Amylyx Pharmaceuticals, Inc. (AMLX) Earnings Call Transcript & Summary

Well, thank you all for being here. Pleasure to have Amylyx management join us. Just before we begin, I remember the first time I hosted them or the first time I met with you guys, it was over lunch. And I remember Josh had two cans of soda in front of him. And depending on my question, he would sip from different can and became very predictive. So I made sure he has two different cans today. So when we ask about patient numbers and the Italian TUDCA study, we'll see which can you have...

Right after.

All right.

You know us well but...

Well, listen, thank you for being here in all seriousness. I know there's a lot of very important stuff coming up for you guys. So maybe if you want to kick it off and we'll jump right into it.

Yes, we'd be happy to. Well, first, thanks, Umer, Mike, Evercore for having us here. It's really our pleasure, see some familiar faces. For those of you who don't know us, I'm Justin, this is Josh. We're the Co-CEOs, Cofounders at Amylyx. We've been working in neurodegenerative diseases, in particular, ALS for about 11 years now. And I think we're tremendously excited because we feel like we and colleagues in the neurodegenerative disease areas are really at the forefront of a revolution here. What's really driving us right now is, of course, our FDA-approved treatment for adults with ALS. That's RELYVRIO. It's the first treatment in ALS that's shown a difference on the ALS functional rating scales, that's slowing disease progression as well as in the longer-term post-hoc analysis and overall survival difference, which is the gold standard in any fatal disease. Our commercial launch is off to a strong start. As of the end of the third quarter, we had 3,900 people on treatment and we've done $272.3 million in sales for the first 3 quarters in our first full year of launch. On top of that, we think RELYVRIO has great scientific rationale in other neurodegenerative diseases as well. So we are getting a study in PSP up and running. That's progressive supranuclear palsy. That's another large but ultimately rare fatal neurodegenerative disease as well as Wolfram syndrome, which is a neurodegenerative disease that affects people when they're in childhood. So -- and speaking of on the R&D front in case folks didn't see, we announced this morning, we have a new great executive joining us, Dr. Camille Bedrosian, She's going to be our Chief Medical Officer. Camille is the former CMO at Ultragenyx, Alexion and ARIAD, so really a tremendous drug developer and patient-centric executive. So -- but what's really driving our short-term growth right now is, of course, the commercialization. And I think probably a couple of key points, I'm sure we'll get into in the discussion. The first is that while we've seen slowing growth quarter-over-quarter from Q2 to Q3. We think we have the right insights and our actions that we're taking in order to continue the growth there. We think there's a tremendous opportunity. There's 30,000 people with ALS in the U.S. at any one time and actually a global lifetime risk of 1 and 350 people, which is pretty frightening, but just shows the opportunity in ALS. And then, of course, the PHOENIX trial. So in the second quarter of 2024, we'll have our Phase III readout of the PHOENIX study, and we think that will be a tremendous opportunity. I think with two positive studies behind the drug that's never happened in ALS. So it's hard to overstate the importance that, that will have in continuing to accelerate the launch and the transformation of ALS. So really excited to get into those details. And again, thanks so much for having us, guys.

Just before we proceed, I'm getting a few questions online on whether it's being webcast or not. Is this being webcast this one? It is being webcast, okay. So okay, great. So I know there's a lot to unpack there. Maybe let's start with the launch progress right now. It's very clear that you're continuing to add patients. It's also clear that given how late stage many of these patients are and how some of them run into life events that, that catches up to you in the form of discontinuations, which may often be death. Could you speak to your experience on duration of therapy? And how you expect that to evolve relative to when the diagnosis first happens when you get more data next year?

