On Thursday, BofA Securities updated its outlook on Amicus (NASDAQ:FOLD) Therapeutics (NASDAQ:FOLD) shares, raising the price target from $13.00 to $15.00 while maintaining a Buy rating on the stock. The adjustment follows Amicus Therapeutics ' announcement that they have reached a settlement with Teva regarding the patent litigation for their drug Galafold.
The settlement allows Teva the rights to commercialize a generic version of Galafold starting January 30, 2037, which is before the expiration of several composition of matter patents set to expire in 2038. This agreement is seen as a positive development, potentially influencing other ongoing generic litigation negotiations Amicus is involved in.
The settlement has removed a significant concern for investors, as it establishes a precedent for future agreements with other generic manufacturers. Analysts at BofA Securities have incorporated this new development into their discounted cash flow (DCF)-based model, now projecting a more gradual decline from the anticipated peak US sales of Galafold in 2030.
Despite the extended patent life, there is an expectation of market impact from competitive gene therapies entering the space.
The revised model extends to the year 2037, previously 2035, to account for the sales impact of potential generic competition beginning in 2037. BofA Securities continues to forecast peak worldwide sales of Galafold to reach $680 million in 2030. With the recent settlement, Galafold now contributes $9 per share to the new price objective of $15, up from the previous valuation of $7 per share contributing to the $13 target.
As the third quarter earnings approach, BofA Securities reiterates its Buy rating, looking forward to updated launch metrics for Galafold in treating Fabry disease and for Opfolda+Pombiliti in Pompe disease.
In other recent news, Amicus Therapeutics has reached a significant settlement with Teva Pharmaceuticals, concluding a patent lawsuit over the drug GALAFOLD. The agreement permits Teva to market a generic version of GALAFOLD in the U.S. from January 30, 2037, pending FDA approval. However, Amicus continues its legal battles against Aurobindo Pharma and Lupin Pharmaceuticals.
In financial developments, Amicus reported a substantial revenue growth of 34%, reaching $127 million in the second quarter of 2024. This increase was largely attributed to GALAFOLD, which saw a 19% surge in global sales, leading Amicus to raise its full-year revenue guidance to between 26-31%.
Investment banking firm Jefferies recently initiated coverage of Amicus, assigning a Buy rating to the company's stock. Jefferies anticipates Amicus could engage in business development for a commercial rare disease drug in the next 12 to 18 months, a move projected to positively impact the company's earnings per share and drive margin expansion.
These recent developments underscore Amicus Therapeutics' potential for growth in the rare disease market.
InvestingPro Insights
Amicus Therapeutics' recent settlement with Teva and the subsequent price target increase by BofA Securities align with several positive indicators from InvestingPro data. The company's impressive revenue growth of 29.98% over the last twelve months and a strong 34.04% quarterly growth suggest a robust market position for its key drug, Galafold. This growth trajectory supports InvestingPro's tip that net income is expected to increase this year.
Moreover, Amicus boasts an exceptional gross profit margin of 89.88%, which InvestingPro highlights as one of the company's strengths. This high margin reflects the company's efficiency in manufacturing and selling its products, particularly Galafold, and provides a solid foundation for future profitability as sales continue to grow.
While the company is not currently profitable, InvestingPro Tips indicate that analysts predict profitability this year, aligning with the positive outlook presented in the article. For investors seeking more comprehensive analysis, InvestingPro offers 5 additional tips for Amicus Therapeutics, providing a deeper understanding of the company's financial health and market position.
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