Amicus Therapeutics Inc (FOLD) 2008 Q1 法說會逐字稿

Good afternoon. My name is Sarah, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Amicus Therapeutics conference call. All line have been placed on mute to prevent any background noise. After Amicus' remarks, there will be a question-and-answer period. (OPERATOR INSTRUCTIONS)

During this call we may make various remarks about the Company's future expectations, plans and prospects that constitute forward-looking statements for purposes of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Company's most recent annual report on Form 10-K and our periodic reports on Form 10-Q. These documents are available from the SEC, the Amicus website or from our investor relations representatives. In addition any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent dates. While we may like to update forward-looking statements at some point in the future we specifically disclaim any obligation to do so, even our estimate changes.

Before we begin we'd ask everyone to go to the investor relations section of the Company's website, amicustherapeutics.com and print out the press release and related financial tables. These will be useful when the Company reviews the financial results and for the reconciliation of the non-GAAP financial measures discussed today.

At this time I would like to turn the conference over to Mr. John Crowley, President and Chief Executive Officer. Mr. Crowley, are you ready to begin?

Yes, I am, thank you.

You're welcome, sir. You may begin your conference.

Great, thank you and good afternoon to everyone and welcome to the Amicus Therapeutics first quarter 2008 conference call. I am joined on the call today by Jim Dentzer, our Chief Financial Officer; by Matt Patterson, our Chief Operating Officer; and David Lockhart, our Chief Scientific Officer. After the initial remarks we will try to accommodate as many questions as time permits. Let me begin by saying that, as many of you know, Amicus Therapeutics is a biopharmaceutical Company and that we focus on developing small molecule drugs, known as pharmacological chaperones, for the treatment of a broad range of human genetic diseases. We see this chaperone technology as a new and powerful platform with potentially broad applications and also a technology that we're utilizing today to discover and develop new medicine in a broad range of fields. We see, too, three core areas of value for our shareholders.

First that our three lead chaperone programs which target the lysosomal storage disorders, Fabry, Gaucher and Pompe disease, are all in clinical development with Fabry already having established proof of concept in man and validating the pharmacologic chaperone platform. Second, we also see that in developing these three lead candidates we have a great strategic and worldwide development partner and we derive a significant amount of value, we think, for our shareholders with through our partnership with Shire Human Genetic Therapies. Third, I'll highlight here at the outset that we remain in a very strong financial position, as Jim will discuss in greater detail in just a few moments.

So a number of accomplishments we'd like to take you through for the first quarter of 2008 and I'll begin with some of the highlights in our Fabry disease program. Several of these advancements include back in March the clinical investigators for the Amigal drug for Fabry disease presented the complete results for multiple phase II trials of Amigal in Phoenix at the American College of Medical Genetics meeting. The positive results of these studies built on the preliminary results first discussed at our R&D day back in December and some of the highlights of that data include first that Amigal is generally safe and well tolerated at all doses evaluated with no drug-related serious adverse events reported. We also demonstrated with Amigal an increase in the target enzyme level in 24 of 26 patients and that Amigal was shown to reduce the accumulated substrate known as GL-3 in a majority of patients by multiple measures.

We presented this data for the first time back in December and as many of you know we were very encouraged by this data as were a number of the investigators who we shared it with, some of whom were there with us that day. And I can't under emphasize how significant it was to be able to take this platform technology with this first drug, Amigal, and for the first time to put it into man and to have the first demonstration that a small molecule, pharmacologic chaperone can do what it was intended to, and that's to selectively target, fine to and elevate the enzyme deficient in people living with these diseases. We think that was an enormous step forward for the technology, for Amigal, in particular, and also for Amicus more broadly.

