Amicus Therapeutics, Inc. (FOLD) Earnings Call Transcript & Summary

Okay, great. Thank you very much. So thank you, everyone, for joining us today. My name is Mohit Bansal. I'm one of the Biotech Analysts here at Citi. And I'm happy to have the Amicus management team with us today. We have John Crowley, the Chairman and CEO of the company; Daphne Quimi, the CFO of the company; and Hung Do, the Chief Scientific Officer of the company. We are also joined by Andrew from the IR team as well. Thank you, John, for joining us today.

Yes. Good morning, everybody. Thanks, Mohit.

Great. So before we start, if you have any questions on the call, feel free to e-mail me. And also on this webcast, there is a mechanism where you can actually submit your question and you come directly in my inbox, and I'll be happy to take that question anonymously for you. So with that out of the way, John, so it has been a productive year -- productive last couple of years for the company. You have been selling Galafold in Europe for a while. And in U.S. as well, you have been growing patient base significantly. So just wanted to get a little bit of brief overview of the company, where you have -- what you have done in last 12 months? And what excites you about the company in the next 12 to 18 months? If you can start with that.

Yes. Thank you, Mohit. It's interesting. If you look at Amicus today, it really has never been better positioned. And if you think about it, we have the cornerstone, which is Galafold. Galafold, we continue to have great confidence in. We reiterate that it will do between $250 million and $260 million in sales this year on its way to becoming a $500 million drug in 2023. And ultimately, we believe in the late 2020s that drug with a $1 billion sales potential. So that's the cornerstone of our success. Coming behind that, we have the crown jewel of our portfolio, which is AT-GAA, our enzyme replacement therapy combined with a chaperone that we think has the potential now to become the standard of care for everybody living with Pompe disease. That's the one drug in our portfolio, the $1 billion to $2 billion sales potential. And again, the potential to obsolete the need for the existing standard of care, which in itself is a $1 billion drug. So you take the cornerstone Galafold, and you take the crown jewel of AT-GAA, and then you look at the pipeline, and we have now assembled the largest collection of gene therapy, rare disease programs in the entire industry. And I know we'll talk about it, but the way that we've structured this around our neuro business particularly the battens disease franchises as well as the programs that we have with Jim Wilson and you -- and we are the largest collaborator with Jim and the University of Pennsylvania in gene therapies. And again, that's founded on the signs of combining the Amicus' expertise in protein engineering with Jim's expertise in vector development and gene therapy technologies much of which has been focused on how do we not only develop safe or effective gene therapies, but how do we do it safely? And we've always been focused on providing doses that could be safe. And I think in a world now where people have significant reservations and appropriate questions around safety of high-dose systemic AAV, I think our approach could ultimately prove to be quite beneficial to patients. So you take that cornerstone, the crown jewel, the pipeline, and against all of that, as you saw about 6 weeks ago, we announced a financing with Hayfin Capital, where we are now fully funded through profitability. So we don't have the need to raise any additional capital in the company to drive this forward. And I think that fits in with our vision. We've always wanted to build one of the world's great rare disease companies. And I think we're at that inflection point where we now have a line of sight for how we can do that. And that's why 2020 has been, despite all the COVID challenges, an incredibly important year for Amicus in that regard. And 2021 will be, I think, what takes us to that next step to be in that handful, that upper tier of great rare disease biotech companies.

Great. This is a really great overview. And since you mentioned COVID, just wanted to touch upon that because yes, there is a COVID challenge, but for Galafold, if you compare it to what is out there, those are infusions. So theoretically, Galafold could be in a better position to take some -- or switch even more patients, given it is an oral. So to that end, what you are seeing in marketplace? Are you seeing a little bit of acceleration there? I mean I don't know, it's hard to quantify given that COVID is basically slowing down everything anyways. But what would you say about the proposition which Galafold has versus the ERTs in current environment?

