Amicus Therapeutics Inc (FOLD) 2020 Q3 法說會逐字稿

Good morning, ladies and gentlemen, and welcome to the Amicus Therapeutics' Third Quarter 2020 Financial Results Conference Call and Webcast. (Operator Instructions)

As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Andrew Faughnan, Director of Investor Relations. You may begin.

Thank you, Ren. Good morning. Thank you for joining our conference call to discuss Amicus Therapeutics' third quarter 2020 financial results and corporate highlights. Speaking on today's call, we have John Crowley, Chairman and Chief Executive Officer; Bradley Campbell, President and Chief Operating Officer; Daphne Quimi, Chief Financial Officer; Dr. Jeff Castelli, Chief Development Officer; and Dr. Mitch Goldman, Senior Vice President of Clinical Research.

As referenced on Slide 2, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to our business as well as our plans and prospects. Our forward-looking statements should not be regarded as representation by us that any of our plans will be achieved. Any or all the forward-looking statements made on this call may turn out to be wrong and can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. You are cautioned not to place undue reliance on any forward-looking stats, which speak only to the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, and we undertake no obligation to revise or update this presentation and conference call to reflect events or circumstances after the date hereof. For a full discussion of such forward-looking statements and the risks and uncertainties that may impact them, we refer you to the looking statements and Risk Factors section of our Annual Report on Form 10-K for the year ended December 31, 2019, and the quarterly report quarterly report on Form 10-Q for the quarter ended September 30, 2020, to be filed later today with the Securities and Exchange Commission.

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

Great. Thank you, Andrew, and welcome, everyone, to our third quarter 2020 results conference call. As we did last quarter, we hope you and your families continue to remain safe and healthy. Our leadership team at Amicus continues to emphasize a range of programs and initiatives to protect and support our global workforce during the ongoing pandemic. While adapting to all of the changes brought about by the global pandemic for Amicus, 2020 has been a period of excellent growth and execution across all aspects of our business, including science, clinical, regulatory and as you see, our commercial effort as we continue to build one of the next great biotechnology companies, positions employees to impact people around the world living with rare diseases.

As we did in this morning's press release, I'd like to highlight several key accomplishments. First, Galafold continues its strong launch performance and remains the cornerstone of our success. With $67.4 million in third quarter revenue, the Galafold launch continues to exceed expectations. The third quarter revenue represents the performance across all the global business, including new patient starts from both switch and naive patients throughout the quarter.

Second, our key R&D time lines remain on track. We now expect the Phase III PROPEL study for AT-GAA in late onset Pompe disease to read out in the first quarter of 2021. Additionally, the rolling BLA submission remains on schedule, and we expect the first submission before the end of this year. Today, also, we'll be sharing results from the Amicus sponsored natural history study in Pompe disease.

Within our gene therapy pipeline, we continue to move forward our lead Batten disease programs for both CLN6 and CLN3 as well as our most advanced preclinical gene therapy programs. Through our major research collaboration with Dr. Jim Wilson and the University of Pennsylvania, we are pleased to announce this morning that a Fabry disease gene therapy clinical candidate has now been selected to move into IND-enabling studies. Based on the data that we have seen to date, this program has moved much faster than originally planned for and highlights the capabilities and potential that this collaboration can bring to people living with rare diseases.

And third, following our strategic financing in the third quarter, the Amicus' cash position is sufficient to achieve self-sustainability without the need for any future dilutive financings. Our continued revenue growth, our prudent expense management and the growth potential for Amicus has allowed us to reach this important milestone as we continue to realize our vision of delivering groundbreaking, and we believe potentially curative new medicines for people living with rare diseases around the world.

Turning to Slide 4. We are well on track to achieve our 5 key strategic priorities for 2020. These include: Galafold, our precision medicine for Fabry. We will continue to drive Galafold to more people living with Fabry disease with amenable variance in existing and in new geographies. We look to achieve global product revenue of $250 million to $260 million this year.

Two, we are increasing the clinical regulatory, manufacturing and launch planning activities surrounding the Pompe program, as we move this therapy toward approval. Three, we are advancing our industry-leading rare disease gene therapy portfolio. Stemming from our new global research and Gene Therapy Center of Excellence in Philadelphia, we will continue to advance the clinical development, manufacturing and regulatory discussions for both our CLN6 and CLN3 Batten programs. In addition, we are progressing our Pompe gene therapy towards IND, and for the first time, announced that an IND candidate has been declared for our Fabry gene therapy program. A lot of work is underway in our manufacturing partners for the manufacture and scale-up of the gene therapy potential IND candidates. And again, we will continue to maintain a strong financial position as we carefully manage our expenses and our investments, and we remain fully funded through all major milestones.

So with that introduction, let me now go ahead and hand the call over to Bradley Campbell, our President and Chief Operating Officer, to further highlight the Galafold performance. Bradley?

