Amicus Therapeutics to Acquire Rare Disease Company Scioderm, Inc.

31 Aug 2015 | Author: | No comments yet »

Amicus Therapeutics to Acquire Rare Disease Company Scioderm, Inc..

CRANBURY, N.J., Aug. 31, 2015 (GLOBE NEWSWIRE) — Amicus Therapeutics (Nasdaq:FOLD), a biotechnology company at the forefront of therapies for rare and orphan diseases, and Scioderm, Inc. a privately-held biopharmaceutical company focused on developing innovative therapies for treating diseases with high unmet need, have signed a definitive agreement under which Amicus will acquire 100% of the capital stock of Scioderm, Inc. Amicus Therapeutics has stepped in to snap up the late-stage rare disease biotech Scioderm, beefing up its orphan drug pipeline in exchange for $229 million in stock and cash along with a promise of up to $618 million more for meeting a slate of milestones. Leverages Scioderm development team’s EB expertise with Amicus’ global clinical infrastructure to advance Zorblisa toward regulatory approvals and Amicus’ commercial, patient advocacy and medical affairs infrastructure to support a successful global launch Phase 3 pivotal study (SD-005) is currently enrolling pediatric and adult EB patients across all major subtypes to support global regulatory approvals – data anticipated in 1H16 Creates a leading rare disease portfolio that is well-positioned to bring substantial value to patients and shareholders – potential for Fabry commercial product launch, EB marketing submissions, and Pompe Phase 3 study in 2016 “This acquisition is a major step forward toward our strategic vision and is transformative for the Epidermolysis Bullosa, or EB, community as well as the shareholders of Amicus and Scioderm,” said John F. The buyout leaves Amicus ($FOLD) with its lead drug Galafold under regulatory review, a new drug that could be filed in the near term and a third program entering the clinic — with CEO John Crowley prepping for more deals as the company builds out a global commercial team. Amicus completes this buyout a little more than a month after Scioderm started a rolling submission of its NDA for Zorblisa (SD-101) an experimental drug for epidermolysis bullosa, a condition that leaves children’s skin papery thin and fragile, subject to tearing and blistering.

The deal could be worth close to $1 billion in total payments if the privately held Scioderm’s drug, SD-005, a cream for a rare, debilitating skin disease called epidermolysis bullosa, hits a variety of regulatory and sales milestones. Data from the late-stage study is due in the first half of next year–following a successful Phase IIb trial–with Amicus looking for a regulatory green light on a drug Crowley believes could be a blockbuster for Amicus. The market for Zorblisa, says the CEO, is worth “a billion dollars-plus.” Adds Crowley: “We want to be one of the leading biotech companies focused on rare diseases.” There’s also an added bonus involved in this deal. We believe we are well-positioned to rapidly complete the clinical development of Zorblisa and to make Zorblisa commercially available for all EB patients as quickly as possible.

If Zorblisa is approved, the owners could qualify for a priority review voucher — an asset that’s been worth hundreds of millions of dollars in recent deals. Little Durham, NC-based Scioderm was unique among the virtual crowd back in 2013, when the FDA handed out one of its first breakthrough therapeutic designations to the biotech. Crowley (pictured above) says Amicus will soon begin a “rolling submission” of an application to approve the drug—basically, a tool that allows companies to submit completed portions of their FDA applications to the agency, rather than wait until they finish the whole document. The current standard of care is palliative treatments which cost $10,000 to $15,000 per month, and mainly consist of bandaging, treating the open wounds to prevent infection and trying to manage patients’ pain.

The FDA awards the vouchers to companies that bring treatments to market for neglected tropical diseases and rare pediatric ailments, and they enable a swifter review from the FDA once a company files for approval of a drug. That can cut months out of a review process, and what’s more, vouchers can be used for any drug in a company’s pipeline or flipped just like any other asset.

The failure spurred GlaxoSmithKline to drop out of its partnership, but Amicus came back with a new plan to use a different biomarker on symptoms of the disease. That strategy paid off with successful Phase III studies of the drug, comparing well with Sanofi’s Fabrazyme and Shire’s Replagal in two measures of kidney function. At closing, Amicus will pay Scioderm shareholders $229 million, of which $125 million will be paid in cash and $104 million will be paid through the issuance of 7 million newly issued Amicus shares.

