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

Good afternoon, everyone. Thanks for joining us again at the Bank of America Healthcare Conference. It's our pleasure to have our next presenting company, Amicus. Presenting for Amicus today are Brad Campbell and Jeff Castelli. Brad and Jeff, good afternoon. Nice to have you with us again.

Thanks for having us, Tazeen.

Good afternoon.

So for the few people that might be on the webcast that aren't as familiar with Amicus. Maybe, Brad, you can give us like a 2-minute elevator pitch and all the things that are going on at the company, and then we can go into a little bit more detail.

Yes, sure. Thanks again to you and to Bank of America for having us. I'm happy to give a quick summary and then we can dive into questions. So as you know, our mission is to develop next-generation therapies for people living with rare diseases. We have a commercial product, Galafold for Fabry disease, which continues to track ahead of our internal expectations, and we just reiterated guidance. It remains on track to achieve our full year revenue guidance of $300 million to $315 million for this year. So very successful commercialization, and I'm sure we'll talk a lot more about that. We, of course, have our next-generation enzyme replacement therapy, AT-GAA, which is for Pompe disease. We had our Phase III data readout in February. We're moving forward with our global regulatory submissions this year. Starting, of course, in the U.S. with the FDA submission, where we're on track to complete by the end of the second quarter. And then we have a broad range of gene therapy programs, 2 in the clinic in 2 different forms of Batten disease and a number of other programs in preclinical development. So we think we have a number of value drivers that are all underpinned by our financial strength, and we've said we're on a path of self-sustainability without need for future dilutive financing. So very much looking forward to executing this year and driving our value forward. So with that preamble, happy to take your questions.

Yes. Maybe let's spend a few minutes on Galafold. And maybe let's start with a follow-up to a question I asked you on the earnings call that's just happened. As it relates to sales guidance, you guys have been able to have a good grasp of how the year is going to look from pretty early on in the launch, frankly and not all companies either want to or guide -- project what to expect. You have the added challenge this year as well as last year of having to navigate around COVID. So to the extent that you can, Brad, can you talk to us about like what kind of impact has COVID really had on the launch? And as we hopefully start moving into reopening, how do you think any of those stressors will start to lift? And would you see an immediate impact as a result.

Yes. So I think we came into last year before COVID really hit all of us with a great momentum. We've done a great job, I think, opening up markets around the world. We're approved now in 40 countries around the world in all the major markets, for sure, Europe, U.S., Japan, but now really starting to expand into Latin America, Asia Pacific, et cetera. So really strong momentum coming into the year. And last year, we were able to execute even in the face of multiple waves of the pandemic and delivered higher than our expectations and higher than consensus at the end of the year with $260 million in global sales. What we did see is, interestingly, because we're a small molecule, we do get some tailwinds from COVID in that we're a small molecule. We've maintained our supply chain. It's easily shipped, easily distributed. And I think that really helped us continue to add patients throughout the major markets throughout the years even when COVID kind of rolled in and out of different phases around the world. What we saw at the end of the year was in kind of whatever was the second or third wave, we did see some delays between patient identification and patient initiation. And so that was a dynamic that we've been watching very carefully. As we came into this year, we gave guidance of $300 million to $315 million in global sales. And I think while we had a very strong quarter, we were ahead of our expectations in terms of patient adds. We did see a couple of things that I think are related to your question. The first is we are reducing nonlinear growth from quarter to quarter. And a lot of that is just the natural ebbs and flows of -- it's not really seasonality in the traditional like asthma as a seasonal disease perhaps. But in our case, it really has to do with some larger orders in Q4 and Q2. And so those quarters tend to be higher quarter-to-quarter growth. But even with that, we saw great numbers this year and even though I think some of those disruptions at the point-of-care hit us in Q1. Again, we're still adding patients. We're slightly ahead of our own expectations. And what we saw encouragingly, to your point about are we now starting to come out of COVID, we did see in April, the highest number of prescriptions written in the United States since before COVID. And we saw the highest number of net patients starts on a rolling 3-month average in Europe compared to the previous 6 months and compared to the previous 12 months. So we feel like the business is strong. We kind of know what to expect now. And with what we think are early signs of the pandemic receding, we expect to add more patients even in the second half of the year than we do in the first half of the year. And maybe the last thing I'll add, and then happy to dive into more questions. But all of that, I think, is underpinned by this over 90% compliance in adherence, which means that generally, when patients start on Galafold, they stay on Galafold, and that base is really what we're kind of building upon going forward.

