Amicus Therapeutics Inc (FOLD) 2010 Q4 法說會逐字稿

Good afternoon and welcome to the Amicus fourth earnings conference call. My fame is John and I'll be your conference facilitator today.

(Operator Instructions)

I would now like to turn the call over to Chad Rubin from the Trout Group

Good afternoon. This is Chad Rubin from the Trout Group. Welcome to the Amicus quarterly call.I would like to walk you through the forward-looking statements before I hand the call off to John Crowley, CEO.

This conference call contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, relating to the business operations and financial conditions of Amicus, including but not limited to, pre-clinical and clinical development of Amicus candidate drug products, the timing and reporting of results from pre-clinical studies and clinical trials evaluating Amicus' candidate drug products and the projected cash position for the Company and business development and other transactional activities. Words such as, but not limited to, look forward to, believe, expect, anticipate, estimate, intend, likely, should and could and similar expressions or words identify forward-looking statements.

Although Amicus believes 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' 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 publicly update any forward-looking statements to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events. At this time it is my pleasure to turn the call over to Mr. John Crowley, Chairman and CEO of Amicus Therapeutics. Go ahead, John.

Great. Thank you, Chad. good afternoon, everyone and welcome. This is Amicus' fourth quarter and full year 2010 conference call. I'm joined on the call by Matt Patterson our Chief Operating Officer who will review our lead programs and recent advancements. Also joined by Daphne Quimi, our Corporate Controller, who will provide an overview of the financial results for both the fourth quarter and the full year 2010. Also with us today are David Lockhart our Chief Scientific Officer and Paul Boudes our Chief Medical Officer who will also be available to participate in the Q&A portion of the call that will follow our formal remarks.

I am pleased to report that 2010 was indeed a very good year for Amicus and we start 2011 in a much stronger position than this time last year. We believe that with all of the work that we did in 2010, and leading into this year, that we've created a significant amount of momentum in the Company and we plan to continue building on that momentum. This is a very exciting time for the development of medicines in the rare disease phase and we believe that with our partnership with our friends at GSK, our robust pipeline, and our management team that we are very uniquely positioned to succeed in this disease phase.

We have a number of important milestones across our three areas of focus this year. We have of course, Amigal, for the treatment of Fabry Disease. We have also the evaluation of pharmacological chaperones co-administered with enzyme replacement therapy and we also have the investigation of pharmacological chaperones for the treatment of diseases of neurodegeneration.

Among the milestones expected this year are results from the following clinical studies, a Phase 3 study of Amigal for Fabry Disease. That data expected in the second half of this year. A Phase 2 study of Amigal co-administered with enzyme replacement therapy for Fabry Disease, date also in the second half of this year. A Phase 2 study of our chaperone and Pompe Disease, AT2220, co-administered with an enzyme replacement therapy in Pompe, again, date also in the second part of this year.

And then finally we continue to advance our technology with our late-stage pre-clinical proof of concept studies for a new molecule AT3375, which is our pharmacological chaperone for Parkinson's Disease. And we expect by the second half of this year to deliver additional IND-enabling activities and studies to report on as we continue to advance that program.

So, certainly a busy year ahead of us and a lot of milestones to look forward to. And with that, let me turn it over to Matt for some remarks and more detail about our programs, as well as some comments on our ongoing business development strategy. Matt.

Thanks, John. Good afternoon, everyone. Let me take a few minutes to review our status and planned milestones and then I'll turn it over to Daphne for a review of the financials. Let me start with our lead program.

Our number one priority which, of course, is Amigal, also known as migalastat, for the treatment of Fabry. I would like to start actually, with a brief reminder about the GSK deal that John mentioned earlier. On October 29 of last year we announced a definitive agreement with GlaxoSmithKline to develop and commercialize Amigal, which is currently in Phase 3 for the treatment for Fabry. Under the terms of the agreement GSK received an exclusive worldwide license to develop, manufacture and commercialize Amigal. Additionally, as a part of the agreement GSK and Amicus will work together on advancing clinical studies exploring the co-administration of Amigal with enzyme replacement therapy for Fabry.

I'd like to say that more than three months into the relationship, that we believe things are going very well with our new partners. The two companies are collaborating extremely effectively in a broad rage of activities that are going on in Phase 3 development for the program. And, it's safe to say that from our perspective more than ever we believe that having GSK as our partner increases the chances of success for the overall program.

