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

Welcome, everybody, to the 42nd Annual J.P. Morgan Healthcare Conference. My name is Anupam Rama. I'm one of the senior biotech analysts here at J.P. Morgan. I'm joined by my squad, Malcolm Kuno, Priyanka Grover and [ Laurea Hall ]. Our next presenting company is Amicus and presenting on behalf of the company, we have CEO, Brad Cam. Brad?

Thanks a lot. Anupam, J.P. Morgan for hosting us. It's great to be here. It's always a great way to start the year. Everybody has been reflecting on how nice it is to have sunshine outside, a better macro environment. It's a good time to be a biotech CEO with 2 commercial products and we'll talk a lot more about Amicus. Of course, we'll be making forward-looking statements as I refer you to our Safe harbor provisions. Amicus Therapeutics. We are a company that was founded on the idea that we could make next-generation therapies for people living with rare and orphan diseases. And after almost 20 years with the company, I think what you'll see today is we've really differentiated ourselves. We have built a real sustainable business here poised to create real value for our shareholders, but it all starts with creating great medicines for patients. And our vision is to become a leader in the rare disease drug development space. And I think we're really in a place of transition this year that puts us on a trajectory to do that. So, what is the business of Amicus. We have 2 commercial products today, and we'll talk a lot about Pompe disease, Pombiliti + Opfolda, which, of course, was all the rage coming into the end of the year last year with our approvals, but we do have a significant and growing product in Galafold for Fabry disease. That's the core of our value today. And so you'll see significant growth from both of those products, and I'll talk more about that over the course of the presentation. Just a couple of other things I'd orient you to here. We are a global business. I think that's really important because the leverage we get from the investment we made in the Galafold infrastructure leads to significant opportunity to drive profitability for the first time for Amicus. And for the first time, we will deliver a full year of non-GAAP profitability this year and that's all because of that investment we made in Galafold. And now all of the revenues that come in from Pombiliti + Opfolda help contribute to that evolution of our financial structure. We do have, as I said, 2 commercial products. We are just at about $400 million in combined sales at the end of the year last year. That's a 21% increase over the year prior and you'll see significant growth again this year and going forward. And both of those products, both Galafold and Pombiliti + Opfolda have about $0.75 billion to $1 billion in revenue potential for each product. So that looks like a $2 billion potential peak opportunity for our portfolio today. 2023 was certainly a transition year. We saw a significant, again, revenue growth for Galafold. We started the year thinking we could do 12% to 17% year-on-year growth. We actually raised that to 16% to 18% and delivered just above 17% growth for those products. Of course, we got the approvals of Pombiliti + Opfolda. We don't have to talk about inspection risk here today. For those of you who've been part of the story for a long time or even for the last year, had great launches, and we'll talk a lot more about the launch color, what we're seeing, why we're confident in the opportunity going forward. We did work on in a very limited way, scientific research into our next-generation Fabry Pompe gene therapy as well as our next-generation Galafold product, and we'll continue a very modest investment in that this year as well. But all of that was with an eye towards turning profitable. We committed to do that in the fourth quarter. And what we've said is we're on track to do that. Of course, we still have to close our books, but you'll see the outcome of that as we get to our full year year-end call over the next 1.5 months or so. We've talked a lot about this. You've followed this, but it was kind of a year of headlines for us, continue to see growth in Fabry. In fact, we were the fastest-growing treatment on the market for Fabry disease, successful early launch, we're going to talk a lot more about that. We passed $100 million in quarterly revenue for Galafold for the first time last year and you saw that again in the fourth quarter as well. And that was really driven by significant patient demand, and I'll talk about some of the dynamics that we're seeing in the Fabry market that gives us continued confidence there. We did refinance our debt, which I think was really important in the context of just pushing out those payments, lowering the interest payments and ensuring that we could really maintain our independence of the equity capital markets from an operating perspective and then, of course, continue to