Research Association of America. There are no FDA-approved treatments for EB, and SD-101 was the only experimental treatment in Phase 3, according to DEBRA’s website.
Amicus bought Scioderm aiming for a two-fold payoff. First, it hoped the drug would provide a new revenue stream for a company just starting to generate cash from its first product, migalastat. And second, that FDA approval would land Amicus a priority review voucher from the agency. These vouchers enable a swifter review from the FDA once a company files for approval of a drug, and can be used for any drug in a company’s pipeline or flipped just like any other asset.
Amicus paid about $224 million in cash and stock up front for Scioderm, and an SEC filing shows it paid the company’s shareholders—investors including Morganthaler Partners and Technology Partners—another $5 million in mid-2016. The big payoffs, however, another $600+ million in downstream payments, only would’ve materialized had SD-101 succeeded in clinical testing and hit various regulatory and sales targets.
For Amicus, SD-101’s failure turns the company’s focus back to its long crusade to winning FDA approval of migalastat, and progressing the other, earlier stage drugs in its pipeline—like a Pompe disease drug expected to produce data this quarter. Migalastat was approved in Europe in 2016 and Australia in August generated about $7.2 million in sales in the last quarter. Getting the drug by the FDA has been a tougher task, but Amicus got some good news on that front in July when the agency, under new commissioner Scott Gottlieb, reversed an earlier decision and said the company would not have to run a new clinical trial to file for approval. It aims to submit an FDA application by the end of the year.