Okay. And then very early on Amicus stated a target of what the company thinks is the market opportunity for Galafold. And you were specific about how you think you're going to get there. Relative plan of where you ultimately expect to be, which is, let's say, around about maybe $1 billion opportunity. Where are you in terms of the ramp to get there? Is it something that is happening within your internal expectations?

Yes, I think so. And remember, we kind of gave an interim guideline. In order to get $2 billion, you've got to get to $500 million, and that's, I think, our next big milestone. What we've shared there is we've always have had a target around 2023. And what we said -- the color we gave on the call is we think that's about a 2-year time line to get there. It does depend a little bit on how quickly we can have this kind of acceleration out of COVID, but we're very confident just with the business we have today with the major growth segments around continuing to switch patients, around bringing diagnosed untreated patients on, and around the last of the geographic expansion, which is about 20% of the market today, we still have to kind of launch into. Those growth drivers get us well into that and past that $500 million mark. And we're very much on track to hit that. And then to your longer-term point in terms of how big can this product be, we're increasingly confident that it can get up to that kind of $1 billion range. And really what underpins that is this phenomenon we've seen in Fabry, which is it's one of the, if not the most underdiagnosed genetic disease and that's been proven time again through newborn screening studies, through high-risk population studies that we're really starting to invest in more and more. And if you combine that with our IP portfolio, which has Orange Book listed patents, a number of which go into the early 2030s and then 13 of which go into late 2030s. And I think that's what gives you that runway as the market grows to be able to continue to support the growth of Galafold.

Okay. Now in terms of where your patient finding efforts are focused these days. As the launch matures, how has that changed. Do you feel like you have exhausted most of the switch market yet or no?

Not quite. It's interesting. So as you remember, our strategy at launch was to focus on the switch patients. They are the ones that are already coming into their infusion every other week. So they're in the system, They're getting reimbursed for a Fabry treatment. So that was really -- that's really the first focus at launch. And globally, today, we're at about 49% -- precise number, probably more like 50% share of treated amenable patients. So good news is still have and that was that number is as of the end of last year. So we did $260 million in revenue last year. So you kind of have an equal number of revenue opportunity just in the switch market. And I think there's an important question there, which is kind of how high can you drive your market share? And what we've said is in our more mature markets like the U.K. and Germany, we're getting to 80%, 90% market share. So we know we can really penetrate deeply into that switch market. But then we have started to focus on the diagnosed untreated patients. I mean this is a genetic disease. It's typically fatal, eventually, if left untreated. And so those patients should come on to a therapy and again, using just last year's numbers, when we had 1,400 patients on therapy, about 35% of them had actually been previously naive to treatment. So we already have started to kind of grow into that diagnosed, untreated segment. That's still a big opportunity for us. And in Europe, where, again, we're sort of at the higher end of the -- at the market share range, there, we're sort of getting for every switch base, we're actually getting a naive patient. So we're really starting to switch over and focus more on bringing more patients on to therapy. I would say what has changed more in the last year or 2 is starting to spend more time looking at how do we help find more Fabry patients regardless of they have amenable mutations or not. And there, we've highlighted some of the work actually at WORLD this year, we highlighted 2 really interesting initiatives. One was in Germany, we helped create an app actually for pain clinics where physicians can use the app and it helps them with a diagnostic algorithm, and we're actually finding undiagnosed Fabry patients within pain clinics. And then kind of the other end of the spectrum, we are working with some really cool artificial intelligence technology to improve diagnosis, and we found some really interesting investors at WORLD too. Concomitant diseases that we have never heard of before, like asthma, as an example. So we're going to see if we can come from sort of from the top-down as well. So those are 2 examples of a myriad of pilot studies we've done, and we'll continue to invest in to help, again, improve the diagnosis of Fabry. And the other piece that I think is so important which has been well reported on is because it's an X-linked disease for every 1 indexed patient that you find, you typically find 4 to 5 family members who have undiagnosed Fabry as well.

Thanks. And geographically speaking, you were able to -- it's unusual for U.S. companies to first get experience in Europe. What have you been able to apply to the U.S. launch, if anything, from what you've learned in Europe?