There are, of course, many ongoing activities with the Amigal program led by the Phase 3 Study 011. As we reported in January patients are being enrolled at 36 sites worldwide and the majority of the planned 60 patients have been enrolled in the study. We expect a complete enrollment in the first half of this year, and to report preliminary results -- top-line results from this study in the second half of the year.

Amicus and GSK are also working together to commence a Phase 3 study, which we call Study 012, in the first half of this year. As you recall, the plan to perform Study 012 is a result of our discussions with the European regulatory authorities and will also serve as a key component of our planned for Phase 4 post-approval requirements for FDA according to accelerated approval regulations. Study 012 will be an 18-month randomized open label study comparing Amigal to enzyme replacement therapy in approximately 60 subjects. The primary outcome of efficacy will be renal function as measured by glomerular filtration rate.

And finally, we continue to treat 17 subjects in our ongoing Phase 2 long-term extension study and we are looking forward to providing an update -- an annual update with the results from this study at the Lysosomal Disease Network WORLD Symposium in Las Vegas which starts Wednesday of this week and completes on Friday. And as I'll mention throughout my remarks, we have a strong presence at WORLD this year and will be presenting information from most of our programs. So, a lot going on to evaluate and advance Amigal as a monotherapy in Fabry. Let me now turn to talking about our work evaluating chaperones in combination with ERT.

As many of you know -- many of you that follow the Company know we have evaluated this concept in pre-clinical studies for several years now. And as we announced in January, we're very pleased to advance this year into clinical studies of this new approach in both Fabry and Pompe Disease. We previously reported promising pre-clinical data demonstrating that the co-administration of a chaperone with ERT has the potential to address key limitations of enzyme replacement therapy. The addition of a chaperone has been shown to prevent the loss of activity of ERT in circulation, increased tissue uptake, and increase substrate reduction. Pre-clinical proof of concept has been established in both Fabry and Pompe. And similar to the Amigal update from long-term extension study, we are also going to provide an update at WORLD regarding our historical and new data evaluating the combination approach in Fabry and Pompe.

With regards to Fabry, as you may have seen, we announced just last week that we have treated the first patient in our Phase 2 clinical study evaluating the co-administration of the drug with ERT. I look forward to working closely with GSK on this study and results are expected in the second half of the year, as John mentioned, which we certainly think of as a very exciting milestone for us as we advance this approach of our science into the clinic. Get our first data in Fabry patients with this approach and hopefully take one step further towards another new treatment option for Fabry patients.

We're also excited to be moving back into the clinic in Pompe. In January we announced our plan to study a Phase 2 study with our chaperone AT2220 co-administered with ERT for Pompe in the first half of this year. As you may recall, in 2009 we decided to no longer advance this molecule for use as a monotherapy treatment in Pompe, but all along we felt it had excellent potential for use when co-administered with ERT. And we're working with FDA to lift the hold on the program and advance -- initiate the study as soon as possible after getting their feedback. We expect results from this study to be available in the second half of the year. Again another important milestone, not just for Amicus and this approach to the science, but hopefully for Pompe patients as well.

And finally let me turn to our programs on diseases of neurodegeneration. As a reminder, we've been investigating the potential for chaperones for the treatment of genetically defined sub-populations of patients with Parkinson's Disease and Alzheimer's Disease. Thus, are focus today on these is as indications as rare diseases. Amicus previously reported encouraging results from pre-clinical work evaluating the use of a chaperone for the treatment of Parkinson's.

This year we expect to complete late-stage pre-clinical proof of concept studies, including IND-enabling activities for our molecule AT3375, which is in development for the treatment of Parkinson's. Yet another key milestone on our list for the year as based on our current data we are optimistic that our approach has solid potential as a new treatment option for Parkinson's. As a reminder, this work is partly funded by a grant from the Michael J. Fox Foundation.

Additionally, we're continuing to advance our pre-clinical program evaluating a chaperone approach for the treatment of Alzheimer's Disease. In January we announced that we're focused on two approaches to treating Alzheimer's with a particular focus on a genetically defined population that have a mutation in the gene that encodes for a protein called presenilin 1. Individuals with this mutation develop what is called early onset familial Alzheimer's Disease. We believe a chaperone approach has interesting potential to treat this sub-group of the overall Alzheimer's population and plan to continue our pre-clinical work, and establish additional proof of concept during the year ahead of us. Similar to the Parkinson's program, this program is funded in part by a grant, and this one from the Alzheimer's Drug Discovery Foundation.

