In anticipation of PhIII trial results, Amicus pares down old debt with $400 million loan
Amicus received a healthy heaping of good news last month when analysts threw cold water on Sanofi’s late-onset Pompe disease ERT, after a Phase III study essentially cleared the way for Amicus’ competing candidate to be the standard-bearer. Now, Amicus is preparing for a new “path to profitability” with an expected windfall.
The New Jersey-based biopharma announced today it is refinancing debt to the tune of a $400 million loan from Hayfin Capital Management. Amicus will utilize the credit, which is expected to be funded in full on or about August 4, to refinance existing debt and for other development purposes.
As part of the announcement, Amicus also noted it remains on track to see between $250 and $260 million in revenue from sales of its drug Galafold, which treats Fabry disease.
Crucially for Amicus, the loan allows current obligations to be paid without turning to the equity market and diluting its ownership stake. In other words, Amicus did not have to sell off shares to subsidize debt payments.
Amicus will only need to pay interest until mid-2024. Then, beginning on the four-year anniversary of the loan withdrawal, the company will repay the principal amount in nine equal quarterly installments until the loan matures in late 2026, according to an SEC filing. Amicus can also pay back the entire principal amount at any time.
The mere fact that Hayfin is willing to provide such a large line of credit illustrates the firm’s confidence in Amicus’ ability to not only repay in full, but in the upcoming Pompe disease candidate itself. Since the release of Sanofi’s study last month, Amicus stock has risen about 40 percent.
That study showed underwhelming data for Sanofi’s neo-GAA program in treating Pompe disease when compared to Lumizyme, an earlier-generation ERT from Sanofi. Though neo-GAA met its primary endpoint in non-inferiority, it did not demonstrate superiority, a Cowen analyst said at the time.
Additionally, a cross-trial comparison from SVB Leerink indicated that Sanofi’s Phase III results showed less efficacy than Amicus’ Phase II results. Amicus is currently conducting its Phase III trial for its Pompe disease candidate, AT-GAA, and plans to apply for and complete a rolling BLA sometime in the first half of next year.
The completion of the Amicus Phase III could provide the final, definitive evidence its candidate will set the market for Pompe disease drugs, if all goes well. But nothing has, as of yet, implied otherwise.