Thanks, John. Good morning, everyone. As John mentioned, I'll walk you through more detail, our Galafold performance for the quarter. And I'll start on Slide 6, where we go through the continued growth of Galafold revenue in the third quarter of 2020. We gave here a global snapshot of the Galafold commercial progress. And for the third quarter, our total product revenue was $67.4 million, driven by strong patient demand, favorable reimbursement dynamics and business continuity.

Importantly, the global compliance and adherence rate continues to exceed 90%. The geographic breakdown of revenue during the quarter was $47.2 million or 70% of the revenue generated outside of the United States and the remaining $20.3 million, or 30%, coming from within the United States. And I'm pleased to announce today the addition of Poland [Island], Luxembourg and Argentina to the growing list of countries around the world with regulatory approvals and now access to reimbursed product. As a reminder, before these newest additions, we had approvals in 40 countries and commercial sales in over 30 of those today. This expanding global footprint is important not just to support the continued expansion of access to Galafold for Fabry patients, but of course it also lays a very strong foundation, which is highly leverageable to support the potential launch of AT-GAA and future products as well.

Turning now to Slide 7. As John mentioned, third quarter was another strong quarter for us. The business continues to be incredibly resilient, and the quarter comes in above internal expectations for Galafold, with patients added in all of our major markets. In select geographies outside the United States, we did see the COVID pandemic impacting the rate of new patient starts, largely due to disruptions in the interactions between patients and physicians and some bottlenecks in the provision of patient care. Importantly, though, our supply chain remains fully intact. Our customers have confidence that they can access Galafold, and our field team has been able to achieve a substantial majority of their pre-COVID touch points through a combination of in-person, digital, telephonic and other means of interacting with their physicians. Of course, as we close out the year, we will continue to monitor the pandemic's impact and duration, but the good news is today, with 10 months under our belt, we're confident we will deliver on our guidance and see continued growth into next year.

From a number perspective, you can see that third quarter sales increased 38% from third quarter 2019, which does include 3% benefit from foreign exchange. From a true operational performance perspective, sales increased by 35% compared to the same time last year, so great growth from quarter 2019 to quarter 2020.

And on the left-hand side, we show our quarterly performance over the past several quarters, and as we mentioned in previous calls, while we do continue to expect strong quarter-to-quarter growth due to a variety of factors that growth is typically nonlinear. And again, despite the recent COVID-related headwinds in certain ex-U. S. geographies, we continue to be very confident in our guidance of $250 million to $260 million in full year global sales. And in fact, we can say at this time that we expect to come in at the top half of that range.

Turning to Slide 8. With several years now of performance behind us, we can confidently say, we're on a path to that $500 million sales opportunity in 2023. As I outlined previously, to get to $500 million in global sales, we expect a 5-year compound annual growth rate of about 40% from 2018 to 2023, and we expect to generate $1 billion in cumulative revenue between 2020 and 2022 alone, which of course, goes a long way towards funding our R&D and operating expenses over that period. We've also gained even further confidence in the $1 billion revenue opportunity at peak, as we continue to see significant growth in the Fabry market globally, driven by continued diagnosis from high-risk screening, newborn screening and other diagnostic initiatives, which we're also investing in. And we have orphan exclusivity in the U.S. and Europe, in addition to our multiple Orange Book-listed patents that give us IP coverage into the late 2030s. So a lot of opportunity to continue to provide access to Galafold globally for a long period to come.

So with that review of the revenue performance for the year, let me continue now -- hand the call over to Dr. Mitch Goldman, who is our Senior Vice President of Clinical Research, to highlight our AT-GAA program. Mitch?

Thank you, Brad. Good morning, everyone. Moving on to our R&D updates on Slide 10. I would want to remind everyone of our highly differentiated Pompe therapy, AT-GAA and its mechanism of action. AT-GAA is our novel next-generation therapy, consisting of ATB200 or glucosidase alpha, an investigational human recombinant GAA enzyme, administered into the body through intravenous infusion, designed to target muscle cells throughout the body, combined with AT2221 migalastat, an orally administered enzyme stabilizer. The AT2221 is administered shortly before the infusion of the enzyme replacement therapy begins and is intended to bind and stabilize the ATB200 in circulation, allowing more active enzymes to be taken up into cells and delivered to lysosomes. The combination of enzyme replacement therapy, enzyme stabilizer is one major distinction from the standard of care and from any treatment currently in development for Pompe. The other distinction, and we believe more impactful advancement, is the unique carbohydrate profile of enzyme itself. Dr. Hung Do, our Chief Science Officer and his team have been working over the past decade to develop this Pompe enzyme replacement therapy that has both improved binding, target receptors for efficient uptake in the cells as well as the ability to be processed by those cells to the mature form of GAA.

