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

Good afternoon. I'm Salveen Richter, biotechnology analyst at Goldman Sachs, and we're really pleased today to have Amicus Therapeutics with us, for which John Crowley, CEO, is joining us. John, thank you for joining today.

Yes. Hi, Salveen. Of course. Good evening, everybody.

Maybe to start here, maybe we'll start with the AT-GAA. You expect to complete the rolling BLA submission for the drug in Pompe disease in the second quarter. Given the results of the Phase III study with regard to what you saw at the primary endpoint and the secondary endpoint, what are the key factors contributing to your confidence in approval? And what are the key risks?

Yes. Thanks, Salveen. So again, we continue to have great confidence in AT-GAA. We know it's working. We know it's helping people. We think the data are very distinguished from the standard of care enzyme: Lumizyme or Myozyme. And again, to step back and remind everybody, we had done several years of Phase II studies that led to the breakthrough therapy designation, showing that if people could walk with Pompe, they could walk even further. And that if they could breathe, they could breathe better. And that's why we went into the Phase II study to look at principally and other end points that are important. We went in, in an ambulatory population. Importantly, too, to remember, we studied this as the only controlled study looking at a switch population. So about 80% of the patients, the 120 or so patients who went into the Phase III, they were on Myozyme or Lumizyme, beforehand, an average of about 7 years, a minimum of at least 2 years. About 20% of the patients had never received any enzyme before enzyme therapy. We went into that study looking for superiority. And that's a pretty high bar. I think, important to remember, in the rare diseases, as you know, it's hard enough to beat placebo, and we went head-to-head to demonstrate superiority to $1 billion medicine. The primary endpoint of that study was 6-minute walk. The first key secondary is forced vital capacity and a range of other endpoints. And in the combined population of the switch patients and the treatment-naive patients, on superiority, we just missed statistical significance, as you know, by about 2 meters for superiority. We more than hit it for noninferiority. The P there was 0.07. Importantly, the overall population on forced vital capacity and respiratory failure is the leading cause of death in late-onset Pompe disease. So very relevant. Also the approvable end point for Lumizyme a number of years ago. There, in the overall population, we showed statistical significance P of 0.02. We stabilized the forced vital capacity across these patients. In 8 of 8 key secondaries, we showed that we were superior to the standard of care. So I think when you look at all the data, you look at the key secondary endpoint, you look particularly at the switch population where we demonstrated statistical significance for superiority on both 6-minute walk and forced vital capacity, I think the data are pretty compelling. So that's a good part of what gives -- thanks for allowing me to kind of reiterate what we saw back and announced back in February. Because I think there was a misunderstanding of just how powerful that dataset is and the very high bar that we set for superiority that we think on multiple measures we reached. So that's what continues to give us confidence, but it's also the unmet need. What's known as the approved enzyme therapy has been approved for about 15 years. It's the only therapy that patients with Pompe disease have had. Thankfully, they'll have 1 and maybe 2 new therapies here over the course of the next year. And I think that's excellent for patients. But the data drive the decisions. We think we've got a great data set, significant unmet need and regulatory precedent with the approval on a key secondary endpoint of forced vital capacity for Lumizyme. All of that, I think, leads us to believe that we'll be in a really good place. And importantly, we've now vetted this with regulators. As you know, we've met with U.S. FDA in a formal pre-BLA meeting at the end of April. Very positive meeting, acknowledging the significant unmet need. We discussed the data. Importantly, we do not have to do any other studies, and there's no other data necessary to a BLA. So having confirmed that with FDA, we're now on track by the end of this month to submit the BLA, and we're preparing all the launch activities necessary to support getting this to everybody with Pompe disease who needs it, together with other ongoing studies. So maybe a lengthier answer than you needed, but I think it just conveys the enthusiasm around the program. And I would like to, at some point, talk about the news we had yesterday of the positive opinion in the United Kingdom on this program, too.

So maybe we can just pivot there. Just curious where you stand on the regulatory front ex U.S. And then I'd love to talk about the U.K.

