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

Disclaimer, for important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. Good afternoon, Justin and Camille. Great to have you here.

Thanks so much for having us.

So much has happened over the past year at Amylyx. You've got 4 clinical trials ongoing. And so, there's a lot to talk about today. So, congratulations on all that. And I guess, most recently, you in-licensed a product called Avexitide. So, it would be great to hear a little bit about that.

Sure. Yes, very happy to. So, thank you. So yes, so we're very excited about our pipeline. We have AMX0035, which is a combination of small molecule in 2 clinical programs: one in PST. We'll have data -- interim results on that mid-next year. And in Wolfram syndrome, we announced interim data earlier this year, which was quite encouraging, and we have further data in October. And then our antisense oligonucleotide in ALS, we're working to get first participants enrolled by the end of the year, and we'll have our first cohort-level data next year on biomarkers, such as neurofilament light chain. But then to your point, the summer, we're very excited to acquire avexitide, which is a first-in-class GLP-1 antagonist first for the treatment of post-bariatric hypoglycemia. Post-bariatric hypoglycemia is a condition that affects we estimate about 160,000 people in the U.S. and grows as over time with bariatric procedures. It's basically a condition that happens in a rare group of people, roughly 1 to 3 years after. So, avexitide has breakthrough status for post-bariatric hypoglycemia. There have been 5 trials supporting its use in raising the glucose nadir and thereby helping with hypoglycemia. It's really Phase III ready. So, we're working to get that trial up and running in the first quarter, and we figured the data in '26 and hopefully, commercialization in '27. So, we're super excited about the asset. And the fact that it's a first-in-class GLP-1 antagonist, we think is really exciting, too, because we've seen how much power there is in targeting the GLP-1 receptor, but this would be the first antagonist as opposed to the many agonist.

Well, maybe we'll get into a little bit more detail on that so people understand the differences between antagonism and agonism. But maybe stepping back because I think you set out -- I'm not sure if anyone can close the door there, please. Thank you. You set out some very important criteria in terms of products to in-license. And I think avexitide really fits the bill in terms of that, and it does provide the context in terms of the profile that you've just delineated. So maybe we can touch on that first because I think it does speak to, obviously, the excitement associated with the product.

Yes, absolutely. Happy to start and then pass to Camille who has a wealth of experience in these areas. So, we've had a long process of looking for opportunities to complement our existing pipeline. And I think we've learned that there's no shortcuts. I think you have to do deep diligence to really see many assets, maybe look good on the surface and then you dig in and they can be more challenging. Avexitide, really the more we learn, the more we got excited. So first, on the surface, the clinical trials looked really good. So, every clinical trial showed reductions in insulin raising of the glucose nature in hypoglycemia. That's what led to the breakthrough status from FDA. In fact, the next idea, 2 breakthrough status is also it has breakthrough status in congenital hyperinsulinism. I think that speaks to the pharmacology as well. We understand GLP-1 fairly well. We know that antagonism of the receptor lowers insulin. It prevents insulin secretion and thereby raises the glucose nadir, so of course, helps with hypoglycemia. I think critically for us as well, I think it really had -- they've done a nice job with their manufacturing scale up, their toxicology program, some of the things that maybe can trip up development programs. So, it's really Phase III ready. And I think critically as well, PBH is an orphan disease of really high unmet need. So, this is a persistent progressive form of hypoglycemia, where people are often afraid to leave their homes. They're afraid to be alone, and it's because they experience often multiple hypoglycemic events a week and hypoglycemic events really are that the brain is not working the way that it's supposed to. They're generally characterized as neuroglycopenia. And it's because our brains are perhaps the highest glucose utilizers in our bodies, and so when we don't have enough glucose, our brain don't function. So, it's anything from lack of focus and tingling and those sorts of things. The loss of consciousness and seizures. So, if you're constantly in fear of these, oftentimes people have the driver's license is taken away. They often have to live with family members. They can't work. So, it's a really severe condition. And very sadly, there's nothing for PBH right now. Endocrinologists and doctors who care for people with PBH try to manage with diet intervention. There's glucagon rescue, but that has its own challenges. So, it's a really unmet need. And I think what we've shown is that we have a team that's very good at developing assets in the orphan space. And then if they work, making sure that they get to people effectively. So, those are the things that really attracted us. And Camille, I'll pass to you.

