Amicus Therapeutics Inc (FOLD) 2009 Q4 法說會逐字稿

Please stand by, we're about to begin. Good afternoon and welcome to the Amicus Fourth Quarter and Full Year 2009 Earnings conference call. My name is Jason and I'll be your conference facilitator today. (Operator Instructions)

This conference call contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 related to the business, operations and financial condition of Amicus, including, but not limited to preclinical and clinical development of Amicus's candidate drug products; the timing and reporting of results preclinical studies and clinical trials evaluating Amicus's candidate drug products and the projected cash position for the Company; words such as, but not limited to "look forward to", "believe", "expect", "anticipate", "estimate", "intend", "likely", "should" and "could" and similar expressions or words identifying forward-looking statements.

Although Amicus believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there can be no assurance that its expectations will be realized. Actual results could differ materially from those projected in Amicus's forward-looking statements due to numerous known and unknown risks and uncertainties, including the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2009 and our other public filings with the Securities and Exchange Commission. Amicus does not undertake any obligation to publically update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of anticipated event.

At this time it's my pleasure to turn the call over to Mr. John Crowley, Chairman and CEO of Amicus Therapeutics. Go ahead, sir.

Thank you, Jason and good afternoon, everyone and welcome to Amicus's fourth quarter and our full year 2009 conference call.

I am here in the room and joined on the call by other members of the executive team at Amicus, including Matt Patterson, our Chief Operating Officer. Matt will review our lead programs and recent advancements in this call and Jack McAdam, our Vice President Finance and Accounting is also with us and Jack will provide on overview of financial results for the quarter and for the 2009 year. Both David Lockhart, our Chief Science Officer, and Pol Boudes, our Chief Medical Officer, are also here and available to participate in the Q and A section of the call that will follow our formal remarks.

Let me begin with some opening comments. 2009 was a very important year for Amicus. It was marked both by significant progress in our programs, as well as some important learning. We finished the year and began 2010 with momentum and financial strength and we fully intend to maintain both of those through this year.

We plan to do this by remaining committed to advancing our three centers of value at Amicus today and to remind you those three centers are first, the Phase III development of our lead program, Amigal, for Fabry disease. Our second key center of value at Amicus today focuses on the advancement of the use of our pharmacological chaperones in combination with enzyme replacement therapies for the treatment of lysosomal storage diseases and potentially more broadly with other recombinant protein therapies.

And then, finally, of increasing interest is our third center of value at Amicus, which focuses on the advancement of our lead preclinical program utilizing the pharmacological chaperone technology for the treatment of diseases of neurodegeneration, particularly now focused on Parkinson's and Alzheimer's.

In 2009 we made significant progress across each of these three areas of focus, led by the initiation of our Phase III program for Amigal for Fabry disease. This Phase III program is a major milestone and an important step forward for both Amicus and for the technology. In addition, we made some excellent progress in the preclinical evaluation of the use of our chaperones in combination with ERT, as well as in our programs for Parkinson's and Alzheimer's and Matt will take us through more detail around those programs.

In Q4 of 2009, we did face some significant challenges with the Phase II clinical data for Plicera for Gaucher disease and as you know when we previously announced, we've decided not to advance that drug into a Phase III development. We will, however, continue to evaluate Plicera in combination with ERT moving forward. Throughout the fourth quarter after those changes, we continued to refocus our strategic priorities and in doing so, we also reacquired the global rights to Amigal for Fabry disease, as well as Plicera in AT2220.

So, coming out of 2009 and after a positive start to 2010, we have a very clear focus and a commitment to our strategic priorities. We remain highly confident in the technology and we have a very clear vision for advancing our lead programs. As a result, we're starting this year with momentum and we believe that these programs will have multiple opportunities to yield very meaningful near- and long-term value for our shareholders here at Amicus.

Let me pause, and with that hand it over to Matt who will review our key priorities in detail, particularly our recent progress on the programs, including a summary of the new data we just announced last week at the World Lysosomal Disease Network meetings down in Miami and our business development vision designed to build on our current strategic and financial foundation.