We also realized that day that there were a number of questions that came out of this presentation of the initial data at our R&D day back in December. These questions generally centered around, first, dosing of chaperones, particularly Amigal. Second, the appropriateness of kidney GL-3 as measured in the urine as a surrogate marker in Fabry disease. And third, questions around the regulatory path forward for Amigal in Fabry disease. I can assure you we have worked diligently together with our partners at Shire over the past four months to address these outstanding questions, and let me provide just a little bit more color about some of the work that we've done to clarify these questions. First on dosing. As you all know we have previously evaluated multiple doses and regimens in our phase II Amigal studies. Coming out of the primary treatment periods for Amigal in this phase II we saw that indeed we can hit the enzyme target, again elevated, and also decrease the substrate that accumulate in Fabry patients and we've also seen encouraging trends in a variety of clinical measures in these patients. So we believe we have a dose and a dose regimen that we can move into phase III studies.

In addition, with respect to the appropriateness of end points, over the past few months we've continued to consider in detail the phase II clinical results with the study investigators and also done a series of additional preclinical studies to evaluate further the most optimized dose and dose regimen. Based on these evaluations we have amended the extension protocol to evaluate potentially optimized does and dose regimens of Amigal and we expect data from these patients to be available in Q4 '08 to Q1 of '09 prior to our finalization of the phase III protocols for Amigal for Fabry disease. Second we have worked extensively to understand and characterize the appropriateness of utilizing kidney GL-3 as measured in the urine as a primary surrogate end point for Fabry disease. We continue to believe that this is the best, most objective and least invasive surrogate measure available based on the consensus of many experts in this field and based on multiple prior published studies. Thirdly, regarding the regulatory path forward for Amigal, Amicus together with Shire have already initiated the process for obtaining feedback from the U.S. and European regulatory agencies regarding our plan for phase III clinical evaluation of Amigal and the path for regulatory approval.

We expect to complete these interactions and to provide an update on this path forward in the second half of 2008 and we also expect to initiate the global phase III registration trial for Amigal for Fabry disease in the first half of 2009. In parallel with the regulatory process, as I alluded to earlier, all 23 patients who voluntarily elected to go into the extension study with Amigal for Fabry and to have remained on this study continue to be treated with Amigal today in this voluntary phase II extension study. And these are the patients who are moving to the potentially optimized doses and regimens and for whom we'll have the results later this year or in early 2009. And, of course, we continue to collect long-term safety and efficacy data from these 23 patients, some of whom have been on Amigal for the treatment of their Fabry disease for more than two years. And I should note, too, that every one of these patients has the option of going back to being treated with enzyme replacement therapy, but each one of them continues to voluntarily elect to take Amigal in their treatment for Fabry. So for Fabry, to summarize, a significant number of events happening to advance this program to better understand the path forward as we move -- prepare to move into phase III with our partners at Shire.

Turning to Gaucher disease, in Gaucher again at the American College of Medical Genetics meeting in March, the clinical investigators presented the full data from a four-week phase II study in patients who were switched from enzyme replacement therapy to our pharmacological chaperone for Gaucher disease, know as Plicera. Highlights of this data include that, first, Plicera was generally safe and well tolerated at all doses and that it increased the target enzyme activity in 20 of 26 patients. Five of the six patients without a clear increase were either in the lowest dose cohort or the cohort dosed least frequently. And as expected in this short-term study the level of rel -- the relevant hematological markers of Gaucher disease remained stable.

Based in part on the work done in the Fabry program, both clinically and preclinically around the dose optimization, Amicus has also amended the protocol for the ongoing six-month phase II clinical trial of Plicera in individuals who are naive to enzyme replacement therapy. This study will now evaluate two dose regimens.The first cohort will receive Plicera at 225 milligrams three days on and four days off of that drug, and the second cohort will take Plicera at 225 milligrams, seven days on and seven days off. We expect the results of this study to be available in 2009, and in addition, during the second half of 2008 Amicus expects to initiate a longer-term study in individuals switching from enzyme replacement therapy to Plicera, building on the knowledge and understanding that we developed in that first four-week switch study.

Turning to our third lysosomal disease program, our program in Pompe, a number of advancements there. In Pompe clinical investigators presented encouraging results at the ACMG meeting from an ex vivo response study in cells obtained from patients with Pompe disease, as well as three phase I clinical trials of AT2220 in healthy volunteers. Some of those highlights to bring to your attention here, the first is that in this ex vivo response study it was one designed to test the effect of AT2220 -- that's our chaperone for Pompe --on various Pompe mutations, and what the data showed was that of the 26 patients, the cells from 24 showed a dose responsive increase in GAA, the Pompe enzyme. The GAA level suggesting that a majority of Pompe patients may be amenable to chaperone therapy for the treatment of their Pompe disease.

