Amicus Therapeutics Inc (FOLD) 2015 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Amicus Therapeutics first quarter 2015 results conference call and webcast. (Operator Instructions). As a reminder, today's call is being recorded.

I would now like to turn the conference over to Sara Pellegrino, Director of Investor Relations. Ma'am, you may begin.

Thank you. Good evening, and thank you for joining our conference call to discuss Amicus Therapeutics' first quarter of 2015 results.

Speaking on today's call we have John Crowley, our Chairman and Chief Executive Officer; Chip Baird, our Chief Financial Officer; Bradley Campbell, our President and Chief Operating Officer; and Dr. Jay Barth, our Chief Medical Officer, is on today's call and available to participate in the Q&A session.

As a reminder, 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 preclinical and clinical development of Amicus candidate drug products, cash runway, and the timing and reporting of 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 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, 2014.

All forward-looking statements are qualified in their entirety by this cautionary statement, and 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 Therapeutics.

Great. Thank you, Sara. Good evening and welcome, everybody, to our conference call. I just want to emphasize the momentum going on at Amicus right now, as we build our initial commercial team and do so on an accelerated timeline following our positive meetings with both European and United States regulators at the end of the first quarter.

So, we are very busy at Amicus, preparing for the global launch of migalastat monotherapy, which as you know is a precision medicine for people living with Fabry disease, who have amenable genetic mutations. We have accelerated our submission timeline in Europe, which of course moves up the potential EU launch, and we are very pleased to report that we are on track to submit the MAA for migalastat.

Again, this will be our first ever marketing submission for Amicus, so a major milestone for this Company. That is on track to be submitted in the second quarter -- so, this quarter.

We also -- following our Type C meeting with FDA, we are also, as you know, pursuing a US approval pathway on the recommendation of the US regulators under Subpart H, as we work toward the NDA submission in the second half. And I'll comment more on both of those efforts underway in a moment.

With respect to commercial -- and Brad Campbell is here as well, so I'll ask Brad to provide a little more color and background -- this is a major investment and a major focus in the Company. Today we are focusing first in Europe, and we will very quickly turn the buildup of the team to here in the United States, again in preparation for the migalastat launch.

We continue to recruit key leadership in Europe. There is a very significant pool of talent there, after successful rare disease companies being acquired by other companies. So, we're looking at that, but we're also looking at existing companies, both in the rare diseases and also more prominently throughout biotechnology with some of the key European leadership.

You saw, of course, a week ago, our announcement of a new member of our senior leadership team, David Allsop -- David coming to us from Biogen, where he was most recently Senior Vice President of Europe and Canada.

David is a remarkable leader and 27-year industry veteran, very instrumental in building Biogen's international commercial organization. And we are just so very pleased to have David on board, and certainly welcome him to Amicus and to my senior leadership team, David reporting directly to Brad Campbell, our President and Chief Operating Officer.

We are committed to making migalastat available and accessible to patients as quickly as possible. And to do that, let me provide you some updates on some key recent activities.

Again, just to briefly recap our regulatory meetings as we outlined on our March 19 conference call, and with many of you in individual meetings over the past several weeks -- again, with Europe we received in a personal meeting very positive feedback from the rapporteurs who are designated to this project in Europe. They commented specifically on this significant unmet need in Fabry, as well as the quality of our dossier. And the rapporteurs encouraged us to request accelerated assessment, and we have done that.

So, as far as the status update, we've requested accelerated assessment. And with either accelerated assessment or standard review, again we are in place to file the MAA over the coming weeks, this quarter -- the second quarter of this year.

In the United States, we also had a very good Type C meeting with the US FDA -- again, a face to face interaction. Based on the guidance from FDA from that meeting, we will be pursuing a Subpart H pathway for accelerated approval in the US, which is for an unmet medical need based on a surrogate biomarker reasonably likely to predict clinical benefit. That, of course, is a standard for approval.

The FDA indicated it will consider, in addition to the previously-agreed-to endpoint of the GL3 reduction in the interstitial capillaries, they will also consider cardiac mass as measured by left ventricular mass index by echocardiogram as a potential surrogate.

FDA also indicated additionally that they would consider stabilization of kidney function as measured by [glomerular] filtration rate. So, having now completed two phase 3 studies successfully in Fabry -- again, both of these the largest randomized, controlled studies ever conducted for Phase 3 in Fabry disease -- we continue to be very confident in the drug's approval pathway in the US.

The second part of the feedback from that meeting from the US FDA was their input to us that we would, of course, under accelerated approval, have the Phase 4 commitment. So, our team is working diligently on a number of different alternatives that was specifically by the -- that were specifically suggested by FDA within the context of a GI study.