So I'll hand it over now to Matt.

Thanks, John and good afternoon, everyone. I'll start off with our first key strategic priority, the global Phase III program for Amigal.

As John mentioned, in 2009 we've made significant progress with this program and we believe and we have established a clear path to registration in both the United States and in the European Union through agreements with the FDA and the EMEA. And secondly, we initiated our Amigal Phase III program with the start of patient dosing for studying 011 this fall, this past fall. As a reminder, Study 011 is the study to support potential U.S. approval. Study 012 is the study to support potential approval in the European Union.

Now, these two critical steps were major accomplishments for us. We worked very hard in building a solid foundation for the Amigal program in 2009 and I believe we're well positioned to continue this momentum in 2010 and advancing Amigal will remain our number one strategic priority. This year there are two principle goals for this program. The first is to complete enrollment in Study 011 and the second is to commence study 012. We are on track to meet both of these goals.

I'd like to spend a minute elaborating on why we are confident in the probability of success for Amigal in Phase III. In addition to our agreements with the regulatory authorities, we're confident for two major reasons. First are the positive Phase II and Phase II extension study data and I'll go through our recent data update we provided last week in just a moment.

Second, we've designed the Phase III studies with specific entry criteria that enrich the study populations and are likely to increase our chances of success. For example, subjects enrolled in Study 011 must have both the genetic mutation that is known to respond to Amigal, as well as an elevated baseline level of the substrate we will measure at the primary endpoint of the study.

So now let me spend a minute on the updates to extension study data update that we provided last week in Miami at the conference John mentioned, the World Conference, which is an important scientific meeting for the lysosomal disease community.

As a quick background reminder, 26 subjects completed either 12 or 24 weeks of treatment with Amigal during the initial Phase II studies and 23 subjects enrolled in a separate voluntary, long-term extension study designed to evaluate the long-term safety and efficacy of Amigal.

It's very important to mention that 15 subjects, 15 of these 23 have been treated with Amigal for approximately two-to-three years and eight subjects have been treated with Amigal for more than three years. For us, this is extremely valuable, because this gives us a chance to evaluate longer-term safety and efficacy outcomes. For example, on the safety side, we now have 70-plus patient years of data with no drug-related serious adverse events. On the efficacy side, it allows us the opportunity to begin to assess outcomes and clinical measures of Fabry, such as renal function.

So, turning to the news from last week. The recent data from the extension study presented at World was focused on renal function, which is being evaluated by two measures - estimated glomerular filtration rate, or EGFR, and proteinuria.

To summarize, the primarily data we presented indicated that EGFR remained stabile out to two-to-three years for all subjects continuing in the extension study and that trends of reduced proteinuria continue to be observed in subjects identified as responders to Amigal. What was particularly encouraging to us was that the EGFR results at this point in the study compare favorably to the previously-published EGFR literature in untreated and ERT-treated Fabry patients.

So what we have see now, through Phase II and the Phase II extension study, is that Amigal is generally well tolerated and in responders we see the treatment results in increased enzyme levels, decreased GL-3 levels and what appears to be a positive impact on renal function. We have more to prove, of course, but overall we're very encouraged by these data and believe it supports our growing body of evidence and our expectation of success in the Phase III studies of Amigal and longer-term that Amigal has the potential to be an important treatment option for patients suffering with Fabry disease.

So let me now turn to our second key strategic priority, as John mentioned our work combining chaperones with enzyme replacement therapy as an expansion of our technology platform. In 2009 we reported preclinical data at several scientific conferences demonstrating that the addition of a pharmacological chaperone to ERT has the potential to address key limitations of that treatment. We are currently conducting preclinical proof of concept combination studies for the treatment of Fabry, Pompe and Gaucher disease.

In January of this year we announced the advancement of Amigal in combination with ERT as our next clinical candidate and we expect to initiate a Phase II study for the treatment of Fabry disease using this combination this year, 2010.

