Amicus Therapeutics Inc (FOLD) 2013 Q4 法說會逐字稿

Good day, ladies and gentlemen. Welcome to the Amicus Therapeutics full-year 2013 financial results conference call and webcast.

(Operator instructions)

As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Ms. Sara Pellegrino, Director of Investor Relations. You may begin.

Good evening, and thank you for joining our conference call to discuss Amicus Therapeutics full-year 2013 financial results.

This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, relating to business, operations and financial conditions of Amicus, including but not limited to pre-clinical and clinical development of Amicus candidate drug products, cash runway and the timing and reporting of our results from clinical trials evaluating Amicus candidate drug products. Words such as, but not limited to, look forward to, believe, expect, anticipate, estimate, intend, plan, would, should, and could, and similar expressions of 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, 2013, to be filed later today. All forward-looking statements are qualified in their entirety by this cautionary statement. Amicus undertakes no obligation to revise or update this conference call to reflect events or circumstances after the date hereof.

At this time it is my pleasure to turn the call over to John Crowley, Chairman and Chief Executive Officer of Amicus.

Great. Thanks, Sarah. Good evening, everybody. Welcome to the conference call to review our full-year 2013 financial results, and also to provide a few program updates.

Let me begin with a couple of key themes to highlight, as we have been doing since the beginning of the year at the JPMorgan conference and now into March. So first off, I will highlight that during 2013, we took a number of steps, especially in the fourth quarter of the year, to strengthen our biologics business strategy.

Those included acquisition of Callidus Biopharma, which brought to us a number of novel technologies, as well as our more advanced Pompe program and the leadership of Dr. Hung Do as our Senior Vice President, now, of Discovery Biology here at Amicus. We continue to strengthen the team.

I think you saw, hopefully, the press release earlier today announcing the recent promotion of Bradley Campbell to our Chief Operating Officer. Brad has been with us since 2006 and has served in a number of roles of increasing significance to Amicus. We certainly look forward to Brad's continued leadership.

We are also very pleased to welcome Dr. Jay Barth, who is with us this evening on the call as well, as our new Chief Medical Officer here at Amicus. Dr. Barth comes to us most recently from another great rare disease company, PTC Therapeutics, where he served as Senior Vice President of Clinical Research. Jay, welcome.

Thank you.

Another key theme during the year was the emphasis on the CHART and the enzyme targeting technologies. CHART, of course, our Chaperone-Advanced Replacement Therapy, the notion that we'll use small molecules to enhance enzyme activity and increase enzyme uptake into tissues, which we think could also potentially address the tolerability and the immunogenicity associated with the current ERTs on the market.

We think, beginning this year in 2014, that we are strongly positioned and well capitalized to execute on our 3-in-3 strategy in biologics. That is advancing three next-generation ERTs into the clinic in the next three years, with lead programs in Fabry, Pompe, and MPS 1.

Finally, we continue to remain optimistic about and committed toward advancing migalastat as a monotherapy for Fabry disease, for patients with amenable mutations. This -- 2014 will be a very data rich year in that program as well. I'll have more to comment on that here shortly in the program updates.

Let me talk a little bit about this 3-in-3 strategy, and begin with Pompe disease. Pompe is now a key focus of our Company, and much of our activities are geared toward the development of this next enzyme replacement therapy for people with Pompe. We still believe that there is a significant unmet need for patients.

We see, principally, three major challenges with currently marketed products for Pompe disease. First has to do with the lack of activity and stability of the enzyme.

Second problem is one of tolerability and immunogenicity. The third problem is one of uptake and targeting.

We believe those first two problems can be addressed with the addition of a small molecule binding at the active site of the enzyme product, as we do with our CHART technology, and today, our proprietary small molecule AT2220 in that formulation, to address the activity, stability and tolerability of immunogenicity issues. With the new cell line that we have from our acquisition of Callidus in the fourth quarter, we also think we have an enzyme that has been uniquely engineered in its carbohydrate structure to significantly enhance the uptake and targeting of that enzyme to the mannose 6-phosphate receptor. We are also using the Callidus core technology of the addition of a peptide marker, which we think is very distinguished from any other approaches in the field, to further enhance the uptake to that receptor as well.