Yes. Very importantly, when we set up the PROPEL Phase III study, we wanted to make sure we had one global study for PROPEL. So we met -- actually, we were the first company in the fall of 2018 to take advantage of the new mechanism, whereby EMA and U.S. FDA can coordinate on rare disease programs. So we have one harmonized study. So that's good. We've now begun engaging with the EMA authorities. We've had preliminary meetings. They've appointed the repertoire, the co-repertoire. They've indicated everything they need to see in the filing. They also, likewise, with FDA, have not indicated that we need to do any other studies or provide any other data. And by the end of September, we'll have the MAA filed with the EMA. Importantly, we think we got a great validation yesterday, and that was from the MHRA. And now since Brexit, the MHRA will be the sole determining body to approve new medicines in the United Kingdom. In December of 2019, we received the PIMs designation, the Priority Innovative Medicine designation for AT-GAA. We then decided last year that we would pursue the option for early access for patients in the United Kingdom. So that's a formal filing. We filed that some time ago, we've been engaged for several months now with the reviewers at MHRA. Importantly, they reviewed all of our data. They looked at the preclinical, the toxicology, all of the clinical data, including the Phase III PROPEL study, and they did a review of all of our CMC as well. And just on Tuesday, they issued -- or Monday afternoon, we received, Tuesday, we press released. Yesterday, that they had issued a positive opinion for patients on Myozyme on standard of care, having been treated at least 2 years. For those patients they are now eligible to switch to AT-GAA, and that's all eligible patients in the United Kingdom. So we think it's a great validation from an important regulatory body. And we're fully committed to provide access -- early access prior to the full approval to all patients eligible in the United Kingdom. So we think that's a great step forward. It also will enable us to begin the pricing discussions in parallel with the final approval. So both discussing with MHRA, the approval, final approval as well as the pricing with NICE. So a lot of advantages here. And it's great that people in the United Kingdom will have even earlier access to AT-GAA.

And help us understand on the uptake front with clinicians, as you have talked to them, what are the most important considerations for them to support switching patients from Myozyme or Lumizyme to AT-GAA? And what's the commercial outlook? I guess, has it changed with the data? And how are you thinking about it?

It really hasn't. I think the data are very strong. And what we've seen is, and we're now in the period. We said when the data come out, we would focus on submissions, launch preparation and then launch. And we're doing all of that. And I think we've checked some good strong boxes along the way. What you see, again, just to reemphasize is, there's dramatic unmet need in Pompe disease and that's been in multiple publications. It's widely known in the field that the first generation ERT was a good start, a good first medicine. It helped a lot of people, but we needed to do much, much better. Almost all patients on that ERT standard of care, any benefit they see is in the first couple of years, then they plateau. And then there's this inexorable decline in muscle strength and pulmonary function, leading oftentimes to death from respiratory failure. And we need to intervene and do better, and that's what we sought to do. So I see a lot of enthusiasm from patients and physicians. I believe that our drug and other drugs coming to market have the potential to help a lot of people. I think our drug will become -- has the potential to become the standard of care, but it will all be driven by data. At the end of the day, we want patients to have choices, new medicines. We want to see these meaningful improvements in standard of care, and we really want to be at the forefront of it. So I think you'll see a lot of enthusiasm for next-generation ERTs in Pompe, and I think we'll play an important part. The current market is already $1 billion of reimbursed ERT for Myozyme or Lumizyme. Even without any new entrants, we would see that opportunity growing to be about a $2 billion market by the end of this decade. I think our product will -- again, the potential to be that standard of care and to take a meaningful part of that and to provide help to a lot of people. So I think for us, when you step back and look at Amicus, you've got Galafold, I know we'll come to it, but Galafold is a revenue-generating product with $300-plus million in revenue this year on its way to $1 billion potential. Our second medicine to be launched next year with AT-GAA, that we think has a $500 million to $1 billion potential and then the whole gene therapy pipeline behind it.

Okay. And maybe let's just discuss Galafold since you brought that up. So you have guided to revenue opportunity here of $500 million going towards $1 billion potentially peak.

That's right.

What are the growth levers that play here underlying your confidence in getting to those projections?