Yes, I think it's important to remember, coming into the year, we had really strong tailwinds for Galafold. We're seeing significant continued switching in some of the new markets, including the United States and Japan. And we were seeing substantial adoption in treatment-naive populations. We exceeded the upper end of guidance for 2019. So we had really good tailwinds coming into 2020. COVID obviously changes a lot of things for everybody. On balanced, COVID has provided further tailwinds to Galafold because of the nature of the drug, for sure. We saw significantly higher rates of switching than we had anticipated in the early days of COVID in March and April into May. We're back now on or slightly above trend line for switch patients. So we haven't seen -- I think that both has hint in those first 60, 90 days of COVID where patients either didn't want infusion nurses coming into their home or they didn't want to be going into the hospital for hospital-based infusion. So for those patients with amenable mutations, who we always thought Galafold would be an appropriate therapy for COVID is what pushed them and their doctors to a faster adoption. It also did lead to some newly diagnosed patients having a slower uptake of Galafold than they otherwise would have, but that's provided a queue of patients through the spring into the early summer, who diagnosed with Fabry, diagnosed with amenable mutations, approved for treatment and reimbursement in a range of countries, but they came on slower than we have thought. But with all the tailwinds coming into the year with the higher switch rates, we still were ahead of all of our sales projections. And we see that continuing. So when we get now into -- we're pretty deep into Q3, we feel really good about the quarter, and we feel really strongly about our ability to achieve that guidance in the $250 million to $260 million range. Important for this year, but really important for continuing that trend line into next year, which, of course, keeps us on track for that about 40% compounded growth rate that we need to get to 2023 sales of about $500 million. And importantly, one key metric that we look at is adherence and compliance. We were able to ensure through COVID that all patients who needed Galafold had access to it. So lots of work on our supply chain in the early days to ensure, in some cases, we push the drug to individual patient's sites to ensure that they had ample supply. And importantly, patients, as we've seen for years now when they come on Galafold, particularly the switch patients. When they switch off of ERT, they don't go back and we've seen that through COVID. So that 90% plus annual compliance and adherence rates, those have continued through the COVID crisis. So again, it gives us really good confidence in Galafold this year, but it really reaffirms that trend line into 2023 and beyond.

Got it. This is very helpful. Maybe talk a little bit about your goal about -- of reaching $1 billion in revenue in 2023. Just wanted to learn more about it. If you can walk us through how do you plan to go there? And what -- I mean, I understand Galafold is definitely part out of it and some part in AT-GAA, is gene therapy also part of it? How are you thinking about the building blocks to get there?

Sure. More than half of it is going to be Galafold, sales of $500 plus million. We think for Pompe, again for AT-GAA, we have a rolling BLA that's agreed to with FDA. We'll begin at the end of this year. We'll complete that by the second quarter of next year. We expect priority review with the Breakthrough therapy designation. So that's a 6-month review time line. So we expect late '21 or early '22 in the United States to launch AT-GAA for Pompe. We expect launches very soon after that throughout the EU. In fact, if you remember in the United Kingdom, we have the potential for an early approval with the PIMS designation, and we'll have more in the coming months to say about that. But that could be an approval a couple of years early. So we think 2022, 2023 will be significant years for the launch of AT-GAA and frankly, if the data is as strong as it's been throughout all of our Phase II studies, we expect a really strong uptake of that medicine. There is significant pent-up need for a newer, potentially better medicine in the patient communities. So we think that will be the bulk of that second part of the $500 million. And the rest of it would have to be through our battens franchise or potentially by that with some business development. So whether the $1 billion in 2023, 2024, we'll have a better line of sight here over the next 1 year, 1.5 years, a significant revenue base to continue to build from.

Well, that's fair. That's really very fair. So maybe talking a little bit more, sticking with Galafold for one more question. So in Europe, you already reached above 50% mark in terms of penetration in amenable mutation in many countries. So what do you anticipate for the U.S.? Do you think you can get there or beyond as well? And then the second part of the question is, in the beginning, you saw a lot of new patients or patients who were earlier not on some kind of ERT, not newly diagnosed necessarily, but they were not on ERTs. They were also coming online. So what kind of dynamics you are seeing in those patients who are probably sitting and not taking any drug and now coming on Galafold. So is this still happening? And the second part is 50% plus, how do you plan to get there? What is the road map there?