Sure. Absolutely. I would say as well, stepping back a bit, understanding that the driver of the disease -- excess GLP-1 because of the change in the anatomy, food is seen coming through to the small intestine, releasing GLP-1. The amount of food is seen as excessive to what is actually ingested. And so excess GLP-1 is secreted up to 10x as much as would be appropriate for the size of the meal. And that, that fact then has taught us more generally that that's the driver of the disease process. And avexitide is addressing that driver of the disease, namely blocking the excess GLP-1 at the beta cell level so that excess insulin then is not secreted. And when Justin speaks of the Phase III-ready nature of the study, it's absolutely true. We did deep diligence on the regulatory meeting minutes that Eiger had. And of course, because of breakthrough therapy designation, there are multiple iterations and meetings and minutes. And it was clear that the most recent iteration with a proposed Phase III trial design was finally agreed to by the agency, namely primary endpoint composite of Level 2, Level 3 hypoglycemia. And we can go into those definitions in a moment. The dose, 90 milligrams daily, where in the Phase II study, we saw a 66% reduction in the hypoglycemia Level 3 events, which is so meaningful because those are the events that require assistance by another person. Also, they agreed to the nature of the trial design, randomized, placebo-controlled trial, and Eiger had proposed a 90 participant 12-week trial. Now we have our own biometrics team at Amylyx, which is a luxury and it's great and very important actually. Now they're doing their analysis, and we're refining around the edges, the details of the trial. But we want to be sure that inclusion and exclusion criteria, the patients who we ultimately enroll are those that we capitulate what was done in Phase II as well as addressing those individuals who are most severely impacted by PBH.

So, there was a lot of content in there, Camille. So maybe like pulling back, so 5 clinical trials underpinning the product. And we now know what the Phase III clinical trial design is. Maybe you can just dissect the clinical underpinnings and then the read-through from those to what you're anticipating.

Absolutely, Absolutely. So, the first 3 studies were a single dose IV, which showed very clearly a reduction in insulin production and increase in the glucose nadir, statistically significant. The second was a single ascending dose study SubQ, third single ascending multiple ascending dose study SubQ. Those all were used glucose tolerance test to look at the insulin production and the glucose levels. The Phase II PREVENT study, which has been published, looked at 2 doses dose regimens, actually, 60 milligrams once a day, 30 milligrams twice per day and did also use mix meal tolerance test to show the reduction in insulin production and the rise in the glucose nature, statistically significant, by the way. And there was a double crossover study with a run-in placebo run-in to ensure individuals had a certain level -- certain incidence of Level 2, Level 3 hypoglycemia.

And you had mentioned Level 3 before you defined at Level 2.

Level 2 is based on a glucose level of less than 54 milligrams per deciliter. And these studies use CGM continuous glucose monitoring to signal when glucose levels were going low. Justin mentioned, individuals with this condition have low glucose anyway. And in this instance, the glucose going below 50, 54, we would not be able to function with those glucose levels. These individuals have a lower set point. But even at that, the individuals start to have the autonomic symptoms and some of the neurological consequences. So, what happens with, the glucose monitor has an alarm, alarm goes off, they do a finger stick and confirm the low glucose. So that is a level 2 that if unmanaged, people can often go into Level 3, where they are unable to assist themselves. It's less about glucose levels and more about the clinical condition of the individual. So, they need somebody to be there to make sure they don't fall in the shower or fall in a Walmart. And I use these examples because that's what we heard from the participants in the study. And often, that also means some assistance and rescue potentially.

And then 2 Phase II studies supporting it. In the second Phase II, again, they tested 2 dose levels, 45 mg twice a day or 90 mgs once per day. The 90 mg once per day, we think has the best efficacy as well as patient friendliness. So that's the dose we're going to take going forward. But high level, there have already been 2 Phase II studies that hit the exact end point that we're now taking into Phase III, which is this composite of Level 2 and Level 3 hypoglycemic events, which has been agreed to with FDA. In fact, it's in the FDA guidance when you're running trials for hypoglycemia that a composite of Level 2 and Level 3 events is an acceptable primary outcome. So, the reason I think we have such confidence going into the Phase III and what attracted us to the asset as well is 2 Phase II that already hit this endpoint with breakthrough status now going into a Phase III, again for a very unmet need. So, we think it's quite clinically derisked as far as development goes.

I'll make one other relatively small point, but it might be implied, but I'll explicitly state the FDA agreed to one clinical trial right as well.

Fantastic. Great. And so, the specific plans in terms of initiating the pivotal trial?