Yes, it's been a very successful launch. This is the third full year of launch in the major geographies: U.S., Japan and Europe. The guidance this year is $300 million to $315 million in revenue. We're highly confident that we'll be able to achieve that. Beyond that, we see -- we know exactly how we're going to get to $500 million over the next couple of years, whether that comes in 2023 or 2024, either way, we're very confident we'll hit that $500 million milepost. To get there is pretty straightforward, we just have to keep moving patients from enzyme therapy to Galafold. We've done that successfully now. We're about 50% of market penetration for those eligible patients with amenable mutations on ERT. So more room -- we've been successful, but more room to go. There are significant pools of treatment-naive patients. We see more and more of those coming on to Galafold. We need to keep putting people for whom the therapy is appropriate on that medicine and then new geographies. We received approvals in Latin America, for instance, last year in Colombia, Argentina, Brazil. Launches there are delayed due to COVID. We expect to see some significant uptakes in those rest of world regions. So we know exactly what we need to do. We don't need to open new pools of patients or new more exotic, if you will, geographies to get to $500 million to $600 million. To go from, call it, $600 million, $700 million to $1 billion, we need to keep identifying patients. And then I think given the nature of Fabry disease, I think we and other companies in this field, other patient advocacy groups were finding a lot of Fabry patients. It used to be thought as you know that this was a 1 in 50,000 rare disease. Now it's commonly accepted it's a 1 in 3,000 or 5,000 to an order of magnitude more prevalent. So we're doing a lot of initiatives. We're looking in multiple sclerosis clinics. As you know, there was a pilot study in Germany that recently found that 5% of the patients in the MS clinics in Germany didn't have multiple sclerosis, they had Fabry disease. So we're looking at MS clinics. We're looking in pain clinics, IBS clinics, GI clinics. A lot of the symptoms that present that are misdiagnosed that are actually Fabry. We have an initiative with Invitae, finding more patients through genetic screening. Newborn screening is helping to identify more patients. So I really think, again, increasingly, this will be recognized as one of the most prevalent human genetic diseases, and that's what it'll take Galafold to that $1 billion peak.

You've added a bunch of mutations to the label in Europe, less so in the U.S. Is that at all a lever to uptake?

I think, yes, partly. It's not what's going to drive the growth. Though most -- when we launched -- we launched, I believe, in Europe with 269 mutations. We were able to grow that over time to over 300. And that was from mutation cell that we found that were coming to us with newly identified patients. We then had a research project, where we built the constructs of every known theoretical mutation, and that allowed us to identify up to 1,000 or so mutations that could be responsive to Galafold. Many of those will never find in practice. But importantly, when they are found, it will delay the time to treatment for. It won't delay the time to treatment for those patients. And we'd expect similar updates to the U.S. label as well. So it will be a small part of the growth, but something we're committed to.

And could you remind us as to the breakdown between switch and naive patients?

The initial launch strategy was oriented towards switch patients, patients who would give up the every other week infusion for the convenience of the pill and for the added benefits of the efficacy and safety profile of Galafold, and we're very successful with that. You look at the countries where we first launched. In Germany and the United Kingdom, we're approaching 90% of the enzyme patients who have amenable mutations have switched to Galafold. So a little more room to grow there. And other countries, in Europe, we're more like 60%, 70%. In the United States now, we're just about half of eligible treated patients have switched. Japan just a little under 50%. So that's all meeting with our expectations. Right now, if you look at all patients treated with Galafold, about 2/3 of them have switched from enzyme therapy, a 1/3 were treatment-naive. They may have been diagnosed a while ago, but they've been treatment-naive. And we see that. For instance, in Germany in the last 1.5 years, the majority of patients treated are treatment-naive. In the U.S., there's a larger reservoir of patients who have never received ERT or who long ago left ERT. And so we're seeing a higher percent early on of treatment-naive patients that we saw in Europe, or even Japan has very high treatment rate. So there's very few naive patients. So again, more room to grow, more opportunity to help people. And again, I think you'll see a very expanding pie as well in the Fabry world.

And how are you prioritizing your portfolio -- your preclinical portfolio in terms of what to advance into the clinic next, recognizing that you have a good gene therapy effort there? Just curious what -- how we should think about that?

Yes, we have a lot of gene therapy programs. As you know, we get little to no credit for it today, but I'm hopeful with additional data that we'll be able to do that. To remind everybody, we have the largest portfolio of rare disease gene therapy programs in the industry, we believe. Over 50 rare disease programs that we have rights to. They are anchored in our relationships, the acquisition originally of a small spin-out company from Nationwide Children's Hospital focused in Batten disease. And there are 13 different subtypes of Batten disease. Together, the most prevalent form of fatal brain diseases and genetic blindness in children. So those programs were clinical stages we acquired them. They're now ready for pivotal development. But most of our pipeline comes then from the Amicus research labs, working together with Jim Wilson and his team at UPenn. We have the broadest and deepest collaboration with the Wilson Lab at UPenn. We are actively developing with them programs in Fabry disease, Pompe disease, gene therapy. We have programs in CDKL5 deficiency disorder, a number of other programs that we've named that we have rights to, including Angelman, Rett, myotonic dystrophy, other large diseases we haven't disclosed. And importantly, what we're doing there is we're combining the Amicus expertise in protein engineering. We are engineering the transgenes in a bespoke way disease by disease to solve the problems of the targeting of these enzymes, the uptake of the enzyme, leading, we think, to better safety profiles, better manufacturability. And we're also doing that -- we're able to do that because we're combining it with the next-generation gene therapy technologies that the novel capsids and vectors coming out of the Wilson Lab, again, that we've had exclusive rights to in about 50 diseases. So we're excited about the pipeline, whether they're the later-stage Batten program, other Batten programs in preclinical development, and maybe we can get a little more deeply into particularly our Fabry and Pompe gene therapy programs.