With that in mind, let's turn to the next slide, Slide 11. Today, here, we're showing the natural history data from the Amicus POM-002 study in people living with late onset Pompe disease. Treated with long-term -- treated long-term with the current standard of care alglucosidase alpha. The POM-002 study data shown on the left hand of the slide compared to the medical literature on the right-hand side. These POM-002 data are consistent with the medical literature, reproducing it, where patients, on average, generally see a benefit on 6-minute walk test on first year or 2 on treatment, which then stabilizes, but over time, declines. These data support the need for new therapies and underpin the design assumptions for PROPEL.

Next slide, please. Importantly, here shown on this slide is that our time lines remain on track with data expected from PROPEL in the first quarter of 2021. To date, more than 97% of the 3,100 planned infusions and assessments for the ongoing PROPEL studies have been completed on schedule. In addition, we continue to enroll patients in the pediatric studies and advance our manufacturing platform to support a 2021 BLA and MAA filing. We want to express our thanks to all the Pompe clinical study participants, their families, to all our investigators and site staff and to our cross-functional Amicus Pompe team for collective unwavering commitment and supportive efforts during this unprecedented time.

With that, we hand the call over to Dr. Jeff Castelli, the Chief Development Officer, to review our portfolio of gene therapies. Jeff?

Thank you, Mitch, and good morning, everyone. Moving now to Slide 14. I'll briefly highlight here our industry-leading portfolio of gene therapies for rare diseases. During this time of COVID, we've been able to maintain our critical science and lead programs across the gene therapy portfolio, including CLN6 and CLN3 Batten disease as well as Pompe and Fabry gene therapy programs at Penn.

Starting with our Batten disease franchise, on Slide 15, last month at the Virtual Child Neurology Society Annual Meeting, we reported positive interim data in our ongoing Phase I/II clinical study in CLN6 Batten disease. The data demonstrated a meaningful effect in slowing disease progression out to 24 months compared to natural history. The data continues to suggest that our gene therapy has the potential to be a treatment option for children living with CLN6 Batten and ultra-rare debilitating condition that leads to progressive declines in cognitive and motor function and often results in death in early childhood. We continue to advance regulatory discussions to finalize the clinical and regulatory path and expect to provide an update in 2021 for CLN6. We believe the initial CLN6 results also provide important read-through for our clinical study in CLN3 Batten disease, the most common form of childhood neurodegeneration. We plan to report initial data from the ongoing Phase I/II study in CLN3 early next year at a medical conference.

Additionally, we continue to make great progress on our commercial manufacturing process for both CLN6 and CLN 3 programs and remain on track to initiate studies for these programs next year using this commercial material.

Moving on to Slide 16. I would like to remind you of the research collaboration between Amicus and the University of Pennsylvania, which will be an important driver of growth in the future. This collaboration with the Wilson Lab at Penn combines Amicus' protein engineering and glycobiology expertise with Penn's gene transfer technologies and expertise to develop novel gene therapies designed for optimal cellular uptake, targeting, stability, dosing, safety and manufacturability. As part of this collaboration, Amicus has rights to 50-plus diseases, including 5 currently in active preclinical programs.

Moving on to Slide 17. As part of that collaboration, we are very pleased to announce that a gene therapy clinical IND candidate has been selected for Fabry disease. Initial data from our proprietary AAV gene therapy, which includes the ubiquitous promoter and an Amicus-engineered GLA transgene, demonstrated significantly better GL3 reduction and knockout mice then one containing the wild-type GLA transgene. We're very excited to now show that in addition to engineering transgenes for improved protein uptake into target cells as we did for our Pompe, IND, AAV gene therapy candidate, we're also able now to engineer transgenes for improved stability and activity. We will have the full set of preclinical data for this Fabry gene therapy presented at the medical conference in early 2021. We're very excited for this initial data in Fabry and continue to make progress across our preclinical gene therapy programs as highlighted by the takeaways here on Slide 18.

With that, I would like to now turn the call over to Daphne Quimi to review our financial results, guidance and outlook. Daphne?

Thank you, Jeff, and good morning, everyone. Our financial overview begins on Slide 20 with our income statement for the quarter ending September 30, 2020. And for the third quarter, we achieved Galafold revenue of $67.4 million, which is a 38% increase over the third quarter of 2019. This includes year-over-year operational revenue growth measured at constant currency exchange rates of 35%, further benefited by a positive currency impact of 3%. The cost of goods sold as a percentage of net sales was 12.5% in the third quarter as compared to 11.5% for the prior year period. The increase in cost of goods sold as a percent of revenue was due to sales in select countries achieving the highest royalty rate in this quarter. Total operating expenses were $111.8 million in the third quarter of 2020, reflecting an increase as compared to $100.5 million in the third quarter of 2019.

On a non-GAAP basis, total operating expenses were $92.4 million in the third quarter of 2020 as compared to $89.7 million in the third quarter of 2019. The increase in research and development costs reflected our continued investment to support the gene therapy program pipeline and the PROPEL study as well as realignment with our strategic priorities. Our investment in research and development includes the impact of the implementation of cost reduction measures as does the decrease in selling, general and administrative expenses. We define non-GAAP operating expense as research and development and SG&A expenses, excluding share-based compensation, changes in fair value of contingent consideration and depreciation.