Yes. So, we are on track very much to initiate the trial first quarter of 2025, and by initiate, I mean, enrolling participants in the study, and we anticipate that we'll have data read out by 2026.

And maybe just touch on the IP position of the product.

Yes. So great IP position. Again, something we did a lot of diligence on, as you might imagine. So, 11 issued patents. The base case we're seeing for the complimentary patent goes to 2037. That's without patent term extensions, a patent term extension, maybe a few years past that, but very solid IP as well, and of course, orphan designation as well.

And maybe just thinking about the competitive landscape. Are there other drugs in development addressing this area? And I guess just with respect to the advent of GLP-1, how are you thinking about the market opportunity?

Yes. So, I would say, currently, really unmet need, there's nothing approved specifically for the treatment of PBH. Physicians will use medical nutrition, acarbose, but again, still very high unmet. Those are really not specifically for PBH. In terms of the landscape, there's a company, MBX that has a GLP-1 antagonist for the treatment of PBH in early development. It's just in Phase I now. But aside from that, there have been several other companies looking at various mechanisms around insulin glucose, in PBH. But as Camille was saying, we really think GLP-1 antagonism gets to the part of the disease. And again, I think that's why, for example, in the Phase IIb with the 90 mg dose, there's a 66% reduction in Level 3 events. And the P value is point 0.003, so very highly significant and clinically significant results.

And I think you whizzed by the stat, but 160 -- maybe just go over the target patient population. This is a rare disease, but it's a large rare disease.

That's right. So maybe to back up. So, over the past decade or so, there's been well over 2 million bariatric procedures that have been performed in the United States. Of those, roughly 1 in 3 people will experience hypoglycemia. Those can often be managed through nutrition and other interventions. We estimate that about 8% developed this very persistent, significant, often progressive form of hypoglycemia that is resistant to such things as nutrition. Because it's 8% of a very large number, it's about 160,000 people who have post-bariatric hypoglycemia in the United States today, with the bariatric procedures that happen annually, we estimate there's probably roughly an additional 16,000 cases, new cases every year of PBH, so it's been quite enlightening, talking with endocrinologists, many of them will say, yes, I have many patients who have PBH. I don't have much to offer them. And they'll often tell us, these are some of the most fragile patients that I have, they're afraid to travel from their home to my clinic. So, it's a really unmet need. And to your point, it's orphan, but it's quite a significant orphan condition. And maybe the last thing I'll say, too, is that while we're studying for people who had weight loss surgery and then develop this, there are other surgeries and other reasons that people can develop this form of hypoglycemia as well, such as in gastric cancer, gastrectomy is often standard of care. It's one of the leading killers in many Asian countries. And again, with gastrectomy as Camille was saying, when you alter the gut, some people can develop this form of GLP-1 really driven hypoglycemia. So, we think that there's probably many, many people who are needed of help. And again, having a first-in-class GLP-1 antagonist, we feel like we may have a real opportunity to change lives.

I know Kathleen, you had asked about with GLP-1, what does that mean, right? And that is something that we consider also, but in speaking with the endocrinologists and speaking also with bariatric surgeons, it's not going away for sure. And then we can't really predict whether it's the use of bariatric surgery will increase or decrease, or by how much either way. What we are reasonably confident is it's not going away completely for sure. And the sample size, the population is already quite large. So, if it's reduced by 10%, even 20%, that's good for people who have obesity, there's increased awareness of obesity. Nine-plus percent of people per population in the US have elevated BMI above 30, and those are individuals for whom weight loss is a major problem. And maybe the glimpse, maybe combinations will help, but it's not necessarily for everyone. And there will always be a need for something more. A different approach because of all the consequences of being morbidly obese.

I think the last point is that obviously this is a rare disease, but obviously the identification of these patients is absolutely right in front of you in terms of the people who have undertaken the procedures versus having to put all the metrics in place and in terms of identifying a simple glucose level will.

Exactly. And again, in our discussions with endocrinologists, many of them have even set up multidisciplinary clinics for people with PBH. They'll have a dietitian, a nurse. Often social support. So, this is a well-known issue in endocrinology. And again, hopefully, being able to provide a tool to really help people get their lives back is really exciting.

Any questions on that side? Okay. Well, I think then will move on to 0035, and you've got 2 indications ongoing. Perhaps you'd like to describe Wolfram's disease, and then we can move on to PSP.