Again, we are in the GI division for review at FDA, so it's not a surprise that the FDA GI division focused on the very serious and life-limiting GI symptoms, notably the diarrhea -- constant diarrhea in patients living with Fabry disease. So, again, all therapies under Subpart H have that postmarketing commitment.

So, we're actively preparing the new drug application -- the NDA submission -- for the second half of this year. Again, much of that work overlaps with the very excellent and detailed work that our teams have done in preparation for the imminent filing of the MAA in Europe.

The next interaction with the FDA will be a pre-NDA meeting in the middle of this year to finalize the details for the NDA and to discuss a final plan for this Phase 4 postmarketing study.

So, I'll comment, I could not be more proud of Jay Barth and his teams in clinical and regulatory here at Amicus. They have been working tirelessly to finalize these marketing applications, to make them of the very highest quality, and certainly that that provides us a great path forward as we begin to prepare to market these drugs globally.

So, we've been very conservative -- just a brief update -- I'll go now -- pivot briefly to a mention of the updated guidance, and Chip will outline in more detail.

As you know, we've been very conservative up till now in our commercial infrastructure. But now, especially with the feedback -- the regulatory feedback we received at the end of the first quarter, and now with David Allsop as our leader -- business leader in Europe -- we are ready to move forward with the full execution of our launch plan. And that includes accelerating the timelines based on that regulatory feedback.

So, with that, we will be updating our full year net cash spend guidance to account for the pre-commercial investments that have shifted from 2016 into 2015, as well as with the continued success in our Pompe program, increased manufacturing investment for our next-generation Pompe ERT. So, we'll hear about that revised guidance in a moment from Chip.

Let me just comment briefly on the Pompe program. Again, this is our next-generation enzyme replacement therapy for people living with Pompe disease. That remains on track, and will enter the clinic by the end of this year.

We, as you know, are manufacturing that drug through our partnership with WuXi Biotechnology in China. In fact, I'll be in China all next week for meetings with their CEO and senior leadership on that program. It's a trip I'm very much looking forward to, and part of our deepening relationship with our partners at WuXi.

This program and our investment, as you know, is built off the significant enthusiasm that we have had from this program, based on our preclinical results, much of which was presented earlier this year at the WORLD Meeting in Orlando in February.

And again, what we've identified and designed and now scaled up to manufacturing is a novel, uniquely glycosylated, highly phosphorylated Pompe enzyme replacement therapy -- what we refer to internally as ATB200, and that is combined with a chaperone.

So, we believe that through our dedication to being an extraordinarily patient-focused Company and world-class science and clinical medicine, we're laying the foundation to become a leading global biotechnology company, with one product poised to -- for its filing, and hopefully to enter the market, and our next-generation product in Pompe, our second product, ready to enter patients in the second half of this year.

Before I turn it over to Chip for the financial update, let me just hand it over to Brad to add a little bit more color on some of the significant activities underway in building our commercial infrastructure and leadership.

Sure. Thanks, John. Good evening, everybody. So, I'll just touch on a couple of key themes here, not to go into too much detail.

First and foremost, we are continuing to build on our 10-year history of strong medical affairs and patient advocacy relationships with the community, and we are redoubling our efforts to engage in that medical outreach here going forward.

That builds upon, I think, the great new data that we've seen over the course of last year from our studies, and continue to see from our extension studies, and we've been able to take sort of an updated target product profile out to the community. And the anticipation and support for the physicians and payers and patients -- all of our key stakeholders -- continues to be strong.

And finally, as John mentioned earlier, we are building a top-notch organization to ensure that we're successful in the launch of migalastat. David Allsop, in particular, is a strong leader, as John mentioned, with a wealth of experience building successful teams and launching great products into areas of high unmet medical need. And we're continuing to recruit and hire top talent in key functional areas as well as key territories, in order to be sure that we have that team in place.

So, we're making great progress towards a successful launch. And, as John mentioned, with the feedback from the regulatory agencies, if anything we're accelerating those efforts, and things are going smoothly so far.

So, with that, I will turn it over to Chip to highlight the financial details.

Chip, I know you're traveling, so you're joining us remotely. Go ahead.

Sorry, guys. Yes. Thank you. Good evening. Start today's financial discussion with a few comments about our current cash position and guidance. Amicus continues to maintain a strong balance sheet. At March 31, 2015 we had $151.6 million in cash and cash equivalents, compared to $169 million at the beginning of the year.

As indicated in our press release issued earlier this afternoon, we are updating our full-year 2015 net cash guidance to $100 million to $110 million for 2015, an increase from our previous guidance range of $73 million to $83 million.