Net loss for the third quarter was $64 million or $0.25 per share as compared to net loss of $61.8 million or $0.24 per share for the prior year period. As of September 30, 2020, we had approximately 260 million shares outstanding.

Turning now to Slide 21. Following our $400 million senior secured term loan facility, we are now on a clear path to self-sustainability without the need for any future dilutive financing. We have achieved this milestone by our continued revenue growth with Galafold as well as driving efficiencies, cost savings and careful expense management. Securing this financing with market setting terms gives us a strong financial platform to advance both patient and Amicus' shareholder interest.

Going forward, again, to emphasize, we expect total non-GAAP operating expenses in 2020 to remain relatively flat from 2019 as we leverage the commercial -- the global commercial infrastructure that is already in place for the AT-GAA launch and other products in our pipeline. We transition the costs associated with the development of AT-GAA to multiple gene therapy programs in our pipeline, and we maintain financial discipline while meeting our objectives.

To reiterate, all high-priority research programs in gene therapy are moving ahead on schedule, especially CLN3, CLN6, Pompe and Fabry, and we continue to fully support the work with the Wilson Lab at Penn.

A few comments about our cash position and 2020 financial guidance. Cash, cash equivalents and marketable securities were $509.1 million at September 30, 2020 compared to $452.7 million at December 31, 2019. We are reaffirming our full year Galafold revenue guidance of $250 million to $260 million in addition to our non-GAAP operating expense guidance of $410 million to $420 million.

And with that, let me turn the call back over to John for our closing remarks.

Great. Thanks, Daphne. So as everybody can see, we have continued to be relentlessly focused on performance across the business. I'm incredibly proud of our team and the resiliency that they've shown despite this great global pandemic and all the challenges brought about by it. We have a great global team of passionate entrepreneurs, who have led and will continue to lead us through this. And I'm confident that as the world emerges from this crisis, Amicus will emerge even stronger.

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

(Operator Instructions)

Your first question comes from the line of Anupam Rama from JPMorgan.

Just a quick one for me. Thinking about Slide 7, in particular on Galafold, when you look deeper into the operational growth that you're seeing, how do we think about sort of deeper penetration into the core regions versus, say, new patient adds in some of the newer emerging market regions?

Yes. Sure. Bradley, do you want to provide some more color there to Anupam's question?

Yes. Thanks, Anupam. So it's still mixed. I mean, we have Japan and the U.S., who are still pretty early in their sort of launch cycle. And so you're getting really strong switching in those markets, although we are starting to see some naive patients come on there as well. In Europe, it's really -- those are a little bit further along in their launch curve. So there, you're seeing both switch and naive patients coming on at almost an equal rate, which is what would we expect over the course of the evolution of the launch there. And then maybe 1/3 of the growth is kind of new patients from different geography, I highlighted a few on the call today. None of those in and of themselves are large, particularly the large markets, but when taken together, they are an important part of the growth story as well. So it is still a mix. And I think we're -- for the next 2 to 3 years, we're going to be very much in that -- kind of continued to penetrate in the mature markets, continue to push the launch in the big new ones, Japan and U.S., and -- but also bring on as many of the small and mid-sized countries as we can.

Your next question comes from the line of Ritu Baral from Cowen.

Glad to hear you guys well. I want to focus on -- so Slide 11, so the new -- sorry, the Pompe POM-002 natural history data. I wanted to know how much the 002 data contributed to the powering of the PROPEL study for small? And second, how do your potential assumptions around powering for PROPEL change or not change if you think about the placebo arm of the neoGAA -- the Phase III neoGAA study that we saw. And if you could just -- just one housekeeping thing on PROPEL, if you could talk about like the number of primary endpoint visits you've managed to retain and timing of that?

Good. PROPEL -- okay. So Ritu, I've furiously been taking those. I think that's only 3 questions, but that's actually quite good.

It is one question.

In multiple parts. So yes, we're happy to answer. So let me -- before I ask Jeff and Mitch to weigh in, again, I'll just emphasize the POM-002 study was originally done is the potential for a comparator? Or had there been a window for an early filing? Here once we completed it, I think it adds to our body of knowledge, adds to the field, but it looks to be entirely consistent with everything that's been known about any benefit for Lumizyme and then the decline over time.

So with that, Jeff, and maybe you want to begin, and then we can ask Mitch to add any comments or colors to it. Did you capture those questions from Ritu, Jeff?

Jeff, you're on mute. No, we still can't hear you, Jeff.

(technical difficulty)

Give us one second or two. I have him up on video, muted with our video systems. I can see he's trying to talk, but -- then we'll go ahead, and Mitch and I will be happy to take your questions. So Mitch, do you want to talk about the first part in terms of powering and what we assumed? I think takeaway is it entirely consistent with all the assumptions we had made prior to seeing any of this data, but it did partly inform building the plan. So Mitch, I'll let you talk about the powering.

