Amicus Therapeutics, Inc. (NASDAQ:FOLD) Q4 2022 Earnings Call Transcript

Amicus Therapeutics, Inc. (NASDAQ:FOLD) Q4 2022 Earnings Call Transcript March 1, 2023

Operator: Good morning ladies and gentlemen and welcome to the Amicus Therapeutics Full Year 2022 financial results conference call and webcast. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Andrew Faughnan, Vice President of Investor Relations. You may begin.

Andrew Faughnan: Great. Thank you operator. Good morning everyone. Thank you for joining our conference call to discuss Amicus Therapeutics full year 2022 financial results and corporate highlights. Leading today’s call we have Bradley Campbell, President and Chief Executive Officer; Daphne Quimi, Chief Financial Officer; Sébastien Martel, Chief Business Officer; and Dr. Jeff Castelli, Chief Development Officer. Joining for Q&A is Dr. Mitchell Goldman, Chief Medical Officer, and Ellen Rosenberg, Chief Legal Officer. As referenced on Slide 2, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to our business as well as our plans and prospects. Our forward-looking statements should not be regarded as representation by us that any of our plans will be achieved.

Any or all of the forward-looking statements made on this call may turn out to be wrong and can be affected by inaccurate assumptions we might make, or by known or unknown risks and uncertainties. You are cautioned not to place undue reliance on any forward-looking statements which speak only as of the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and we undertake no obligation to revise or update this presentation and conference call to reflect or circumstances after the date hereof. For a full discussion of such forward-looking statements and the risks and uncertainties that may impact them, we refer you to the forward-looking statements and risk factors section of our annual report on Form 10-K for the year ended December 31, 2022 to be filed with the Securities and Exchange Commission today.

At this time, it’s my pleasure to turn the call over to Bradley Campbell, President and Chief Executive Officer. Bradley?

Bradley Campbell: Great. Thanks Andrew and welcome everyone to our full year 2022 results conference call. I’m pleased today to highlight the progress we’ve made across our business throughout 2022 and now into the start of 2023. As we did in this morning’s press release, let me highlight several key points. First, Galafold continues its strong performance and remains a cornerstone of our success. We continue to be very pleased with a strong demand for and growth of Galafold globally, with now over 2000 people living with Fabry disease, taking Galafold as their only treatment for Fabry. What an amazing milestone for this precision medicine. And despite the significant foreign currency headwinds experienced throughout last year, in 2022, we reported Galafold revenue growth of 8% or 16% on an operational or constant currency basis.

Throughout last year and into this year, we continue to see strong trends across a number of our key performance indicators, including increasing demand through new patients starts from both the switch and naive populations, continued growth and in person visits between our field teams and Fabry traders throughout the world and sustain patient compliance and adherence rates of over 90%. In 2023, we expect to see continued double digit Galafold growth fueled by significant demand from patients and physicians. We’re also pleased by the growing Galafold Intellectual Property estate through the issuance of 19 new patents over the last year. There are now a total of 46 Orange Book listed issued patents related to Galafold in the United States, 30 of which provide protection to 2038 and beyond.

And importantly, this includes five composition of matter patents. We see this patent portfolio, along with our orphan drug exclusivity, providing broad and long-term intellectual property rights well into the late 2030s for this novel, precision medicine. Second, we continue to make progress on our global regulatory filings and commercial launch planning for AT-GAA, our novel two component therapy for Pompe disease. We are thrilled today to announce the U.S. FDA has scheduled the required pre-approval inspection of the WuXi Biologics manufacturing site in China during the second quarter of this year. Pending completion of a successful inspection, we anticipate the regulatory approval and launch of AT-GAA in the United States will be during the third quarter of 2023.

Additionally, in Europe, we’re on track with the regulatory reviews by both EMA and MHRA on the marketing authorization applications for AT-GAA. As a reminder, in December, the CHMP adopted a positive opinion of cipaglucosidase alfa to be marketed as Pombiliti with the European Commission approval expected this quarter. We anticipate a CHMP opinion from Miglustat the enzyme stabilizer component of AT-GAA in the second quarter of this year. And as a reminder, the EMA has indicated that it does not require an inspection of the WuXi manufacturing site as a condition of their approval. In the U.K., the regulatory submission process for AT-GAA was initiated in December and is on track for an expected approval in the third quarter of this year. As we’ve observed throughout 2022, we continue to see significant interest in participation in our expanded access mechanisms for AT-GAA globally; programs are now in place in the U.S., United Kingdom, France, Germany and Japan, with a growing number of patients participating in each.

