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

All right. Great. Good afternoon, and thanks for joining us at the Morgan Stanley Healthcare Conference. I'm Mike Ulz, one of the biotech analysts here. It's my pleasure to introduce Brad Campbell, President and Chief Operating Officer; as well as Jeff Castelli, Chief Development Officer from Amicus Therapeutics. Just as a quick reminder, the format for today is a fireside chat. So please feel free to ask a question if you have any, and you can do so through the portal, and we'll be sure to address it during our discussion. Before we get started, I just need to read a quick disclaimer. So for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. And with that, I will turn it over to Brad to make a few introductory comments. Brad?

Great. Thanks, Mike, and thanks Morgan Stanley for inviting us to speak here today. Just to give a quick summary of Amicus and where we are this year. So as you know, our mission is to develop next-generation therapies for rare and orphan diseases. And we have our commercial product, Galafold, which continues to track ahead of our internal expectations and remains on track to achieve our revenue guidance of $300 million to $315 million this year. And I can say we're confidently on the path to $500 million in global revenue over the next few years, and I'm sure we'll talk more about that later in the conversation. Of course, we have our next-generation enzyme replacement therapy, AT-GAA, which is moving forward with the global regulatory submissions. Our rolling BLA was completed in July with the FDA, and we're on track to submit in Europe and the U.K. in the second half this year. And we think that AT-GAA has the chance to become a standard of care for treating Pompe patients in the years to come. And finally, we do have a broad gene therapy pipeline with 2 clinical-stage programs in different forms of Batten disease and many more preclinical programs in development. Our goal with gene therapy is to combine our protein engineering capabilities and know-how with UPenn's capsid technology and next-generation vector technologies to make best-in-class or first-in-class gene therapies. And all of these value drivers are, of course, underpinned by our financial strength, which is sufficient to achieve self-sustainability without the need for future dilutive financing. So with that backdrop, Mike, happy to take your questions.

Great. So thanks for that, Brad. And maybe I thought we could just start with Galafold. Obviously, it's your lead commercial product. It's been on the market for several years now, and you're still seeing growth. So maybe you can just talk about where you're seeing the growth this year and how that's sort of trending into the end of the year?

Sure. Yes. So we've had a great year so far. Second quarter we released not that long ago, where we had 24% year-on-year growth with $77.4 million for the quarter, so great momentum there. In 2021, we do expect to see double-digit growth again. And our revenue guidance is $300 million to $315 million, and we're well on track to see that. We do continue to add new patients, both switch and naive, which are 2 important segments that we follow, and have had great success throughout our European markets, in the U.S. as well, starting to see great uptake in some of our newer markets like Brazil. And I think we'll continue to see that. That's all underpinned by that high rate of compliance and adherence, over 90%. So when patients start on Galafold, they tend to stay on Galafold. And as I said before in the intro, I think we're well on our way to that $500 million in sales, really just based on execution, what we've seen so far, and we can talk more about that. But fundamentally, the drivers will continue to be switching patients in our existing market, continuing to grow the market by penetrating into the diagnosed untreated patients and then continuing to focus on geographic expansion. So lots of exciting drivers so far and good growth to come.

Got you. You touched on this a bit earlier, but the dynamics between sort of switch and naive patients. Maybe you can expand on that a little bit? I know initially it was more switch and now you're starting to get more into the naive patients. And so maybe you can just comment there.

Yes. So when we launched Galafold, just as you said, and I know you've been following the story for a long time, our initial focus was on the switch market over, I think, 8,000 or so treated patients today in the global Fabry market. It's actually, last year was $1.8 billion in global sales. I think this year, it's sure to pass $2 billion in global sales, so quite a large market even for a rare disease. And we focus on switch at launch because they are the patients that were coming in every other week for their infusions. They're in the system. They're already being reimbursed for a Fabry treatment. Right now where we sit, the distribution between switch and naive is about 65% switch, 35% naive. So still majority of patients who have been switched. But in our more mature markets, we're seeing that mix more like 50-50 and even flipping, which makes sense as you kind of penetrate into the switch market, then you start focusing on the diagnosed untreated market. And I think in the medium term, you'll see that dynamic play out. And then in the long term, I think this will be a market growth story. But interestingly, if you just think about those top line numbers that I talked about. So like I said, sure to be a $2 billion market by the end of this year. And if you think about where we sit today, we have about a 50% market share of treated amenable patients. So if you kind of project the amenability onto that, which is 35% to 50%, so call it, $700 million to $1 billion market this year, we're getting 80%, 90% market share in our most mature markets in the U.K. and Germany. So if you think about the global guidance this year, $300 million to $315 million, just with the switch market alone, you can easily see how you could drive past that $500 million milestone. So lots of progress since when we first started, lots more room to go. But those are some of the dynamics we see between those 2 important segments.

