Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) Q2 2024 Earnings Call Transcript

Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) Q2 2024 Earnings Call Transcript August 9, 2024

Operator: Good morning. My name is Camille, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Amylyx Pharmaceuticals’ Second Quarter 2024 Earnings Conference Call. All participants will be on a listen-only mode. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please be advised that this call is being recorded at the company’s request. I would now like to turn the call over to Lindsey Allen, Head Investor Relations and Communications. Please proceed.

Lindsey Allen: Good morning and thank you all for joining us today to discuss our second quarter 2024 financial results. With me on the call today are Joshua Cohen and Justin Klee, our co-CEOs, Dr. Camille Bedrosian, our Chief Medical Officer, and James Frates, our Chief Financial Officer. Before we begin, I would like to remind everyone that any statements we make or information presented on this call that are not historical facts are forward-looking statements that are based on our current beliefs, plans, and expectations and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, our expectations with respect to Avexitide, AMX0035 and AMX0114, statements regarding regulatory and clinical developments and the impact thereof and the expected timing thereof, and statements regarding our cash runway.

Actual events and results could differ materially from those expressed or implied by any forward-looking statements. You are cautioned not to place any undue reliance on these forward-looking statements, and Amylyx disclaims any obligation to update such statements unless required by law. Now, I will turn the call over to Justin.

Justin Klee: Good morning and thank you all for joining us today. As an organization, we have made significant progress over the past few months as part of our continued mission and our goal to deliver important treatment options to the neurodegenerative, neuroendocrine, and endocrine communities we serve. Most notably, last month, we expanded our late-stage pipeline with our acquisition of Avexitide and now have three assets targeting orphan indications. Avexitide is a Phase 3-ready asset with FDA breakthrough therapy designation in diseases with no approved treatment options. Avexitide is a GLP-1 receptor antagonist with orphan drug designation in hyperinfluenemic hypoglycemia. The GLP-1 receptor is one of the key regulators of the glucose insulin response, and an imbalance in this response leads to hyperinfluenemic hypoglycemia, which underlies several conditions and diseases.

So far, Avexitide has been studied in two indications characterized by hyperinfluenemic hypoglycemia, post-bariatric hypoglycemia, or PBH, and congenital hyperinfluenism. The first indication, PBH, is a significant but orphan condition that affects the subpopulation of people who have undergone bariatric surgery. Now, let me elaborate a little further on the market opportunity ahead. Despite the introduction of GLP-1 receptor agonists for weight loss, more than 200,000 new bariatric procedures are performed every year, and this number has continued to grow on an annual basis. Over the past 10 years, approximately two million people in the United States have undergone the two most common types for weight loss, Roux-en-Y gastric bypass and sleeve gastrectomy.

Experts expect surgery to remain a cornerstone of weight loss therapy given the procedure is highly effective and results in substantial and sustained weight loss, particularly for people with higher BMIs. Evidence also suggests that bariatric surgery reduces the risk of cardiovascular events and the severity of metabolic dysfunction associated liver disease. Turning to PBH, this persistent condition can develop in people who had received bariatric surgery one to three years prior, and in some cases, even longer post-surgery. We estimate that approximately 8% of the two million people I referenced, or 160,000 people in the U.S. today, have symptomatic PBH. Symptomatic PBH is characterized by hypoglycemic events associated with brain glucose starvation, known as neuroglycopenia, including impaired cognition, loss of consciousness and seizures, as well as activation of the autonomic nervous system, presenting as hunger, sweating, tingling, tremors, palpitations, and anxiety.

People living with PBH could benefit from a treatment that helps stabilize glucose levels, particularly the dangerously low crashes in blood glucose associated with PBH. Camille will discuss our plans for the Phase 3 development program for Avexitide, which we expect to initiate in the first quarter of next year. There is agreement with FDA on the primary outcome for the pivotal Phase 3 study for PBH. The outcome, reduction in the composite of level two and level three hypoglycemia events is clearly linked to GLP-1 receptor antagonism, and was already met in the Phase 2 and Phase 2B clinical trials of Avexitide and PBH with high significance. Camille will also recap the key data, including the statistically significant and clinically meaningful reductions in hypoglycemic events.