Across all of our on-going clinical studies and expanded access programs we’re now over 195 patients on AT-GAA today, which we believe represents more than 5% of the total treated Pompe patients around the world. We expect this number to continue to grow as we approach approvals in the United States and Europe and beyond. In anticipation of these approvals in the near term, our global launch plans continue to move ahead, including our prelaunch activities, targeted investments and additional personnel and capabilities to support the launch and on-going investments and building launch inventory. We’re closer to reaching this much anticipated milestone of getting AT-GAA across the regulatory finish line and providing another treatment option for people living with Pompe disease in the United States, Europe and the United Kingdom with further regulatory applications planned in the months ahead.

And third, Amicus has maintained a strong financial position as we continue to execute in the global expansion of Galafold and prepare for the global launch of AT-GAA. Importantly, based on the projected strong growth of Galafold, our latest assumptions and approvals in launch for AT-GAA, our current operating plan and continued careful management of expenses we remain on track to achieve non-GAAP profitability, which we continue to expect in the second half of 2023. And finally, just to round out the key highlights and progress we’ve made across our Fabry and Pompe disease programs, I do want to mention that we once again has a significant presence at the 19th Annual World Symposium held this February in Orlando, Florida. Amicus has two oral presentations and 11 posters highlighting data from our development programs in Fabry and Pompe disease.

Most notably, as Jeff will go into more detail later in the call, we represented for the — we presented for the first time encouraging long-term efficacy and safety data from the Phase III open-label extension study of AT-GAA and late onset Pompe Disease, demonstrating consistency and durability of effect in patients now up to two years. Also noteworthy, we provided the first results from our own FollowME Fabry Pathfinders registry, showing stability in EGFR out to three years in that population. And this will be a key part of our efforts to continue to build the body of evidence supporting Galafold. Finally, on slide four, as we laid out last month, we are focused on achieving our key strategic priorities for 2023 including number one, sustaining double-digit Galafold revenue growth of 12% to 17% at constant exchange rates, while delivering Galafold to more people living with Fabry disease with a minimal variance in existing and new markets.

Number two; we remain laser focused on securing AT-GAA regulatory approvals by the FDA, EMA and MHRA later this year, as well as continuing to advance preparations for the respective anticipated launches. Given our experience and success with Galafold and our seasoned global commercial, medical and market access teams, we are fully prepared for and anticipate a successful launch of AT-GAA. Number three, we will continue to judiciously invest in the advancement of our best-in-class next generation Fabry and Pompe genetic medicines and capabilities, as well as our next generation chaperone for Fabry disease. And number four, as always, we will maintain a strong financial position as we carefully manage our expenses and investments on our path to non-GAAP profitability.

With that, let me now hand the call over to Sébastien Martel, our Chief Business Officer to further highlight the Galafold performance.

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Sébastien Martel: Thank you, Bradley, and good morning to everyone on the call. I’ll start by walking you through in more details of our Galafold performance for the year. On slide 6 as you can see for the full year 2022, Galafold reported revenue, reached $329 million driven by strong new patient accruals offset by significant foreign currency headwinds. The geographic breakdown of revenue during the full year consisted of $213 million, or 65% of revenue generated outside of the U.S. and the remaining $116 million or 35% coming from within the U.S. This is in line with a two thirds, 1/3 split that we expect as we continue to grow both parts of the business. We are pleased to see continued patient growth in countries like the U.S., Japan, Germany, Italy and the U.K., just to name a few of our key markets.

Turning to slide 7, our results for the full year highlight the strengths of our global commercial efforts, the demand for Galafold globally continues to be incredibly strong, with patients added in all major markets, delivering a professional growth rate of 16% over the same period in 2021 at constant exchange rates. The negative impact on foreign currencies was 8% in 2022. As a result Galafold reported revenue growth was 8% for the full year. In 2022, Galafold continued to be the fastest growing treatment for Pompe disease globally, and the greatest contributor to the global Fabry market growth. That’s remarkable. I’m pleased to report that our monthly net new patient trends continues to increase and the three month trend was the highest in the last two years.

And if you look at the growth net patients on Galafold globally, which is perhaps the truest measure of the underlying business, we saw greater than 19% growth and patients from Galafold at the end of 2022, versus the same period in 2021. All indications of the continued and growing demands of Galafold. As Brad mentioned earlier, we ended the year with more than 2000 patients on Galafold, which is over half of the global market share of treated amenable patients, and while the global mix remained about 55% switch and 45% naïve in many geographies, we’re seeing stronger uptake in naïve populations. So while we’re achieving high market shares in countries where we’ve been approved the longest, there’s still plenty of opportunity to continue to switch patients over to Galafold and to continue to grow the market as we penetrate into these diagnosed and treated and newly diagnosed segments.