Last week at the World Conference, we presented new data these preclinical studies evaluating combination use in both Fabry and in Pompe with our chaperone molecule AT2220. We're very encouraged with these findings.

The studies of both combinations demonstrated that when our chaperone is co-administered with ERT, prolonged half-life of ERT in the circulation was observed, as well as increased enzyme activity in cells and greater substrate reduction in target tissues, compared to that seen with enzyme replacement therapy alone. Now we believe there are a number of shortcomings to the existing ERTs and their chaperones in combination have the potential to address those problems and we expect to report additional preclinical data at scientific conferences throughout the year.

Finally, I'll end with our third strategic priority, chaperones for the treatment of diseases of neurodegeneration. As John mentioned, Parkinson's and Alzheimer's are our focus.

We've talked for about two-and-a-half years now, three years now or so, on the use of a chaperone in Parkinson's disease and through our work have established initial proof of concept for the use of our pharmacological chaperones in animal models with this disease. During 2009 we continued to advance this work significantly.

At the World Conference last week, we presented new data from preclinical studies that evaluated our chaperone AT2101 in mouse models with Parkinson's disease. We continue to be very encouraged with these findings. The study has demonstrated that treatment with AT2101 increased the activity of glucocerebrosides, or GCase, prevented accumulation of alpha-synuclein in the brain and improved motor function as assessed in various behavioral tests.

In addition, in 2009, through a significant medicinal chemistry effort here at Amicus, we were able to identify new compounds that improve on the properties of AT2101 with a focus on the brain as a target and importantly, that have potential for strong intellectual property protection. So, in 2010 we plan to further advance the study of these molecules and therefore continue our preclinical proof of concept studies in Parkinson's disease

Also, as John mentioned, in January we announced that we're working on a second indication in diseases of neurodegeneration and specifically Alzheimer's disease. Our work in Alzheimer's builds on the work we've done in understanding chaperones over the last five years and specifically on the work done in the last few years on Parkinson's. It's closely aligned with our understanding of the chaperone mechanism of action, our understanding of diseases of misfolded proteins and lysosomal enzymes broadly. We think our work in Alzheimer's has great potential and in 2010 we plan to complete initial preclinical proof of concept studies using chaperones in this disease.

So, overall, we're very encouraged with our work in the neurodegeneration space as well and look forward to advancing those programs as rapidly as possible. And that completes our review of the key strategic priorities. I hope that was helpful. Let me just finish by noting that in addition to executing on our plans in each of these leading programs, we also plan to be active on the business development front.

As we have said before, we plan to evaluate various partnering options with the goals of ensuring the continued financial strength of the Company and continuing to build long-term value for our shareholders. With multiple valuable assets across all three areas of our strategic focus, we're optimistic that we'll be successful in this effort this year.

With that, I'll now turn the call over to Jack McAdam, who will give you a review of the financial results for the quarter and full year. Jack?

Thanks, Matt, and good afternoon, everyone. Before I review the fourth quarter financial results I will comment briefly on our cash balance and financial guidance.

After net cash spend of $11.1 million in the fourth quarter, we ended 2009 with $78.2 million in cash and marketable securities. In early January, we provided financial guidance and at this time we reiterate our expectations that cash spend in 2010 will be $40 to $50 million and that our current cash and marketable securities will be sufficient to fund operations and capital expenditure requirements into the second half of 2011.

Now, as I move to the financial results, I'll be referring to Table One in our press release.

Total revenue for the fourth quarter was $49.5 million, representing two different revenue streams from the Shire collaboration agreement. Upon signing the agreement in 2007, we received an upfront payment of $50 million that was being recognized as revenue on a straight line basis over 18 years from the date of the agreement. In connection with a mutual termination of the Shire collaboration agreement in the fourth quarter, we recognized $44.7 million of previously deferred revenue on the upfront payment from Shire.

