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

Good afternoon. I'm just going to read this disclosure. 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 rep. I forgot to do that last time. So I had to do that. So good afternoon. Welcome, Josh and Justin. What a year?

Yes. Thanks a lot.

It was just -- it was almost a year ago that you were sitting here today, and it's been incredible. Maybe you can just give a couple of highlights, and we're going to dive right into avexitide.

Sure. Yes. Well, first of all, thank you so much for having us here. It's really a pleasure. And yes, it was just a little over a year ago that we had the fortunate opportunity to acquire avexitide. And then this was our first chance to start to share more about why we're so excited about the opportunity. So avexitide is a competitive inhibitor of the GLP-1 receptor. So in some ways, the opposite of the GLP-1 receptor agonist. And the GLP-1 receptor controls or is one of the key controllers of insulin and glucose. And so a competitive inhibitor lowers insulin secretion and therefore, raises glucose. And it turns out that's very important in conditions of hyperinsulinemic hypoglycemia. And so where we are particularly studying it right now in -- is in what's called post-bariatric hypoglycemia or PBH, which is -- so millions of people have had bariatric surgery. It's a very effective treatment for weight loss, but a small percentage of people develop this very persistent symptomatic hypoglycemia. I'm sure we'll get into that a bit, but it's highly, highly debilitating. And this is not sort of your run-of-the-mill hypoglycemia. This is your brain starves of glucose, and you have all sorts of clinical manifestations ranging from bout of severe confusion to even loss of consciousness to even seizures. And people have these events very frequently, sometimes once or even more than that per week. So it's highly, highly debilitating. There are no treatments for people. And although it's a rare complication because there have been so many people who have had bariatric surgery, we estimate there are about 160,000 people in the United States today who have PBH. And unfortunately, once someone has PBH, it does not appear to go away. It's persistent, it can even be progressive. So avexitide has been studied in 5 prior trials of PBH, very strong data, very strong reductions in hypoglycemic events that supported FDA breakthrough therapy designation. And now we are running the Phase III pivotal study of avexitide in PBH and we are targeting completion of enrollment by the end of this year, data first half of next year, which would then support commercialization in 2027. So we're really excited about the opportunity. We've made a lot of progress, as you said, in the year since we were last at the conference. And we have two other assets in our pipeline as well, AMX 35 for Wolfram syndrome and then AMX 114 our Calpain-2 ASO for ALS. But I would imagine we'll probably spend the bulk of our time on avexitide given that it's in a pivotal study right now.

Yes. Great. Well, maybe we'll drill down a little bit on PBH in terms of -- you mentioned really the symptoms, but I think it's best to describe actually how this is unfortunately impacting people's lives and maybe go through some of the patient numbers. You did say some of the percentages, but I think, again, these are very large numbers and what the standard of care is today.

Yes, sure. I'm just making sure, it's working. So in terms of symptoms so people with PBH will experience sudden blood sugar drops, most often in reaction to a meal. So they'll have a meal and they'll see a spike in GLP-1, corresponding spike in insulin and then a big drop in glucose, which will make them get all of a sudden very -- in the extreme, lose consciousness, have seizures, but even can be things like trembling, confusion, being unable to complete a sentence, maybe not knowing where they are, feel weakness, things like that. And it's not just after meals. They can also have these during exercise. We had one patient who described to us that she can't walk a full lap around the track without having herself kind of go into hypoglycemia. It can happen during stress. It can happen from caffeine or alcohol. And sometimes it happens without any clear proceeding cause. And I think that's what really makes this disease tough for people. This could happen to them at any point. And so they're always at risk for falls. They're very -- they may not be able to drive. They're certainly not recommended to drive. They may have trouble in the workplace where all of a sudden, their sentences aren't making sense or they can't think clearly all of a sudden. So it makes their life very limited. Many patients want to have a caregiver around them at most of the time because if they do have a significant event, they want somebody there to be able to help them. So it really constrains the lives of the people who get it. In terms of the patient number, I'd say we've continued kind of hammering, drilling down on that and trying to learn as best we can. I think we kind of started from going through literature. And this disease are actually quite good literature studies. There have been large prospective studies that follow outcomes in people who have bariatric surgery. Those are some of the studies that have detected rates such as the 8% estimate that we're estimating for patient prevalence. And I'd say those have been consistent with some of the bottoms-up work we've done too and claims work. But probably most striking to me is when talking to endocrinologists, we've talked to quite a number who will say they have over 100 patients with this condition under their care. And that starts to have face validity too, that when you talk to physician after physician who have a large population, you start getting kind of comfortable around the 160,000 number as well.