The first is really that pricing philosophy that's focused on market access. And our pricing philosophy is that we, number one, our belief statement says, our products must be fairly priced and broadly accessible. We think getting patients on therapy is really the goal. And so we took that parity or even modest discount strategy from Europe and applied it to the U.S. And I think that's led us to have great success with the U.S. payers. We have had nearly 100% success in bringing patients through to getting paid either through private insurance or through public insurance. If for some reason, they are -- they don't have proper insurance then provide patient assistance or even in sometimes free drugs. So our goal is anybody who wants access to Galafold gets access to Galafold, but we've been very successful in getting them reimbursed. And then I think the second thing is really that concept I mentioned earlier in terms of kind of launch sequence, which is focus on switch patients first and then focus on kind of growing the market. And we've seen similar dynamics. U.S. is earlier in its launch cycle, but similar dynamics where at launch, we were probably 80-20 or even 90-10 switch versus naive. And now even in the U.S., that distribution is closer to like 60-40 in terms of the overall patient mix.

Okay. Great. I could probably spend another hour on Galafold but we're on time. What about Pompe that you guys had on...

Right. Right.

So a lot of stuff is going on. There's a lot of new flow both from yourselves as well as the competition. I know it's not your style to really comment on what other folks are doing. But just from like the conceptual standpoint, why would it not be good for Amicus if Sanofi were to ultimately get a broad label for its Pompe drug? And I say this because I don't have to tell you, Sanofi, only looked at naive patients in their placebo controlled portion. And while they did switch patients in the study, it was not part of the placebo controlled.

Exactly.

So they have still applied for a full label. Presumably, the extension of PDUFA has to do with that task, which, at the least, I would think shortens the gap between them and Amicus for potentially launching. And then secondly, also, I would say, potentially shows that FDA is still willing to be a lot lenient, if you want to use that work in the Pompe space, sort of contrary to how they've been perceived to be behaving in other cases. So I guess, conceptually, is that the right way of thinking about it?

Yes. I think, of course, to your point, very careful not to either speak on behalf of the agency or certainly on behalf of Sanofi. But I do think some of your comments are how we're seeing this as well. So number one, we think both Europe and the United States have clearly acknowledged the unmet medical need here. And I think that's why you're seeing them supportive of these 2 new products that are coming through development. So that's one point. The second point is, we can only read the same thing you do, which is it seems like that it's a conversation around label that has part of, at least based on Sanofi's comments, part of their delayed PDUFA date and to your point, just from a calendar perspective, that probably shortens, to some extent, the time line between their approval and our hopeful approval as well or their anticipated approval or our anticipated approval. So that's kind of just a math thing. Of course, we'll know better. We'll submit -- on track to submit here in June, typically 2 months to accept the filing, and that's when they comment on whether they'll give you a priority review or standard review. So that's when we'll really clarify kind of what that time line actually looks like, but it's probably shorter than it would have been if they'd been on their original time. And then the last point in terms of label, just from a good competitive preparedness perspective, we're assuming a broad label for them. We're positioning our product for a broad label and we think the data supports it. But I think you pointed out what we think is really the key difference kind of regardless of where the labels shake out. The way COMET was designed was noninferiority, primarily against Lumizyme in a naive population. And our design was superiority on a mixed population, but the majority of our late data is in switch. So we think at the end of the day, coming out of the market with those 2 kind of data sets and trial designs, we think our data is very compelling and will stack up well kind of regardless of the label.

Okay. And what is left for you to do to complete your submission? When are you submitting between now and June.

Yes, at this point. So remember, we completed the nonclinical section at the end of the year last year which started the rolling BLA. And now we have the clinical section, which is, of course, the safety -- integrated safety and efficacy and then the CMC section. There's no real data left to kind of data milestones to collect. It's really now just putting together the submission. Of course, you know it's like tens of thousands of pages that end up going into agency. And then there's a big QC process. There's a validation process to make sure the links all work out. So it's -- there's a lot of kind of just blocking and tackling and QC checking that go into the end here. So it's really just finishing the writing of the documents and then the QC.

Okay. And then what is your strategy for Europe, just remind us?

Yes. So similar to the U.S., we'll position this for a broad label for adult Pompe patients. Based on the data set that we have from PROPEL. Remember, the -- we were one of the first companies to go through the joint scientific advice process. And so the input into the trial design and the statistical analysis plan was actually joint. So we think there's good alignment kind of coming into the study. And our intent is to submit, and we're on track to submit in Europe in the second half of the year. We'll also look to submit in the U.K. And as you probably know, we're eligible for the early access medicine scheme, so that could be an opportunity to perhaps get an earlier read in the U.K. as well.