Additionally, we received a $5.2 million termination payment from Shire as full and fair settlement of all development cost sharing obligations. Approximately $4.7 million of this payment was recognized as research revenue during the fourth quarter and $0.5 million was applied to a receivable for reimbursable research and development costs incurred during the prior quarter. Net income for the quarter was $33 million, as compared to a net loss of $14.2 million for the same period in 2008. The swing to net income in the current year quarter was attributable to the termination of the Shire collaboration agreement and the resulting recognition of previously deferred revenue. R&D expense in the fourth quarter of 2009 of $10.1 million, which included $0.7 million of stock compensation expense, was lower than the $13.8 million of R&D expense in the prior year quarter. The decrease is primarily due to a $2.6 million non-recurring license fee incurred in the fourth quarter of 2008, as well as reduced Pompe program costs in the fourth quarter of 2009. Our fourth quarter of 2009 G&A expense of $4.3 million, which included $1.0 million of stock compensation expense, was lower than the $5.0 million of G&A expense incurred in the fourth quarter of 2008. The decrease was primarily due to reduced consulting and personnel costs. In Q4 2009 we incurred restructuring charges of approximately $1.5 million consisting of employment termination costs and a charge for facility consolidation. The employment termination costs associated with our previously announced 20%, or 26-employee reduction in workforce, totaled just under $0.9 million, comprised principally of onetime severance payments and benefit continuation. Additionally, the Company initiated and completed facility consolidation efforts in the fourth quarter to reduce operating costs. The facility consolidation resulted in a charge of approximately $0.7 million, consisting of future minimum lease payments and the write-off of certain fixed assets in the vacated facility. Interest income for the fourth quarter was $0.1 million, as compared to $0.8 million in the comparable quarter last year. This decrease is primarily due to lower prevailing interest rates. So that covers the financial update on 2009. If there are any other areas you want to cover, I'd be happy to address them during the Q and A part of the call. With that, I'll turn things back to John.

Great, thanks, Jack. I'll conclude here with just some brief thoughts and comments. Before I handed the call over to Matt, I noted that we start 2010 with momentum and we believe that our programs have multiple opportunities to yield some very meaningful near- and long-term value for our shareholders here at Amicus. For me, that became very real when I was at this World Lysosomal Disease meeting last week. I had the chance and the honor to deliver the keynote address there last week at this conference. And through it I had the chance, also, to meet with a number of key opinion leaders, physician, scientists that we work with, particularly in our lead program Amigal and get a sense of the excitement that they have and the encouragement that they have around our Phase III program. A lot of questions around when we're going to begin the 012 study, the international study and also, too, a lot of questions based on some excellent scientific presentations that our folks gave around the use of these small molecules in combination with ERT, particularly the Amigal combination with ERT, as well as questions around and excitement building around our Parkinson's and earlier-stage program in Alzheimer's. So, with all that, it's clear to me that the folks we work with the community - the docs, the patient leaders - are all excited to be a part of the Amicus team and to learn with us and to help us advance our products. And for me, that just reiterates the mission of Amicus to continue building momentum in the fight against human genetic diseases. So, with that, operator, I'll turn it back to you and I'm happy to take any questions.

Thank you. (Operator Instructions) Matt Roden, JPMorgan Chase & Co.

Hi, this is Matt Roden in for Geoff today. Thanks for taking the question.

Sure, Matt.

First on the Amigal Phase III, you mentioned that you expect the first preliminary data from the 001 study to be in 2011. Can you talk about what the nature of the preliminary data may be, whether or not there are pre-specified interim analyses to look at safety or futility or any other aspects of that trial that we should be aware of?

Yes. I'll ask Matt Patterson just to put a couple of comments in there.

Yes. Our expectation of the data in mid-2011 would be certainly to give you the preliminary results for the key primary -- the primary endpoint and certainly safety and as best as possible any secondary endpoints that we have available at that time. And we do not have any intention of interim analyses on this study. It's a double-blind, placebo controlled trial, as you know, Matt. So there's no expectations for an interim analysis that would result in an announcement.