Sure, Mohit. Again, it's been one of the most successful rare disease drug development launches, and it's played out exactly as we hoped for and planned for. So if you look at markets like Germany, the United Kingdom, for instance, we launched in 2017. What you saw in the first year, the vast majority, about 90% of the patients coming on Galafold were switching from the ERT products. And what we expected was over time, the switch population as we captured more and more of them would become a lesser percent of the newly treated patients each year. And that's exactly what we saw. In fact, last year, for the first time a majority of new patient starts on Galafold in Germany were not switch patients. They were treatment-naive patients, either newly diagnosed patients or patients who have been diagnosed but gone untreated for a variety of reasons. So if you look at the balance of patients, where significant switch patients in the early years, gets to about a 50-50 mix as we saw in Germany last year. And we would expect then that, that would continue eventually to 80-plus percent of your new treatment starts would be treatment-naive patients, many of them newly diagnosed. Another important reason why is we find more and more of these patients where their family members do newborn screening or if you're looking in clinics such as the MS clinics where we're finding significant number of Fabry patients, more and more reason to be able to find more of these patients it's played out the exact same way in the United Kingdom. In fact, the uptake in the United Kingdom is fastest of any country that we've seen. Our share of treated amenable patients now there is close to 90% in that market as well. So more patients than we potentially switch who are on the existing ERTs, but most of that growth is going to be coming from the treatment-naive population. In the United States, similar dynamic, although there is a larger pool in the United States of patients who are treatment naive. These are people for whom -- again, remember in the United States, they've only had 1 approved ERT since 2003. So if they failed on that or they weren't having a good experience, they didn't have any other choices. So because of that, you had a larger pool of patients untreated in the United States, still in the first year of launch in the United States. About 80% of our new patient starts were switched from Fabrazyme. So slightly higher percent of treatment-naive patients, and we expect both of those populations to continue to grow. And we're seeing similar dynamics around the world. Japan, a little bit different in its own right. Mostly because you had about a 90% treatment rate with the ERT products as well. So there's a much smaller pool of treatment-naive patients in Japan, but we're seeing some of those come on. So when we look at this around the world, we still have significant room for growth even with the already diagnosed population. And again, in the years ahead, through all these different mechanisms, if we can find more and more people living with amenable mutations with Fabry. We think Galafold could be an excellent option for them.

Got it. This is very helpful. Maybe switching gears to your crown jewel AT-GAA here. So there is a lot of enthusiasm among investors as we are approaching the data. Can you just remind us again about the timing of the data, as well as the design of the trial in terms of, is it a security trial, non-infusion trial? Because a little bit of confusion there because -- so can you just remind us around the trial design and the timing here?

Yes, very clear. So to remind everybody, PROPEL is our global Phase III study, registration study for people living with Pompe disease around the world. It's agreed to with both the FDA and the EMA. Next study, the primary endpoint is 6-minute walk distance over a 52-week period. This study is and always has been designed as a superiority study. It's built on the years of Phase II studies that we've done with this molecule. Again, to remind everybody, those studies, particularly the Phase I/II study, where we studied both switch patients and treatment-naive patients. We studied ambulatory, non-ambulatory patients, and the data was really compelling. If you look at the magnitude, the durability, the consistency of response was quite strong. On 6-minute walk distance, for instance, for the patients who were switched from the standard of care, who had all been on the approved ERT for more than several years. We saw at the 52-week endpoint, more than a 40-meter improvement. So rather than continuing to decline on the approved standard of care they actually reversed virtually all patients reversed and showed significant improvements. And it's important to remember to 6-minute walk test is a measure of both muscle strength and pulmonary capacity as well. So it's quite a holistic measure. It is the preferred endpoint for the regulators as well. If you look at the treatment-naive population in our Phase II study, the cohort 3, where we had 5 treatment-naive patients. All 5 out of 5 showed significant improvements in muscle strength, including on 6-minute walk. There, they showed more than a 60-meter lean improvement at the 12-month endpoint. And that, combined with all the secondary measures that were all heading in a positive direction, the biomarkers consistently in all patients heading in very positive directions. That's what we used as the data set to build the Phase III study for PROPEL. And importantly, in building out the powering of the study, we assumed less than half of the effect that we saw in Phase II to achieve statistical significance for superiority over the ERT standard of care. It's a study that enrolled. In fact, we had such demand for this study. We kept enrollment open, as you know, through December of last year, we had targeted 100 patients. We enrolled over 120, virtually all of those patients continue in the study. The dropout rate has been much, much smaller than we even expected in our Biostats plan. So when you take all of that together, we need to show about a 15-meter delta from the ERT standard of care, the control arm. Again, it's a 2:1 randomization, 2 patients going on our drug, AT-GAA for every 1 remaining on or going to Lumizyme. So even with COVID, again, to remind everybody, we've seen greater now, well greater than 97% of all of the infusions and the assessments go off as planned. That's better than we have planned for even in our stats plan as well. So all of that, I think, gives us continued confidence that we're going to have a successful study here and we're in the midst of preparing for both a successful study and the launch. So the really commercial planning, the launch planning all the manufacturing, which is so important with our partners at Wuxi Biologics. We've nearly completed all the PPQ work for the lyophilization phase, which is the last step in finalizing the PPQ, so that the CMC module can be prepared again, breakthrough therapy designation in the United States, the PIMs designation in the U.K. with the potential for early approval there. We've begun the juvenile studies. We have also now begun the expanded excess or compassionate use program. We've previously reported the data on that first young child in Germany, who had a remarkable response switching from Lumizyme to our drug. It looks like we saved his life and we've now made that available. We've enrolled additional infants over the last several months granting compassionate use for the medicine. So there's a potential noted, a year from now, we could have hundreds of patients in all of our studies on AT-GAA even prior to launch. So we're really good place with AT-GAA.