We are highly encouraged by the greater than 50% reductions in level one, two, and three hypoglycemic events that have been demonstrated by Avexitide. Avexitide has the potential to be the first-in-class GLP-1 receptor antagonist. Before I turn it over to Camille, I would like to quickly touch on our cash runway. In the second quarter, we largely completed our restructuring. We expect our cash runway to take us into 2026. Jim will provide additional context. I will now turn the call over to Camille.

Camille Bedrosian: Thanks, Justin. Now I will briefly review each of our four programs, Avexitide and hyperinsulinemic hypoglycemia, including post-bariatric hypoglycemia or PBH, AMX0035 in Wolfram syndrome, and in progressive supranuclear palsy or PSP, and AMX0114 in ALS. Avexitide is designed to bond to the GLP-1 receptor on pancreatic islet beta cells and block the effect of GLP-1 to mitigate hypoglycemia by decreasing insulin secretion and stabilizing glucose levels. Avexitide has been studied in five clinical trials in PBH. Data from these trials demonstrated highly significant reductions in hypoglycemic events. Most notably, the 90 milligram dose, which we intend to study in Phase 3, showed a 66% reduction in level three hypoglycemic events in a Phase 2B trial with a P value of 0.0003 and a 53% reduction in level two hypoglycemic events with a P value of 0.004.

The primary efficacy outcome of our Phase 3 program will be the reduction in the composite of level two and level three hypoglycemic events. The FDA has agreed on this primary efficacy outcome. Furthermore, these data were achieved while demonstrating a favorable safety profile. The benefit of Avexitide is further supported by four additional trials in PBH, which reproducibly showed glucose stabilization and decreased insulin levels with statistically significant P values. We reviewed these data in-depth during our conference call last month. Based on these data, we are actively planning and are on track to initiate a pivotal Phase 3 program in PBH in Q1 of next year. For those of you who are not familiar with PBH, the condition affects people who have undergone bariatric surgery.

Symptomatic PBH can have disabling effects on quality of life and ability to live independently, especially the neuroglycopenic symptoms. Imagine you are driving and your blood sugar drops without you realizing it and you have a seizure. As a result, your license could be suspended. Or because you could potentially faint and lose consciousness at any time, you have to move in with a friend or relatives so they can provide immediate assistance or call 911 if you fall and injure yourself. Imagine being forced to retire mid-career because you have impaired cognition due to sustained low glucose. These examples are experiences that individuals living with PBH have shared. This is the reality for the 160,000 people that we estimate are currently living with symptomatic PBH.

These individuals could benefit from a therapy that might mitigate unexpected or current drops in blood glucose, which can create very problematic health, social and economic issues, despite their best efforts with dietary modifications and off-label use of other medications. We believe the significant unmet need coupled with the robust of Avexitide clinical data in PBH contribute to the excitement about our PBH program among endocrinologists. We will work to enroll participants in our Phase 3 program as promptly as possible, such that we will be in a position to share top line data from the program in 2026. Now, turning to the Wolfram syndrome program. We look forward to presenting the top line data for all 12 participants in the Helios trial at week 24, including longer term data available for participants who have reached their week 36 or week 48 visit at that time at the International Society for Pediatric and Adolescent Diabetes Conference this fall.

We are engaging with stakeholders, including the FDA and planning for a single Phase 3 clinical trial and we’ll provide more details once finalized. As a reminder, AMX0035 has shown highly significant benefits in glycemic control in the in-vivo WSS1 knockout mouse model of Wolfram syndrome. These glycemic results were recapitulated and extended in our clinical trial of Wolfram, including promising data on glycemic, as well as optic and global impressions of change outcomes presented in April. Recall the Wolfram syndrome is a progressive neurodegenerative disease. While we had anticipated slowing of this progression, in fact, the data suggested stabilization or even improvement across these outcomes. Now turning to the Orion PSP program, enrollment in the study is going well.