You saw at the World Conference in San Diego just a few weeks ago the first public presentation of our next generation Pompe ERT, which we're designating AT-B200, with and without the peptide targeting technology. Again, one of the problems that we have had to solve for is not just the addition of high levels of mannose 6-phosphate from chose cell-produced enzyme, but also making sure the other carbohydrates attached to that structure have the right uptake mechanism and targeting mechanisms.

We think we have this with this Callidus generated enzyme, that even without the peptide tag, within cells and in an in-vitro setting, shows significantly enhanced uptake compared to existing products. Also, we think has the potential, with the addition of the tag, to further increase that activity.

So compared to the current standard of care, we continue to advance what we think has the potential to be a much improved therapy for patients with Pompe disease. We have a lot of work ahead of us this year.

That drug, as we've talked about previously, has completed its master cell banking. It's with a contract manufacture. That relationship was inherited with the Callidus acquisition.

It is a world-class manufacturer with quite a significant team, now, working on the scale-up and manufacture of that enzyme. So it's in its advanced pre-clinical phase. We will continue to have, throughout this year, what we hope will be further proof of concept data to support the use of this next-generation protein into people living with Pompe disease in the clinic in 2015.

Secondly, our most advanced, next-generation enzyme replacement product is in Fabry disease. That is in the combination with ERT, migalastat HCL our small molecule chaperone. It is designed, again, to remind everybody, to bind to and stabilize the infused alpha-Gal A enzyme, independent of a patient's genetic mutation. So while we believe that if you do have a responsive mutation, that the monotherapy is a more appropriate approach, we do believe that this next-generation enzyme therapy would be appropriate for all patients with Fabry disease if they would so choose.

So we have established initial human proof of concept in our prior Phase 2 study of migalastat with the marketed enzymes, Fabrazyme and Replegal. The pre clinical CHART proof of concept, co-formulated with a JCR enzyme, that was, again, inherited with our relationship through GSK, we have shown pre clinical proof of concept of significantly enhanced enzyme uptake and greater reduction of the GL3 substrate in key tissues of disease. We believe that the positive results from these clinical and pre clinical studies demonstrate that the increased activity of enzyme in plasma and the greater enzyme uptake into tissues in the presence of this chaperone compares very favorably to any one of these ERTs alone.

I will just highlight, specifically from our PR that was released a short while ago, you will note that in the first half of 2014 we plan to conduct a Phase 1 study to assess the pharmacokinetics of an intravenous formulation of migalastat in healthy volunteers. With this, we expect to identify the optimal dose for co-formulation with the ERT, very importantly.

In the second half of this year, we expect to initiate a Phase 1/2 study to evaluate this next-generation ERT. That is migalastat co-formulated with JR-051, a proprietary enzyme replacement product for Fabry. We are also currently evaluating our longer-term strategy for supplying later-stage clinical and commercial ERT, which may include developing or in-licensing of recombinant alpha-Gal enzyme comparable to JR-051.

Finally, our third program that continues to run very well is our MPS 1 program. That continues to advance a proprietary recombinant human IDUA enzyme, the protein deficient in people living with Hurler or Hurler Shae syndrome, MPS 1. As a reminder, we are eligible to continue to receive up to a total of $0.25 million in grant funding for this program.

So those are our three programs. I expect we will have much more throughout the year to continue to say as those programs advance. We expect, again, our Fabry next-generation ERT into patients with Fabry in the second half of 2014, our Pompe next-generation ERT into Pompe patients in 2015, and we would expect sometime in 2016 for our MPS 1 program to advance into the clinics.