Yes. And just in terms of the market share of the amenable patients you mentioned, overall around nearly 50%, but in the initial markets, you're much higher. I think you said as high as 80%. If you think about U.S., sort of what does that look like in the U.S.? And do you think you can get to an 80% number similar to what you're seeing in some of those initial markets?

Yes. I think that, so in our sort of newer launch markets, U.S., Japan, we're probably more like 40% or 50% share of treated amenable patients. So yes, I very much believe that as we continue to progress here in the states and some of the other newer launch markets, we can get up to those market shares. And we clearly demonstrated in, again, our more mature markets that we're standard of care. If you have an amenable mutation, we think you should be on Galafold. But we still are launching into some new geographies. Brazil, as an example, we're still going through the judicial review process, but we've had a nice uptick there. And there are other countries around the world where we still haven't even launched yet. So there's still room from a geographic perspective as well.

And can you maybe just comment on diagnosis right now and sort of what are some of the levers you can do to increase that? And maybe how that's sort of progressing maybe over the past year or so?

Yes. It's amazing. When we first came into the Fabry world back in the day in the genetic diseases, this was thought to be a relatively small genetic disease because it was assumed to only affect males. Over time, we've realized that, in fact, it affects both males and females. And through a number of newborn screening studies in particular, the incidence of Fabry, which was originally reported as like 1 in 50,000, looks like it could be more like 1 in 5,000 or even more common than that, 1 in 2,000. And those are borne out by numerous newborn screening studies. So that's one way that we're looking for new patients. But of course, once you find an affected family member, typically you go through the family screening efforts. So it's an X-linked disease. And you typically find about 4 additional family members who have undiagnosed Fabry once you find what they call kind of an index patient. So those are also very exciting. There's also some other places that we've continued to invest in. So for example, there's a number of populations like the multiple sclerosis population, the idiopathic pain, some GI and IBS kinds of clinics where we have done some screening studies and found undiagnosed Fabry patients. And we're looking to do more work there. And on the most kind of advanced side of things, taking advantage of the latest in artificial intelligence, we actually published a study at WORLD this year that looked at a whole host of new concomitant diseases that seem to have some correlation to Fabry disease. And so as you get better sort of end-to-end claims data in these health care systems, you can use some of these advanced diagnostics and algorithms to diagnose more patients. So I think both the work that we're doing and some of the other players in the space, you'll see continued increased diagnosis of Fabry patients for many years to come.

Okay. Great. Maybe we can shift gears now to AT-GAA. You mentioned it's sort of a next-gen ERT, but maybe you can just expand on that and maybe talk to what makes that product unique versus what's available today?

Sure. So remember, we call the whole product AT-GAA, but it's really 2 components. So the first is a next-generation enzyme replacement therapy, which was developed by selecting a naturally occurring cell line with a very high percentage of mannose 6-phosphate. Mannose 6-phosphate is actually the carbohydrate that's responsible for getting these ERTs taken up into tissues, in particular, into muscle tissue. And then we designed our production process around that cell line to make sure we preserve that carbohydrate structure. And importantly, because it's a naturally occurring cell line, it allows the carbohydrate chains and amino acids to be able to be processed appropriately within the cell so that it can actually take its more mature form of GAA and then turnover glycogen. And so mechanistically, it's a very important part of the story. The other piece, of course, is that we do combine the enzyme replacement therapy as part of the treatment regimen with AT2221, which is an enzyme stabilizer. It's taken orally about an hour before the infusion. And that helps to keep the enzyme properly folded and stable within the circulation during the infusion. The majority of the benefit we think is coming from the enzyme replacement therapy, but I think the chaperone, at least in preclinical studies, has shown to confer additional benefits as well.