Thank you, Jessica. So, the wolfram syndrome, so this is a program we've been working on for over 7 years now. So, Wolfram syndrome is a monogenic disease caused by mutations in WFS1. WFS1 is an ER transmembrane protein that's very close to what's called the mitochondrial-associated ER membrane. And so, deficits in this caused both ER stress and mitochondrial dysfunction. And what we see is that in cell types that has high expression of WFS1 and/or are only so resistant to this form of cellular stress you see cell dysfunction and cell death. And so, it's the same pathophysiology from cell type to cell type. It first presents in the beta cells of the pancreas. And so, the disease first presents is what looks like early onset diabetes. So, kids age 6,7,8,9 have what looks like early onset diabetes. What then I think makes it clear that it's not just early onset diabetes is kids get progressive vision loss and then progressive hearing loss, ataxia and early mortality. It's a really tough condition. And again, it's the same pathophysiology, this ER stress and mitochondrial dysfunction from cell type to cell type to cell type. There are no approved treatments currently for Wolfram syndrome. We estimate there's about 3,000 people in the United States who have this. It is indeed a global disease. There are people who had WFS1 mutations globally. And as you might expect, with a small molecule or a combination of small molecules, one that targets the ER stress and one that targets mitochondrial dysfunction. It's almost tailor-made for Wolfram syndrome. So, we had done years of preclinical experiments with one of the world experts, Dr. Fumihiko Urano at Wash U, looking first in cellular cultures and beta cells in iPSC neurons derived from people with wolfram syndrome and showed quite encouraging results. Then we had an in vivo model of Wolfram syndrome. And now just recently, we announced our interim clinical results in Wolfram syndrome, which were very encouraging, and we can talk a bit more about that, but seeing increases in C-peptide, which is very different than what one would expect. So, our Wolfram program, we're quite excited about. And as we said as well in October, we'll have further data from that program.

Well, maybe I don't know Camille want to provide some of the details from the intermodal? And what the expectations for the data readout?

Of course. So, what we did an interim analysis earlier this year, as mentioned, where we looked at the impact of AMX0035 on the beta cell, in particular, and our priori hypothesis was that the beta cell. We would slow the deterioration and loss of beta cell function, loss of beta cells. And we measure that by using a mixed meal tolerance test to stimulate the pancreas, to secrete glucose and insulin to help with the diabetes. And the measure of insulin, which is independent of exogenous, insulin C-peptide that's also produced. It's one of the byproducts of insulin secretion. So, we measure C-peptide response in a mixed meal tolerance test. Expecting from baseline, maybe we'd see a slower decline or maybe a decline in the C-peptide levels. What we actually saw both at 12 and 24 weeks was an improvement in the C-peptide response. So that was very exciting, and it's further supported by other measures of glycemic control, hemoglobin A1C, time and acceptable glucose range and other measures as well. So that was very encouraging for us. The other measure we focused on during our interim was the visual acuity. As Justin mentioned, many of these individuals lose their sight because of optic atrophy. Again, the neurons are dying and individuals lose their sight. And what we saw was stabilization or maybe even slight improvement in the visual acuity of these individuals, again, in a disease that's otherwise progressive. So, we're very encouraged by those results. And in October, we'll be sharing all 12 individuals from the study through 24 weeks, and a subset to 36 and 48 weeks. We'll be looking again at the glycemic control measure C-peptide response to a mixed meal tolerance test as well as other measures such as hemoglobin A1C and the visual acuity.

Yes. And that data will be at a medical conference, the International Society of Pediatric and Adolescent Diabetes. That's been accepted for an oral presentation, which I'm very proud about.

Excellent. And with that data in hand, what would you anticipate the next steps for the program.

The next steps is we already are engaging with a number of stakeholders, including the FDA to work on a design and finalize the design for a Phase III study, which we believe at this point would be the definitive study going forward. Since this is an orphan drug. It has orphan drug designation. And as Justin said, there's nothing for these individuals. And no one's really studied it either. So, we're sort of the vanguard of trying to solve this problem.

Fantastic. Any questions on Wolfram? Okay. So, on PSP, you expect to read out some interim data in the middle of 2025. And as I understand, have a go no-go decision with respect to that program. So, I think it would be helpful to discuss the parameters on that decision?