Yes. Maybe let's start there. With the Fabry and Pompe programs, do you have a sense of which ones you're prioritizing first?

Yes. They went into preclinical development at about the same time. Pompe was a higher priority for us. And we made -- we had great success there, where we engineered the transgene. We engineered it with a particular targeting entity to enhance uptake to mannose-6 phosphate receptor. We had the first data at the ASGCT meeting in the spring of 2019 that showed greater uptake, greater substrate reduction, penetration to the CNS. And we continue to move that forward. At the end of last year, we disclosed that we had a drug candidate now for Fabry disease. And what's happened as we sit here today, Fabry is actually now leapfrogged Pompe in development. So that will be in the clinic first, just prior, maybe 6 months or so prior to Pompe. And February is something we're excited about as you think about what we did there. There, the problem in Fabry gene therapy was less about targeting. The protein is naturally pretty well phosphorylated. But we need to do the real problem in February, there's a couple of them. Primarily, we needed to solve for stability. So what we had done is, we had actually characterized basically 2 stabilized forms of alpha-Gal, 2 different constructs that were engineered with disulfide bonds to keep them stable. So we improved for stability, and we also showed with the improved stability that you'd see significantly greater substrate reduction across all relevant tissues in Fabry disease. We also showed with this construct the first evidence of dorsal root ganglia storage reduction, so the ability to affect the DRGs as well. And importantly, we think we can keep this at a low enough dose with high efficacy that we have a wide therapeutic window for safety. But we'd also have a wide window for the technologies we could use to manufacture it. We think we may be able to stay in a small scale, maybe the iCELLis system and not have to scale to suspension. So it was really the advantage of the manufacturing approaches here that enabled Fabry to leapfrog Pompe. Pompe, we're still working on the manufacturing technologies to manufacture it at large-scale. Because for me, what we're trying to -- at Amicus, what we're focused on for each of these gene therapy programs now is, it's a race to the BLA, not necessarily to the IND. We're mindful of time, and we want to get to the IND fast, but importantly, so much work has gone into the analytical development, the manufacturing, so that when we dose our first patient, we wanted to be with our commercial scale and commercial grade material. So we can take those CMC questions off the table, we think it will give us a much more clear path in these programs through the clinic. And that's how we've been approaching all of our gene therapy programs.

Interestingly, this space has become competitive recently. And I think if you take kind of the next-generation approaches, it's yourself and 4DMT and uniQure taking the programs in the clinic, all in with differentiation to some degree. And I was just curious as you guys thought about -- I don't know if you've disclosed the vector here, but I'd love to understand the tropism for heart muscle and so forth and how you're thinking about that? And then just the gene, it seems like there is some differentiation on the gene, whether it's alpha-Gal or NAGA or AGA.

Yes, we're using the alpha-Gal gene, and we do have a proprietary capsid that we haven't disclosed, but it's proprietary to UPenn, a next-generation capsid that Jim and his team have developed. We'll disclose that in time. But we think that's adding to the benefits here. It does have a very high degree of tropism for cardiac tissue, but also all relevant tissues of disease. So while some may focus on tropism for heart, we're focused on heart and other key tissues and organs of disease. So again, I think, we've got a differentiated approach. Importantly, we've got a lot of experience and a lot of relationships around the world in Fabry. It is a complex disease. Whoever is developing a gene therapy in Fabry, it is going to be a significant effort to move this through the clinic. We're committed to it. And I'm glad that others are as well. I think more options are better, certainly in gene therapy. But I think it's going to be quite a few years until we see approved gene therapies in Fabry.

Maybe help us understand that. It has been really hard for gene therapies to kind of make a dent in lysosomal storage diseases, though it seemed like initially, that was the was thought to be kind of the low-hanging fruit, but it's just taken a while. Why is it still complicated?