In addition, at the ACMG meeting we also presented complete data from the phase I trials in a total of 72 healthy volunteers in Pompe disease, and this showed that AT2220 was generally safe and well tolerated at all doses evaluated. In the second quarter of 2008, Amicus plans to initiate a phase II clinical trial of AT2220 in patients with Pompe disease. In addition, we are also conducting preclinical studies to evaluate the safety and therapeutic effect of administering AT2220 as a combination to the treatment with Myozyme. Based on these preclinical results we plan to consider initiating a clinical trial of an AT2220 Myozyme combination treatment in Pompe disease and this would be focused specifically at Pompe patients for whom AT2220 as a monotherapy may not be appropriate.

In summary we have made significant progress over the last quarter in each of our three lead programs. In other programs we continue to accelerate our investment in research and development and to assess the potential for using this pharmacological chaperone platform to treat a broader range of human genetic diseases beyond lysosomal storage disorders. As part of this effort Amicus continues to conduct preclinical experiments in Parkinson's disease then work, I should note, is funded in part by a grant from the Michael J. Fox Foundation. We also continue to invest in new research aimed at evaluating disease targets for neuro degenerative and metabolic disorders. With all the advancements and all the work that we've done, both scientifically and medically to advance these programs, I will take a break now and turn the call over to Jim, who will give you a review of the financial results for the quarter and then I'll take the call back and just provide some final commentary before we move to our Q&A session,

Jim, I'll pass the call to you.

Thanks, John, and welcome everyone. I'll provide a brief summary of the financial results for the first quarter. First let me note that in 2008 we're focusing our capital to advance our portfolio of three clinical development stage programs and fund investment into expanding the application of our chaperone technology platform to additional disease areas. Overall, we used $7 million of cash in the quarter, ending with $155 million in cash and marketable securities. I'll now briefly review the first quarter results.

In our press release you'll see that our GAAP financials are provided in table one. The next two tables, table two and table three, are a reconciliation of the GAAP and non-GAAP financial results. As noted on the reconciliation tables, the difference between GAAP and non-GAAP comprises charges for three non-cash items; of stock-based compensation, preferred stock accretion, and changes in fair value for warrants. Note that the charges for preferred stock and warrants do not impact the current period as they were converted to common stock in connection with the IPO.

Now let's move on to the P&L. On a non-GAAP basis the net loss for the quarter was $6.4 million as compared to $8.9 million for the same period in 2007. The reduction in operating loss was driven primarily by revenue resulting from our collaboration with Shire. Recall that we signed a strategic alliance with Shire in November of 2007, which included a $50 million up-front licensing fee, $150 million in clinical and regulatory milestones, $240 million in sales milestones tiered double-digit royalties for each product sold ex-U.S. by Shire, and a 50/50 cost sharing on global development expenses for all three clinical programs in Gaucher, Fabry and Pompe diseases. In addition, Amicus retains all U.S. rights to these programs, as well as rights to all other programs in our pipeline. Total revenue for the first quarter 2008 was $3.2 million, comprising $0.7 million of collaboration revenue on the up-front payment, and $2.5 million in research revenue for the reimbursement of R&D costs associated with each of our three lead programs.

Now to the R&D investment. We spent $6.9 million on R&D in the quarter. While this is essentially flat compared to 2007 we expect that R&D will ramp up through 2008 as we initiate and enroll additional clinical trials, invest in clinical drug supply and expand our discovery research activities. Our SG&A expense was $5.2 million, compared to $2.9 million in 2007. This was primarily due to increased headcount and other administrative costs associated with being a public company. Our interest income for the first quarter was $1.7 million as compared to $0.7 million in the first quarter last year. This increase is primarily due to higher cash balances attributable to our 2007 initial public offering and the up-front payment we received from Shire.