Also, again turning to the WORLD meeting, we do plan to present some information on both our Parkinson's and our Alzheimer's Disease research this week. So, that's it for the program review. Before I turn it over to Daphne, let me just end by saying that this year we continue to evaluate additional business development opportunities to further build shareholder value. With this in mind we're actively exploring a range of opportunities with potential partners at this time. So, thanks for your attention.

I'll turn the call over now to Daphne, who will give us a review of the financials for the fourth quarter and full year. Daphne?

Okay thanks, Matt. And good afternoon, everyone. Before I review the fourth quarter financial results, I will comment briefly on our cash position and financial guidance. After net cash spend of $11.1 million in the fourth quarter, we ended 2010 with $107.4 million in cash and marketable securities. In early January we provided financial guidance, and at this time we reiterate our expectations that we plan to spend a total of $45 million to $55 million on 2011 operating expenses, net of any cost-sharing and milestones related to the GSK collaboration.

Additionally, our current cash position including anticipated payments from GSK in connection with the collaboration is expected to be sufficient to fund operations and capital expenditure requirements through the anticipated commercial launch of Amigal in the United States. Now, as I move to the financial results, I will be referring to table 1 in our Press Release.

Upon signing the agreement with GSK last October we received an up-front payment of $30 million and a premium of $3.2 million related to GSK's purchase of an equity investment in Amicus. The total up front consideration of $33.2 million will be recognized as revenue on a straight-line basis over the development period of the collaboration agreement which is approximately 5.2 years.

Total revenue recognized in the fourth quarter was $0.9 million. Net loss for the quarter was $15.1 million, as compared to a net income of $33 million in the same period of 2009. The prior year quarter net income position was attributable to the termination of the Shire collaboration agreement and the resulting recognition of previously deferred revenue in the fourth quarter of 2009.

R&D expense in the fourth quarter of 2010 of $13.2 million, which included $0.7 million of stock compensation expense, was greater than the $10.1 million of R&D expense in the prior year quarter. The increase was primarily due to a $3 million nonrecurring license fee incurred in the fourth quarter of 2010 related to payments we were obligated to make in connection with our license agreement with Mt. Sinai and which were triggered by the payments we received from GSK.

Our fourth quarter 2010 G&A expense of $3.8 million, which included $0.8 million of compensation expense, was lower than the $4.3 million of G&A expense incurred in the fourth quarter of 2009. The decrease in G&A expense was primarily due to reduced consulting and personnel costs.

Interest income for the fourth quarter was $0.04 million as compared to $0.1 million in the comparable quarter last year. This decrease is primarily due to lower average cash and cash equivalents balances. So, that covers the financial update on 2010. If there are any other areas you want to cover, I will be happy to address them during the Q&A part of the call.

With that, I will turn things back to John.

Great. Thank you, Daphne. So, hopefully everybody will see we begin this year with a significant amount of momentum building on a lot of the work we did in 2010. We have, as we outlined at the JPMorgan Conference, 10 major milestones to deliver throughout this year, including the 3 clinical milestones that I highlighted at the beginning of this call and that Matt provided further detail on.

So with that, operator, we're happy to take any calls.

Okay. (Operator Instructions)I'm showing a few questions in the queue. The first call comes from Ritu Baral.

Hello, guys. Thanks for taking the question. Could you go into any color that you can give us on the doses in the combo therapy Amigal trial?

I'll let Matt take that, Ritu, hello.

You know, Ritu, we're not specifying what those two doses are at this time. But there will be two, as you know. And, but we do not have other information besides that to share.

And then could you go into the biology of the GL-3 accumulation in skin?What could we expect to see in the skin biopsies after essentially a single dose two weeks -- over two weeks of treatment?

Well, I think what we're most focused on in the skin biopsies is enzyme uptake rather than GL-3. GL-3 is something we're going to measure but it's not something that in when a single does study we are focused on as a key measure of efficacy or pharmacodynamics in this case. So, the two key parameters we're really interested in the most are the effects on the [pharmakinetics] of enzyme replacement therapy and from a pharmacodynamic's perspective whether you see a higher amount of enzyme get into tissue than you did with just with ERT alone.

And again, if we can see those, we think that will be tremendous proof of principal in man of the utility of using a chaperone in combination with ERT to potentially enhance the efficacy in targeting of ERTs.

And further on the combo therapy as part of the GSK deal, are there any specific milestones for combo therapy clinical development?

There are. That's built into the agreement, Ritu. They are not a significant part of the agreement, but it is a part of it.