Great. And then -- so just wanted to probe this further on the control arm side. So you have -- you talked about what you expect in the treatment on, which is half of what you saw in Phase II, that is for power, not you expect that, sorry, [indiscernible] that. On the control arm, I mean, you have about 80% or so patients who are treatment -- who are switch patients versus about 20% -- 15%, 20% who are naive patients. And we saw with the neoGAA data of Sanofi that the naive patients on Lumizyme did not do as well as you would expect them to do looking at prior data. So how does -- I mean, what do you think about the control arm? How you powered it versus what it looks like in the real world, can you talk a little bit -- put some context there?

Yes. It's interesting. So we had almost 30% of the patients in our study are treatment naive, which was our target. So with that, that was one of the confounding -- I think it was, excuse me, a well-executed study, the COMET study, the Oxy neoGAA performed about as we expected, seemed to be consistent with their lots data for Lumizyme and any of the published data on Lumizyme. So I'll let the neo data speak for itself. But the control arm was interesting. They showed only, I think it was a 3-meter improvement in the Lumizyme arm. Again, in treatment-naive patients, we've assumed in our statistical plan, much better performance for Lumizyme, something more in the range of 20-plus meters improvement at 12 months, which is consistent with everything that has been known about Lumizyme. If it were to perform as poorly as it did in the COMET study, we'd be even a better place from a Biostat standpoint. So I'm not sure what to make of that poor performance of the Lumizyme arm.

Got it. One question I have, and I'll just read it because part I don't understand. But are there plans to read out interim data from the Phase III ZIP pediatric LOPD study and how many patients are enrolled in the expanded access program?

Yes. So the expanded access program, we haven't just -- we've only said it's been a handful or so of patients. So the exact number, we haven't updated. Again, that gets updated every month or so as additional requests are granted. And yes, we would expect to be able to provide additional data. We haven't seen specific data on those children. Many of them just began in the second quarter on to AT-GAA. But it's an expanded access study. So it is what it is. I hope it benefits these kids, and that's the purpose of it. It will be supplemented with a formal IOPD study that will begin in 2021 as well. Again, the true classic infantile presentation of Pompe, again, is a very small percent of the overall population in Pompe, but incredible need in that population. And for a lot of reasons, it's important to study that population.

Got it. That's very helpful. So one thing I get a lot of questions around is the concept of rolling BLA and before you even have data. So just trying to understand how common is that and what it means? So just -- can you just provide some more granularity around the rolling BLA and how it helps to get the expedited review in that?

Sure. So to remind everybody, there are three key parts of any BLA submission. The first module is all of your preclinical data, including your toxicology data. We've completed all of those studies that's being collected and written right now. We expect by the end of this year to begin the BLA with the full module submission for preclinical as the foundation and then in the first part of next year, we'll submit the second part, which is the CMC, which here is really, really important. This is arguably the most complex like cosylated protein ever manufactured. And we have focused for years with our partners at WuXi on ensuring that we have the highest quality material because that's the drug, once sugar is off in the manufacturing...

We know the Lumizyme-Myozyme saga, yes.