And I'll say there's 2 anecdotes that I think have really cemented that I think PBH is starting to be a medical concern that many people are aware of. So recently, the endocrinology board exams are updated and included a question on post-bariatric hypoglycemia, which makes sense that this is a significant population and high unmet need. Recently, there's a group of physicians petitioning CMS for CGM coverage for PBH. And I'd say at the recent ENDO meeting, there was quite a lot of research going on in PBH. So I think it's really being recognized as a major unmet need independent even of the work that we've been doing.

Great. And you mentioned there's 5 existing clinical trials. And what did you learn from those clinical trials? And how did they help you design your current pivotal LUCIDITY trial?

Sure. So the initial 3 trials were kind of challenged trials, if you want to put it that way. Patients were given either active or placebo and challenged with a meal test, either a glucose meal test or a kind of mixed meal test, which would then cause their body because they have PBH to secrete excess GLP-1, excess insulin and then have a significant blood sugar drop. And what we're seeing in those first 3 studies was with avexitide in the majority of patients, you could completely prevent that low blood sugar drop. You attenuated the insulin spike that came after the meal. We saw that even with the single dose. In the initial studies even with a single dose, you're seeing statistically significant differences on glucose and insulin. Then the Phase II and Phase IIb follow people in a more ambulatory setting to look at how many hypoglycemic events are people having over the course of their daily life. And what we're seeing there is quite a significant reduction in so-called Level 2 and Level 3, Level 1, but I'd say we're most interested in Level 2 and Level 3 hypoglycemia, in particular, at the dose we're studying in the Phase III.

I'm sorry, can you explain what Level 1 and 2 and 3 means?

Yes, happy to. So I think these were first defined by the American Diabetes Association and a few other endocrinology groups and they got together to really define what does hypoglycemia mean. So Level 1 is defined by blood glucose less than 70 milligrams per deciliter, typically done by a fingerstick blood glucose measurement could be by CGM these days as well. And that's really where the people are advised to first start sort of taking notice. That's where your body will start to try to do things to boost up your blood glucose. Level 2 is where your blood glucose is less than 54 milligrams per deciliter. And so that's the first major event that we're talking about. That's where you start to enter into severe hypoglycemia. And the ADA defines a single severe episode of hypoglycemia is a medical emergency. And the reason is because the medical term of what happens is neuroglycopenic, which is kind of a fancy way of saying the brain is starved for glucose. Our brains are the highest glucose utilizers in the body. So when the brain is not getting enough glucose, it basically starts to shut down. So that's where people start to have real risk of those bouts of very severe confusion or even loss of consciousness as we were mentioning and can have really significant injuries, not to mention the fact that chronic severe hypoglycemia has really deleterious consequences as well. And then Level 3 is the person has had the events, the clinical events. So someone, for example, has lost consciousness. Basically, they're so significantly impaired that they need someone to help them. They need someone to rescue them. And so when looking at the types of hypoglycemia that we're talking about, the FDA outcome that's really looked at is the composite of Level 2 and Level 3 hypoglycemic events. And that's because that's what's really clinically meaningful. Those are medical emergencies. And as mentioned, again, to put it in context, whereas in the diabetes world, a single Level 2, Level 3 event is a medical emergency. People with PBH may be having one or more of these events every week. And that's because they're -- as opposed to taking exogenous insulin and trying to titrate your dose and that being the challenge. Here, because of these excess GLP-1 in the body, it's the patient's own insulin that's causing their blood glucose to plummet. And that's why this is such a hard disease for people to live with.

Yes. And just closing on that, too. So what we observed, particularly -- I won't maybe go through all the data, but particularly at the dose we're using in the Phase III, 90 mgs once a day. We saw a 53% reduction in Level 2 with a p-value of 0.004. We saw a 66% reduction in Level 3 with a p-value of 0.003. And when you look at the composite when you kind of combine those together, which is what we're doing in the Phase III as well, we saw a 64% reduction with a p-value of 0.003. So as we kind of go into the Phase III study, I'd say one of our biggest goals has been to try to keep as much the same as possible, given that we've seen strong results in the Phase II, in the Phase IIb, including on Level 2 and Level 3 hypoglycemia. We want to keep as much as we can the same to hopefully see that again in Phase III.

Right. So the actual trial design for LUCIDITY?