Yes. Certainly, happy to start. So first, what drove us into PSP. So, we ran about 100 participant Alzheimer study. We published the data just about a month ago. And we looked at a number of CSF biomarkers in the Alzheimer's study. And what really jumped off the page were the reductions in tau and phosphorylated-tau 181, very, very highly significant reductions. And so, we're talking with people in the neurodegenerative disease world, and they all said PSP. PSP is really considered the purest tauopathy. The genetic association with tau and PSP is like to the negative hundreds. I mean, it's very clearly a tau-driven neurodegenerative disease. So that led us into a trial for PSP. For those who don't know, PSP is another really devastating neurodegenerative disease. People think that it's Parkinson's when it presents, but it's really clearly not Parkinson's. And it eventually leads to people being locked in, and then usually dying within about 7 to 9 years, and there's nothing approved for PSP. In fact, one of the ways they know it's PSP is because they give dopamine therapy, and it doesn't work. And it's another significant unmet need. The estimates currently are there about 20,000 people in the U.S. who have PSP, it's very under diagnosed. There's been recent autopsy studies that find many people who were diagnosed with Parkinson's actually have PSP. So, we think 20,000 is really a low estimate. So, we're very excited about running the study. In the interim analysis mid next year, we're going to do a full efficacy analysis. So, we're going to look at biomarkers like tau. There's a particular pattern of brain degeneration you can measure by MRI, so we'll be looking at that as well as there's quite a reliable rating scale, the PSP rating scale. So, we'll be looking at a subset of the participants from the study, who make it to the study endpoint in that interim analysis. And based off of that, we'll decide to expand or not into a larger Phase III. But it's a program we're really excited about. AMX0035 has already shown reduction in the key biomarker. In many ways, it's the first intracellular agent that can lower tau being tested in this disease. Now the question is, with tau lowering do you see the associated changes in clinical outcomes as well?

And would you expect those biomarkers to be part of the Phase III endpoints?

Certainly, I think that's very important. And I think in a disease like PSP, which is maybe a little more homogeneous than other neurodegenerative diseases where we have a clear biomarker associated with the disease. We have a pretty reliable rating scale. We have a pretty clear idea of how the brain degeneration pattern occurs. I think all of those endpoints are important in assessing efficacy.

And maybe just going back, you had mentioned there were a number of tauopathies. I mean, would there -- depending on the clinical trial results, could this be broader than PSP?

I think there would be great excitement. I think our goal right now is to focus specifically on PSP. But I think there's a huge unmet need in tauopathy generally. So, I would imagine with positive results that people would be excited about the potential and other tauopathies as well.

Great. And I guess the last candidate is 114. Perhaps we can touch on that.

Sure. This is a program. Again, we have been very committed to the ALS community and trying to solve for this devastating fatal disease for a number of years, as you well know. And we continue our crusade to find a solution. Our 114 is a 5-10-5 ASO, anti-sense oligonucleotide that targets Calpain-2, which is a protease that cleaves neurofilament and is involved in axonal degeneration. And so, of course, there are data in ALS with regard to the degeneration of the neurons due to axonal degeneration, neurofilament byproducts are seen in ALS as well elevated significantly in ALS. So, we have biomarkers already in this instance, and we'll be studying the ASO in ALS. intrathecal ASO, it targets very specifically Calpain-2 and only Calpain-2 based on the sequence, which is very important since there are about 12 other Calpain in our body. We'll give it intrathecally, so we'll get it to the neurons where it's really needed. And we'll be conducting a multiple ascending dose study in individuals with ALS with our goal of beginning the Phase I multiple ascending dose study end of the year with data throughout 2025. Cohort by cohort.

Fantastic. Well, I can't imagine we're going to be sitting here next year, and there's going to be an incredible number of milestones that have been achieved. Maybe, Justin, you'd like to just recap what we can envision that's going to happen over the next 12 months?

Thank you, Jessica. Yes, we're incredibly excited. I mean I think all of us at Amylyx are very dedicated to try to help people with unmet needs, and we now have that opportunity across all 4 of our programs. So, AMX0035 and Wolfram syndrome will get data in October presented at ISPAD. Our PSP program, we'll have interim results on that mid next year. Again, that will be a full look at efficacy in totality. Our 114 antisense oligonucleotide against Calpain-2, that will be going into a clinic and we'll have our cohort level data next year. And then our recent acquisition of avexitide, will be going into the pivotal study in the first quarter with readout soon in 2026. So, we're really excited about our programs and the opportunity to help many people in need.

Great. Well, thank you very much.

Thank you, Jessica.