Before I turn it over to Chip for a financial summary, let me just talk a little bit about our migalastat monotherapy program. Again, we remain committed to the further development of migalastat as a monotherapy for people with Fabry disease who have amenable mutations.

We believe that migalastat works, and we think it actually works very well in patients for whom it is intended. We have seen these positive effects in our long-term extension studies; in our interim Stage I were six-month data, in our Phase 3 study, Study 011.

I'll highlight where we are in patient disposition to date. we have had a total of 137 patients in various studies over the last eight years, who have taken migalastat as a monotherapy. As we sit here today, we have 97 patients on migalastat as their only treatment for Fabry disease.

Total patient years on therapy are 330 with no drug-related SAEs. We have had a sum taken on therapy for, now, eight years. Most significantly, I'll highlight this disposition figure, and that is the retention rate, the average retention rate into the next study for Fabry patients with migalastat monotherapy is 94%.

So our job here is to build the best data set that we can to support approval. We very much look forward to the 12- and 24-month data, those will be the complete data sets from Study 011 in the second quarter of this year. We remain fully on track for that.

We think our Study 011 data, together with the data from our second Phase 3 study, Study 012, will be an important part of our global registration strategy, and we think, very importantly, responsive to the FDA request for the totality of the data from both studies to consider for approval in the United States. Data from Study 012, which again is a switch study comparing migalastat to enzyme replacement therapy, is on track for data in the second half of 2014. That study continues to go extremely well for us.

Hopefully, you'll see, in migalastat monotherapy, we continue to be bullish. We do think it is an important option that we want to see for people with these amenable mutations in Fabry. It will be very much data-driven over the next couple of quarters.

With that strategic overview and program assessment, let me turn it over to Chip to talk about our financials.

Great. Thanks, John. Good evening, everyone. I will start today's financial discussion with a few comments about our current cash position and guidance for 2014.

As indicated in this afternoon's press release, Amicus continues to maintain a strong balance sheet. At December 2013, we had $82 million in cash and cash equivalents. That's compared to $99.1 million at the end of 2012.

Our balance sheet was strengthened in the fourth quarter of 2013 with a $15 million equity fining and a $25 million debt financing, under which we drew $15 million in December. $10 million of that debt financing remains available through the end of 2014.

As guided at the JPMorgan conference at the beginning of the year, we expect full-year 2014 net cash spend to total between $54 million and $59 million. We expect our current cash position to fund our operating plan into the second half of 2015.

Turning now to our full-year 2013 financial results. I'll be referencing tables 1 and 2 in the press release, which we issued earlier today. Additional details can be found in our report on Form 10-K, which should be filed later this evening.

Total operating expenses for full-year 2013 were $64.5 million, which represents about a 10% decrease as compared to the $71.3 million in operating expenses for 2012. The year-over-year decrease was primarily due to decreases in clinical development costs on the Fabry monotherapy program. Despite the decreases in operating expenses, the GAAP defined net loss for 2013 was $59.6 million, compared to a net loss of $48.8 million in the full year of 2012.

Net loss per share of $1.16 in full-year 2013 was wider than the net loss of $1.07 per share in the full-year 2012. The wider net loss and loss per share versus 2012 is due to the change in revenue recognition in the GSK collaboration.

When you look at our net cash spend for 2013, it was $47.1 million, which comes in at the low end of the guide range of $47 million to $53 million for the year. Finally, as of December 31, 2013, we had 62 million shares outstanding.

This summarizes our key financials for the full-year 2013 as well as our full-year 2014 guidance. Much more information on our financials will be available in the 10-K, which, as I said, will be available online later this evening. I'll be happy to answer any questions during the Q&A session, but for now will turn the call back to John.

Great. Thanks, Chip. Hopefully, everybody gets a sense for a -- at a top level at least, some of the key program activities and consistent with what we have been saying since the beginning of the year. I think that all the change that we saw in 2013, especially in that fourth quarter of 2013, where, for the Company, it was very much a strategic repositioning and strengthening of the business in a lot of different respects, program technology, people and financial.