Our updated guidance reflects additional commercial and manufacturing investments [along with] our positive meetings with regulators in the Europe and in the US to prepare for the commercial launch of migalastat monotherapy, as well as manufacturing critical supply of our Pompe ERT as we advance that program towards the clinic.

We expect our current cash position to fund our current operating plan into the second half of 2016 and beyond several expected regulatory and data milestones.

Turning to our first quarter 2015 financial results, I will be referencing tables 1 and 2 in the press release we issued earlier today. Additional details on our financials can be found in our Form 10-Q, which will be filed later this evening.

Total operating expenses for the first quarter of 2015 increased to $24.1 million compared to $16.1 million for the first quarter of 2014. The year-over-year increase was primarily due to increases in preclinical and clinical development costs on the monotherapy program and the Pompe ERT program.

Moving down to P&L, we had a nonoperating loss of $200,000 in the first quarter of 2015 compared to a nonoperating loss of 300,000 in the first quarter of 2014. This change was primarily due to an increase in interest expense on outstanding debt, partially offset by an increase in interest income on our higher cash balance.

Net loss attributable to common stockholders in the first quarter of 2015 was $24.3 million or $0.25 per share, compared to a net loss of $15.9 million or $0.25 in the first quarter of 2014. The change in the net loss was attributed to an increase in operating expenses, and as of March 31, 2015 we had 96.4 million shares outstanding.

This summarizes key financial results from the first quarter of 2015, as well as our updated full-year guidance. More information is available in the 10-Q, and I'm happy to answer any additional questions during the Q&A session. But, for now, we'll turn the call back to John.

Great. Thanks, Chip. So, it was a great quarter for us. Again, continued momentum.

We've got some great milestones ahead of us. I think they'll be terrific for people with Fabry disease, as we look to the MAA submission this quarter and then the NDA submission in the second half of this year; and again, for people living with Pompe disease, to know that they will have another potential therapeutic option entering in the clinic in the second half of this 2015, on many levels is very, very rewarding.

So, with that, operator, we are happy to take any questions.

(Operator Instructions). Ritu Baral, Cowen.

Now that we're approaching commercial launch, have you given any more thought to sequential pricing, both in -- especially the EU, but especially the US, given some of the recent orphan drug launches and how their pricing has worked out?

Yes, of course, Ritu, for your -- thanks for your question on pricing. We have done a lot of work on that with consultants, and internally, and are forming a point of view. Let me turn it over to Brad to answer that question specifically.

Thanks, Ritu. We continue to believe, as we've looked at the value that migalastat brings and the orphan pricing landscape, that the orphan pricing model still holds up quite robustly as long as you're bringing real value to the community, which we believe we are.

I think we're in a unique position to some extent, compared to some recent launches, in that we don't have to create a reimbursement environment for Fabry disease. We don't have to convince payers that it's worth -- a disease that's worth reimbursing for. So, that provides us with some advantage.

And as we've said, if you -- even if you were to price at parity with the current enzyme replacement therapy somewhere in the $275,000 to $300,000 range, you're still bringing significant savings to payers in the avoidance of the infusion-associated costs, concomitant meds, et cetera, with the enzyme replacement therapies.

So, we think we bring a lot of value with migalastat, and we think we have a strong package to bring to payers. And we think that the pricing opportunity is robust for this orphan disease.

And just a followup on the co-formulation study -- the expanded co-formulation study that you mentioned. What details do you have set and what's supposed to be determined around the potential co-formulation study later this year?

Are -- you mean in Pompe, Ritu?

I'm sorry. The -- I believe you mentioned the Fabry co-formulation study?

Sure. So, we of course have our Fabry monotherapy precision medicine, migalastat, and that's for up to half the patients living with Fabry. For the other half or so of the patients, we're developing our proprietary next-generation Fabry enzyme replacement therapy, and that is co-formulated with migalastat.

And the benefit there, of course, is that the chaperone co-formulated with our ERT in one product is conferring substantial benefit in terms of keeping the enzyme folded in plasma, more active -- specifically more active when it gets to key compares and key tissues of disease.

So, we've seen in preclinical studies that it's led to substantially greater reductions of substrate versus enzyme alone. So, that's the basis of the product, and that is a product in development still. That'll be part of my discussions when I'm over at China. WuXi is also in the process development stage for that protein with us, and I think we'll have more to say in the second half of that year -- of this year.

And the potential for a co-administration study in Fabry's as well?