show exciting data coming out of the ongoing extension studies for Pombiliti + Opfolda. This year will be a pivotal year for Amicus. Again, we know we can continue to grow Galafold. We think we can do 11% to 16% year-on-year growth. And that's on a much larger base, of course, than we did the year before. So, continuing to grow that product robustly. We'll continue the launches of Pombiliti + Opfolda. We'll do a little bit of work around the portfolio, as I mentioned, but the vast, vast majority of our R&D expense goes into continuing to expand the labels for Fabry and for Pompe. Our ongoing clinical work. We have about 95 patients still on clinical drug today, Pombiliti + Opfolda, and we'll talk about sort of how we think about converting them. And we'll continue to maintain our leadership position from a medical and development perspective in Fabry and Pompe disease. And all of that while delivering on our first full year of non-GAAP profitability. And again, I think that really differentiates us from most of our peers in the space. So, let's talk a little bit more about Galafold. Most of you know the disease, it's a lysosomal storage disorder. It affects primarily the heart, the CNS and the kidneys. If people aren't treated for their Fabry disease, eventually they'll die from one of those organ systems. Typically, what's I think important about Fabry and this will permeate the conversation as I go through is that it was once thought of as a disease that primarily affected men. Over time, what we realize is that although it's X-linked, women have disease progression as well. Women in fact, make 50% of the treated population today. This is one of the most under-diagnosed genetic diseases and this market, therefore, will continue to grow significantly over time. So, what does that look like? Today, this year, at least 2023, we believe we passed the $2 billion mark in terms of global sales. By the end of this decade, we think that will be $3 billion in global sales for treatments for Fabry disease. And you can see that dark blue bar on the bottom of those bars is the percentage of patients who have an amenable mutation. And so you could see today, we're looking at about $0.75 billion worth of treated amenable patients. And then we think by the end of the decade, that will be well over $1 billion. And so the market will continue to grow. And why is that? It's growing because we're just finding more Fabry patients. And there are a few things that have led to that. I think first and foremost is just the availability of low-cost genetic screening. And so we've been able to drive that down, which means that more physicians and more patients can get access to that technology in a much more prevalent way. We've also seen newborn screening in a very sort of targeted way, not as prevalent as Pompe, which I'll talk more about. But certainly, that helps to identify families who have Fabry disease. And remember, once you find a Fabry patient who has undiagnosed disease, you typically find 3 to 5 additional family members who also will be undiagnosed with the disease. So, this is a hugely growing market fueled primarily by diagnosing patients. And Galafold is the fastest-growing product used within this market. So, just to put a fine point on that, how has this market evolved just since we've launched Galafold. So back in 2015, the year ahead of launch for Galafold, there were about 10,000 diagnosed patients worldwide. About half of them were on treatment then, of course, all enzyme replacement therapy. In 2023, that number has almost doubled. The number of treated patients has more than doubled. So, there's 11,000 now patients who were treated for Fabry disease. We represent 2,400 of those patients. But unfortunately, there's actually a higher number of diagnosed untreated patients. So, there are 6,000 patients now who are diagnosed and untreated, many of them will be eligible for treatment of Galafold. In fact, an interesting phenomenon is that the vast majority of new patients who are diagnosed with Fabry have an amenable mutation. And so we think as we diagnose more and more Fabry patients, more of them will be eligible to come on our therapy. So, let's look at Galafold specifically in the year in review, and then I'll talk about the year going forward. So as I mentioned, a great growth year for us from a sales perspective, delivered $388 million in global sales. That was, again, over 17% year-on-year growth at constant exchange rate. I talked about the 2,400 patients, a big number. We'll continue to see that grow over time. But importantly, too, on the upper left-hand side here, you can see a market share of treated amenable patients of 60% to 65% globally. Now, the good news is that means there's a lot more patients still to treat and to put on to therapy, but you can see that we're continuing to penetrate into that treated amenable market and we'll continue to do that over time. Now, over 40 countries that have