As we have described previously, we intend to conduct an interim analysis of Orion and share data in mid 2025. I would like to describe the planned analysis in a bit more detail. We have introduced an operationally seamless Phase 2B3 study design. The first part will include approximately 100 people living with PSP. Mid 2025, we plan to conduct an unblinded analysis of top line data through week-24 for these participants. In addition, the available data on participants who have proceeded beyond 24 weeks also will be analyzed. The goal of this analysis is to inform a go no go decision. Strong data will encourage us to move seamlessly into the second portion of the study, whereas mixed or negative data will allow us to reprioritize our resources.

As a reminder, AMX0035 has shown highly significant reductions of tau and CSF in a randomized placebo controlled study in Alzheimer’s disease. As we have previously discussed, PSP is a tauopathy with a highly significant genetic link between variance in tau and the disease and with clear tau pathology in human samples. AMX0035 is believed to affect intracellular tau and we believe it is the first agent to be studied in a large trial with the potential to impact intracellular tau pathology. Finally, our AMX0114 program remains on track. We plan to begin clinical testing before the end of the year. AMX0114 is an antisense oligonucleotide, or ASO, designed specifically to inhibit Calpain-2, a protein involved in axonal degeneration and neurofilament biology.

We are planning to study this agent in a multiple ascending dose placebo controlled study in ALF to evaluate the safety and the biological activity of AMX0114. At AMLX, our goal is to significantly impact diseases of unmet need and with these four programs, we believe we are on track to do so. I will now turn over the call to Jim. Jim?

James Frates: Thanks, Camille. Following Phoenix topline results, we restructured quickly, which placed us in a strong cash position and enabled us to focus on our meaningful near-term clinical milestones. We ended Q2 with $309.8 million in cash and investments. As a reminder, we acquired Avexitide in early Q3 for a purchase price of $35.1 million. As a result of this work, we believe our cash will take us into 2026 and we will work to manage the company through meaningful clinical data readouts, namely the data readout from our Phase 2 Helio, the interim readout from our PSP program, interim clinical data from our AMX0114 program and the readout of top line data from the Avexitide Phase 3 program. Now, turn into other details of our financial results.

Net product revenue was negative $1 million for the second quarter due to adjustments to our gross to net revenue reserve estimates. This was mainly driven by adjustments to our estimates for returns once we stopped our sales. Cost of sales were $7.4 million for Q2 compared to $5.6 million for the same period in 2023. Cost of sales this quarter were primarily related to estimated losses on firm commitments under commercial manufacturing and supply agreements for RELYVRIO and ALBRIOZA that were established for future production prior to the results from Phoenix. We do not expect any material COGS moving forward. Research and development expenses were $23.3 million for the quarter compared to $29 million for the same period in 2023. The decrease was primarily due to a decline in payroll and personnel related costs as a result of our restructuring and a decrease in clinical expense due to the outcome of the Phoenix trial.

Selling general and administrative expenses were $21.6 million for Q2 compared to $43.4 million for the same period in 2023. The decrease was primarily due to a decline in payroll and personnel related costs and a decrease in consulting and professional services following our decision to voluntarily discontinue the marketing of RELYVRIO and ALBRIOZA. Restructuring expense was $22.9 million in the quarter compared to zero for the same period in 2023. The majority of this charge is related to employee severance and termination related benefits that were paid in Q2, and our restructuring plan was largely completed this quarter. Consistent with our prior expectations as we move into 2025, we expect total combined spend on R&D and SG&A will be in the range of $30 million to $40 million in cash per quarter.

Finally, in the second quarter, we recorded a net loss of $72.7 million or $1.7 per share, including the restructuring charges. Overall, we’re in a solid financial position and believe in our ability to deliver on the clinical milestones that we outlined today. I’ll now turn the call over to Josh to provide some closing remarks.