Okay and then I was wondering if you could share with us your latest thinking on the chaperone ERT combos. Is it your belief that the increased activity that you're seeing in the combo is just increasing exposure to the enzyme replacement through stabilization of the enzyme? Or do you think there's evidence for a distinct additive effect of the two separate mechanistic approaches?

Yes, we've done a lot of work, pre-clinically, in establishing that proof of concept. A lot of it was presented last week. Let me ask Dave Lockhart, as his team presented that data, to comment on that question. David?

There seem to be multiple effects. The primary one is the stabilization of the injected or infused enzyme, but stabilizing the enzyme also seems to increase the cellular uptake, which we've measured just in cells and culture. So having a more stabile, properly folded enzyme seems to increase the uptake, recognition by the receptors on the cell surface and uptake into cells.

And then lastly, in the animal studies that we did, we did those in knockout animals. So there was no -- there should be no effect of the small molecule alone on the endogenous enzyme, because the animals are knockout, so they don't have any. So there may be, in some people who have a responsive mutant form of the enzyme, there could be that effect as well, but in the animal studies that we have been doing, they're knockout animals. So it's completely an effect on improving the enzyme replacement therapy that's brought in from the outside.

Okay, so in other words you wouldn't expect to see a similar effect just by further increasing the ERT exposure in dose?

They're -- potentially up to some dose. If you gave more enzyme it's possible that you would get more into the cells and into the lysosome. But of course that would require giving more of the enzyme, exposing patients to more risk due to a longer infusion of more material and also these enzymes do elicit an immune reaction. So, if the amount of enzyme given is greater, the chance of the immune reaction being greater, being higher is increased.

Perfect. That's really clear. And then just lastly shifting gears to the regulatory front. Have there been any discussions with the FDA about potentially expanded access program in the midst of supply constraints?

Yes, Matt, go ahead.

There's been some discussions, of course. We have a very good relationship with the Agency. We spend a lot of time together thinking through the strategy for the Amigal plan. I think it's safe to say that our focus is on executing on that Phase III plan, but under the right circumstances I think the Company and the Agency are open-minded about potential "compassionate use" of the drug if that was absolutely necessary.

But for today, all of our discussions really have been focused on the Phase III program and the importance of getting that up and running and completed. Because that really is what serves the patient community, the broad patient community the best is to get that done and if possible, get the drug available commercially.

Okay, thanks a lot and congrats on your progress.

Thanks, Matt.

Thank you.

Ritu Baral, Canaccord Adams

Hi guys, thanks for taking the question. Can you comment on the rate of enrollment in the Amigal Phase III? Has that met expectations, given the biopsy requirements of the trial?

Well, we don't, for competitive reasons, provide immediate updates on enrollment except to say that we are on track with all of our plans. We have -- I think I had a slide at JPMorgan that outlined the various efforts that we're going to with all the different sites, Ritu, worldwide. So more than 40 sites to enroll this study and that we're currently on track to complete enrollment by the end of this year and to deliver the data then in mid-2011. So it's been an enormous focus and effort in the Company to set up the global Phase III network for this study. But we feel confident that, with all the work that we've put into it and all the sites that we've got us, particularly after we spent a lot of time with many of these doctors in Miami last week. That there are sufficient patient numbers and enthusiasm to make sure we enroll this study.

Great and would you be able to provide an update on 2220, the October Phase I that you initiated?

Yes. Let me ask Matt to comment on that briefly.

Hi Ritu. We're working hard on AT2220 and right now we're still committed to providing an update on that molecule and its status, the lessons learned from the Phase I study we've been doing, as well as our vision for next steps of that program in the first half of the year. So we don't have an update for you today, but we certainly believe we're on track to provide that update as previously noted.

Great and last question on the strategy for when you pull together the Phase II for the combo Amigal trial. Which of Fabry's enzymes do you plan on using and will you sort of design the trial to focus on lower enzyme doses, given that may be a possibility given the mechanism?