Sure. I think it's really largely right, John. I mean. It helped us to have an in-house data sets with the variability that we would see. We use that along with our Phase II data to really understand moving against the 6-minute walk time point, the variability in the variable and outside of the study. So that's how we landed on 100 or so patients in PROPEL study, looking to deliver a 15 to 20 meter improvement in 6-minute walk at the end of the study versus the competitor alglucosidase.

No. Thank you, Mitch. I think what this does in looking at 002, once we saw, this just gave us further confirmation, the study of PROPEL was extremely well powered. And again, based on what we know, we think we need somewhere around 15 or so, 15 to 20 meter delta to show statistical significance on superiority.

It's interesting to -- your second part of the question, you referenced the neo data. And while I won't speak to the neo arm, just their control arm, we did see that they had, I believe, it was a 3-meter improvement at one year, so essentially flat to where those patients began. That is worse than we assumed for Lumizyme. Again, that is in a naive patient population. Again, our study is about 70% switch, about 30% naive. But with respect to the naive patients, in our studies, we expected that they would look more like 25-or-so meters was our assumption. So therefore whatever reason, the patients randomized to Lumizyme and the control arm of our study and the PROPEL study were to be closer to what we saw in neo. It would just further add to the powering of our study as well.

The third part of your question were -- of course. And then the third part of your question were around the assessment lately. We did see some disruptions in the March, April time frame. By mid- to late-May, all of the sites were receiving patients. Patients were getting not only their infusions, but their assessments. And again, even in the height of the pandemic back into early spring, the vast majority of patients, we were seeing -- we're still getting their infusions and all of their assessments. And we look at in the aggregate of the 3,100 assessments and infusions, we're still well more than 97% of those have gone off as planned. So the integrity of the study remains very high.

And again, in any study, of course, you plan for missed infusion, missed assessments. And we're actually -- even with the pandemic, we're in a better place than we assumed we would be without a pandemic so and I think that's a real testament to the effort of team here.

Great. And are you guys making any adjustments for any increase in pandemic-related logistics as cases are rising right now in Q4?

We follow every patient every week. We've got a master tracker of every set of activities for every patient. And again, the vast majority of patients now have completed the PROPEL study. We, of course, remain blinded to all of that, but virtually, all patients have completed. Last patient out is in -- scheduled in December.

Your next question comes from the line of Joseph Schwartz from SVB Leerink.

I'm Joori dialing in for Joe. My question is on AT-GAA. Could you just remind us if there are any key steps remaining to complete your rolling BLA submission once you have your Phase III data?

Sure. We will have completed and submitted by the end of this quarter, the first module, the preclinical module, all of those activities have been completed. So that will begin the rolling BLA process, Joori. We are nearly complete with all of the PPQ activities. We've completed the manufacturing parts of it, both the upstream and the downstream. So some final last work and time on the stability studies. Then, of course, all the final reports necessary for that CMC module. And we're already drafting the clinical module, and once we have the PROPEL data, we'd expect to update the clinical module with all of that important data. So no, there are no barriers left for us other than receiving the PROPEL data.

Next, we have Salveen Richter from Goldman Sachs.

So really 2 around the gene therapy portfolio. One around your Fabry candidate that's moving forward, and how you see it differentiated versus competitors out there? And we've had a few others kind of discussed their target as well -- or the protein as well as construct and approach here. And then on the Batten's program, what do you need to understand regulatory-wise in order to move forward or expand into a pivotal stage?

Great. Thanks, Salveen. Hung, maybe you can speak to the science work that went into our Fabry gene therapy and the differentiation. What was unique about the protein and the TAC that you took. And then that we can come to Salveen's Batten's question in a moment. But go ahead, Hung, please.

Sure. Thanks, John. Salveen, yes, to your question about how we develop our approach for the Fabry gene therapy, it actually is quite differentiated between us and how everyone else is approaching that. First and foremost, I think I should stress the importance of that protein is expressed as a dimer of 2 identical subunits, and it's imperative that, that dimer stays together and intact for it to be functional. And so with that in mind, what we've been able to do is to engineer the transgene so it produces a protein that maintains that dimer formation, and it maintains this activity to ground. And that's important, as we've shown you that middle panel in our slide, that it remains active while it's secreted into the blood prior to its targeting to the various tissues. And so that is a huge advantage that we have seen where we've been able to increase the activity and potency essentially of that protein, so that when it actually targets to the specific cells, actually is able to be much more potent and effective for clearing substrate. So again, as far as we know, this is the only gene therapy approach that has made more potent enzyme through the transgene.