All of that is underpinned by impressive compliance and adherence rates that continue to exceed 90%. This is really reiterating our belief that those patients who go on Galafold stay on Galafold. Importantly, the value of Galafold continue to be recognized by payers and we have continued on our strong track record of successfully negotiating and renegotiating reimbursements outside of the U.S. Our relentless commitment remains on ensuring access to Galafold for anyone who needs it. What we’ve seen in the full year 2022 is that Galafold uptake continues to track very well. And through the first two months of 2023, we’re seeing those trends continue with growth across all our key markets. Turning on to Slide 8, Galafold growth remains strong with $88 million in the fourth quarter.

As mentioned on past calls, due to a variety of factors including uneven ordering patterns and FX fluctuations the rate of growth within the year is typically non-linear. We expect that to continue through 2023. In the table on the right hand side of the slide, we’ve provided you with a five year historical snapshot of the percent of Galafold sales that altered each quarter during a given year. We would expect to see similar trends work through this year. And so while we don’t provide quarterly guidance, the historical breakdown is very good benchmark for revenue distribution like water. As an example, you’ve also observed in the last two years that Q1 sales in the current year tends to be generally aligned with Q3 sales in the prior year. Moving on to slide 9, we know that there’s a significant patient demand for Galafold, and that it has potential to surpass $500 million in annual revenue over the next few years.

We anticipate sustained growth through 2023 to be driven by several key growth drivers; first continuing to penetrate into existing market. Second, further uptake into the diagnosed and treated population. And third, is expanding into new geographies and label expansion. As we just mentioned, all of these efforts are supported by solid compliance and adherence rates and policy reimbursement and access mechanism throughout the world. I’m pleased to share that we’re making continued progress on expanding into new markets, to name a few examples. We received last year market authorization in Turkey and are in the pricing and reimbursement process as we speak. We have submitted the marketing authorization applications in Hong Kong and New Zealand and hope to see those countries as new countries for Galafolds in the near future.

We have successfully renegotiated pricing and reimbursement agreements for Galafold in countries like Italy, Spain, Poland, Switzerland, and Iceland. With longer-term we continue to see significant growth in the Fabry market globally driven by diagnosing patients through a variety of measures including high risk screening, newborn screening and other diagnostics initiatives, which will continue to support and testing as well. Also important to note we have orphan exclusivity in the U.S. and in Europe. In addition to our now 46 Orange Book listed patterns that gives us IT coverage into the late 2030s, which provides us the opportunity to give access to Galafold globally to patients who need it for a long time to come. On site 10, we outlined launch preparations for AT-GAA as we are poised for another successful product launch.

And it is today as a presence in over 40 countries around the world, including all the major Fabry and Pompe markets. That team will be largely that the same that launch at AT-GAA with only a handful of new SGS needed. We have experience across all areas that are needed for successful drug launch, regulatory, commercial, supply chain experience with payers reimbursement and access. And in addition and perhaps most importantly, key relationships with physicians. We’re very confident in our world class organization that we can leverage their experience and relationships and deliver AT-GAA to people living with Pompe Disease around the world. From the team, the medical education, the publish Phase III data, our experience with reimbursement and access around the world.

And again, all the strategic planning we’ve been doing together with building inventory without partners at WuXi biologics, we believe we are in very strong position for a second successful launch for Amicus. With that, let me now hand the call over to Dr. Jeff Castelli, our Chief Development Officer. Jeff?

Jeff Castelli: Thank you, Sébastien, and good morning everyone. On Slide 12, we’ll start with our AT-GAA program. We recognize that Pompe disease continues to pose a range of health challenges for people affected by the disease, and having therapeutic choices is crucial. Pompe is a severe and fatal neuromuscular disease and one of the most prevalent lysosomal disorders, and multiple publications and natural history studies continue to highlight the initial benefits of treatment, generally being followed by continued long-term decline on key measures of disease for many individuals. Moving onto Slide 13 as Bradley mentioned, we are very excited to now be anticipating potential regulatory approvals and launches into three of the largest Pompe markets in the third quarter of this year.