Yes. So, with the co-administration -- and again, that's the notion that you're taking our oral migalastat in combination with one of the currently-marketed ERTs, Fabrazyme or Replagal -- we've done a study previously, a couple of years ago, where we showed in a single dose that you could significantly enhance the half-life and tissue distribution of the enzyme, so it was a good proof-of-concept single PK study.

We'd like to do that over a longer period of time. We know through our preclinical studies that the co-administration over longer periods of time can confer significant benefits. We're not envisioning that as a product extension necessarily for migalastat monotherapy; rather, we see that as a longer-term study and a bridge for patients and physicians to our own next-generation ERT.

And what will a -- more co-administration work look like? What sort of studies may you have to do?

Sure. It would be a longer-term clinical study. So, previously, we'd only done a single-dose study, Ritu. This would be a longer-term study to understand the PK, the safety, the uptake of the enzyme, and potentially other benefits that we may be able to measure over a period of time measured in months instead of that single dose. But that's still in development.

Is this a potential data set that you could generate before a potential approval in Europe or the US?

Well, we think we're on such an accelerated timeline, certainly in Europe, that that data is -- wouldn't be available prior to approval in Europe. Uncertain whether it would be available in time for US. I think we need to understand the US filing timelines a little bit better first.

Great. Thanks for taking the questions.

Anupam Rama, JPMorgan.

Just maybe a quick modeling question for Chip on the increased spend -- how should we think about the spend in terms of maybe a steady growth throughout 2015, or will it be more second-half-2015-weighted; and are there differences between, say, the R&D and SG&A lines that we should be thinking about? Thanks.

Sure. Thanks, Anupam. Yes, I think you're right. It's going to be more back-end loaded versus [one] year. And in fact you can see from the first quarter here, we spent about $18 million in cash. So, it'll be ramping.

And as Bradley and John alluded to before, it's really driven by pulling some of those 2016 commercial expenses into 2015, as well as accelerating and continuing the investment with WuXi on the Pompe manufacturing.

So, those are the two principal drivers. And I would say, between R&D and SG&A, they are fairly equally weighted in terms of their driving of the increase in the overall net cash spend for 2015.

Great. Thanks for taking my question.

Yes. Thank you, Anupam. And just to add a little more color to that, in terms of any future financing, we think we're -- we've got good strength in our balance sheet today. Even with this increased spend we're looking at 18-plus months of cash on hand today.

So, we have no immediate needs for financing. We will be opportunistic. But we do think it's important, though, for us to achieve one or more significant value-creating milestones before we do any financing. So, no immediate plans for financing.

Thanks for the additional color.

Joe Schwartz, Leerink Partners.

Thanks. This is [Mayam], covering for Joe. Quick question, along the same themes on oral migalastat co-administered with currently-marketed ERTs. Can you talk a little bit about the longer-term Phase 2 study? How big is that? Any value-creating milestones that we can expect from that, around some of the approvals that may come?

And going back to the FDA meeting that you have, is that calendared yet, or no?

And a followup to that -- what are some of the key topics that -- I know you said you will be discussing the Phase 4 study design there, but also with the existing data points that you have, are there some themes that you plan to focus more, which will help you set the stage up for the ad comm panel which may happen closer to the approval? Thanks.

Yes. That's excellent questions. There's quite a few of them in there, so let me try to piece them apart.

In terms of FDA, we've not yet requested the pre-NDA meeting. So, to do that, we need to finalize our plans for what we think is the best Phase 4 GI-focused study.

And to the last part of your question, yes, absolutely, if you look at the Fabry patient community, although they die from cardiac disease and kidney disease as well as strokes, what they complain of, in terms of the most life-limiting aspects of their disease, is severe GI problems -- most notably, diarrhea problems, very, very severe.

And we've shown in one of our Phase 3s that -- where it was measured, a statistical significance in the improvement on a validated patient-reported outcome measure of the GI symptom. The -- I believe it was diarrhea, Jay. And with that endpoint, compared to placebo, we showed improvement again in patients, statistically significant.

So, we think we can design a study where we have a high confidence that we would succeed. But also, it would be something very, very meaningful, and also something that would support very rapid conversion of this Subpart H conditional approval to a full and final approval, which would make it, of course, the only approved fully-approved drug in the United States for people living with Fabry disease.

So, I do think we can design a good study -- Phase 4 study. The work on that is well underway, and certainly would be helpful in a number of different ways for us.

The first question that you had was around the co-administration. And on co-administration, again, that is a study we think is a very important further proof-of-concept of the significant benefits of our CHART platform technology -- the Chaperone Advanced Replacement Therapy -- the use of a small molecule combined with enzyme therapy.