Now turning to our balance sheet, we ended the first quarter 2008 with approximately $155 million in cash and marketable securities as compared to $162 million at the end of 2007. In short, we have a strong financial position to support our pipeline development. Our financial and related guidance for 2008 is as follows. We will continue to recognize the $50 million up-front payment from Shire on a straight line basis over an 18-year period from the date of the agreement last November. We do not expect to raise cash from any equity financings in 2008 and we reiterate our guidance for 2008 net cash burn in the range of $40 million to $60 million. And as a reminder, our net cash burn guidance includes reimbursement of R&D costs but excludes milestones from Shire.

With that I'll turn things back to John for his closing comments.

Great. Thank you, Jim. So hopefully you all get the sense that we've done a very significant amount of work to advance the technologies, the programs and to better position Amicus to be able to execute on all the future studies that we need to do. And for many of us, like me, who have been involved in these disease areas for over a decade it is quite satisfying to see that patients may finally have an option for another therapeutic approach to their diseases. And when we think about Amicus it is helping to shift the paradigm potentially for treatment of these diseases and to advance the science and medicine. We feel real good about the work that we've been able to do and that it's all been grounded in data together with our consultation and the weight of the discussions with the experts in this field.

We've got a lot of work ahead of us for the balance of 2008 and as we move into 2009. In the months ahead we'll be looking to advance the global regulatory path for Amigal for phase III development. We'll be announcing the data from the phase II extension study on those 23 patients who continue to take Amigal for their Fabry disease. We'll be initiating additional studies in both Gaucher and Pompe disease. We'll be exploring the potential use of our Pompe chaperone, AT2220, as a combination therapy with Myozyme. And finally we will be working to identify additional therapeutic areas to apply our pharmacological chaperone technology. We look forward to keeping all of you updated on our clinical and scientific progress and developments as we execute on the business plan and I thank you.

And as a reminder, I am joined here today not only by Jim, but by David Lockhart and Matt Patterson. And with that, operator, I'll be happy to take questions.

Thank you, sir. (OPERATOR INSTRUCTIONS) First, Geoff Meacham with JPMorgan.

Hey, guys, this is Terry Shu calling in for Geoff today. Thanks a lot for taking the question. My question is on the, on the -- I'm wondering if you can expand a little more on your specific plans for the phase II Pompe trial, if you can give us some more details about what that trial could look like?

No, the only guidance I'll give here is to say that by the end of this quarter, so within the next month or two we'll be initiating that study and at that time we'll be able to comment on the study design.

Okay. And then just wondering if there's any plans to look at the Fabry and Gaucher plans in combination with the ERT in the near term or is that something that you're just going to look at with the Pompe program for now?

Well, we've chosen to begun look -- to begin looking at the potential for combination therapy and there's several different ways, of course, to look at combination therapy. But we think it's most appropriate to begin looking in Pompe disease, both by the nature of that enzyme replacement therapy, Myozyme, that treats Pompe today for many patients but also the nature of the disease. So we think that's best in terms of meeting unmet patient needs but also establishing the potential for proof of concept of a combination approach. So we'll begin and continue to advance that preclinical work. but we are also mindful of the potential in Fabry and Gaucher. We just think given the nature of that disease and the patient population that Pompe is a better place to begin looking at the combo therapy. And again I'll highlight that is combo therapy in addition to our initially pursuing in the clinic the monotherapy chaperone AT2220 and based on the ex vivo study that was shared at the ACMG we were very encouraged by that data and we do believe that a good majority of patients with Pompe disease will be amenable to this chaperone as a monotherapy. We simply want to make sure that we're leveraging the technology as best we can to meet as much of the unmet medical need of patients as we can.

Okay, thanks a lot.

Thank you. Next we'll go to Matt Osborne at Lazard Capital Markets.

Hi, guys, thanks for taking the question. John, can you comment on the new dosing regimens that are being closed, both for Plicera and Amigal, Was there a signal that you saw that is allowing you to consider different doses and can you describe a little bit more, should we consider these as maintenance-type dosing regimens that you'll be exploring in both the extension phase and the change in the Plicera study?