Yes. So I'd say, probably main thing we're trying to do is stay as consistent with the Phase II as possible. As you heard from Josh, very strong results, very significant reductions in hypoglycemic events. So I think we're trying to keep as much similar as possible while making sure, of course, that the trial would support an approval. So inclusion criteria, we've really tried to keep the same. We want to enroll a very substantially similar population. Level 2, Level 3 hypoglycemic events are what we're looking at, again, like we looked at in the Phase IIs on how we're measuring those, we're doing the same way. The probably key differences are that those were 4-week trials. This is a 16-week trial. And then those were crossover design studies, and this is a parallel group study. So those are the 2 key differences. But besides that, we really tried to keep substantially similar to the Phase IIs.

Right. So from your perspective, what is your target product profile ideally?

Yes, it's a good question. Maybe it starts with what's clinically meaningful. And as we've spoken to physicians, they really do look at Level 2 and Level 3, it's kind of the consensus within the ADA as well as medical emergencies. And so often what we hear is, if you're telling me that there can be less severe hypoglycemia, that is clinically meaningful. So I think we're really -- I think any significant reduction would be viewed as clinically meaningful. In our Phase IIb, we saw a 64% reduction. I think that is a phenomenal result. I mean I think that is a very substantial reduction in the amount of hypoglycemia that people would be experiencing. But I do think physicians would, I believe, be excited for any significant reduction in hypoglycemia.

Right. You made quite a splash at ENDO 2025. And I believe you've indicated that the clinical trial results will be available at some point next year. Should we anticipate any additional clinical -- like scientific conferences or data before the actual Phase III readout?

So I would say that the main will be the Phase III readout to your point. I think the really key milestones are target completion of enrollment by the end of this year, data first half of next year. But I'd say, given that this is a pretty fast study, we randomized our first study participant at the end of April. We're targeting data -- top line results first half of next year. So that's why I think we're going to stick to our execution for now, and then those will be really the key data readout next.

Right. And Justin, you mentioned earlier, you have breakthrough designation. What does that actually mean?

Yes. Yes, it's a really important point. It's one of these things that gets batted around, but I'd say breakthrough therapy designation, the sort of technical meaning is it's a treatment that as substantial benefit over existing treatment for a high unmet medical need. And what it means sort of more in practice, though, is FDA kind of has designated these as the most promising clinical candidates in development because what it means from an FDA perspective is that they're sort of committing their resources to this program or to these programs. So you get a number of things. First, companies get much more frequent interactions with FDA. Second is you expect to get a priority review. So it would be 2 months from filing and then 6 months for review instead of 8 to 10 months for review and a number of other benefits as well. But I think the main thing is it really highlights the strength of the data and the unmet need. And I'll say it's been very exciting for us. We've never had the opportunity to work on a breakthrough therapy designation drug before, and it's a privilege.

Great. And you mentioned the rapidity in terms of time line to actual product approval. So we might as well talk about commercial readiness, which is just around the corner.

Yes, happy to. Yes. So I would say the -- what we're really taking our time this year and into next year, building our market insights. I think that's the most important thing, especially in a new market like PBH, there are no treatments for PBH right now. And so our team really will be pioneering in terms of how do you address this unmet medical need. I think what we're finding so far is, as you might expect from the numbers, 160,000 people, it's an orphan disease, but it's a large orphan disease. And so I think what we're finding is that there are quite significant numbers of people who are diagnosed at key centers, seeking treatment, well educated. And so there's quite a significant population there. But there's also a substantial population of people who maybe have all of these symptoms, but they're not quite sure that they have PBH yet or maybe they are, but they're not sure what to do about it. So I think really for us, it's going to be about how do you do the right education in both sort of parts of the market. But it's very, I'd say, sort of classic rare orphan disease type commercialization is how we're thinking about this. So really targeted strategies. And I hope it builds nicely on our prior experience launching successfully in rare disease. I'd say the last piece that's really been a nice sort of wind in our sales is that there have been a number of recent rare endocrine drugs that have been approved and are having quite successful launches and quite successful market access as well. And so I think that's very nice for us as well, particularly as you go into that market access segment that there are a number of analogs to look to point to that have been recently successful in these types of spaces.

No, that's great. And earlier you mentioned the known mechanism of action. So I think beyond PBH, there could be some other indications that you might be able to apply avexitide to.