Okay. Now we did do a survey right after your data came out on how physicians feel about the Pompe market level of undermet need. And to the extent that they can compare the data, although it's not apple to apples between Amicus and Sanofi. And our takeaway, it was interesting that even though at the time, it looked like Amicus might launch, let's say, a year after Sanofi that doctors who felt that the importance of that switch data, the placebo-controlled switch data will be meaningful enough for them to want to use AT-GAA, whenever that launches. And so I wanted to get your thoughts on what your own market data checks are saying, now that you have a lot of this data in-house.

Yes. We -- so we really feel like in our conversations with KOLs who are investigators on the study and helped us interpret the data that they were very bullish on the outcome of the data, to your point, in particular, in the switch market, where I think the unmet need has been clearly published upon those multiple natural history studies. And so I have mentioned this a couple of times, you may remember during the WORLD presentation of the PROPEL data, Dr. Schoser took a question from the virtual audience, and it was something on the fact that was this in line with your expectations? Or have you ever seen this before in switch patients? And his response was effectively something on the along the lines of no. This is -- we've never seen this in a study before and in patients who are on treatment for this period of time, and he said, this is exactly why this trial was designed to be able to show that you could improve patients who were on enzyme replacement therapy for multiple years. And you could improve their outcomes in 6-minute walk or forced vital capacity. So we feel like we've gotten the same reception from the conversations we've had. I will say, one important thing to remember is, aside from the investigators who, of course, participated in the study and could see the data really most physicians in the community can only see publicly available information or information presented at medical congresses. And so I think we believe this is a very data-driven story, and we think the real measure of acceptance is going to come when assume the products are approved when you're actually promoting the product and you can have a proactive conversation to really help them understand the data. So I think the early read is very, very supportive. But folks should remember that you don't have a really full dialogue with most of the Pompe community because you have to have approval first.

Right. Okay. So as we kind of get to the point where you will have filed your application, you could be on track to having 2 approved drugs on the market. And for a rare disease company, that is still more on the unusual side.

Yes.

We've been fans of Amicus, as you know, for some time here at Bank of America. But I would ask you the question of what do you think the market might currently be missing as it relates to Pompe? From our vantage point, it doesn't seem like the company is getting too much credit?

Yes. Yes, I agree. I think more than anything, it's a fickle business in biotech. And I feel like it's never a straight line or it's never a straight a line as you want it to be. And I would argue at these share prices. We're not getting much credit at all for Pompe disease or any kind of market opportunity there. And I think that's where we try to encourage people to -- and by the way, also not giving credit on gene therapy. I know we'll come back to that. But in Pompe, what we've tried to encourage people to remember is that there is regulatory precedent for this. We think the Lumizyme case study is very informative here. Of course, that was versus placebo in naive patients. So even a higher hurdle for us, which is superiority and real-world population, switch and naive. So that's one piece that there's -- we think there's regulatory precedent. I think the second piece is there's a lot of fair speculation around what's the label going to look like? Does neo get there first? What does that competitive dynamic look like? And we would say, even if we end up with a narrow label, if we're approved, the market today is still a $1.1 billion global market. It's a growing market. And that, of course, they're all switch patients. So even if conservatively, you end up splitting the market, it's still not 0. And so we think we're getting really no credit today, and we feel like we have a body of evidence and really a track record of being able to get these products over the finish line, and we're very much looking forward to the opportunity to do that.

Okay. So yes, let's maybe talk about gene therapy now that you mentioned it. So you guys do have a program in Pompe, can you talk about where you are in terms of development plans for that? And how that could be complementary to your chronic therapy that you're trying to get approved right now.