reimbursement and regulatory approvals for Galafold and you'll see that grow over time as well. So, what do we expect going forward? The answer is continued strong, robust growth. How is that going to happen? Well, we continue to look at improving diagnosis, medical education, the more patients we can find, the more patients are eligible for treatment, whether it's for Galafold or one of the other products. But you'll see that continue to happen. I'll talk a little bit about one specific strategy here in a minute. The other piece is just market share of treated amenable patients. You heard me say we got 60% to 65% global share today. So, what we see in our most mature markets is that we can get that up to 85% or 90% of share. So, we know that that's kind of the target for how high we can bring our global market share. But a huge part of the growth is coming from finding new patients and penetrating into the diagnosed untreated population. 1,000 of those 2,400 patients actually were naive to treatment before they came on to Galafold. So, we are growing the market. We expect to continue to do that. And in fact, we saw this year, the highest net new patient growth in places like the United States, United Kingdom, Japan since launch, since the first full year of launch, I should say. And where is that growth coming from in those markets, it's primarily from new patients, naive patients. That's what we had envisioned happening, if you think back to that pie chart that I showed you, over time, as this market evolves, and that's exactly what we're seeing, and we expect to continue to see that. We will see a little bit of benefit of geographic expansion. I know that's something we'll touch on Anupam in the Q&A. There are still some markets in LatAm and in Asia-Pacific, where we're either newly reimbursed or expect reimbursement. There's maybe 15% of patients remaining in those markets. So that will help a little bit as well. But all of that is buoyed by this 90% adherence and compliance. We have seen that since launch. It's one of the best adherence compliance rates I've seen in any small molecule for many treatments, frankly. And that's something that says effectively when patients start on therapy, they stay on therapy, and so we tend to have them for as long as they're treated. One last thing that I'll touch on in the context of Fabry disease is artificial intelligence. It's obviously a buzzword today. Not trying to get the AI premium here for Amicus. But I do think that AI will transform drug development, biotechnology, health care broadly. You're already seeing it in drug discovery, hyper high throughput drug discovery approaches. You saw that in probably the development of the vaccines, the COVID vaccines. You'll see that drug development designing studies a whole host of other areas. But where we think it can be the most relevant impact for us today is in diagnosing patients. You heard me talk about the improvement in diagnosis globally. What we're talking about here is a partnership with a company called OM1, we use machine learning along with some physicians to develop a better diagnostic algorithm for Fabry disease. And now we're piloting that in a closed system with significant end-to-end payer claims, electronic medical records in a very large millions of lives, Mid-Atlantic health care system. We're going to push this program into that. Number one, of course, it helps to prove that you can do it with the new algorithm. But number 2, you're going to find a lot of Fabry patients. And again, they're going to have 3 to 5 family members who are undiagnosed with Fabry as well, excuse me. So we think, number one, this is important just to help prove the theory, but also we think this will help continue to drive real outcomes. And then you have treatment options for these patients. So, look out for more news for that. So again, healthy growing product opportunity, really excited about the business there. So, now let's talk a little bit about Pombiliti + Opfolda. The top line message is really pleased with how the launch is going so far. Such a long time coming. Complicated drug development as it always is. This is a tough disease. It's a neuromuscular disease. It's a lysosomal storage disease. If left untreated, patients will die typically of progressive respiratory failure or pulmonary between the United States and Europe and then rest of world. So, the predominant treated population comes from those 3 geographies or at least sales does. It's about 4,000, we think adults treated today with Pompe disease with one of the enzyme replacement therapy. So, large and growing market fueled by newborn screening in the United States and some other geographies, again, but also fueled by low-cost genetic testing. If you look into populations with muscular dystrophy or with Elevated CK, you find a very enriched population for Pompe disease. It's sort of the fourth or fifth most common disease that's identified through the