And last question before I hop back into the queue. As far as AT2220, what do you guys envision right now as being involved in lifting the clinical hold currently on the drug?

We're just going through the process. It's still officially on hold and so it's up to us to submit to FDA our plans for the next study. So, we're going through that now and it's -- there is a set process for doing that. But we have put forward our proposal, we believe we have a strong rational for it and we're in the process of working with them now to make sure they're perfectly comfortable with the plan's next step. So we believe that it has a good likelihood of success.

So, there are no specific written questions from FDA from the last round of communications that are outstanding?

No. No, there is not. If you recall, we previously submitted to them the plan to do a Phase 1 study to further understand the pharmacokinetics of this drug in muscle tissue and we completed that study. And then since then, we've been focused on preclinical evaluation of the combo approach, and now we're ready to advance another clinic and so we're just going through this -- the typical process of sending them our proposed protocol and the justification for it, and we're optimistic they will be supportive of our plan to go forward.

Great. Thanks. I'll hop back in the queue.

Thanks, Ritu.

Geoff Meacham.

Thanks, guys, for taking the question. A couple of ones, just on Amigal. I know we'll see some data at the WORLD meeting, but I'm curious if you can speak to -- in the patients on the long-term extension study, maybe the volatility over time of GL-3 measured in the urine because I guess that that is one of the key issues when it comes to measuring efficacy in the [study]?

Well, you know, Geoff, we do not have any data that suggests significant movement in patients GL-3 measures, specifically in the urine, for example. You know, you see reductions in GL-3 pretty rapidly when people start treatment and then based on our information they remain pretty consistent then over time. It's not actually a key focus of our long-term evaluation. We're certainly keeping an eye on it. But, what we're most focused on is renal function since that is sort of the key measure for long-term care for parents with Fabry. So, and that's what we plan for our update at WORLD to focus on as well is, of course, safety. And we are -- long-term safety is obviously critical to the overall risk benefit ratio and profile but the efficacy data as measured by GFR and proteinuria are really the key measures we're focused on and plan to speak to at the conference.

Got you. And just on that point though for your -- the Study 011, though you are in fact looking at GL-3 though, right?

Yes, sorry, absolutely. The primary end point is GL-3 as measured in the biopsies and the interstitial capillaries and GL-3 in the urine is a secondary end point. So, in the short-term those are the measures of efficacy, and those are the surrogate endpoints that we will focus on for this study and for initial approval. But, in the long run what we care about and what we hope to establish, both in Study 012 and with our Phase 4 data collection, is a positive impact on renal function by GFR and proteinuria.

I Got you. So, to characterize it though, you're -- the GFR will be measured but as a secondary in 011, but then when you shift gears to 012 it's the GFR as the primary, but you'll still be measuring GL-3 just to provide the best bridge to [Fabryzine] data.

That's right, yes. 011 has both GFR and protein -- renal function measure by GFR and proteinuria being collected as prospectively defined secondary end points. So we'll gather those data, but you wouldn't necessarily expect those to change a lot over a 6 month period. Those are things you look at a little longer term. And, but yes, you're right in 012 the primary end point is GFR and we will monitor GL-3 but it will be just the urine. We won't be doing biopsies in 012.

And last question. Based on your discussions with the agency on using GFR in renal function as an end point, do you get the sense they are -- I guess, the implied message here is that they are becoming more comfortable in that as an end point and not necessarily GL-3?Is that the case and do you think that has any research as to how your 011 data is going to be interpreted?

No, remember with FDA they are very comfortable and supportive of our plan to use GL-3 as a primary end point. When it comes to long-term data and monitoring these patients they're interested in renal function just like we are, and so that's when GFR and proteinuria come into play, but that's a post-approval issue for FDA. The reason that GFR is being used as a primary end point in 012 is because that's what the European authorities were more focused on, and they think of GL-3 as more supportive and they wanted the primary end point of renal function by GFR. So, hence the design of that study.

Got you. Okay. Thank a lot guys.

Thank you, Geoff.

Okay. Thank you. Joseph Schwartz.

Hello, thanks for taking my question. In the Fabry Disease combination setting with Amigal and ERT, would you envision a similar GL-3 inclusion reduction response rate as a primary registration end point, or would it be something more like GFR, or something else? Thank you.

Hello Joe, it's Matt. It's a little early to say. We haven't had a chance to talk to the agency about what would be an appropriate primary end point for the co-administration approach, and from our perspective, there is a whole range of possibilities. Of course, we think GL-3 is an excellent marker to use and we think using it in the urine, in particular, could be very helpful in this case with a commitment to monitor the other end points long-term.