Sure. And maybe I'll kind of hit some high-level points, and I'll ask Jeff to go into a little bit more detail. So I would say a couple of things. The first is that to your point, we are -- we fully believe that enzyme replacement therapy and in our case, AT-GAA, will have a meaningful impact on patients, and we'll have a long opportunity to continue to help patients on that therapy. That being said, I think for some patient segments, the idea of taking a onetime gene therapy has some real benefit. We do think it's going to be a full clinical development plan. You've got a fully approved drug in Lumizyme and we anticipate at least one, if not 2 more fully approved products with ours and potentially neo. And so you'll have to really show that a gene therapy is at least as good as if not better than enzyme replacement therapy. So that's, I think, one important point. So it's going to take some time. But within that, our approach, we think, is very differentiated, which is, we think it's just as important to focus on what you're expressing through your gene therapy as it is to focus on where it's delivered and where it's expressed. So a lot of the conversation is around tropism. And are you looking for cross correction? Or are you directly transducing certain cells, and we think that is important. And we're working with Jim Wilson and his team on next-generation capsids and those kinds of things. But just as important, and this is where I think we're differentiated, we're focused on making sure that the protein that's expressed can get where it needs to go. And I think that will lead to, we hope, a very differentiated and hopefully, superior product. So maybe, Jeff, just talk about sort of status what we've shown and what the time lines are.

Sure. Thanks, Brad. And hi Tazeen. So as Brad mentioned, really, there's 2 lead programs with our collaboration with Penn on the gene therapy is our Pompe and Fabry. And I think both programs, we've declared IND candidates. We presented preclinical data, showing that the engineered transgene of AAVs are more potent in terms of substrate clearance than the wild-type transgenes. We selected our capsids for both programs, are now going on the parallel path of IND-enabling toxicity studies, along with the GMP manufacturing to support the IND. And things are progressing well on these 2 programs. We feel really confident about those profiles to try to come up with how we believe our best-in-class AAV gene therapies. And importantly, at the expression levels, we expect to see in humans it will provide enough expression levels to be potent enough to have the clinical benefit we want to see. And at the same time, we want to avoid very high dose systemic administration. That's something going into the collaboration with Penn that we felt strongly, both of us that we wanted to find ways to deliver systemic gene therapies at doses that did not reach those toxic levels where you start to see complement activation et cetera. So we think that this combination of approaches and our expertise in there as well will be the plan.

Okay. So some question that I get when I talk about Pompe in general, is that why bother developing an ERT when ultimately, there could be a gene therapy available? What are your thoughts on that?

Well, as I think as Brad mentioned, there's quite a way to go for gene therapies in both Pompe and Fabry disease in terms of significant number of existing treatments or hopefully in Pompe there soon will be multiple approved therapies that those new gene therapies will have to go up against and show sort of comparable safety efficacy. I think we're seeing more and more gene therapies, a hurdle on safety, given some of what's been shown, and we're going to need to see a larger number of patients to support submissions. And ultimately, I think the big question is, while the one-time administration will gene therapy see durable? And will they provide enough enzyme activity to reach the same therapeutic thresholds we're seeing with approved ERTs or Galafold in the case of Fabry. I think that's still to be seen, knowing that as you go from mice to human, you see a big drop-off in expression levels.

Okay. And so if you were to take a guess, how long do you think your program would take to become commercial to in gene therapy?

It's a good question, but a lot of it depends on any remaining flexibility, for example, on Fabry, there's targeted approval pathway through the gene therapies. We think it's somewhere in the 5 to 10-year range until any gene therapies are really approved in those diseases. We think they're going to require significantly sized and long Phase III studies. So we do hope eventually when there are gene therapies available and approved that it's Amicus gene therapy that offers the best profile. But at this point, there are multiple other companies in early clinical development with gene therapies, and we're really focused on trying to come up with what we think is the best-in-class before we enter the clinic.

Okay. And maybe in the like 30 seconds we have left, what's the next catalyst for your Batten's program.

Yes. So Batten's, we keep following, the kids have been treated. We're really excited to see the stability we've seen compared to natural history in those kids. And right now, everything is geared towards our manufacturing, the supporting bioanalytics to characterize that new GMP material from our CMO Thermo Fisher to go into those next registration studies. And we're getting the final input from the agencies on the design of these trials and really excited that here in the near future will be treating additional Batten kids again given the severity of the disease and being in essence to registration studies of gene therapy.

Okay. With that, we're out of time. So Jeff and Brad, thanks so much for spending the last half hour with me. Always like to get on top of what's happening on the pipeline front and stay current. So really appreciate your time. There's a lot going on, we're obviously going to keep following what's happening on the Pompe front, but there are other things also that the company is working on. So we're looking forward to all of those things advancing.

Thanks, Tazeen, and thanks for doing the hard work.

We'll talk to you soon. Have a good afternoon.

Yes. Take care. Bye-bye. Thank you.