Yes. I think it's a great question. So first of all, during the quarter, we shared that at 6 months, roughly 60% of people remain on drug in the United States. That contrast within Canada, where at 6 months, roughly 80% of our people are remaining on therapy. So immediately made us think how can we action, how can we continue to improve this? I think one of the things that Canada really focused on was not just educating the doctors but also educating the nurses. Most of the times when you call a doctor's office, especially specialists, a busy specialist office, you get the nurse. So you get somebody other than the doctor. So I think that's really key. And they also were really proactive about their education about how you can -- empowering people to actually manage these. Things like diarrhea can be managed with different interventions and otherwise, many of which are available at CVS, over the counter, things like Pepto-Bismol. So I think that, that's been a big focus as we work to improve the disconts. I'd say in terms of kind of on the launch dynamic, yes, we've seen that as the launch has gone on, we have more patients earlier than we did at the start of launch earlier in their disease. But I'd say the biggest variable we found is actually the sites. We find that certain doctors have really strong persistency curves and certain doctors are less strong. And as we've dug into that, what we found it comes down to is really how they set expectations with their patients. Doctors that are saying, this is a drug that will extend your function, they'll extend your survival. And if you have side effects, they can be managed. You get a very different outcome than if a doctor says, here's a script, call me in 3 months, if that makes sense.

No, that makes sense. Just a follow-up. How should we think about, I guess, in the future, net patient adds given that prescribing at least, as a 3Q still remains hyper-concentrated in these academic centers, do you think that once it does trickle down to the community centers that this will improve exponentially? And what may cause it? Do you think it's truly the Phase III PHOENIX trial that will be the catalyst here?

Yes. I think it's all of the above. And I really appreciate you asking. I think despite that, I think we had a very public approval. We're a year into launch. And I think now is the time where you take the insights and you figure out the actions in order to continue to drive growth. And I think importantly, remembering, we're trying to transform the disease space here. This is not the fifth or sixth drug launch in the space. It's really new. I mean, for example, at launch, a lot of our team's time at the centers were spent on insurance and prior auth and things that were quite new to the ALS community because they just haven't had these sorts of interactions before. So I think as we look at the market, we have, I think, a pretty good understanding. So the way we've maybe characterize it is I think they're ALS specialists. They are maybe roughly 500 of them in the country, and then there's the more general neurology community. And each of those groups sees about half of the population, so roughly 15,000, 15,000 just for easy math. Even within that 500 group of specialists, overall, we have about 25% of their patients are on RELYVRIO, but it varies. So we have a high degree of concentration, so about 80 -- roughly 80 doctors accounted for half of our prescriptions, which means that in some centers, it's much higher than 25% and in other centers, it's lower. So I think the first thing is that's a great area for our key account managers to spend time because those are people who are specialists, they're familiar with the product, they've used it, but they haven't changed their medical practice, whereas other groups have. So I think that's a lot of education. Then there's the broader neurology community who, honestly, we haven't spent that much time focused on. And I think there, it's just awareness. And I think nonpersonal promotions, digital strategies, those sorts of things can have tremendous influence. And then on top of all of these things, having the Phase III PHOENIX trial, I think having that additional data, hopefully, two positive studies behind an ALS drug, I think that's where it really starts to change medical practice to say this needs to be standard of care for your patients.

Yes. And I probably just to add on PHOENIX, too. It's kind of hard to overstate what a moment it may be for the ALS world and ALS community. When we had CENTAUR, we weren't a public company back then, so it may be less familiar. But when we had CENTAUR, it was on television, it was in the New England Journal, it was in the New York Times, it was in the Wall Street Journal, it was in the Washington Post. It was kind of a thunder clap moment. I do think if we have the second positive randomized placebo-controlled study of this drug in PHOENIX, it will be a thunder clap moment and a great moment to build on the foundation we have and continue growing this market.

Josh, from diagnosis, on average, how removed are these patients when they initiate the therapy right now? And how much will that change with the next trial in end?

Yes, I'd say it varies. It varies -- what we said at launch was that we were seeing people within 6 months from diagnosis, within 3 years and even ones beyond 3 years, we still see that. I mean I think we expect as launch goes on to move a bit earlier, particularly once you've penetrated a center, then at that point, you theoretically only can go for the earlier patients because all the prevalent patients are on. But I think different centers are at different parts of their journey. Some have come on more recently. Some have been on since the launch. When we think of the general neurologist, some are just kind of being reached out to and educated and everything like that, so I think it varies but...

So this is not Day 1 riluzole and RELYVRIO are together?