Amicus has agreed to pay up to an additional $361 million to Scioderm shareholders in cash or stock upon achievement of certain clinical and regulatory milestones and $257 million to Scioderm shareholders in cash or stock upon achievement of certain sales milestones. If the price exceeds $200 million, all the excess cash would flow to Amicus—meaning, in theory, if the voucher went for $400 million, Amicus would get $300 million, and Scioderm’s backers would get $100 million. As this deal cost $125 million in cash, he says Amicus’s business development team is well positioned to hunt down more tech and product deals, with an early focus on some early-stage deals this time around. The transaction is subject to customary conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The Boards of both companies have approved the transaction and the companies currently anticipate that the transaction will be completed in the third quarter of 2015.

It’s actually 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. “You meet these kids and it just takes your breath away,” Crowley says. “Some of them are wrapped in bandages from head to toe, and their hands are fused, it’s just awful.” The disease affects 30,000 in the U.S., and 500,000 worldwide, according to the Dystrophic Epidermolysis Bullosa Research Association of America.

Based on the closing of the Scioderm acquisition, the anticipated debt financing and the forecasted spending on Zorblisa development, Amicus expects to end 2015 with $200 million to $225 million of cash on hand. Scioderm’s cream, as Frank Vinluan explained in this piece last year, keeps allantoin more stable and delivers it in a higher concentration for a longer time. He’s been on Scioderm’s board of directors for two years—his only non-Amicus board seat—and developed a “strong relationship” with the startup’s co-founder and CEO Robert Ryan.

An audio webcast and slide presentation can also be accessed via the Investors section of the Amicus Therapeutics corporate web site at http://www.amicusrx.com, and will be archived for 30 days. Web participants are encouraged to go to the web site 15 minutes prior to the start of the call to register, download and install any necessary software.

Its Fabry disease drug, migalastat (Galafold), is currently under review in Europe, and Amicus has been raising cash to prep for the drug’s launch, which could come next year. There are many genetic and symptomatic variations of EB that all share the prevalent manifestation of fragile skin that blisters and tears from minor friction or trauma. Patients with the more severe forms of EB have generalized blistering and lesions affecting a substantial percentage of their bodies that can lead to infection and scarring, and, in severe cases, death. Half the patients receive Zorblisa cream (also known as SD-101) and the other half receive placebo cream, applied topically once daily to the entire body for 90 days. Secondary outcome measures include 1) median time to complete target wound closure; 2) change in lesional skin at Month 2; 3) change in itching at Day 7; and 4) change in pain at Day 7.

Scioderm was financed initially in 2013 by Morgenthaler Ventures and Technology Partners, followed by a subsequent financing that was led by Redmile Group and included the initial investors. Ralph (Chris) Christoffersen, Ph.D., Chairman of the Board, noted that, “Robert Ryan and the Scioderm team have done an outstanding job in bringing Zorblisa through both preclinical and clinical studies. It is a real pleasure to join with the excellent team at Amicus to continue the development and commercialization of this product which we believe will have a significant positive impact on the lives of EB patients and their families.” The company’s lead therapy, Zorblisa (SD-101), is in Phase 3 development for treatment of the skin effects associated with Epidermolysis Bullosa (EB), a rare genetic connective tissue disorder. The Company is developing novel, first-in-class treatments for a broad range of human genetic diseases, with a focus on delivering new benefits to individuals with lysosomal storage disorders.

Words such as, but not limited to, “look forward to,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “potential,” “plan,” “targets,” “likely,” “may,” “will,” “would,” “should” and “could,” and similar expressions or words identify forward-looking statements. With respect to statements regarding projections of the Company’s cash position, actual results may differ based on market factors and the Company’s ability to execute its operational and budget plans.

In addition, all forward looking statements are subject to other risks detailed in our Annual Report on Form 10-K for the year ended December 31, 2014 2014 and our Form 10-Q for the quarter ended June 30, 2015. All forward-looking statements are qualified in their entirety by this cautionary statement, and Amicus undertakes no obligation to revise or update this news release to reflect events or circumstances after the date hereof. CONTACT: Investors/Media: Amicus Therapeutics Sara Pellegrino Director, Investor Relations spellegrino@amicusrx.com (609) 662-5044 Media: Pure Communications Dan Budwick dan@purecommunicationsinc.com (973) 271-6085

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