And then, Salveen, I'll just comment briefly to your questions around regulatory. Again, this year, we've spent an enormous amount of time and effort focused on the CMC and the technical operations parts of these programs. We've successfully completed the tech transfer from Nationwide Children to Thermo Fisher Brammer. They are now producing at commercial -- what we believe will be the commercial scale and commercial quality. A lot of work has gone into the analytical development, the tightening of the potency assay and all the related analytics. So in terms of regulatory interaction, a good part of our regulatory interactions are to make sure that the key regulatory bodies are comfortable with all of the technical operations and CMC components of both CLN6 and CLN 3.

And then on the clinical side, as you know, we're going to dose additional patients in both of those diseases with the commercial scale and quality material from Thermo Fisher. And right now, we're going to work with the regulators to figure out what is the right amount of time for additional follow-up for these patients for CLN6, in particular, what is the amount of time and then the number of patients as well. For CLN3 3, we've only dosed 4 patients with the Nationwide material. And to Jeff's point earlier, we'll be able to provide first look at that clinical data in the early part of 2021. So we're very much looking forward to that. And then with the regulators, we know we need to move into a pivotal study there. And our guess is that will be somewhere around 2 dozen or so patients in CLN3. And again, CLN3 is the largest of the Batten diseases and among the largest of the genetic, fatal brain diseases in children. So significant numbers of children suffering with that just horrible disease. So we're moving as fast as we possibly can in those programs and in other programs, Neurologic Batten programs that continue through our preclinical pipeline. So lots more ahead on those programs in the next couple of quarters.

Your next question comes from the line of Mohit Bansal from Citi.

This is Keith on for Mohit. Congratulations on the quarter. So we're just looking at expectations for gene therapy in general. They seem to have moved away from a cure and more towards sort of very long-term therapeutic. It's obviously very early, but looking at the CLN6 data, the probability of no decline seems to be pushed out rather than avoid it entirely. How are you thinking about the mid- and long-term expectations for this therapy? And then what would be the bar there for efficacy over time?

Yes. Candidly, we continue to have very high expectations. These Batten disease's programs, as you know, Keith, they're really just awful devastating diseases. And it seems that the earlier that you treat children in their disease progression, the better the outcome will be. Right now, it's unclear whether you can ever reverse neurodegeneration. It doesn't seem that you can based on today's tools and technologies. So it's really important to identify these children as soon as you can after birth and to administer a gene therapy. But we remain optimistic that for children without significant brain damage, with a properly targeted and safe gene therapy that you can have a profound difference in fundamentally changing their quality of life. Will it be a cure for some of the younger children or something more in the lines of a curative therapy? We still think potentially so, but still much to be seen over time.

Mitch, Jeff, if you guys want to add color.

John, this is Jeff. Can you hear me?

You're back. Yes. You paid your phone bills. Good.

Yes. My apologies for getting disconnected at wrong time before. One thing I will comment on, as John mentioned, we really think it's the baseline severity that can impact whether kids treated with these neurological gene therapies can remain largely normal and have a pretty normal life. So close to what you would call a cure versus if they're impacted already, and there is other damage that's done, there is still going to be some progression that's not really due to the underlying genetic factor that you're addressing with the gene therapy. So we think that's a big factor here.

In terms of durability of gene therapies, we know that's an issue with some of the liver-directed gene therapies and some of the blood disorders, for example. With the CNS delivery, we really do expect that these gene therapies should be durable. There is really not a lot of data suggesting that there is any sort of turning off of expressing cells or turnover. So we are really hopeful that durability, at least, for CNS-directed gene therapies could be quite good.

The next one would be from Mike Ulz from Baird.

Just a quick follow-up on the PROPEL study. John, you mentioned you kind of get the last patient through in December. So maybe you can talk a little bit about the time frame to sort of turn that data set around and provide the top line results. And I'm just curious if you see any unique challenges created by COVID? And if that could potentially extend the time lines there?

Thanks, Mike. Yes, again, we've tightened the time line. We've always said it would be first half of 2021. Now that we're just on the cusp of last patient out, we're confident that we'll be able to report the data out in the first quarter. The patient will receive the last infusion assessment as part of the protocol in December at that point shortly thereafter into early 2021, you'll lock the database, and we'll go through all of our protocols that we have in place and standard operating procedures for our clinical operations, clinical research teams to go through all of the data once we're confident of the integrity of the data and the databases scrubbing all of that. We don't foresee anything with respect to COVID that would delay that, but we'll have to see as we get into it. And that's why I think we gave ourselves some cushion by narrowing it to Q1, but we're also very confident that in the 12 weeks or so of Q1 that, that should be ample time, even if there are some challenges at some sites and the final data assembly. So I think we'll be in a really good place to report that out in Q1. And again, by Q2, we expect to file the BLA in the United States to complete that submission.

The next will be from Evan Wang from Guggenheim Securities.

I had a question on gene therapy CMC broadly. We've seen some difficulty with, I guess, communication or with respect to the guidelines with FDA with comparability, especially between clinical grade to commercial grade. Has there been any change with respect to regulatory agency requirements with respect to CMC? Or is this some sort of growing pain for the gene therapy industry? And is this impact work towards building out in-house capabilities compared to utilizing a CMO?

