) --Welcome back to the Biotech Stock Mailbag.

@StuckinStock writes, "Do you care to share your thoughts on FOLD, Adam?"

I'm bullish on

Amicus Therapeutics

(FOLD) - Get Report

, meaning I believe the phase III study of Amigal in Fabry disease patients will be a success. Amicus and partner


(GSK) - Get Report

are expected to announce top-line results from the Amigal study in December.

Given the dynamics of the current biotech market, the announcement of a win from the Amigal study should be fuel for a nice bump in Amicus' stock price. (Look at

Acadia Pharmaceuticals

(ACAD) - Get Report

this week as a comp.) Whether Amicus can hold the higher bid is a tougher call.

A positive outcome from the Amigal study should wipe away many of the questions about Amicus' "pharmacological chaperone" technology platform that cropped up after the 2009 failure of the company's Gaucher disease drug Plicera.

On the other hand, it's difficult to gauge the commercial opportunity for Amigal in Fabry disease, which affects about 10,000 people worldwide. The current therapy for the disease is Fabrazyme, which generates approximately $500 million annually for the Genzyme unit of


(SNY) - Get Report

. Amigal won't work in all Fabry patients, but how many will benefit is a bit of guess. Amicus says half to three-quarters of Fabry patients have genetic mutations amenable to Amigal therapy. Other independent estimates predict 50% or fewer patients will be eligible for Amigal. Fabrazyme isn't going away, so Amigal will have to compete for Fabry patients. (Amicus does believe Amigal and Fabrazyme can be used in combination, too. More on that later.)

Amicus' market cap is approaching $300 million as the Amigal data release nears, so the size of the drug's commercial opportunity isn't a trivial matter.

Let's dig into the details.

Fabry is an inherited disease in which a genetic mutation stops an enzyme from breaking down a fatty substance known as globotriaosylceramide, or GL3. The buildup of GL3 in blood vessels throughout the body causes severe damage to kidneys, heart, brain, and other organ systems.

Currently, Fabry patients are treated with replacement enzyme. Fabrazyme takes the place of a patient's misshapen or missing native enzyme and clears GL3 from the body. As a replacement for the non-working native enzyme, Fabrazyme is effective in various degrees for all Fabry patients, although patients must sit through a time-consuming infusion every two weeks. The Fabrazyme infusion can also cause serious allergic reactions in some patients.

Amicus takes a different approach to treating Fabry disease. Amigal is a "chaperone." As the term implies, Amigal accompanies, or fixes, a patient's native enzyme. Without the Amigal chaperone, the native enzyme in a Fabry patient doesn't work well and can't get to the place in a cell where it's needed to break down GL3. But with Amigal as a helper, the native enzyme is stabilized and has increased cellular activity so it can break down GL3.

Remember when I said Amigal works only in some Fabry patients? That's because a chaperone can't do its job unless enough native enzyme is present. Patients with too little native enzyme or mutated enzyme that Amigal can't chaperone don't benefit from this approach. Don't expect Amigal to work as well or as broadly as Fabrazyme, but Amigal is a more convenient pill and the safety profile looks superior.

Amicus and Glaxo are running two phase III studies of Amigal in Fabry. The first, Study 011, enrolled 67 Fabry patients with severe disease, meaning they have high levels of GL3 built up in their kidneys. All patients were also screened to make sure they had enzyme mutations amenable to Amigal treatment. The patients were randomized in a blinded fashion to treatment with Amigal or a placebo for six months. After six months, the placebo patients were switched to Amigal while the original Amigal patients remained on therapy. The study's primary endpoint compares response to Amigal versus placebo at six months, with response defined as a 50% reduction in GL3 levels measured via a kidney biopsy. Response at 12 months is a secondary endpoint.

From a statistical standpoint, Amicus and Glaxo set up Study 011 to be a success with a nine-patient difference in response between Amigal and placebo.

37 patients were treated with Amigal; 30 on placebo. The likelihood that a meaningful number of placebo-treated patients achieve a 50% reduction in GL3 levels at six months is very small, which means the success of the trial hinges on Amigal's ability to produce a response.

Data from phase II studies have been mixed but more positive than not, with sufficient numbers of patients achieving 50% reductions in GL3 to be reasonably confident the phase III study will succeed. Is a positive outcome guaranteed? No, which is why Amicus' stock price isn't higher already.

Amicus and Glaxo will announce top-line results from Study 011 in December but details may be scant. Amicus has only committed to disclosing if the primary endpoint was reached with statistical significance or not, a company spokesman told me Wednesday. Details about the exact number of Fabry patients in each arm responding to Amigal or placebo may not be revealed until a presentation of the study data at a medical meeting next year.