screening opportunities, that's driven this kind of low double-digit growth rate for a long time in this market, and we'll continue to see that going forward. All that being said, we know, and this has been well documented that the legacy enzyme replacement therapy, well published was, unfortunately, most patients come on to that therapy and after a year or 2 plateau and then over time, start to decline. That's been well documented, well studied, huge need for new therapies. And what we designed was a very differentiated approach to treating this disease. What we knew is that a big challenge with the legacy enzyme replacement therapy was it was poorly phosphorylated. Of course, Mannose-6-phosphate for those of you who haven't followed the story is what's critical for getting this enzyme taking up into key tissues of disease, particularly in the muscle. What we were able to do is select a cell line that had high amounts of Mannose-6-phosphate that was produced naturally. And then we built our manufacturing process around that. The importance of that naturally occurring carbohydrate is that GAA within the cell has to be processed down to a more mature form in order to optimally turn over glycogen. So, this is a very differentiated approach and we preserve those properties of this enzyme replacement therapy in order to lead to that. So, there's a mechanistic difference between the way we address that carbohydrate challenge and the way our competitor did with their next-generation product. The other thing, of course, is that these enzymes aren't very stable in the circulation. These are long infusions. These enzymes aren't typically meant to be in the blood for a high -- long amount of time. And so by including the enzyme stabilizer, we add additional stability and provide for more active enzyme to be taken up into the tissue. So, a very different mechanism of action. And what that led to was a very differentiated clinical outcome. What you see here is a summary of our Phase 3 data, our pivotal data from the PROPEL study, which showed that in particular, in this graph in patients who are experienced, that is they were on enzyme replacement therapy coming into the study if you compare head-to-head in these experienced patients, we're the only product that was able to show improvement in particular, this is showing 6-minute walk in these patients. So, these patients were on drug for an average of 7.5 years, right? So, they're clearly in that decline phase if you look at the natural history. We don't just keep them stable, we can actually improve them. And the important thing is that then translated to, in particular, the label in the United States that said for patients not improving on enzyme replacement therapy, we can deliver these outcomes. So, we really see this as an opportunity to reset expectations for physicians and for patients and what they want to get out of their therapy. First time this has ever been shown. And this is really the data that we think is driving the clinical differentiation in this disease. So, how is the launch gone. The answer to the top line again is incredibly well, very pleased with what we've seen so far. Last year, we delivered $11.6 million in global revenue. The guidance we gave sort of in the middle of the quarter, was we hope to do about $10 million. So, we outperformed that guidance that we gave middle of the quarter. Importantly, 120 patients on treatment or having scheduled to get on treatment. That comes from 2 sources. 105 of them were clinical trial patients or expanded access patients, so a nice bolus of patients that we focused on immediately to convert to therapy. And then 15 new patients spread across each of the 3 geographies about equally. But what's really important within that segment is that we're seeing a significant number of switch patients in the United States. Still early days, small numbers, but significant numbers of switch patients coming from Nexviazyme. In fact, majority in the United States came from Nexviazyme. And then in Europe, we're seeing a mix of Myozyme, Nexviazyme or sorry, Lumizyme, Nexviazyme and then naive patients as well. So, all the patient segments that we want to see are represented there. Great outreach with KOLs. We've seen all the top doctors. We'll continue to interact with them in those 3 countries and then as we start to launch into other countries. Pricing and reimbursement has gone incredibly well, both in the United States and in Europe. And we'll talk more about this, I think, in the Q&A, but we do have a number of new countries that we think we'll launch into this year, primarily in Europe, and those countries will likely mostly come in the second half of next year -- sorry, of this year 2024. Just to drill down a little bit into the 2 regions. So, Europe and we've lumped the U.K. in with Europe, although technically not part of the EU anymore. But those have gone incredibly well. There's about 1,300 treated patients