We think the ultimate benefit for people living with Fabry is going to be, when combined and co-formulated with our own proprietary ERT, we do think it's very important that physicians have experience with a longer-term chaperone plus ERT, and that we could build on our extensive preclinical data together with the data from that single-dose Phase 2A PK study that we did with migalastat plus either Fabrazyme or Replagal.

So, we don't have any specifics on patient numbers. We think it would be a small study. And it could support a very strong publication; maybe even further additional intellectual property. There's a lot of different ways in which that study could be beneficial. But, again, with the notion that we'd want to move science forward to provide better alternatives for people with Fabry. And we think that would be an important step forward.

And maybe I can squeeze in one last question. Does that feed into, in any way, your life cycle management plans?

And also, can you remind us on the patent situation on the IP for migalastat? And will this in any way help, or one of your next-generation programs will facilitate with that?

No. So, to the second part of that question, we had -- we have very strong intellectual property protections in addition to the orphan exclusivity -- the 7 years in the United States, 10 years in Europe.

We have a significant patent estate around migalastat -- around the method and use, and various extensions of that, as well as different patents and patents pending around the dosing and novel characteristics of migalastat that take us out to the late 2020s on that patent -- around 2027, 2028 in the United States. So, I think we're in a strong position there.

So, we're not doing this study as part of life cycle management. We're doing this study to facilitate a better understanding -- the co-administration study -- a better understanding of the benefits of chaperone plus ERT, so that that would lead, we think, to better data, to better facilitate how we design our studies with our next-generation ERT.

And that's a program we think would certainly have substantial exclusive protections, and quite a few trade secrets around that, in terms of our unique abilities to make those enzyme therapies.

So, I think we're in a very, very good place with migalastat monotherapy, and the co-admin is a terrifically strong bridge to our next-generation ERT, the co-formulated program.

Great. Thanks.

David Lebowitz, Janney Capital.

Would you have any estimate on to when you might hear about whether or not there will be accelerated assessment in Europe?

We think we should hear right about the time that we're filing the MAA. Those are separate activity as -- and workstreams, but probably this quarter.

Okay. And what's the process going to be like for obtaining reimbursement, given the high cost in Europe, as far as country by country? If you could just shed some light on that.

Yes. Go ahead, Brad.

Yes, I mean, it's fairly standard. As you've said, it is country by country. In some cases it can go almost immediately upon approval from the central authorities; in other cases, it's a more drawn-out process.

And so, we'll of course follow that process closely. It's also based on a global value dossier, which articulates the value in a payer-friendly way, and then you translate that to local value dossiers for each of those geographies. That's in Europe, and of course US and other geographies follow a different process.

So, those are the kinds of activities that are well underway now and that we're preparing for. And we will proceed as quickly as possible in each of the territories to get migalastat available to as many patients, as quickly as we can. That's the goal.

Thanks.

Ritu Baral, Cowen and Company.

Where are you as far as the CMC package and any additional CMC work that needs to be done either for US or Europe?

That's complete. So, all of those sections of the filing are complete, for CMC; for preclinical. We are, with the MAA, in the final quality checks of the overall document, and the clinical section I believe is also complete, or very, very nearly complete. So, I think we're in a very good place.

So, there's no gating data. There's no data we're waiting for. There's no other analysis of data. We're just being very, very thorough in this document.

Would a rolling NDA make sense?

It may. We haven't had that conversation with FDA. But I -- usually you do that when you're waiting for more data, of course, and we're really not waiting for any more data.

Okay. And, last question -- what is your current priority or priorities on commercial hires? Are you looking for a Chief Commercial Officer? Regional Heads for Europe? Where are the priorities here, as you expand the commercial teams?

Right. So, with the strength of David and his experience as head of international, David reports directly to Brad. And at the appropriate time, we would expect also to hire a head of the US [and/at] a par with David.

There are other commercial -- key commercial hires. A Head of Global Marketing; other executive-level hires, beginning with the international, together with market access, reimbursement, patient advocacy, medical affairs, and country managers. All that's underway.

We actually are in very advanced discussions and not yet ready to announce, but some senior executive hires in addition to David Allsop that I believe we'll be in a position this quarter to announce as well.

So, I've been very, very pleased, Ritu, with the quality of candidates that have stepped forward. We had an abundance of high-quality candidates from biotechnology, including major rare disease companies as well as other companies with significant international experience, who raised their hand for this opportunity. So, we're very, very pleased with the quality of candidates that we're seeing for these positions.

Great. Thanks for taking the followup.

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

Great. Operator, that's all I have. Thank you, everybody, for listening. Have a good evening.

Ladies and gentlemen, this concludes today's conference. Thank your for your participation, and have a wonderful day.