Yes. Evan, I'll just state broadly. I think if Amicus is going to become one of the world's leading gene therapy companies, we've also got to be one of the world's leading gene therapy companies in process science. In many respects, in gene therapy, the process is the product. So we have been just hyper focused on it. And again, I think actually, Amicus is uniquely suited to succeed here, based on the experience we have with AT-GAA. That is among the most complicated glycosylated biologics ever produced. And for that Pompe enzyme therapy program, we have successfully scaled it, produce it at commercial scale with our partners at WuXi Biologics. We have a really sophisticated and experienced team in technical operations, in quality, in regulatory CMC. And we're applying all of that excellence together with our partners at Thermo Fisher Brammer in these lead Batten programs. But then also with other CMOs, with Jim Wilson and his UPenn team. So a lot of work on the CMC, the analytics and manufacturing side. I actually think it will be a great strategic advantage for Amicus.

To the part of your question about the regulatory environment. Without question, in the last 12 to 18 months, the regulatory framework at the FDA has continued to evolve. There have been much strengthened and much tightened standards around the analytical component, CMC requirements, manufacturing requirements for gene therapy, and I actually think that's a good thing. I think it was necessary. I think it's important for patient safety, but also important so that we understand exactly what we're providing to patients that we can assess efficacy as well.

Again, gene therapy is fundamentally different. With AAVs, in particular, most patients are going to, at least based on today's technologies, have one shot. And we've got one shot as innovators and drug developers to get it right for patients. So that's why we are just hyper focused and a lot of focused attention, a lot of our resources into the CMC side. We are busy at work, designing a world-class state-of-the-art clinical manufacturing gene therapy facility, and we're also in the early stages of thinking through a larger commercial scale facility as well. We would expect in very early 2021 that we'll be able to describe a lot of that more fully. So a lot of work behind the scenes on CMC for all of our programs, really, including investigating next-generation technologies and working to develop and invent, I think, some of the key technologies in gene therapy manufacturing ahead. So we really, really want to be -- we need to be at the forefront of gene therapy manufacturing.

Your next question comes from the line of Kristen Kluski (sic) [Kristen Kluska] from Cantor Fitzgerald.

Congrats on the great progress you've made over the last quarter. So I wanted to ask on Fabry disease. How are you looking at the trends of identifying more amenable mutations on the label in the U.S. and Europe? And then for your gene therapy program, could you remind us what you would view as the key differentiators and advantages to Amicus versus some of your peers, including your understanding of the market, of course, through Galafold? And I know in the past that you've discussed in detail, the importance of a really safe approach here as well as targeting higher transduction to the heart and other key organs?

Great. Thanks, Kristen. Nice to hear from you. Bradley, you want to take the first part about identifying more patients in -- who may be suitable for Galafold?

Sure. Yes. So I think there is really 2 pieces of that. One of them, Kristen, as I'm sure you saw last quarter, we did announce that we expanded the European label to include all of the potential mutations in the GLA gene. So we went from sort of 350-or-so mutations of the European label to 1,384 mutation in the European label, and we were able to do that for the great internal science theme that we have and with the really creative approach that the Europeans took with the ability to update that label, again, just with the preclinical assay determining amenability.

In the United States, that process is a little bit different. There, we actually have to have a patient who has been diagnosed with a new mutation in order to update the label. So you see that the number is growing in the United States, but it's growing kind of 1s and 2s as we find patients with those mutations. So that's one piece of the puzzle.

I think the other piece is identifying new Fabry patients. And there, we're doing a ton of work. We've talked before about some of the interesting data looking at underdiagnosed Fabry disease in MS clinics, and we're going through some investigator-initiated studies to look more closely at that. We've also looked at Penn and GI clinics, and we're doing some really exciting things around both artificial intelligence, looking at improving the diagnostics. And we hope maybe in the first part of next year, we can talk a little bit more about some of the exciting signings there. And then, of course, all the newborn screening initiatives going on in the United States and around the world. And then finally, we've talked about the work we've done with the company called [DK] which, of course, helps promote the use of diagnostic genetic testing. And there, we partner with them to include Fabry in the panel, and in particular, amenable -- Fabry with amenable mutations in the panel that pay you. So -- and then the last piece of the puzzle, I guess, is that for every Fabry patient, you find -- because it's an excellent disease, you typically find 4 to 5 family members with undiagnosed Fabry as well. So a ton of work going on there. I think everybody in the field is really focused on that, and I think that's why you continue to see significant increases in diagnosis broadly and also identifying more patients with amenable mutations.

Thanks, Bradley. Jeff, maybe if you and Hung, want to go ahead and tackle the gene therapy question. I think just very high level, again, a reminder of what we're doing, how it complements. What your Wilson is doing. Like Hung, you provided an excellent explanation for Salveen's question specific around Fabry. But I think Kristen's question is a bit more thinking holistically about the overall approach in gene therapy. And again, why this is going to continue to be such an important part of the Amicus business ahead.