Yes, we certainly think so. And maybe I'd start surgically. So gastric surgeries are done for weight loss, bariatric surgeries. These can be Roux-en-Y. They can be vertical sleeve gastrectomy. There are other surgeries as well. But gastric surgeries are also done for a number of other causes. They can be done for gastric cancer to try to resect the cancer. They can be done for peptic ulcer disease, less common today, but there certainly are a number of people who have had gastric resections due to peptic ulcer disease. They can be done due to esophagectomy or they can be done due to esophageal cancer where somebody has an esophagectomy. Sometimes they're even done for other cancers in the gut to kind of cut out the margins and everything like that. [Audio Gap] So there are -- one, I'd say there are quite a number of other gastric surgeries that have been shown in the literature to have the big GLP-1 elevation to have the hypoglycemia, to have what seems to be a very similar set of pathophysiology as what we see in bariatric surgery. I'd also say when we look at other disease of hypoglycemia, such as congenital hyperinsulinism and some other conditions as well, there also seems to be an opportunity there. You asked about breakthrough. This drug actually has 2 breakthrough therapy designations. It has one in post-bariatric hypoglycemia and one in congenital hyperinsulinism. I would say we're focused on PBH for the time being, but there was also quite strong data with this drug and mechanism in [ CHI ].

Right. Good. And I guess lastly, with respect to avexitide, you solidified a partnership with Gubra in terms of developing a longer acting. Maybe you want to comment on that?

Yes, we'd be very happy to. We've been very pleased with that partnership. So sort of backing up, so avexitide, we think has a great profile in terms of the efficacy we've seen so far, the safety that we've seen so far. It's a once-daily subcutaneous injection, and we think that's perfectly appropriate to bring to market. There are other analogs to look at as well, especially for such a significant unmet medical need. That being said, if you can have the same efficacy, the same safety profile, longer acting would be nice. And so we were introduced to Gubra, who are a Danish company, who are really some of the world's true experts in peptide drug development as well as incretin. And it was a really nice match from the start because I think we bring our expertise in a post-bariatric hypoglycemia. We were seeking to try to make a potential longer-acting competitive inhibitor of the GLP-1 receptor. They had already been studying the GLP-1 receptor. Unsurprisingly, they have those assays up and running, and they bring their very robust peptide and long-acting peptide expertise to the table as well. So we signed that research agreement at the end of last year. We just recently announced that we have both in vitro and in vivo data on candidates that show the potency that we're looking for as well as would support half-lives that would support longer acting and less frequent dosing. So we haven't given exact time lines to clinic yet, but the partnership is going really well, and we're very excited about that. So I think long-term our goal would be to bring avexitide to market, very significant unmet need, continue to look at these additional opportunities, as Josh was just mentioning, and then hopefully come with a longer-acting version in the future as well.

Great. Before we move on to the rest of the portfolio, any other questions on avexitide? Okay. Great. So maybe we'll touch on a few other things that are going on, lots going on here. So I think you -- with respect to AMX0035, you recently announced the termination of the PSP program. But obviously, you've got an ongoing a very successful program in Wolfram. Maybe you can comment on 0035.

Sure. So AMX0035 is a combination of sodium phenylbutyrate and tauroursodeoxycholic acid. These are compounds that have been studied quite a lot by a number of labs, have shown very frequently reductions in ER stress, reduction in various mitochondrial pathways, leading to reduced cell death and benefit in a number of disease models. We conducted a study in PSP based on some prior data we had seen on tau and PSP as a tauopathy. So we believe there was good scientific rationale. Unfortunately, that study didn't bear out. So we ultimately discontinued the work in PSP. As it relates to Wolfram, with our mechanism, I guess, at this point, probably about 8 years ago, we got contacted by a researcher who said, I'd really like to work with you in Wolfram syndrome. Wolfram syndrome is the prototypical disease of ER stress. And here we are with taurursodiol and phenylbutyrate, which have shown kind of repeated and clear effects on ER stress. So over multiple years, we ran preclinical models. It's a monogenic disease. So the preclinical models are generally models of not having that gene and what that does to both beta cells and neurons and then eventually in mice. Those results were quite strong in the preclinic and ultimately led us to go into a pilot study in Wolfram, which we conducted a 12-patient open-label study. Maybe it takes -- is worth kind of just saying quickly what is Wolfram syndrome. This is a monogenic form of diabetes where it initially starts by looking like type 1 diabetes. So people are typically diagnosed with type 1 diabetes. But then as they go on, they start to become fully blind in both eyes. They become death. They get speech swallowing and breathing difficulties and they can have some movement difficulties as well, usually passing away in the early 30s. So it starts by looking like diabetes, but progresses into a much more kind of multisystemic very severe disease. So in running our trial, we tried to track those symptoms. So we looked at the diabetic symptoms, we looked at visual symptoms. We had kind of global assessments of their symptomology as well. And what we saw initial open-label study, 12 patients, but what we saw across the outcomes we measured was stabilization or improvement, which was exciting in a disease that what you'd expect is progression and worsening instead seeing stabilization or improvement. So right now, we're working with -- and I probably should also mention, we estimate there about 3,000 people with Wolfram syndrome in the United States. So right now, we're working with FDA on a potential Phase III design. This would be the first pivotal study in Wolfram, and it is multisystemic. So there is stuff to work through in terms of exactly what that optimal design is. But our goal, given the severity of disease is to find a path that is -- gets us to the finish line as quickly and efficiently as possible.