Sure. Let me begin by reiterating in Fabry disease with Amigal we believe we have a safe and effective dose;safe for all patients, effective for a majority of the patients studied. And that dose again was 150 mg given in an every other day fashion. What we were able to do is to look at the clinical data, particularly the people who have limited to non-responses with the chaperone, and try to think, are there different ways to approach it where we can get them -- those patients to be good responders. So we looked that the clinical data. We conducted a series of preclinical experiments and the also we did some advanced PKPB. modeling and our partners at Shire and their pharmacokineticists were particularly helpful here and there is a building on the on-again, off-again with 150 mgs every other day.

With Fabry disease we're going to explore regimens where it's three days on, four days off, beginning patients -- taking them to 250 mgs and then again up to 500 mgs Total of four months of treatments, two months in the first dose and dose regimen at 250 and then the next two months at the next dose. So it was based on clinical data, preclinical data and pharmacokinetic modeling and the intent is to evaluate potentially optimized doses. I'm not sure that it will help the patients who already have a good response, but it may give us a chance to take the people with -- who were limited or nonresponders and move them up to be good responders. And the nice thing is its this same patient population that we already studied extensively and we're doing it in parallel with our regulatory discussions in the U.S. and in Europe.

Okay. And the same on Plicera, was there some kind of signal that you saw and can you describe and remind us what the original dosing was?

Yes, I would -- the Plicera, there are a lot of commonalities across these chaperone programs, particularly around the uniqueness of dosing. So the decision to amend the protocols with Plicera was based in part on the preclinical and clinical work we have done with Amigal, so we leveraged a lot of those learnings, plus some very specific work we did with Plicera in Gaucher disease. We explored in the switching study a number of different dose regimens. In this current study I'll just highlight again that it's 225 mgs three days on and four days off and 225 mgs seven days on and seven days off and we think there's very strong rationale for why that may be a more optimized dose for these patients who are naive to enzyme replacement therapy.

Okay. And can you remind us how long it took you to enroll this phase II trial in the naive group from start to finish?

Well, we're not commenting on enrollment of ongoing studies. I will say that in the switching study that we reported the data on back in March the total time for enrollment of those 30 patients cross 11 clinical centers just in the United States was about six months from --

Okay, great. And last --

-- start to finish.

Last question on Amigal, what effort is ongoing, if at all, to establish kidney GL-3 as measured in the urine as a surrogate, what gives you the confidence so far that this is a useful surrogate in the absence of a controlled clinical trial?

One of the things that we have done is to not just extensively review the literature -- and there are papers going back to 1971 describing kidney GL-3 as measured in urine and why that is an appropriate objective measure of overall kidney function, multiple papers and we're happy to provide investors with those references, and continue to speak to the experts about the appropriateness of that end point. For instance, I'll refer you to a 2006 paper comparing the efficacy of fabrizyme and repligal in the presence of antibodies and the primary biochemical surrogate (inaudible) referred to there was kidney GL-3 is measured in urine. so that's part of our overall rationale. It's not, again, something we invented. This has been around for many decades and we think it is the most appropriate and objective measure surrogate marker in the disease.

And can you look at the Shire patients or patients who are on repligal and look back and see if there's a surrogate there as well with measuring urine GL-3 to their results on repligal now? Is that another way you can correlate urine GL-3 with clinical outcomes? Is that something you're considering with Shire of looking at now?

Let me begin by highlighting we work very closely with Shire and I should also highlight that both for fabrizyme and for repligal it's been very clearly demonstrated that with treatment -- effective treatment with enzyme replacement therapy that kidney GL-3 as measured in urine decreases. So, yes, I'll leave it at that.

Okay, great. Thank you.

Thank you. (OPERATOR INSTRUCTIONS) Next we'll move to Alan Leong at Biotech Stock Research,.

Hi, I'm going to add a couple side questions. The upcoming results, like let's say your preclinical results that you're working on for Pompe disease, where are some typical conferences that you might be presenting it and will you be still looking at doing -- at presenting the results through a -- initially through a PR release?

Yes, we've got a pretty robust publication and release strategy. We have presented at many conferences over the past year so you can look to conferences like the American Society of Human Genetics, American College of Medical Generics, the Neuroscience Conference, there are a number of other geographic-specific conferences in genetic diseases and you can expect going forward that we'll continue to present data posters, symposia at all those major events.

