Glaxo Group Limited, an affiliate of
) recently announced the expansion of their existing agreement
related to the development and commercialization of migalastat HCl
(also known as AT1001) for Fabry disease.
Additionally, Glaxo announced its intention to hike its stake in
Amicus to 19.9%. Glaxo will make an investment of $18.6 million and
buy 2,949,581 shares of Amicus at $6.30 per share. We note that as
of March 31, 2012, Glaxo's holding in Amicus was 14.8%,
representing an equity investment of $31 million. We believe that
Glaxo's increased holding in Amicus reflects its confidence in
As per the terms of the expanded deal, Glaxo and Amicus will
jointly develop all formulations of migalastat for Fabry disease.
Regarding the commercialization of migalastat, Amicus will possess
the rights in the US while Glaxo will have the rights to market the
drug in the rest of the world.
Migalastat is being developed in three different programs. It is
being evaluated as a monotherapy for Fabry disease with data from a
phase III study expected in the third quarter of 2012.
The second program is evaluating the use of migalastat plus enzyme
replacement therapy (ERT) for Fabry disease. Positive preliminary
results from an ongoing phase II study were announced in January
Migalastat is also being co-formulated with Japan-based JCR
Pharmaceuticals Co.'s JR-051, a proprietary recombinant human
alpha-Gal A enzyme. The studies are still in pre-clinical stage.
The companies expect to initiate clinical studies in 2013.
A major part of Glaxo's revenues will be exposed to generic
competition as multiple drugs are scheduled to lose exclusivity in
the next few years.
We expect the company's top line as well as gross margins to remain
under pressure in the coming quarters. In addition to generic
competition, the US Health Care Reform and EU pricing pressure will
continue to affect sales.
Glaxo is looking towards deals and acquisitions to drive growth.
The company is focusing on increasing the rights on its partnered
products and promising pipeline candidates, so that it stands to
benefit more from their success.
Glaxo's acquisition of Cellzome and increasing investment in
) and Amicus indicate its efforts to expand the pipeline. This
week, Glaxo also entered into a definitive agreement to acquire
Human Genome Sciences
) for $14.25 per share in cash. With this acquisition, Glaxo will
gain full ownership of lupus drug Benlysta along with albiglutide
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