Sure, John. Maybe I'll start, Hung, and then you can add in.

Please, yes.

And I do think that, obviously, our experience with Galafold and Fabry development and interaction with that community over the years has helped us a lot in our gene therapy and that profile that we're looking for. We've learned about the importance of stabilized proteins, not just for our chaperone and Galafold, but also we know that you can combine chaperones with the RTS for stability to help improve those proteins.

So really, when you look at the market, we do think Galafold patients, there's a pretty high burden to switch to a gene therapy. We do think, obviously, in patients that are on ERT that don't have an option of an oral molecule, clearly, there is an opportunity for a convenient one-time therapy. But safety is definitely very important in terms of the gene therapy because there are existing treatments that do address a lot of the issues in Fabry disease today.

So when we look at our gene therapy, there is -- the main approaches out there are either targeting a specific organ like the liver-directed approaches or the cardiotropic approaches. But no matter what, what's clear is, given that Fabry is multi-systemic and you need to address kidney, heart, skin, vasculature, you need to have some main element of cross correction, where you get some transduction in some cells, but those cells are going to need to also secrete the protein into the blood, and that is going to need to then travel to other cells and tissues and treat them. And we've really focused on optimizing that cross correction through the stabilized transgene. So when that enzyme gets put out into the blood, it's now very stable at the neutral pH. As it gets into cells and tissues, it stays very active. And in that sense, we made a more potent gene therapy, we believe. So with whatever small amount of that enzyme that does get put out into the blood that it will have optimal efficacy. So you don't need to go to doses that start to have safety concerns. So we think we have learned a lot about the approach here and really are excited about this stabilized construct for improving cross correction.

Hung, anything to add?

Yes. Just one last thing I would add on from Jeff's explanation there. I think just from a practical point of view, too, is that we are very cognizant of the transduction efficiency between preclinical studies, I mean, ultimately, in people. We know that in primates, and particularly in humans, the transduction efficiency goes way down. And so with that in mind, what we are trying to develop is a very potent protein so that when the efficiency drops in dosing humans, we are certain that we'll actually be able to achieve the level of enzyme produced, and that's going to be effective. So again, all of these factors kind of weighed in terms of how we are developing this approach, which we believe is quite differentiated. And we hope to be quite improved over -- under the current methodologies right now.

You have your next question from Ritu Baral from Cowen.

And Jeff, no running away this time. My question is on -- back on Slide 17, when you're talking about the Fabry gene therapy, could you guys give a little more clarity on that second bullet, the proprietary AAV capsid? Can you talk about how you're thinking about these proprietary capsids, both for Fabry and for Pompe, given what we've seen with safety in the [D&D] studies around possible activation, the potential liver issue seen with the XLMTM program? And when we might get a little more clarity on what makes these truly proprietary?

Sure. Hung, do you want to speak to the -- or Jeff, yes.

I'll start, I guess, John, and then Hung, please chime in. So Ritu, I hope you can hear me this time. I'm not avoiding you. So the proprietary capsids are coming from our collaborators at UPenn. We were well aware of the various safety concerns that have risen up in the gene therapy, AAV filled broadly on the high-systemic dosing. Some of the challenges on liver damage or DRG toxicity. These capsids, we think, would still likely have that -- those concerns. Generally, it seems like these are a broad AAV effect and not necessarily specific to one specific type of AAV. I know some people try to play throughout might be this specific AAV9 or this specific AAV8 or this approach that's causing this toxicity. We think it's a little more broad. It could be a little -- could be impacted by manufacturing processes and maybe the capsids and transgenes have slight differences. But overall, we're trying to address some of those concerns by having very potent transgene and proteins. So we don't need to push on the dose. We can keep in a safe level.

There is also technologies that our collaborators at Penn are working on to help reduce things like the DRG toxicity, and we have early access to those types of technologies through the collaboration as well. So in terms of the capsid itself, though, we're not yet disclosing what it is. It is one of the common clades of AAVs, but we'll provide those specifics when we can. But we're really addressing the main concerns through having a potent transgene.

Hung, anything to add on that front?

And just one last point here, is that, I think, Jeff, you kind of touched on this earlier, the capsid that we're using actually has pretty broad transduction efficiency. And so we're not reliant on any one specific organ or tissue. And so we think that having a broad transduction allowance for the expression and secretion of this protein so that we can get much more effective cross correction.

So again, I think we'll have a lot more to say in terms of what this particular AAV capsid is in the future. But I think that -- for now, I think that we are very confident that we're going to deliver a very effective gene therapy.

At this time, I would like to turn the conference back to Mr. John Crowley, Chairman and CEO, for closing remarks.

Great. Thank you, operator. Thank you, everybody, for listening. Have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you, and have a great day.