Well, for some, it is. And that's why I was saying, and Mike, to your question on the concentration, I think the centers where our team spent a lot of time, they're familiar with the data. They have changed their medical practice, right? They're saying, this should be standard of care. My patient should be on this drug. When I give a diagnosis, my patient should be on this. And generally, with really is also -- but many specialists have not done that yet. And I think that's a mix of education and education about the data that we already have. Again, this is the first trial where we've seen changes in the two key outcomes that you would want to see, given that ALS is a progressive fatal disease. And then on top of that, that's where the Phase III PHOENIX trial is so helpful.

Got it. I know we have limited time remaining. So maybe let's touch up on a couple of other important aspects. One of them is any feedback you've heard? I know there's a couple of ALS meetings coming up. Any feedback you've heard on the Italian study?

Not too much, to be honest. And we have -- we didn't see it on the agenda for MNDA, which will be out in December as well. So no, we haven't heard much about what will be released.

Isn't the PI normally very prolific, at least in my experience?

Not so, the main PI is Alberto Albanese. He's not really in ALS. He's kind of mainly a dystonia doctor.

Oh, I see.

Yes.

Normally like he's chatting and stuff, and I feel like it's more quiet right now. So I couldn't tell what that means.

Yes. And maybe the other thing I'll say is I think kind of -- The Street has taken this view that there's maybe three possibilities: positive, trending or negative. And I'd say that, at least in my view, I think there's actually very much a fourth possibility. And I think that we were just talking about discontinuations. This is a 3-month lead-in study with 18-month follow-up. So it's a 21-month study. We just talked about 6-month persistency in the U.S. for our drug at 60%. What's going to happen at 21 months? It's anybody's guess, but study was also run during the peak of COVID. So I think one other big risk for the TUDCA trial is that few patients completed. At which point, whether it's positive or negative, it will be hard to interpret it. And so I think the kind of fourth option is that the results are hard to interpret, hard to draw conclusions.

And I think I'll add to just while Dr. Albanese, I think, probably with the comparisons between TUDCA and PHOENIX has gotten maybe more attention than he's used to. In the ALS community, I mean this is a no disparaging way, I mean, he doesn't do ALS. And so I think while maybe in our circles, this is certainly a conversation. When you talk to key opinion leaders, especially in the U.S., but even in the EU, they're really not focused so much on the readout of that study. I think, to be honest, the readouts they're very interested in are PHOENIX and then the [indiscernible] is running a study of the data run in Europe. Those are really the ones that I think they're focused on the TUDCA trial is like, well, it's an academic study, we'll see what we get.

Got it. But not nonetheless, we could ask about this trial a lot and we'll have a big ramification for the stock. So just one more follow-up question on the EU TUDCA trial. It's enrolled 337 patients, roughly 2.5 times more patients than Phase II CENTAUR enrolled. However, in this EU trial, patients are assessed every 3 months for 18 months versus in CENTAUR, patients were assessed every 3 weeks or 24 months. So I guess my question is, could the significantly more patients enrolled in the EU took a trial compensate or it's much less frequent assessment schedule?

It's a great question. So I think, first of all, one other key difference is the inclusion-exclusion criteria. So CENTAUR particularly enrolled patients to get a kind of tighter, more homogenous, fast-progression group, and that's how we were able to run a 137-patient trial. When you look at most of the literature in ALS, most will suggest that you need at least 400 patients. And that, of course, depends on which patients you include and which patients you exclude from the trial. So I'll say that their trials may be a little broader in who they include. So the exact powering will kind of depend on that. And I'd say the other thing, so CENTAUR was 24 weeks. There is ultimately 21 months. I think the other question is how you analyze that and how you deal with the dropout. When you look, they published their stat plan recently and what was in their stat plan, at least publicly, was a pretty worst-case assumption for deaths and dropouts. And if you think if you have a huge number of dropouts and you have a huge and a decent number of deaths over 21 months, then you treat all those as worst case. Well, the primary endpoint, they're doing it as a responder analysis, you've kind of ruled out all your responders. So anyway, it will be interesting to see what actually comes out of that.