I think it positions us well this year as a chance to, in the first quarter, kind of settle and communicate. From the second quarter on, we expect to be able to communicate an increasing amount of data, not just from the migalastat monotherapy program, but from our next-generation biologics program, as we look forward to the first of those entering the clinic in the second half of this year.

Again, with the whole notion that with the biologics, our job is to make products that will be distinct from what is currently available to patients. We think by addressing the three significant problems that we see broadly in the ERTs, most notably in Pompe, that we can have a profound difference in patients' lives, and we think, also continue to build a great business.

With that, Operator, we are happy to take any questions.

(Operator instructions)

Ritu Baral, Canaccord.

I wanted to review with you guys some of the interesting stuff that came out of the World Conference, especially in regards to the Pompe's program. Could you give us just a little more detail on the differential chemistry and bioactivity that you are expecting from ATB200 and the variant IGF2 tag?

Ritu, just so I'm clear, that you'd like us to explain a little bit more, the difference in the glycosylation structures as well?

Yes, and the binding as well, yes.

Our chief science officers aren't here today, so we'll have to follow up with you on some of the specific technical information. I think, broadly to understand, that what we have now with the Callidus Pompe enzyme is an enzyme that is fully active, as the lumizyme or other products are. The first distinction is in the carbohydrates. Again, a clone was specifically developed and selected, where it has not only a much higher level of mannose 6-phosphates but also the other carbohydrates.

Remember, there are seven glycans that decorate the Pompe ERT. The mix of complex carbohydrates there, we think, not only encourages uptake with the additional mannose 6-phosphate to the M6P receptor, it also reduces the off-target effects of having, for instance, high levels of mannose residue, which are specifically avoided. The base glycosylation is significantly improved from, we believe, from the current product.

When you then add a peptide tag, you are enhancing the uptake through the shared mannose 6-phosphate IGF2 receptor. Very importantly and distinct from other products we believe, that peptide does not have an affinity for the IGF1 receptor. It also does not have a high affinity for the insulin receptor. So, we think not only does it encourage better on-target effects and uptake, it actually avoids what could be complicating off-target effects as well.

That's very helpful. That's actually what I was hoping for clarity on. Then another thing that you guys had at World was the new GLP assay for detecting amenable mutations for migalastat versus the first-generation assay. Can you tell us a little bit more about the evolution of that, and how that might impact the data coming out of the European study later this year?

Yes, so this was a transfer from our internal scientists, who had developed the assay to characterize the responsiveness of mutations for people in Fabry disease. We think it was a very sophisticated assay here. We used it as we transferred from 011 to the 012 studies. As a result, as we have shown in Study 011, we had, I believe it was 14 of the 60 patients ended up having what would be characterized now as non-responsive mutations. Although we actually had some other patients who were non-responsive, we now believe are responsive.

That confounded the data little bit. That's the difference, for instance, when we showed the presentation with the GL3 burden in the cell type on the continuous variable. If you cut it by amenable mutations, that's where we actually saw a high degree of statistical significance, the 0.002.

For our Study 012, that assay was largely in place for the enrollment. As a result, we only had four patients, two in each of the arms, the migalastat and the ERT arms, who had non-amenable mutations. In fact, the proposed SAP for that study already excludes those patients, even though we think it would have a very, very small effect on the outcome. Does that answer your question, Ritu?

Yes. Great. Thanks for taking the questions. That's helpful.

(Operator instructions)

Anupam Rama, JPMorgan.

Just for the Callidus Pompe ERT, if I remember from the World presentation, there were a couple of next steps listed, and you briefly mentioned this in your opening comments. At the presentation it included longer dosing in combination with chaperone as next pre-clinical steps. If you could walk us through what you think the most important next steps are for that, before you get it into the clinic? Thanks.