And to remind everybody, we -- 2.5 years ago, we went before the regulators with our bio comparability from our small-scale bioreactors to our 1,000 liter. We said that we would begin our pivotal PROPEL study is being done with commercial scale material. We completed all those bioequivalent studies. It was deemed bioequivalent. We set the parameter so tight in the glycosylation, it was bio identical. But again, that's incredibly important because otherwise, you're going to have a different drug. So it's just laser-focused on the CMC and enormous amount of activities and thankfully, it's been highly successful. So that second part of the module will then be completed. That's a lot of work for the FDA to review the CMC section. So you'll have that into the agency in the first part of 2021. We are already writing the third module, which is the clinical module. We've got a lot of data over the years of studying this medicine in patients. So all of the Phase I/II work is being written now. We're writing the outline for the Phase III, and then we'll put the data in once we have it so that we'll be in a position to complete the BLA, the final module in the second quarter and again, with the priority review, that's a 6-month review time line for FDA.

Great. I think we have 20 minutes. I mean I was trying to leave 20 minutes for gene therapy programs. So I mean we have 20 minutes to talk about that. So let's just start with -- before we get into Batten's program. Let's just start with Fabry and Pompe. And I know you have an effort there as well. If I go back, there are papers out there going in even 1990s, talking about Pompe and Fabry gene therapy. So let's just start with the -- what do you think is the challenge? Why it has taken so much time for Fabry and Pompe gene therapy to even get to clinics here? So what is the challenge here? And what -- so yes, first part.

There are many challenges. As we've said for years, there are going to be many challenges that when we develop a gene therapy for Fabry or Pompe, we want it to be both safe and effective. So if you take Pompe, for instance, to begin critically important, like with our enzyme replacement therapy, that you ensure that whatever protein is being made by the vector is properly targeted and that it gets to all muscle cells. Again, remember Pompe is a disease of cardiac muscle, skeletal muscle, off course, diatomatic muscle, smooth muscle, and it's also a disease of motor neurons of the CNS. So you need to be able to address that as well. So that's part of the challenge. Our thesis had been in Pompe that Hung and his team could engineer transgenes that would have a high affinity for the mannose-6 phosphate receptor and allow for proper targeting. By doing that, you can have, we believe, a more efficacious product, but you can also require less of a dose. You don't have to overwhelm the system. We have always believed, and Jim Wilson has always believed, that high dose systemic AAV therapy is not safe or appropriate for many of these diseases, but particularly in Pompe. So that's been guiding all of Hung and our team's science work, since we began our collaboration nearly 2 years ago with Jim. So we're working through -- we have a compound now. We've shared at the ASGCT meeting in the spring of 2019, the preclinical data. That's what exceeded our expectations, Jim's expectations. We're putting that now through all the additional testing. Again, looking at safety and efficacy. We're evaluating that in a range of animal models. We're also now working through the manufacturing and scale up thinking do we need to go to a suspension manufacturing? Could the dose be reasonable enough that you could use an iCELLis system and not have to buy it -- not have to buy hundreds of iCELLis machines? So we're looking at all of that now. So there's an enormous amount of work going on in the combat program. Let me pause and ask Hung to add any color to the work that we're doing in Pompe gene therapy.

Sure. Thanks, John. And exactly to what John mentioned earlier, I think for gene therapy, particularly for Pompe, it is a tremendous challenge to be able to make the protein -- to have the protein express with the right carbohydrate structures. And simply put, actually is not something that's typical. I mean, so to rely on the natural mechanisms, to make a protein least out structure is actually unrealistic. And we actually have found this to be true many, many times in our efforts. And so in lieu of that, we actually designed the protein such that actually contains instead of lease carbohydrates, a different protein entity that allows it to be very well targeted. So that ensures that the protein that is made from a gene therapy is always going to be well targeted, okay? And so I think that really, in effect, makes the -- protein therapy much, much more potent. So it allows for using doses that which are deemed safe and well tolerated. And so it really provides us an ability to actually use this gene therapy in a very safe and hopefully effective manner.

Got it. If I may ask a naive question here. So is -- can -- I think in Pompe, a big part is delivery as well because, I mean, it doesn't get delivered to the target tissue. Could there be some kind of local delivery mechanism there, a direct infusion in the tissue or something? Is it possible at all?