Shares of rare disease specialist Amicus Therapeutics (NASDAQ: FOLD) gained a healthy 10.7% in June, according to data from S&P Global Market Intelligence. What sparked this upswing?
Amicus' stock appears to have been the beneficiary of a rising-tide phenomenon last month. While the prior few months have been somewhat rocky for biotechs in general, June proved to be a banner month for the industry. The iShares Nasdaq Biotechnology Index, for instance, gained a stately 9.1% last month.
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After a tumultuous first half of 2019, biotech stocks perked up last month thanks in large part to the ongoing wave of consolidation that's occurring across the space. So far this year, we've seen numerous mergers and acquisitions such as Biogen's deal to acquire gene therapy specialist Nightstar Therapeutics, Bristol-Myers Squibb's megamerger with Celgene, Pfizer's acquisition of Array BioPharma, and most recently, AbbVie's $63 billion deal to tie the knot with Allergan. Amicus, for its part, appears particularly ripe for a buyout, especially with the company bolstering its presence in the highly coveted field of gene therapy.
Is Amicus' stock worth buying even if a buyout isn't in the cards? The answer to this question is a resounding yes. Amicus is on the cusp of sporting two franchise-level orphan drugs -- Galafold for Fabry disease and AT-GAA for Pompe disease (pending further development) -- capable of generating more than $1 billion in combined revenue early in the next decade.
In addition, Amicus has a rich pipeline of novel gene therapies indicated for a host of rare diseases -- many of which have the potential to generate hundreds of millions in sales if approved. So even though this mid-cap biotech stock is among the most expensive within its peer group, Amicus still has a solid shot at generating market-beating returns for investors in the coming decade.
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