Amicus Therapeutics (FOLD), a clinical stage biopharmaceutical company, continues to make efforts to generate funds to finance its capital expenditures. As the company currently does not have any approved product, it is striving hard to raise both equity and debt to finance its capital requirements.
The company recently completed its long-term debt financing with a lending consortium for $25 million. The consortium consists of MidCap Financial, LLC, Oxford Finance LLC, and Silicon Valley Bank. Amicus has already drawn $15 million under the debt facility while the second tranche of $10 million is expected to be available through the end of the fourth quarter of 2014.
Meanwhile, Amicus also raised equity in a private placement of shares and warrants to Redmile Group and GlaxoSmithKline (GSK). Amicus generated $15 million in a private placement of 7.5 million shares at $2.00 per share along with the issuance of warrants to purchase an additional 1.6 million shares at $2.50 per share.
We remind investors that GlaxoSmithKline amended its 2012 Fabry disease agreement with Amicus in Nov 2013. As per the agreement, Amicus will have the sole worldwide rights to develop and commercialize migalastat HCl (both as monotherapy and in combination with enzyme replacement therapy/ERT) for Fabry disease.
Although Glaxo will not receive any upfront payment, the company is eligible to receive regulatory and commercial milestone payments. Glaxo was also required to make equity investment of $3 million through private placement in public equity transaction in Amicus.
Amicus expects that the current cash position and the proceeds from the private placement and debt financings should fund operations into the second half of 2015. We note that Amicus primarily focuses on rare and orphan diseases.
The key candidates for Amicus includes- migalastat HCl as a monotherapy and in combination with enzyme replacement therapy (:ERT) for Fabry disease and AT2220 (duvoglustat HCl) in combination with ERT for Pompe disease.
The company is also developing treatment for other lysosomal storage diseases. Amcius currently carries a Zacks Rank #2 (Buy). Other stocks that also look attractive at current levels include Isis Pharmaceuticals (ISIS) and Athersys Inc (ATHX). Both carry a Zacks Rank #2 (Buy).