Here on the slide we’ve highlighted the status or our anticipated regulatory milestones this year by market. First in the EU, the European Commission approval pumpability is expected in this first quarter later this month. And for miglustat we’re making great progress on the confirmatory testing and are on track to snip those validated final data EMA for an expected CHMP opinion in the second quarter which would then be followed by EC approval in the third quarter. And then the U.S. the required pre approval inspection of the WuXi Biologics manufacturing site in China was typically manufactured, has been scheduled with the FDA for the second quarter, and we anticipate approval of both components of AT-GAA in the third quarter pending a successful inspection.

Finally, the regulatory submission process for AT-GAA in the U.K. was initiated in December. They had a recognition procedure based on the CHMP opinion, and we’re on track for an expected MHRA approval also in the third quarter. Moving on to Slide 14, to highlight our on-going clinical studies, and providing expanded access through multiple mechanisms that support the demand of AT-GAA. First for the younger Pompe community, we continue to enroll the on-going open label study in children up to 18 years of age, living with LOPD and are expanding into patients with infantile onset Pompe Disease on-going throughout this year. Importantly, in response to the many requests for treatment that we continue to receive for children living with both LOPD and IOPD our expanded access programs continue to increase.

We now have multiple expanded access programs in place in a number of countries around the world including the U.S., U.K., Germany, France, Japan, and others. This includes the EAMS framework of which we previously announced that ATJ was granted a positive scientific opinion for the Early Access to Medicine Scheme by the U.K.’s MHRA. And we continue to see significant enthusiasm for AT-GAA under the EAMS mechanism, with multiple physicians having requested access across the leading Pompe centers in the U.K., and dozens of patients now receiving this novel two component treatment. Since the positive scientific opinion in December interest in momentum for AT-GAA has grown and we are pleased to be able to provide access to those who are eligible.

With this growth in our access programs as Bradley noted, we are pleased to report that approximately 195 patients worldwide are now being treated with AT-GAA across our clinical extension studies and these expanded access programs. And worldwide experience with AT-GAA is growing, with approximately 75 centers now currently participating in trials and access programs. Moving onto slide 15, as Bradley mentioned, as part of the growing body of evidence supporting AT-GAA we just presented at the world meeting last week positive long-term efficacy and safety data from a global Phase III open label extension of the propel study of AT-GAA in late onset Pompe Disease. As seen here on the side, these latest data demonstrate a consistency and durability of effect in patients after two years on the key clinical endpoints and six-minute walk distance and FVC, and importantly these results are consistent with the even longer-term four year data we’ve seen presented from our Phase I/II studies and together these really support the long-term benefit of treatment for people living with LOPD.

On the slide here, we’re showing the results for the large subset of ERT-experienced patients. And we observed similar results for the ERT- naïve patient group as well. We were also very pleased by the continued reduction in the key biomarkers of glycogen storage and muscle damage, suggesting a positive effect on muscle tissue, particularly in participants who switched from Abecassis galactosidase-alpha to AT-GAA and the open label extension. This growing body of evidence from all of our long-term clinical studies gives us further confidence that AT-GAA has the potential to become the new global standard of care for people living with Pompe Disease. With that, I would like to now turn the call over to Daphne Quimi, our Chief Financial Officer to review our financial results, guidance and outlook.

Daphne?

Daphne Quimi: Thank you, Jeff. And good morning, everyone. Our financial overview begins on Slide 17, with our income statements for the full year ending December 31, 2022. For the full year, we achieved total revenue of $329.2 million, which is an 8% increase over 2021. This includes year-over-year operational revenue growth measured at constant currency exchange rates of 16% impacted by negative currency of 8%. Cost of goods sold as a percentage of net sales was 11.7% in the year as compared to 11.3% in the prior year period. Total GAAP operating expenses increased to $502.8 million for the full year 2022 as compared to $477.5 million in 2021. On a non-GAAP basis, total operating expenses were $413.2 million for the full year 2022 as compared to $406.9 million in 2021 reflecting non-recurring expenses related to the reprioritization of Gene therapy portfolio offset by decreased program spent.

We define non-GAAP operating expense as research and development and SG&A expenses excluding share based compensation expense, loss on impairment of assets, changes in fair value, contingent consideration and depreciation. Net loss for the full year 2022 was $236.6 million or $0.82 per share, as compared to a net loss of $250.5 million or $0.92 per share for the prior year period. Driven by the revenue growth of Galafold and careful expense management, we continue to make progress towards our path to profitability in the second half of this year. As of December 31, 2022, we had approximately 281 million shares outstanding. Turning now to slide 18, we continue to operate from a position of financial strength, and our goal remains to achieve non-GAAP profitability in the second half of 2023 as defined in our press release.