Great. So you would expect to commence this registration trial next year?

We haven't given an exact time line to start the study. But I think given the patient need here, as we align with FDA, we definitely want to move as quickly as we can.

Great. Excellent. You also have another candidate 0114 in terms of an antisense oligonucleotide. Perhaps you can comment on that.

Yes, I would be very happy to. Thank you. So it is an antisense oligonucleotide targeting Calpain-2. And as one person put it to us recently, Calpain-2 has been a target hiding in plain sight for many years. And the reason is because while I think there's been a lot of research in the neurodegenerative disease space, one area that's been reasonably well characterized is how do neurons and axons actually degenerate, which is what underlies all of these neurodegenerative diseases. And Calpain-2 is one of the key proteases in that process. So as you might guess from the name, the cal is calcium, so it's a calcium-activated protease. So when the calcium levels get to a certain degree, then Calpain-2 is activated and essentially cleaves many things, including the cytoskeleton. So Calpain-2 activity or amount has been implicated in a number of neurodegenerative diseases, but particularly in ALS. So the challenge though has been there are multiple calpains. And so you want to, in our opinion, pretty exquisitely target Calpain-2 and not the other calpain and you want to be able to get enough CNS exposure. And so that's where we thought an intrathecally administered antisense oligonucleotide would be a really nice approach. So we didn't mess around the sort of any of the chemistry in terms of the backbone or some of those sorts of dynamics with antisense oligo because I think then you can have more predictability in terms of your dose, in terms of your tox, but then have the sequence specific for Calpain-2 and not for the other calpain. And so what we've seen preclinically is very strong knockdown of Calpain-2 as well as reductions in key biomarkers of Calpain-2 activity, including neurofilament light chain. So Calpain-2 is one of the key proteases that clears neurofilament. So we're now in a multiple ascending placebo-controlled trial in people with ALS. We are enrolling the first cohort now, and we're targeting by roughly the end of the year to first -- have our first cohort data. So that would be safety as well as biomarkers. So we get lumbar punctures on people at every visit, given that it's an intrathecally administered drug. And then because calpain cleaves so many things, there are a number of sort of calpain signatures, as I mentioned, including neurofilament light chain that we'll be looking at as well. So we're very excited at the potential of that program. Obviously, it's early days, but I think a really well-researched target and really being targeted in the right way for the first time.

Great. And I'm sorry, how many cohorts -- like so you said the initial cohort data at the end of the year. So with that information in hand, what do you envision the next steps there?

Yes. It's a multiple ascending dose study, 4 dose cohorts envisioned ultimately.

Right. So to your point, this first cohort, the safety will determine then going into the next cohort as well as the target engagement from the biomarkers that we'll be looking at.

Great. Okay. Well, good. Well, look, I think we've talked about a lot. And if I can say what's been accomplished over this last year is amazing. And obviously, the prospects. I mean, maybe we should review the milestones that are coming up over the next 12 to 18 months, a lot is coming up in 12 months in terms of the full portfolio, your current cash, your ability to deliver on those milestones, et cetera.

Sure. So maybe unsurprisingly, I think a lot of our focus -- vast majority of our focus, frankly, is on avexitide given that it is nearing its Phase III readout. So we expect to complete enrollment by the end of the year, data in the first half of next year. And then, of course, we will try to move towards potential approval as quickly as we possibly can following that. So that's certainly where the vast majority of our focus is. We also are interacting with regulators, expect to have an update on the Wolfram Phase III by the end of the year as well as early cohort data from 114 by the end of the year as well. But we are quite excited. Thank you for the kind words as well. I'll say as we've learned more and more about avexitide, we just kind of get more excited. The more physicians we talk to, the more diligence we do. We've had the benefit at this point of getting to speak personally with a number of endocrinologists. And it's generally a consistent story of these are patients who have a really substantial unmet need. I really have nothing for them. I want to be able to do something for them. So I'd say kind of for our whole company, our mission is to try to help people who have these types of unmet needs and it makes us really thrilled about the potential in PBH.

Fantastic vision. Thank you very much.

Thanks so much.