A brief mention about the potential for Amigal-Fabrazyme combination therapy: Amicus and Glaxo's second phase III study is testing whether Fabry patients currently treated with Fabrazyme can benefit from the addition of Amigal. The thesis is that Amigal may further stabilize and boost the activity of the replacement enzyme, thereby making therapy more effective. Results from this phase III study are expected next year.

Combination therapy in Fabry disease is a larger commercial opportunity for Amicus. The challenge is demonstrating the cost-effectiveness of any added benefit. Fabrazyme therapy costs about $250,000 per year. Amigal pricing hasn't been determined but let's assume that it won't be cheap. That means the incremental benefit from Amigal will have to be substantial to justify the added expense. Insurance companies may put up a fight if the added benefit is minor.

Michael W. writes, "I'd like you to write about

Celldex Therapeutics

(CLDX) - Get Report

again since you haven't mentioned the stock since May. Do you think the new data will be as good this time as what we saw back then?"

Michael is referring to Celldex's targeted breast cancer drug CDX-011. Last May, Celldex released

interim results from a phase II study

demonstrating superior response rates in patients with advanced metastatic breast cancer compared to single-agent chemotherapy. CDX-011 worked best in a subset of patients with tumors containing high levels of a protein linked to more aggressive disease.

On Saturday, Dec. 8, Celldex will be presenting updated CDX-011 data from the same breast cancer study at the San Antonio Breast Cancer Symposium.

I'll review the May results in a moment but I'd be cautious about expecting radically different CDX-011 data in December. Response rates aren't likely to have changed significantly, if at all. Hopefully, we get updated and more specific progression-free survival results plus some survival data.

The updated CDX-011 data have been talked up as a significant catalyst for Celldex but I'm not so sure. It may be a big trading event but not much more. More important to Celldex will be the outcome of a planned meeting with FDA to discuss next steps for CDX-011.

Celldex will be seeking FDA sign-off to conduct a pivotal phase III study of CDX-011 in advanced breast cancer patients who overexpress the GPNMB protein and have triple-negative disease. Breast cancer is particularly aggressive in these patients and there are no approved therapies to treat them.

From the interim results in May, CDX-011 yielded a 36% partial response rate in the prospectively defined subset of triple negative/high GPNMB expression patients compared to 0% response rate for similar patients treated with "investigator's choice" therapy.

The confirmed partial response rate in this subset of patients was 9% for CDX-011 versus 0% for investigator's choice therapy.

Celldex bears (yes, I'm talking about the short sellers) point out the subgroup of triple negative/high GPNMB expression patients totaled just 14 in the phase II study. (11 randomized to CDX-011, 3 to placebo.) This means Celldex is basing its optimism for CDX-011's activity on four partial responders, or just a single partial responder if you only count the confirmed response data. Too flimsy to be believed, Celldex bears say.

CDX-011 is a monoclonal antibody drug conjugate. The antibody portion targets cancer cells that express the GPNMB protein, which has been shown to correlate with poorer outcomes in breast cancer patients. When the CDX-011 antibody attaches to GPNMB-expressing tumor cells, it releases a toxic chemotherapy payload. This "drug conjugate" was licensed from

Seattle Genetics

(SGEN) - Get Report

and is the same one used in the newly approved lymphoma drug Adcetris.

Celldex designed the phase II study to test the theory that CDX-011 would work better in breast cancer patients whose tumors over-express the GPNMB protein. The 122 patients enrolled in the study had breast cancer in which at least 5% of the cells screened positive for GPNMB. All the patients had advanced breast cancer that was no longer responding to a median of five to six prior therapies. Two-thirds of patients were treated with injections of CDX-011, while the remaining third of patients were treated with chemotherapy of the doctor's choice.

Treatment with CDX-011 partially shrank tumors in 19% of all patients enrolled in the phase II study compared to 14% of patients treated with "investigator's choice" chemotherapy.

In patients with breast cancer tumors that contained high levels of the protein GPNMB, the CDX-011 response rate was 32% compared to 13% for patients treated with single-agent chemotherapy.

Back to the bear story for a moment: They raise questions about the legitimacy of GPNMB as an anti-cancer target for CDX-011. To them, the Celldex-GPNMB story is similar to Clovis Oncology's development of pancreatic cancer drug CO-101 in patients who were low expressers of hENT1 protein. Clovis' drug blew up in a phase III study because low hENT1 turned out to have no role at all in pancreatic cancer. Celldex bears believe GPNMB's role in breast cancer may also be a fallacy.

-- Reported by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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