I think we'll evaluate all of that. We haven't yet made a decision. We have experienced both with Fabry and Replagal and I think, as we design that study, part of it will be what do we really want to prove in that. Is it a basic PK study or their other potential objectives in that study? So we'll look at potentially evaluating both of them as we make a decision which to compare to.

Great, thanks and congrats on the World data.

Thank you. Yes. It's exciting. It's good progress.

Greg Wade, Wedbush Morgan

Hi, good afternoon. Thanks for taking me questions as well. With respect to the Phase III study that's ongoing presently for Fabry disease, with respect to qualifying patients of their initial renal biopsies. What analysis of those biopsies will be done such that you'll have a baseline measurement that suitable to measure a change against how many patients will you be looking at? Will we learn of the baseline measurement to have some confidence that the study can succeed? Thanks.

Hey Greg, it's Matt. Yes, as I think we've had a chance to discuss before, we do have an opportunity in the protocol to take a look, in a blinded fashion, at a portion of the baseline samples from biopsies to ensure that things look like they're tracking reasonably well for a success in the study. Not analyzing the data per se, but simply analyzing whether the biopsy samples are readable and have a measureable GL-3, for example.

But we're not at that point in the process yet and it's up to us as to how many samples we want to do that analysis. So if something important was to come of that work and results in any decisions or discussions with FDA, certainly we'll provide an update at that time. But we're certainly not at that point today.

What are your present plans with respect to how many patients you're going to analyze and when would you anticipate, based upon how the study is enrolling, that you'd have that data in hand? Thanks.

You know it's something that's still under discussion here, internally, as to how many we feel like would be meaningful to kind of make that decision and the enrollment curve is on track, but difficult to predict exactly when we'll hit a certain number. So it's difficult for me to say any more specifics beyond that, sorry.

Okay, thanks, and then with respect to potential combo therapy for Fabry, what discussions have you had with FDA about what an approval endpoint might be in that type of study and thanks for taking my questions.

Sure. We haven't had that level of detailed discussion around what it would take to be approved with the Agency yet, Greg. But we do plan to interact with the Agency and work with them closely on the combo approach and make sure that they agree with us, with the information we're hoping to gather in Phase II and be meaningful and helpful as we advance it into Phase III development. But that conversation is ongoing as we speak, so as soon as we (inaudible - multiple speakers).

If I can just ask, then, one more quick question then. What are your best chances in terms of what you think you might postulate as an endpoint in a combo study, what you're hoping FDA would agree with? And thanks again.

Well, this is John, Greg. I think what we're really focused on as a next step is that human proof of concept. We've established pretty significant preclinical proof of concept. We'll spend the better part of this year designing and then executing a study that'll establish that proof of concept, showing again that we target bind-to the ERT. That we stabilize it and then we're going to look at what effect that has with pharmacokinetic affects and from there, I think it's a little premature to try to speculate as to what a pivotal combination study would look like. But let's get to the next step of establishing a proof of concept. I think it's very important.

Hi, thanks. This is Matt again. Thanks for taking the follow-up. Realize it may be too early to tell. Just wondering if you guys are in a position to set some expectations for timing around the 2101 IND in Parkinson's?

Yes, I think that is probably premature. We're going to focus this year on the proof of concept. You know we've indicated that we have additional molecules beyond AT2101 that look like they have better characteristics for getting into and out of the brain and we're going to continue to fully explore proof of concept standards, Matt, with those drugs this year. And then we would hope that we'd be able to select the IND candidate sometime this year, so that's the goal and broadly the objectives for that program in 2010.

Okay. Thanks a lot.

Sure.

And at this time we have no further questions from the phone lines, so I'd like to turn the call back over to management for any additional or closing remarks.

Great. Thank you. That's all we have. Thanks for listening and we'll continue to work hard. All the best.

This does conclude today's conference. Thank you for your participation. 12