Joshua Cohen: Thank you, Jim. In closing, we are excited about our four pipeline programs, upcoming milestones and path ahead. Avexitide has both FDA breakthrough therapy designation and orphan drug designation, and is poised to advance into Phase 3 development in PBH beginning in the first quarter of 2025. In Wolfram syndrome, we expect the top line data from Helios in the fall for all 12 participants at week-24, including longer term data available for participants who have reached their week-36 or 48 visits at that time. We are engaging the FDA and other stakeholders and planning for a single Phase 3 clinical trial. We will provide more details on the trial once the design is finalized. The Orion trial of AMX0035 and PSP is recruiting well, and we continue to expect data from interim analysis mid next year.

AMX0114 is on track to be studied in people living with ALS later this year. And we believe we have the team and resources in place to deliver on four meaningful clinical data readouts ahead. We look forward to keeping you updated as we build upon our critical work in orphan neurodegenerative, neuroendocrine and endocrine diseases of high unmet need. Now I would like to open the call up for Q&A.

Q&A Session

Operator: Thank you. We will now begin the Q&A session. [Operator Instructions]. Your first question comes from the line of Charlie Yang from Bank of America. Please go ahead.

Charlie Yang: Great. Thanks for taking my questions. I just wanted to ask about the PSP data in mid next year in terms of the county expectation over there. And then, I was assuming if there’s a signal observed — is there — I guess, is there a path to make an adjustment to a number of pages as needed to further kind of amplify the potential success of this trial at the final readout?

Camille Bedrosian: Yes, thank you, Charlie. This is Camille. As we indicated in our prepared remarks, we will — the first part of the study is the Phase 2B where we will analyze about 100 participants, unblinded, AMX0035 versus placebo, and do a full-on analysis at 24 weeks. And for those who have gone beyond 24 weeks to look at their longer-term data as well. And based on that result, we will then, if positive and strong, we will proceed seamlessly into the Phase 3 portion of the study. And based on those data, the final sample size will be determined.

Charlie Yang: Great, thanks. And maybe just one quick follow-up, just in terms of the Wolfram opportunity in Europe, how does that kind of compare to the U.S.? Thank you.

Camille Bedrosian: Yes. So we are certainly aware of endocrinologists who are familiar with Wolfram and have a large, relatively speaking, Wolfram population. So — but right now we are focusing on the U.S., and though we do — yeah, so more to come on that as we do more research.

Justin Klee: But I would add that. Wolfram being a monogenic disease, we do see people with Wolfram syndrome all around the world. So it is very much a global unmet need.

Operator: Thank you. Your next question comes from the line of Gavin Johnson from Goldman. Please go ahead.

Unidentified Analyst: Hey, good morning. This is Palak on for Gavin. Two from us on the PSP front, the first being what do prior studies in PSP suggest for placebo and natural history population at the 24-week time point? And then the second was, what are you thinking about in terms of the threshold for futility at the 24-week end point in the interim analysis? Thank you.

Camille Bedrosian: Yes. So as you are alluding, in fact, the progression of the disease is actually quite reproducible. There were three relatively large Phase 3 studies in PSP, unfortunately, none of which were showed a benefit of the active ingredient — active drug, but it did show that there was reproducible deterioration at a relatively similar rate. So we do use that as a basis for understanding and looking at the data coming up.

Justin Klee: And as your other question too, on the threshold for futility, this is not a formal futility analysis. We’re doing a full evaluation of the data. So we’ll be looking at kind of a full top line release, essentially a Phase 2B release when we do that interim analysis. And just highlighting Camille’s point as well, when you look at the past larger randomized placebo controlled studies that have been conducted in PSP, the placebo rate is actually quite strikingly consistent, usually at just under a point a month.

Unidentified Analyst: Understood. Thank you.

Operator: Thank you. Your next question comes from the line of Umer Raffat from Evercore. Please go ahead.

Unidentified Analyst: Hi, good morning. This is [indiscernible] on for Umer. Thanks for taking our questions. Firstly, for Wolfram syndrome Phase 3 trial, does it need to be placebo controlled? And secondly, for 0114, are you planning to give incremental data update as it progresses? Maybe the timing between Phase 2 Wolfram trial data this fall and the Phase 3 PSP interim next year?

