(Reuters) – Amicus Therapeutics Inc said on Wednesday it would stop developing its experimental drug for healing wounds related to a rare skin disease, but shares of the company rose as investors appeared to focus on the drug developer’s expanding pipeline.
Amicus’s shares rose as much as 6 percent in morning trading, recovering from a nearly 15 percent slide before the bell.
The company’s wound drug, SD-101, failed to meet the main goals in a late-stage trial testing the treatment in patients with epidermolysis bullosa (EB), a rare, genetic skin disease that causes severe blisters and currently has no approved treatment.
But analysts appeared optimistic about results from Amicus’s upcoming trial testing a treatment for another genetic disorder, and said investor expectations from the SD-101 trial had been muted.
Investors had been “very cautious” about Amicus’s EB program, expressing concern about the trial design and market opportunity, Leerink Partners LLC analyst Joseph Schwartz said in a report to clients.
Amicus is in the early stage of developing treatments for Pompe disease, a genetic disorder, while European and Australian regulators have already approved the use of the company’s drug to treat Fabry disease, another genetic ailment.
“(The failed SD-101 trial) serves more as a clearing event ahead of upcoming Pompe data and Fabry program progress,” Cowen and Co analyst Ritu Baral said.
In another sign of progress for Amicus’s pipeline, the U.S. Food and Drug Administration (FDA) in June gave the company the go-ahead to apply to market its Fabry disease drug, migalastat. That green light followed the FDA’s demand in November for Amicus to conduct another late-stage study of migalastat.
Amicus said SD-101, when compared with a placebo, did not show a statistical significance in reducing the time taken for wounds to close in patients with EB.
The number of patients whose wounds had closed after taking Amicus’s drug, SD-101, was also not different from the number of patients on a placebo whose wounds had closed, the company said.
Shares of Cranbury, New Jersey-based Amicus were up 4.4 percent at $ 13.87 in morning trade. The stock has more than doubled in value since the beginning of the year.
Reporting by Manas Mishra in Bengaluru; Editing by Sai Sachin Ravikumar