Safety is also a very interesting measure here when looking at antibodies and the impact of co-administration on those levels and whether that could translate to an improved safety profile as well. So, there are multiple things that we're thinking about but it would be premature to say exactly what we think the right answer is until we get some of the data from the Phase 2 study and we have a chance to talk to the agency further about it.

That makes sense. How do you control, in the 011 study, for the lack of a better word, random presences of GL-3 inclusions that may occur in different regions of female patient's biopsy samples as a result of lyonization?I would think randomization would help to some extent, but is there any special training that is required to make sure that clinicians sample the consistent regions of renal tissue or anything like that?

Yes, well, there is multiple steps we've taken to ensure that we're getting a lot of good data there, even from females. The number one most important thing is the entry criterion of 4X normal GL-3 at baseline in the urine because that is, as we've shown from our Phase 2 data, a strong predictor of meaningful GL-3 storage in the biopsies. And then furthermore, when it comes to the actual procedure itself, we've got strict requirements around ensuring that enough tissue is sampled to give us a sufficient number of capillaries to evaluate. And so, there is a real strict process around how that's done to really reduce variability, even in females where, as you say, there is the potential for that. But, I think all of the steps we've taken have given us the confidence, and our investigators the confidence, that we can enroll a significant number of females in this study and still have a strong likelihood of success in the trial.

Very helpful. Thank you.

Sure.

(Operator Instructions)And we'll take another question from Ritu Baral.

Thanks for taking the follow-up, guys. Can you remind us again what we are going to see out of the WORLD Conference later this week, specifically through the parameters of the Phase 2 extension data, and I guess what is the longest treatment period you've had a patient on Amigal to date?

Sure. So the long-term Phase 2 extension update will focus on safety and renal function as measured by GFR and proteinuria, and we expect to produce a separate Press Release this week summarizing those data as well as noting what other presentations we have going. But, as I mentioned earlier, we have posters and platform presentations. We had a total of 9 accepted abstracts this year, we have 6 posters, and 3 presentations, and it's a mixture of information from all --across all our programs, including combo and some of the data from our Parkinson's and Alzheimer's programs, so a very robust presence this year. But specific to 205, safety and renal function by those two measures is the focus. And patients have been on a significant amount of time now. Off the top of my head, the longest is just a ways past 4 years now on treatment. So it is a -- patients, everyone's passed 3 years and some patients are now even past 4 years of treatment. So, it's a really robust data set that we are pleased to have as a part of our ongoing discussion with the agencies and our evaluation of the drug's potential long-term.

And going to your Parkinson's Disease program, what are your current patient number and market estimates for GCD function associated Parkinson's?

Oh, well when we -- when we estimate the market for Parkinson's patients who are carriers for Gaucher Disease, which as you notice, is our focus scientifically, at least initially, we tend to estimate that population about 5% to 10% of overall Parkinson's. So, perhaps a number in the United States of between 50,000 to 100,000 patients.

Yes, it's well into the tens of thousands Ritu, just here in the United States. So, it's still an orphan indication, but again, in that genetically predefined sub-population, we think it's one not only with significant un-medical need, but one that could also be a very sizable orphan as well.

Okay, and last question. How do you -- how are you guys envisioning the enrollment rate of your European 012 study versus the enrollment rate that you've seen for 011. I guess keeping in mind that you are not going to need the GL-3 -- urinary GL-3 enrichment or biopsies?

Right. So, these are two very different types of studies, Ritu, and there are certain things that would lead us to believe that it is one that would lead many patients to want to be interested in enrolling. Certainly, the absence of any biopsies and having the measure of urine GL-3, but then also the kidney app comes, I think, as one that would be attractive to patients. So, I think the determinant there is going to be the enzyme supply and that's something that we're just getting into. It looks like that's stabilizing in the February community, but I think in the next couple of months we'll be smarter about that and we will be able to give some better guidance. Right now we're doing all of the prep work and, as you know, just the lead-in to that study right now, but by mid-year we'll be a lot smarter about the enrollment rate.

Great. Thanks, guys. Looking forward to updates throughout the year.

We will give you plenty, I promise.

Thanks.

Thank you very much.

Okay. Thank you. (Operator Instructions)At the moment I show no questions.

Okay. Great. Operator, thank you so much. Great, thanks all for listening. Have a great night.

Ladies and gentlemen, this does conclude your conference. You may now disconnect and have a great day.