As -- take all the basic issues in gene therapy, of course. And if you look specifically in lysosomal storage diseases, many of these diseases are multi-origin systemic diseases, take Pompe for instance. You've got to have an enzyme expressed in all skeletal muscle in the diaphragm in smooth muscle, in cardiac muscle. That's a heavy lift. And look, I'm biased, but I think it's so important that you've got to focus on the protein. So many people we have just been focused on the gene therapy side of the equation, the vectors. Those are important. But you've got to focus on the protein. You need to be able to control the protein being expressed. It's the same rationale that we approached with the enzyme replacement therapy, Salveen. You want a well-targeted protein. If you do that, you're going to have better efficacy, a much wider therapeutic safety window, and it's going to be more manufacturable. And it's just been difficult and a lot of people haven't focused, I think, on an important part of the equation, equally important to the gene therapy technologies. And that's where I really am excited about the protein engineering side of what Amicus brings combined with the gene therapy technologies out of Jim's lab. So it is -- it's going to be a heavy lift and then you have a whole other series of lysosomal disorders that are CNS-focused. A number of the MPSs, the Battens and others. And there, you've got all the challenges of brain diseases. You've got to identify the children, you've got to treat them within a relatively tight time window. There are no biomarkers for these brain diseases today. You've got to compare against natural history. So you're going to need robust natural history. It's been more complex to the field than people have assumed. There's a lot of excitement 3, 4 years ago, broadly in gene therapy. And I think we've come to understand that we're still in the early stages of this next evolution. But I'm hopeful, I really believe in the next decade, the delivery of gene therapies, the delivery of DNA, RNA broadly, is going to transform genetic medicine.

And then on Batten's disease, could you remind us where you stand with the CLN3 and 6 programs? And what's needed to start the pivotal program here?

Sure. To remind everybody, these programs were the ones we acquired from Nationwide Children's Hospital. We've treated -- in CLN6, we've treated a dozen children with an AAV9 approach intrathecally delivered and we've seen really strong results. As you know, particularly for the younger children treated in that window of time, we've seen that we can stabilize the disease. Kids who should be in wheelchairs or have died are walking, and they're going to kindergarten. So seeing that gave us a lot of confidence that we've got a good approach here. In CLN6, it's a relatively small disease. You're talking about hundreds of patients diagnosed with the disease in the developed world. There, we focused for the last 1.5 years on the CMC side of the equation. So we needed to move the manufacturing out of the academic setting. We've moved it to Thermo Fisher Brammer. We've had a great experience with Thermo Fisher. We've improved the process. We can still keep it at the small-scale production in the hyperstacks, but we've improved the process, improved the quality. We've now completed GMP manufacturing runs, so we've had good success with the material. We've also been working for over a year now on tightening the analytics. It's very clear from our perspective, from the regulators' perspective. You've seen it now in a couple of the gene therapy programs in the field, having high-quality assays, the bioanalytics to know exactly what's the characteristics of the material you're delivering, what are the doses is really important. So I think we're ahead of the curve there. So that program, CLN6, will be prepared early next year to begin the pivotal study. We think very likely, it will be a pivotal study compared to the natural history dataset that we've developed. We think the first 12 patients, again, that led to the PRIME designation in Europe, that data. I think, it will put us on a good path there. CLN3 is a much larger, it's the largest of the Batten diseases. 3,000 to 5,000 known children with the disease. We have the most advanced program in development there. We've treated 4 children with the academic material. We disclosed some of that data at the World Meeting earlier this year, again, showing that it looks like we're intervening to change the course of the disease for these kids. And again, same thing. We're working with Thermo Fisher on the analytics, the GMP manufacturing. All of that will be complete over the course of the next year, so we can begin that pivotal study.

John, maybe a last question here, going back to AT-GAA. As you've done the workaround, what the commercial opportunity could look like for your drug or what market share you can gain? What is the most conservative, I guess, outlook that you have?

Well, I think, if you look at it conservatively today, it's a $1 billion market, growing by the end of the decade again to $2 billion conservatively, 50-50 split. There's more than enough room for 2 products. I think there's a potential for us to do better. But if -- again, if you step back and you look at Amicus today, you look at our valuation, we've got with Galafold, it's $300 million on its way to $500 million, and we believe ultimately to a $1 billion. And I know AT-GAA works. I know it's helping patients. I've got very high confidence it's going to be approved. It will be approved around the world, and we'll get it to thousands of patients. And whether it's a $500 million peak revenue or $1 billion-plus, we'll find out. We have our perspective. But that's a pretty unique place to be to have an approved drug generating that level of revenue, with a second drug on its heels equally able to reach potentially $1 billion and the whole gene therapy franchise for about a $2.7 billion market cap today. So we've got a big vision still for Amicus. And I think a good part of it will be driven by AT-GAA.

Perfect. Well, with that, thank you so much, John. And we appreciate the time.

Thank you, Salveen. This was great.

Take care.

Take care. Bye-bye.