Got it. Earlier this year, you read out your Phase III study for AT-GAA. Maybe just you can sort of recap what the key takeaways were from that study for people that might not be familiar with it?

Sure. Jeff, maybe you want to take that one?

Sure. Thanks, Brad. Hi, Mike, and good afternoon, everyone. So as a reminder, PROPEL was our Phase III study comparing AT-GAA versus Lumizyme or Myozyme. We enrolled 123 patients across 62 sites in 24 countries. So really one of the largest rare disease studies ever conducted. 117 patients finished that study. All have now transitioned on to AT-GAA, continue on that product in extension studies. Primary endpoint was 6-minute walk in the overall population, which primarily consisted of ERT experience switch patients and then a handful of naive patients. We just missed on demonstrating superiority on 6-minute walk. We showed an improvement of about 14 meters, missing significance by about 2 meters. However, on our key secondary endpoint, which is forced vital capacity, and was the basis of approval for Lumizyme/Myozyme and most recently for Nexviazyme, we actually showed nominally significant improvement versus Lumizyme of about 3%, and that p-value was 0.02. And that percent improvement is similar to what was actually seen originally between Lumizyme and placebo in terms of improvement in FVC. So we think very meaningful. Importantly, on that switch population, which is really the most unmet need today, it's the 3,200-plus patients out there that the data suggests are, after a few years, start to show pretty consistent decline. We actually showed improvement in both 6-minute walk and FVC that was nominally significant, stabilizing their decline in FVC and actually leading to improvement in 6-minute walk in that group. Additionally, we saw lots of other endpoints across motor function, different measures of breathing, biomarkers, patient-reported outcomes and all were pretty consistently in favor of AT-GAA. So we think a great totality of data from that trial and particularly in that unmet need ERT experience population.

Got you. And Brad, you mentioned you recently completed the rolling BLA. So you guys have had some interactions with the FDA here probably since the data has come out. I don't know if you could comment a little bit on maybe what you're hearing from the FDA or any comments around that?

Yes. Obviously, we're not going to comment on ongoing discussions. But Jeff, maybe characterize for Mike the interactions we have had and kind of the time line here for both FDA and Europe.

Yes. As a reminder, back in the spring, we had our pre-BLA meeting, and we reported out that, that was a very positive outcome in terms of tone and collaborative spirit. Based on that, we proceeded to submit the BLA. We completed that submission just in July. Based on the time line, FDA has anywhere from 60 to 75 days to accept that BLA and to move forward on the review. So we expect to hear back either later this month or maybe very early into next month. So really excited about proceeding on the review of that BLA. Happy to also talk about Europe if you'd like to, Mike.

Yes. And maybe anything different...

Sorry.

Yes. If you can just comment on Europe and then also note anything that might be different in kind of what you heard from the European regulators versus the U.S. regulators?

Yes. I would say, remember, we actually were one of the first companies to leverage the parallel advice with both FDA and EMA together on the design of the Phase III study. So we've had very consistent feedback from the agencies from the get-go on designing the study. Our pre-MAA meeting with EMA went also extremely well. We announced that based on that positive meeting, we are proceeding towards a submission on the EMA by the end of the year. And really, they're very similar packages overall in terms of everything that's in there in terms of preclinical, CMC, clinical. So we expect to have very similar interactions.

Got you. And should we be expecting sort of a priority review here in the U.S.? Is that sort of the, should that be the expectation? Or I don't know if you can make comments around that.

Yes, Brad, I'm happy to start if you're okay.

Go ahead, Jeff. Yes.

Yes. So Mike, we have breakthrough designation. So based on that, we're eligible for a priority review. As a reminder, Nexviazyme did receive priority review in their review. We are hopeful that we'll get priority review based on that. We do know that the FDA is somewhat busy on other things around COVID. So there's a chance there could be some bandwidth constraints that does feed into their ability to have an expedited review within 6 months versus the 8 months. So we're hopeful for the priority review, but there's no way to know for sure until we hear back. And we'll be informed upon acceptance here shortly. They'll tell us whether we have priority review or not.