Profitability is dependent on a number of factors, including, of course, the timing of approvals and the launch of AT-GAA. Our full year 2023 non-GAAP operating expense guidance is $340 million to $360 million. The expected decrease in operating expense for 2023 as compared to 2022 will be achieved by continuing to drive efficiencies and prudent expense management offset by continued investment in the global growth of Galafold and prelaunch and launch activities for AT-GAA. We will also incur certain non-recurring costs for manufacturing to support the global launch of AT-GAA. We expect to see a larger portion of our operating expense be allocated to G&A this year, as we reallocate our resources to support launch of AT-GAA and the continued growth of Galafold.

In 2023, we may look to execute sales under our previously announced at the market or ATM equity program in a strategic and judicious fashion, as we look to maintain a strong cash balance to appropriately fund our operations. A few comments about our cash position and 2023 financial guidance. Cash, cash equivalents and marketable securities were $293.6 million at December 31, 2022, compared to $482.5 million at December 31, 2021. Our full year Galafold revenue guidance is revenue growth of 12% to 17% at constant exchange rates, in addition to our non-GAAP operating expense guidance of $340 million to $360 million. With that, let me turn the call back over to Bradley for our closing remarks.

Bradley Campbell: Great, thanks, Daphne, Jeff, Sébastien. As you can all see, we have been relentlessly focused on execution across the business. We continue to operate from a position of financial strength and remain on the path to profitability in the second half of this year. And we continue to advance the growth of our two franchises in Fabry disease and Pompe Disease, which we believe can enable us to create sustainable long-term value and deliver life changing therapies to people in need. Operator with that, we can now open the call to questions.

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Q&A Session

Operator: And our first question comes from Anupam Rama of JPMorgan. Your line is open.

Anupam Rama: Hey guys, thanks so much for taking the questions. With the regulatory decisions coming here in 3Q, as you look at the next few years and the Sanofi launch here, what are some key learning similarities differences that you would highlight as we think about the AT-GAA launch firm? Thanks so much.

Bradley Campbell: Yes, thanks, Anupam for the question. Look, for us it really just comes back down to the data and the population we studied. We were really excited to be able to present the long-term data both from the Phase I/II study as well as from our Phase III propel study and the on-going extension there. We continue to believe that showing that impact in patients switching from enzyme replacement therapy is going to be the key differentiator for AT-GAA. And as we look at all of the demand for expanded access, and those mechanisms that we discussed on the call in particular in the U.K., we think that patients and physicians are just really excited to have a new treatment options. And we’re thrilled now to have a clear line of sight to timing and to be able to move forward as quickly as we can to approvals and then to the launch

Anupam Rama: Thanks so much for taking the question.

Operator: One moment for our next question. And our next question comes from Ritu Baral of Cowen. Your line is open.

Ritu Baral: Good morning, guys. Thanks for taking the question. The question itself is, how fast should we start booking revenues after we know, the inspection? I guess? Of course, my question has three parts one, how fast should we be thinking about approval after the inspection? Is it a week kind of thing? And how will the model changeovers to commercial from these 195 patients that are in your extended access programs across the world, and we expect all of them to fall under the approved label finally? Thanks.

Bradley Campbell: Yes, thanks Ritu, I’ll try to hit all three of those. The first one is relates to timing from inspection to approval in the U.S. What our team’s estimate is that takes about two months to go through that process. And so that’s why we’ve set the inspection is in Q2, and we expect approvals in Q3. In terms of converting patients from clinical trial, or expanded access to, to commercial product, our goal has been to do that within 90 days. And we saw that we were able to execute on those timelines with Galafold. And we have the same goals here. In terms of numbers of patients within that kind of 195, again, that number we think will continue to grow, I would say there is a small portion of them who might be infantile onset patients.

But that would be a very small portion, I think the vast majority of between the Phase I/II studies, the Phase III study, and then expanded access programs are going to be late onset patients who fall within the anticipated labels. So I think the majority of those patients would be eligible. And, and of course, not all of them are in the first three large countries, U.S., U.K. and Germany. But certainly the majority happened. Just to give you a flavor of the distribution between regions, about 60 of those patients are in the in Europe, about 50 in the United States, about 40 in the United Kingdom, and the balances is rest of world. So hopefully that gives you kind of a flavor of the numbers of patients. And then in terms of revenue. Look, I think what we’ve cautioned people is that will be a modest contribution to revenue this year.