But I think I want to go back to the bigger picture, too. I mean, with this readout, right, it's a different drug. It's -- we have a combination that's been shown to be synergistic. It's a different formulation. And we have an FDA-approved treatment that's covered by insurance. So I think the sort of -- while I understand that people may have some read through, I think the ultimate answers are if we continue to do our jobs on the commercial side, which is make sure that people are educated about the drug, insurance is covering the drug, people can afford their out-of-pocket expenses, then there's no market for it. And then second, I think the PHOENIX trial, again, is the answer there, right? We're running an incredibly high quality, well-powered study on the same endpoint that we saw in the CENTAUR study, which was published in the New England Journal of Medicine and was at -- we looked back. Our PI had 10 keynote or plenary presentations after the results of the CENTAUR study at prestigious conferences. So I think that's why we go into PHOENIX, very excited, but I also think in the sort of TUDCA trial scenario, the PHOENIX trial, I think, will be very important in that as well as our continued commercial business.

Got it. Got it. We actually have 2 more minutes left because we started 2 minutes earlier. Would that be okay?

Yes.

Not okay.

So just on the subject of the Phase III PHOENIX trial, the primary endpoint is ALSFRS, but it will be adjusted for mortality.

Correct.

You don't have to add mortality to hit at the end point, correct?

You don't have to, no.

So it's very similar to CENTAUR, but in CENTAUR, there are only 7 deaths in CENTAUR. And I guess my question to you was, was that same adjustment made in CENTAUR for mortality or no?

So no, it was not made in CENTAUR. However, we just -- it's actually very timely. On Monday, we shared an abstract from something we'll be presenting at ALS/MND or MNDA in December that we've run the same model on CENTAUR and you actually get a slightly better p-value. So had we done that model on CENTAUR, we would have got the same result. But overall, I think, it's important to note that this is a pretty minor adjustment. I think we've heard from the regulators, they want you to not ignore deaths when you run these types of analyses, which I think is fair. Of course, in CENTAUR, the deaths didn't have any impact. They were very few. But I think it is important to have that to account for that. But in most of our modeling and actually what we saw in CENTAUR II, it increases your power, right? It makes it more likely to see an effect, not less to include this adjustment. And broadly, it's very hard for that adjustment to swing things, right? If you hit the ALSFRS-R, you have...

Got it. Josh, Justin, this is an important one. And before we wrap it up. During the advisory committee, there was an infamous question that came up on, will you pull the drug if your Phase III is not successful? And I think on the advisory committee panel, you guys said, yes, we will. However, technically, this is not an accelerated approval, it's a full approval. So what does that dynamic actually look like? Let's say there's a scenario where you missed the stats and/or it's a complete fail on the trial, like how does that look like? Do you have the optionality to run another study while the drug is on market?

Well, so first, obviously, we're planning for success. I mean I think with CENTAUR trial that is prespecified primary outcome and frankly, a pretty predictable disease, we go into PHOENIX with high confidence. But that being said, going back to what we said at the adcomm is we'll do this right for patients. And that's what we'll always do. And so I think, obviously, it depends on the data. I think that's what's going to drive the decision and we'll work with the medical community and regulators and the like. But you're right, it's a full FDA approval.

But to that point, even if it's complete negative this next trial, that doesn't negate the fact that prior trial was positive. So from a patient perspective, doesn't that warrant another study while the drug is out there and you're not necessarily making a call on the drug in July of 2024?

Yes, very might -- I mean, I don't want to make the call before we see the data and know where we stand. But I think when we have this data, one, I think it's important to note we have a full FDA approval. So it will be our decision here.

So they're not holding a gun to your head on that trial?

Well, it's in no way in the basis of our approval, right? There's no mention of this trial in the basis or our approval. But I think we consider ourselves to be important members of the ALS community. We're doing everything we can to try to transform this disease into a treatable disease. And so I think what that means is sticking close to the data, working closely with the medical community and doing right by patients.

I think that's it.

We should wrap it up there.

Thank you so much for taking the time with us. It's been very helpful.

So double the duration of therapy on a positive PHOENIX, is that basically the conclusion?

You can model whatever you want.

Sounds good. Thank you.

Excellent. Thank you, guys. Thank you all.