I do think, Mike, of course, we want to go fast. We want to get to patients as quickly as we can. It starts the launch process a little bit sooner. But from a commercial perspective, we don't see a lot of material difference in a couple of months more for them to review the product. So while we're hopeful for it, as Jeff said, we are eligible for it, and we'll find out here soon. I think it doesn't have a material impact on the commercial launch.

Got you. And maybe just as we think about the label just given the PROPEL data and the miss on the superiority at least on the primary, maybe just talk about the label and how to think about that.

Yes. It's hard to speculate on what's going to happen coming through that, but I would just highlight a few things, a few scenarios you might think about. So the first is, if you look at the Myozyme label, which had kind of a similar outcome on their co-primary endpoint of 6-minute walk, missed statistical significance. It has a P 0.06 in the label and then has a superiority on forced vital capacity with the nominal p-value. In our case, our overall study population is both switch and naive. And so you could have that similar kind of outcome, a numerical benefit in 6-minute walk, which is just missed statistical significance. And then the FVC in the overall study population, which is statistically significant, nominally statistically significant. So that's one kind of scenario. If you look at the Nexviazyme label, they were approved for patients with a diagnosis of Pompe disease and then the label shows just the data in the controlled portion of their study from their naive patient cohort. And so it's also possible you could see the switch data from our data set in the label, so 6-minute walk and forced vital capacity statistical significance. And you can see the naive data set as well. But I think those are some of the things that we could see in there. I think the most important thing for us is, again, we are the only product that has studied switch patients in a controlled setting. And we think the data from those patients, whether it's that overall summary of the population or dropping down into the switch data, will be very compelling for patients and physicians.

Got you. And maybe as you had some time to think about the data set you have and as you think about commercializing AT-GAA assuming you can get approval, maybe just talk about how it fits in the current treatment paradigm and then also just relative to Nexviazyme as well and maybe some points of differentiation potentially?

Yes. I think a little bit comes back to what I mentioned before. So remember, it's a $1 billion market today or sorry, I should say, $1.1 billion market last year. So this year, presumably, they'll continue to show some growth there. So it is a significant market. It is expected to grow upwards of $2 billion over the next decade. So it's a healthy population. Our market research suggests that there's about 3,200 patients that are treated today. And so the lion's share of the commercial opportunity over the next few years is really going to be that switch population. So if you think about the data set that we have, I think that very clear signal in the switch patients is going to be very important from a commercial perspective. If you think on the low side, maybe we get 25% of the market. It's still a $500 million potential for the drug. We think we can do better than that. We think we'll have a bigger impact on the market. And so maybe you capture half of that $2 billion market. That's a pretty significant opportunity. And if you think about Amicus overall with Galafold with $0.5 billion to $1 billion opportunity and AT-GAA in a similar size, then that's a pretty significant revenue opportunity for a company of our size.

Got you. And I know just for Nexviazyme, I know it's still early there in terms of their launch, but do you get a sense of, are patients, switch patients being given that drug? Is it more in line with the label naive or do you have a sense of that?

Hard to comment on somebody else's launch. I will say, we were interested to see the FDA letter at the time of announcement. And there were 2 quotes that kind of stood out for us. So first of all, great for patients to have new therapies. I think that's a good thing. It's a good thing that they approved Nexviazyme. I do think it bodes well for us as well. Just a couple of things that jumped out at us. The first was the comment from the spokesperson from the FDA that said, the FDA was looking forward to working with stakeholders to advance the development of additional new effective, safe therapies for rare diseases, including Pompe disease. So I think that, again, bodes well if you sort of lean towards our submission. And then the other thing that was noted in the FDA, that the treatment improved lung function similar to the improvement seen with the other therapy. And so then if you look at the data that's in their label, it's looking at noninferiority on forced vital capacity in the naive patient population. So I think all of those things bode well for our data set. And of course, we have to wait to see the approval, sorry, the review and hopefully the approval. But we're eager to offer hopefully, another therapy for Pompe patients.

Okay. Great. Maybe we can just switch to the gene therapy pipeline. And maybe just talk to some of your unique capabilities and some of your partnerships there that might set you apart from others in the field?