Camille Bedrosian: Right. So thank you for the question. This is Camille. Regarding Wolfram, as we indicated in our prepared remarks, we are engaging with stakeholders that include of course the FDA. And once our plans are finalized, we’ll share those with you. Just as a reminder, later this fall, we will share data on all 12 participants to 24 weeks and additional longer term data for those individuals who have gone through week-36 and 48. So we’re looking forward to those readouts as well. And then regarding 0114, as we indicated, we are planning to initiate our multiple ascending dose study in individuals with ALS by the end of the year. And as the study progresses, we’ll be able to provide more detailed timing and types of data we’ll be sharing through 2025.

Unidentified Analyst: Thank you.

Operator: Thank you. Your next question comes from the line of Graig Suvannavejh from Mizuho Financial Group. Please go ahead.

Unidentified Analyst: Good morning, everyone. This is Charles [indiscernible] for Graig. Thanks for taking our question. We were wondering what type of data will you present at the updated data presentation for Helios? Should we expect it to be similar to the interim readout earlier this year? Thanks.

Camille Bedrosian: Yes, thank you. This is Camille again. Indeed, so we do intend to provide longer term data for those individuals about whom we reported in April of this year, as well as data through 24 weeks for all 12 participants. Its top line data, primary endpoint and key secondary endpoints. And we look forward to sharing those details with you at the upcoming international meeting.

Operator: Thank you, Graig. Your next question comes from the line of Marc Goodman from Leerink Partners. Please go ahead.

Unidentified Analyst: Hi, thanks for taking my question. This is [indiscernible] on line for Marc. Can you talk about R&D expenses moving into 2025? What is your strategy to build the pipeline going forward with both internal and external assets? Thanks.

James Frates: Yes, thank you. It’s Jim, good morning. I think one of the things that is happening on our R&D line, right? As our restructuring has occurred and as the large Phoenix Phase 3 winds down, and you can find some detail on those expenses historically in our Qs, that really opens up room for some of the new spending that we have going on. And currently the Wolfram study is ongoing. The PSP study is starting to move up into a range where that’s going to be consistent as opposed to really growing. And so that leaves us room as we move forward to spend on the 114 study and the new of Avexitide program. And then just overall, as we outlined, we expect cash expense, now that’s excluding non-cash comp, to be in the range of $30 million to $40 million a quarter for both R&D and SG&A. So that’s how some of the moving parts are going into 2025.

Unidentified Analyst: Very helpful. Thanks.

James Frates: You’re welcome.

Operator: Thank you. Your next question comes from the line of Joel Beatty from Baird. Please go ahead.

Joel Beatty: Hi, thanks for taking the questions. For the PSP interim analysis to get data around mid 2025, does that mean completing enrollment around the end of this year? And what gives you confidence on the trial completing enrollment around that timeframe?

Camille Bedrosian: Yes, hi Joel, this is Camille. We are enrolling quite well, as I indicated in our prepared remarks, and we’re tracking toward having data mid 2025. We’ll give more information as we march toward that timeframe.

Joel Beatty: Great. And then as a follow-up, do you anticipate any more acquisitions after the recent acquisition of Avexitide?

Justin Klee: Yes, I’ll say we wouldn’t — we’ve had a process ongoing for some time where we’re evaluating many assets for whether they fit well into our pipeline and have the requisite scientific and clinical and commercial path forward. Today, we’re very excited about the assets we have today and that’s our focus, but we’re always looking and I’d say we wouldn’t rule out adding additional things to that.

James Frates: Thank you.

Operator: Thank you. There are no further questions at this time. I’ll turn the call back to Mr. Klee.

Justin Klee: Thank you for joining us today on today’s call to discuss our second quarter 2024 financial results. Have a great day.

Operator: Thank you for joining today’s call. Please disconnect your line. Thank you.