Amicus Therapeutics (FOLD) Unfolding The Biotech Sector
What should we make of today’s market conditions? Investors are digesting how the Federal Reserve’s ‘higher for longer’ interest rate policy will impact the economy, and they’re not pleased with the prospect. Other challenges on the horizon include the ongoing Congressional budget battles, lingering inflation, the evaporation of consumer savings and purchasing power, and concerns over China’s incendiary combination of slowing growth, geopolitical ambition, and approaching demographic collapse.
That’s a lot to digest, but covering the situation from banking giant J.P. Morgan, global investment strategist Madison Faller believes there is some reason for optimism through the autumn.
“When it comes to stocks, the recent selloff means valuations are more reasonable today than they were before… Focusing on valuations alone also ignores the actual experience of companies. The S&P 500 has already suffered through three quarters of earnings declines, and expectations for future earnings have been rising steadily over the last six months. Despite all the worry, that backdrop could spur stocks to new highs over the next year… Staying invested through the uncertainty has typically served investors best,” Faller opined.
So, given this optimistic perspective, the question is, which equities should investors consider adding to their portfolios? J.P. Morgan analysts have pinpointed two names they believe would be valuable additions.
And they are not alone; according to TipRanks’ database, both stocks are also rated as ‘Strong Buys’ by the analyst consensus. Let’s see why they are drawing plaudits across the board.
Amicus Therapeutics (FOLD)
We’ll start in the biotech sector, where Amicus is a biopharmaceutical company with a focus on the treatment of rare diseases. These are typically disease conditions with small patient bases and devastating effects. Amicus is working on new therapeutic agents with novel actions to deliver advanced treatments with a patient-centered focus.
This company has achieved its goal and reached the brass ring – it now has two approved drugs on the market. The first of these, Galafold, is a treatment for adults suffering from Fabry disease; the second is a combination therapy, Pombiliti and Opfolda, used in the treatment of late-onset Pompe disease.
These approved drugs have given Amicus a steady revenue stream. The company reported $94.5 million in global revenue for 2Q23, the last quarter reported, beating the forecast by ~$4.6 million. The revenue was also up 17% year-over-year.
Looking ahead, Amicus is predicting that sales of Galafold will show revenue growth in the 14% to 18% range for the full year 2023. The company credits this outlook to high demand and commercial expansion in the US, UK, EU, and Japanese markets. Also of note, Amicus has received regulatory approval from the EU in Q2 for the commercial launch of the Pombility+Opfolda combination therapy.
JPMorgan analyst Anupam Rama is impressed by the full commercialization potential of Amicus, writing of the company, “With peak sales of ~$600M+ for Galafold and ~$750M+ for Pombiliti + Opfolda, we believe that FOLD shares are undervalued. As Pombiliti + Opfolda was approved in Pompe disease in 3Q23, we believe that the therapy shows best-in-class potential and it has been noted that the therapy is preferred by KOLs we have spoken with…”
“Net-net, at current valuation levels, we continue to think that solid execution on the Galafold and Pombiliti + Opfolda should drive value into the mid- to high-teens / share level,” Rama summed up.
Looking ahead, Rama rates FOLD an Overweight (i.e. Buy), and sees it hitting a share price of $19 for ~71% one-year upside potential. (To watch Rama’s track record, click here)
Overall, the Strong Buy consensus rating on this stock is supported by 6 recent analyst reviews, including 5 Buys and 1 Hold. The shares are priced at $11.14 and their $18.17 average price target implies a 12-month gain of 63%. (See FOLD stock forecast)