Sure, Anupam. We do have a series of pre-clinical experiments that are now just beginning that will read out internally in the second and third quarters, where we are looking at various combinations with and without the peptide, for instance, with different chaperones together with the AT2220. So, it is a very, very significant study. It will just build on the already established proof of concept. We have seen this repeatedly in several years now of pre-clinical studies, with the existing ERT therapies. We would expect to continue to see that as we have already seen, and as Dr. Do presented at the World Conference, with now our own proprietary enzyme, the AT-B200.

We have those pre-clinical activities as one of the work streams. Separate from that, we have all of the manufacturing work that's ongoing. That includes the work to continue to scale the base enzyme, the AT-B200, together with the work on manufacturing the peptide, as well, and related formulation work. The third work stream would be, once all those are in place, in the back half of this year, we would expect to begin the toxicology studies as well. I think those are the three gating factors.

Additional pre-clinical studies to further enhance our knowledge, especially around dosing. Secondly, the continued success in manufacturing that we have seen and scale up. Third, the execution of the toxicology studies, which we have every reason to believe will be favorable for us, which will allow the IMD in 2015.

Great. Thanks for taking our question.

Joseph Schwartz, Leerink and Partners.

I was wondering if you could talk a little bit about the Phase 1 study for migalastat and the Fabry enzyme? I wasn't exactly clear what the next steps were. Then I thought I heard you talk about maybe in-licensing another ERT for those patients. Can you help me understand what the strategy is there?

Yes, sure, Joe. What we're doing is we have made an IV formulation of migalastat. What this will allow us to do is to actually have fewer arms in the next-generation ERT study. The goal here is to have a specific locked-on dose. We know very well the pharmacokinetic profile of migalastat as an oral administration. We know pre clinically what it looks like in an IV administration.

This is to continue that into healthy volunteers in this Phase 1 study. That's the principal purpose of what we are doing with the Phase 1 study. Again, I think that hopefully the language in the press release is pretty clear that this is going to allow us to identify the optimal dose for co-formulation. It does not delay at all the timeline. We are able to take that and then very much put it in the final formulation of the ERT. We expect, again, to begin that Phase 1/2 study in patients, and that's that fixed dose of migalastat co-formulated with JR-051. We are working on protocols. We're not yet ready to describe what that study is going to look like.

We are also now evaluating, as we've thought through over some time now, as our relationship with GSK has evolved, that rather than using that JR-051 cell line, we are looking at more optimized cell lines and other alternatives. Basically, taking what would be our commercial ERT and seeing if we could pull that back into our Phase 3 study, so that we don't have to do any switch as we scale up to a commercial scale. Hopefully, it's a positive development for the program and I think forward looking. I think it's the smarter way to do biologics drug development these days.

Yes, okay. That does make sense. Thanks for the clarity. Could I actually ask about MPS 1?

Sure.

Given what you think are the unmet medical needs in this disease which has physical as well as CNS components, is there reason to believe that, or what do you think is the opportunity for a chaperone-enhanced product there? Thanks.

Yes, exactly. I think if you look at what the chaperone in the CHART platform can do, it can increase activity and stability of an enzyme and it can enhance tolerability and reduce potentially immunogenicity. That's exactly what we are experimenting with right now, Joe. We're looking at various ways in which we can de-immunize the enzyme and increase its activity.

I think the BioMarin product has been a good first-generation approach for people with Hurler and particularly Hurler-Scheie syndrome. We're looking to see if we can advance that. I believe that enzyme does have a black-box warning. So, if we can make an enzyme that's better tolerated for patients and more active and better taken up into target tissues, I'm hopeful that it could have a better clinical outcome for patients.

Okay, great. Thanks very much.

Thank you. I'm showing no further questions at this time. I would like to turn it back over to John for closing remarks.

Great. Operator, thank you. I have nothing further. This has been a very straightforward call. I think we will have much more detailed calls in the quarters to come, as these programs advance. Thanks for listening. Have a good night.

Ladies and gentlemen, thank you for participating on today's conference. This does conclude the program. You may all disconnect. Everyone, have a great day.