The market has cooled for companies trying to go public, the latest example being Amicus Therapeutics, which plans to spin off its gene therapy into a separate company that will go public through a merger deal.Instead, Amicus and the Blank Check Company have cancelled Merger, citing unfavorable market conditions.
Terminating the merger with special-purpose acquisition firm ARYA Sciences Acquisition Corp IV means Amicus now needs to save $400 million — the same amount the gene therapy company should have received from the deal.The termination was announced on Thursday, with the release of Amicus 2021 Financial Results.
“This decision was driven by adverse market conditions affecting IPOs, follow-on financings and SPACs in the biotech space, as well as an increasingly challenging environment for independent gene therapy companies,” Amicus said in a financial update.
when Amicus unveiled plans for SPAC merger last September, which pitched the deal as a way to put the Philadelphia-based developer of rare disease drugs on a path to profitability. Since its inception in 2002, Amicus’ focus has been on lysosomal storage disorders, an inherited metabolic disorder. Galafold, a Fabry disease treatment, is Amicus’ only commercialized drug, with 2021 revenue of $305.5 million, a 17% increase over 2020 sales. The company reported a net loss of $250.5 million in 2021, compared with a net loss of $276.8 million in the previous year. Amicus may soon add another commercial product to its portfolio. The Pompe disease drug candidate is currently under FDA review, with a regulatory decision expected in May.
The Amicus pipeline includes gene therapies from Fabry and Pompe, both of which are in the preclinical stage.Last month, the company discontinued One of two clinical-stage programs for Barton’s disease, a rare inherited neurological disorder, following disappointing data. Batten disease therapy and other treatments are Acquired Celenex in 2018The plan to spin these therapies off into a new independent company, Caritas Therapeutics, aims to separate Amicus’ commercialized lysosomal storage disease drug from earlier gene therapy candidates, which will require significant investment to advance their development. One of those investments is a planned manufacturing facility in Florida.
Turning Amicus into a major commercial stage business is no longer viable. The company will remain focused on expanding Galafold’s reach by commercializing in more geographic markets. Amicus is also preparing to commercialize its Pompe drug. At the same time, Amicus will streamline its portfolio and align its business around the company’s research and development pipeline, Chief Executive John Crowley said in the financial report. He added that Amicus expects the moves to save about $400 million in operating expenses by 2026, the same amount that Caritas expects to receive in the SPAC merger. Under this new strategy, Amicus expects to be profitable in 2023 without having to resort to any equity financing, Crowley said. Amicus reported that it ended 2021 with a cash position of $482.5 million.
Under the original spinoff plan, Crowley would leave his position at Amicus in order to become Caritas CEO. He will now continue to lead Amicus until August 1, when he will be succeeded by Bradley Campbell, currently the company’s chief operating officer. Crowley will then become Amicus’ executive chairman for a two-year term.
Both Amicus and ARYA IV stated that it was their decision to terminate the merger and that neither party owed the other a termination fee. Meanwhile, time is running out for ARYA IV to find another company and execute the merger, unless it extends the SPAC’s March 2, 2023 deadline to dissolve.
Photos by Flickr users Oregon Department of Transportation through Creative Commons license