Yes, sure. I would just say at a high level, we kind of have 2 portfolios within the gene therapy space. We've got the Batten portfolio, which came out of the Celenex acquisition. The most advanced programs there are CLN6 and CLN3. CLN3, we should note, is quite a large rare disease, about 5,000 patients we estimate globally and believed to be the largest cause of genetic blindness in children. So a very exciting opportunity there. And we had some interesting early data in patients earlier this year. And then, of course, the collaboration with Jim Wilson around a broader discovery and development platform, looking to combine Dr. Wilson's next-generation capsid vector delivery technology with our protein engineering capabilities. But maybe, Jeff, just hit a couple of highlights coming out of the Jim Wilson collaboration and what we're hoping to see there, in particular with Fabry.

Yes. I mean, so as Brad mentioned, that collaboration really is looking to leverage the Amicus protein engineering and the Penn next-gen capsid vector technologies. So our lead program is Fabry for gene therapy, where we have a stabilized transgene that Amicus has designed. We combine that with the Penn proprietary capsid and a ubiquitous capsid-promoter approach. And we've shown in mouse studies that, that Amicus-engineered transgene is significantly more potent at reducing substrate than the wild-type transgene. We've also now shown the pilot primate data that we can get expression in primates that is in the range of the mouse studies where we see really robust substrate reduction with our engineered transgene. So we think that, that approach will allow us to translate from animals into humans at a dose that is safe and not getting into the range of these high systemic doses where we are starting to see some toxicities in the field broadly. And then Pompe is our second program with Jim and his team at Penn, that instead of having a stabilized transgene, we've actually engineered a targeted transgene for uptake into muscles and for delivery to lysosomes, building upon everything we learned with ATB200 and cipaglucosidase alfa. And similarly there, we've shown that, that engineered transgene is much more potent at getting into muscle and clearing glycogen than the wild-type. We also have ongoing programs in MPS III and CLN1 and just started Angelman with Jim and his team. So we're really excited about that combination of sort of technologies for best-in-class gene therapies.

Got you. And you mentioned sort of the potential for toxicity when you start getting to higher doses. And obviously, FDA held a meeting last week, I believe, or 2 weeks ago, I can't remember. But anyway, maybe you can share your thoughts on or takeaways from that? And then did anything come out of that, that maybe influenced how you're thinking about any of your programs at this point?

Yes. There's lots. It's hard to remember at this point. Look, overall, I think the tone of that meeting from FDA was collaborative and kind of focused on benefit/risk. And we didn't see anything coming out of that, that we think would be likely to change any preclinical or clinical guidance or approach. What we do think in terms of Amicus programs is, we've gone into gene therapy very thoughtful about safety. And part of working with Penn is that they are very focused on safety as well. From our Batten programs, we've now seen our patients, treated 17 patients across the 2 programs, followed out for a few years. We haven't seen any notable safety issues there. We've seen nothing indicating sensory neuropathy related to DRG tox that sometimes theoretically could be seen from an intrathecal AAV. Our programs with Penn specifically are focused on more potent transgenes to avoid going to these high systemic doses where you start to see toxicity. So that is something we've already sort of approached directly. We also have access to other Penn technologies like the one they've come up with to help mitigate DRG toxicity, if you need to. And for all of our different programs early on, we're assessing whether we want that technology or not, partly dependent on whether you're trying to treat the DRGs or not and kind of down to that benefit/risk that FDA was talking about. So we think overall that the outcome was a good thing for the field to give a little bit of clarity, but it didn't really move the needle a whole lot. I think it sort of was right down the fairway.

Got you. Maybe just last question here because we're basically out of time. But just your gene therapy for Fabry and Pompe, can you remind us just where you are and next steps, sort of when we might see the next data from those 2 programs?

Yes. We're on track to get into the clinic with Fabry at the end of next year, which is great. So not that far away at this point. And we'll continue to show, I think, preclinical data kind of as we get closer to that time point. Pompe is a little further behind, but we still have been generating great preclinical data, and we'll continue to do that. We'll have more to say on kind of the time line to the clinic for Pompe probably early next year.

Okay. Well, great. Why don't we just end it there, Brad and Jeff.

Excellent.

Thanks for your time. Appreciate it, and thanks for everyone who joined in.

Yes. Thanks a lot, Mike. Great to see you. Appreciate it.

Thanks, Mike.