in Europe. There's another 200 patients who are estimated to be treated in the U.K. Importantly, you saw it today, I think they published on their website and we talked a little bit about this. We are the fastest ever product to go through the NICE reimbursement process. We're the first product ever to be recommended for reimbursement by NICE in the U.K. prior to marketing authorization. And I think that just shows the acknowledgment of the value that they think we can bring, both in terms of the profile of the product, so efficacy and safety, but also the pricing. Strategy, which we've talked about many times, which is we price for access, which means parity or modest discount. And I think that's a great demonstration of probably one of the strictest health care authorities in the world, supporting reimbursement for our product. And one other factor that we've shared today is that so between the [ IMS ] patients and then the new commercial patients in the U.K., which effectively means we've been available for about 2 years because IMS came about 1.5 years before we launched in the U.K. We're at a 30% market share in the U.K. So, if you think about how does this product perform over about a 2-year period, we think that's a great example of what it could do. If you drill down in the U.S., in the U.S., there's about 800 patients who we estimate -- sorry, about 800 patients treated, about 80% of them are adults. It's about a $500 million market opportunity, very clearly the largest single market. We've seen great uptake, as I mentioned, both the IMS conversions and the new commercial patients. And I think, again, most importantly, one of the biggest questions coming into this launch was, okay, especially in the U.S. where Sanofi launched their next-generation product about 2 years ago, would you be able to switch patients from that product? Or would they be stuck? And what we're seeing, again, it's early days, relatively small numbers, but very clearly, the majority of patients, all but one, switching off of Nexviazyme for the new commercial patients in the United States. So, really positive initial feedback from patients and physicians. I would say look out in coming congresses for some of the case studies. These are what we're hearing from patients and physicians is very positive experiences coming on to the drug, and we'll start to publish on that and then we can share that more broadly. But I think for all of our metrics, this has been an incredible launch. It sets us up for a great trajectory going forward. The only other thing I would say there, though, is I think the most important metric for us to look at is the number of patients on drug at the end of this year. That means we'll have a full year of launch under our belt and see what shares we've been able to get to in those 3 key markets, U.S. Germany and the United Kingdom. It will be a significant amount of revenue for sure, and you can see that in the commitment now to full year profitability. So no question, this will increase our revenue growth. But I think the most important metric for us to focus on is number of patients that we get on the drug and we look forward to continuing to do that over the course of the year. From a regulatory clinical perspective, and I know we want to get to Q&A, so I only have 2 more slides here, continue to submit reimbursement dossiers. 10 of them have been submitted, probably 2/3, 3/4 of those will get to reimbursement this year, continuing to expand the indication opportunity in late-onset and infantile-onset Pompe. And we do have an ongoing registry, which will, we think, eventually lead to real-world evidence. We'll continue to differentiate the product. 2 other quick things. The first is, again, I think we are a very unique company in the biotechnology rare disease space, in particular, in kind of the mid-cap space. 2 very unique therapies, one already demonstrated. It's a real growing important product, another one, great early read on the launch, huge opportunity, combined opportunity of $1.5 billion to $2 billion between those 2 products. Full year non-GAAP profitability this year and then clear line of sight to positive free cash flow. So, I think really differentiated company. And you've heard us talk about this before and I want to sort of close the loop here. So at the end of the day, we think the ultimate measure of success is the number of patients that come on to our drug. Of course, that's part of our mission. But to me, that ties back exactly to building shareholder value. Why is that? The more patients we get on to drug, the more revenues we can produce. The more revenues we can produce, more profitability we have to invest back in the business and that's the virtuous circle. And to me, that's how you drive shareholder value and that's how you make a difference in the lives of so many patients. So with that, I'll conclude, thanks a lot for your time. And Anupam, we'll turn it over to questions.