So I've got to keep my eyes open all over the place this year. Thanks a lot.

Yes, as well as multiple LSD conferences -- LSD-specific conferences.

LSD conferences. Thanks.

Sure.

Thank you. We'll take our next question from Joe Aguilera at BioRevolution Capital

Hi, guys, congratulations on your IPO and your Shire deal. Just a few questions, John. First of all, on the phase III for the Fabry how many patients do we expect to have and how long do you think that phase III might take roughly?

Let me begin by saying that we think there are a number of potential paths that could make sense for phase III. There is a particular path that we believe may be the more optimum way to show the safety and efficacy of this drug and at a relatively high level I'll ask Matt Patterson to comment on what our thinking is there.

Sure, I'd be happy to, John. We've spent a lot of time working with experts in the field and with our partners at Shire to come up with a phase III strategy that we think makes sense. And the study design that we have in mind that we intend to propose and discuss with the authorities this year is a design that builds on a switching concept, switching from enzyme replacement therapy concept which we've spoken about before, and specifically the vision is that a trial could be performed in patients who are currently on enzyme replacement therapy, have known responsive mutations to the chaperone and could be randomized into a study that allows a comparison of them remaining on ERT or going on to Amigal. So it would be a noninferiority study that compares the two treatments and looks at end points over time. But as John has described uses a primary end point -- a surrogate end point of kidney GL-3 as measured in the urine and it will be on a comparison on that end point that would be the basis for a license application globally. As far as patient numbers, it's a little difficult to estimate that with great specificity, but I think it's reasonable to think that it will be slightly larger than LSD studies, Fabry studies done in the past. I think a number range of 75 to 100 would be reasonable.

So how are you going to get enough patients for all these very limited disease markets?

Well, we work globally. Remember the trial design is such that we would work with patients who are on enzyme replacement therapy globally and that is several thousands patients today. So we would work globally with centers that we've worked with through our phase II and in collaboration with our partner at Shire and certainly you would involve many different centers global to the ensure you could enroll the trial in a reasonable timeframe and that is our expectation.

One of the reasons why we like the noninferiority design is because it is, in essence, a switch study, so there is for these diseases is a pretty large existing patient population already on ERT so we don't have to scour the world for that level -- that number of patients who are naive to ERT. So we think actually this trial design, in addition to potentially demonstrating very strongly the safety and efficacy of the drug also will address any concerns around the ability to rapidly enroll the study.

When would the next milestone be with Shire? What would be the announcement and what would you have to meet to get that milestone, how much would be that first milestone?

Sure, we don't comment -- by the nature of our agreement with Shire we can't comment on the specific milestones, triggers or amounts except to say that there is $150 million in clinical and regulatory milestones that are achievable by Amicus and that some of those milestones are achievable within the next 12 to 18 months.

Are you expecting to replace basically Genzyme's products with Amicus or to complement them? Can we really -- can you maybe talk about that, John?

I'll just say that we think going forward as we continue to prove the safety and efficacy of these drugs and as they hopefully come to market, that physicians and patients will be able to evaluate what's the most appropriate drug for their use. We do think that ours is a paradigm shifting technology for many patients with these diseases and that in each of these three diseases at least a majority of patients should be amenable to taking these chaperone drugs as a monotherapy for their standard of care.

If a patient fails Genzyme's hey'll be able to take ours hopefully, correct?

I'm sorry, I didn't catch that.

If they fail Genzyme's products then they'll be able to take our products?

Well, I think there's a number of different ways to look at it. I think patients who are diagnosed with these diseases who have identified mutations that are amenable to these therapies could well take this as their first and life-long treatment and I think for existing patients it will be patients who we be switched -- the majority of our patients we expect to switch over time as the standard of care evolves to chaperones as the monotherapy. So I think that's it. If there are no other questions, operator?

There are no further questions at this time, sir.

Terrific, great. Well, thank you all for listening and we are going to get back to work. Have a great day.

That does conclude today's conference. Thank you for participating and have a nice day.