Cool. Just for those of you, I just wanted to remind you, if you want to ask a question, there's 3 ways to do it. There's the old school method. Just raise your hand and I'll call on you. There's a new school method. And if you have access to the portal, write your question in, it will show up on this iPad, and I'll ask it for you. I guess there's an intermediate strategy where you e-mail me the question and I will read it. So with that, I will kick it off. Brad, I did want to ask you about -- in Pompe, you talked about the 10 dossiers, give us a sense of what are the key regions that could come online in 2024 beyond your big 3?

Sure. And I'm going to ask the management team to variously sort of chime in here. So maybe, Sebastien, do you want to take the first one on the pricing reimbursement?

Happy to take this one. So, we think -- our goal is to have launch the product and have pricing and reimbursement completed in over 10 markets by the end of the year. Some of these launches will take place in the first half of the year, Nordics country, Spain, but most of them would actually take place in the second half of 2024. So, some of the other EU top 5 markets like Italy, France and some of the Benelux markets as well.

But you'll probably have sort of the majority of the large markets having pricing and reimbursement by the end of the year this year in Europe.

Questions from the audience. Maybe drilling down a little bit specifically on those 15 patients that were not from the clinical trial experience. You gave a number of metrics that suggested that there's naive patients, there's switches from Nexviazyme. Are they coming from certain centers? Or is it -- is that a trend that you're kind of seeing from all over globally?

Yes. So, it's pretty spread out, which is great. That's what you want to see, primarily from physicians who had experience through either the clinical studies or the expanded access programs. But of course, those are the key treaters. So that's where you want to be on the leading edge of your prescribing when you launch the product. I would clarify just for completeness, the naive patients are coming from Europe, of course, in the United States, where a switch label in Europe were both switch and naive. But again, that's what we would expect. And I think the most important thing for us was in the U.S., in particular, where Sanofi had launched their next-generation product 2 years ago. The question is like would those patients be stuck on that new therapy for some period of time and therefore, slow down the launch. And what as I mentioned in my formal talk, the majority of the U.S. patients actually came from that next-generation product, which is great. Whereas in Europe, where we're effectively launching kind of head-to-head with the next-generation product, there might even be some markets where we actually get out ahead of them, TBD. But there, we're seeing, I think, a mix across each of the 3 and more really coming from Lumizyme and that's the most available patients to switch from. So, I think it's playing out kind of exactly as we'd hoped.

In the U.S., maybe you could speak to the label a little bit, right? Because these Nexviazyme switches, are they coming from patients who are progressing or not deriving benefit? Do you see any type?

I do. I do. And I think that's one of the reasons we negotiated for that language, not improving. And we've seen this as we've had Advisory Boards as we look at the patients that we're seeing come on the drug today. Again, it's early days, but it's exactly that. The progressing patients is fairly obvious, right? So, the -- if they've tried Lumizyme and we're progressing and then they tried Nexviazyme and progressing, I think those -- that's a more obvious choice for a physician. Where the real win comes as we estimate about 50% of patients are -- would have historically been seen as stable. But if you really kind of peel back the onion a little bit, what you find is, number one, if you look at their fatigue or pain or respiratory assistance, it actually, many of them are suddenly getting worse. And so there's an opportunity to treat those patients. But really the standards should be are they improving? And if they're not improving, then you have an option which has been shown to improve these patients across a variety of measures. And so what we're seeing is a little bit of both today on Pompe, but I think how we win in the end, how we become the lion's share of the standard of care is we really are able to demonstrate improvement in those kind of historically seen as stable patients.

A question from the audience. There's a big lysosomal storage disease meeting in February, [ WORLD ]. Could we get some of those case studies that you mentioned in your talk at that conference?

Yes. You should expect to see that, particularly from one of our leading physicians. There was historically, during IMS, there was one center of Cambridge in the U.K. where they had treated a large cohort, I think a dozen patients during the IMS program. They had done a poster of doing some of their patient outcomes as well. So that's already in the literature. Folks should take a look if they're interested. But yes, you should see some of that new data at the WORLD Con.

And this will specifically focus on patients who are on Nexviazyme switching to AT-GAA or...

In the case of the U.K. experience, I don't -- it's either going to be Lumizyme switchers or Nexviazyme switchers. I don't know which right now, but it will be switch patients.

Questions from the audience? And then maybe switching gears a little bit to Galafold. You did, in a press release, I think, yesterday, gave some guidance around growth of constant, I think it's 11% to 16% is the guidance for a year, which I think roughly translates to $430 million to $450 million for the year. I'm looking at Andrew, I can't really do math. What are -- and you mentioned this in your talk a little bit, what are some of the higher growing countries that underpin that guidance?