Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) Q1 2023 Earnings Call Transcript

Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) Q1 2023 Earnings Call Transcript May 14, 2023

Lindsey Allen: Good afternoon and thank you for joining today to discuss our First Quarter 2023 Earnings. With me on the call are Josh Cohen and Justin Klee, our Co-CEOs; Margaret Olinger, our Chief Commercial Officer; and Jim Frates, our Chief Financial Officer. Before we begin, I would like to remind everyone that any statements we make or information presented on this call that are not historical facts are forward-looking statements that are based on our current beliefs, plans and expectations, and are made pertinent to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to our expectations with respect to RELYVRIO and ALBRIOZA, statements regarding regulatory developments and the expected timing thereof, our business strategy and outlook and our expected financial performance.

Actual events and results could differ materially from those expressed or implied by any forward-looking statement as a result of various risks, uncertainties and other factors, including those set forth in our most recent filings with the SEC and any other future filings that we may make with the SEC. You are cautioned not to place any undue reliance on these forward-looking statements and Amylyx disclaims any obligation to update such statements unless required by law. Now, I will turn the call over to Justin.

Justin Klee: Thank you, Lindsey, and good afternoon. As everyone on this call knows, there’s an enormous unmet need in ALS and other relentlessly progressive and fatal neurodegenerative diseases. It is our mission at Amylyx to one day and the suffering caused by these diseases. Our treatment delivery enabled us to make meaningful advances toward and continued investment in our mission. During the first quarter, we generated 71.4 million in net product revenues. Reflecting the significant progress we continue to make toward our goal of ensuring every eligible person living with ALS has access to RELYVRIO. RELYVRIO is the first and only approved treatment for ALS set in a randomized placebo controlled trial. Both met its pre-specified primary outcome demonstrating a statistically significant benefit and function and showed a benefit on survival and a longer term post hoc analysis.

These data suggests that ALS can in fact be treated. The full approval of RELYVRIO is an important step toward ALS one day being a manageable disease. The ALS community has been waiting for meaningful treatment options since the disease was first characterized over 150 years ago. And we believe that delivery will eventually be a foundational therapy for ALS. In the first quarter, we saw a continued high level of interest from the ALS community and RELYVRIO broadened insurance coverage, and high levels of engagement with our Amylyx care team, also known as act, just two quarters into launch over 10% of the approximately 29,000 people living with ALS in the US are now on RELYVRIO. Even with that success in our first six months, we have more to do.

There remain many more 1000s of people living with ALS in the US and at least 200,000 people living with ALS globally. We are still in the early stages of our journey, and our team remains hard at work. Shifting to our plans internationally, we are diligently preparing to help bring our medicine to all eligible people living with ALS around the world. The regulatory review process in Europe remains ongoing, and we continue to expect an opinion from CHMP mid year and a decision at the earliest in Q3. Overall, we believe we have a strong scientific position that is supported broadly by the ALS medical and advocacy community and a capable team who is leading our process. We continue to prepare to execute a successful launch in the EU if approved.

We are proud of our team’s progress on advancing our mission. And now I’ll turn the call over to Margaret to share a commercial update.

Margaret Olinger: Thank you, Justin. As we enter the seventh month since our US launch, we remain focused on three key priorities. The first is our effort to drive awareness and education about RELYVRIO among people living with ALS and clinicians. This includes educating that RELYVRIO is a first approved drug for adults with ALS to demonstrate a statistically significant benefit in function and a clinical trial, as well as a benefit on survival and a longer term post hoc analysis. Our efforts to drive awareness are yielding strong results. We are seeing continued interest and demand for RELYVRIO. As of March 31, there were roughly 3000 people on RELYVRIO in the US more than double the number of people on RELYVRIO at the start of the quarter.

We are pleased that this many people have gained access to our important treatment. I think it’s worth spending a minute to provide some additional context on the strength of our launch. While we knew there was pent up demand, the fourth quarter and first quarter, were still well ahead of our expectations. The rate of net patient’s [indiscernible] has begun to moderate as expected. However, we still see significant demand for people living with ALS, and physicians alike. Importantly, we still have plenty of room for growth, both at the top ALS centers, and the broader neurology community. [indiscernible]. Now, let me run through a few metrics that show our progress, but also the growth opportunities ahead of us. By the end of the first quarter, approximately 65% of the top 500 US prescribers and approximately 95% of the key ALS centers had prescribed RELYVRIO out to at least one person since launch.

Prescribing remains fairly concentrated, with roughly 80 prescribers mostly at major ALS centers, representing approximately half of all RELYVRIO prescriptions during the quarter. While we are encouraged with these data points, we see an opportunity for broader and deeper uptake of key ALS centers, and the opportunity to continue to penetrate the group of top prescribers. Additionally, we believe we have a large untapped opportunity for additional growth outside of this group of top prescribers as we expand our outreach and education efforts more broadly. Our second priority is engaging with payers to work towards our goal of ensuring that every eligible person who can benefit from RELYVRIO has access as quickly and efficiently as possible.

At the end of the first quarter, U.S. insurers, representing approximately 50% of covered lives, have published formal coverage policies, including many of the key national and regional plans. The vast majority of these insurers provide broad access to RELYVRIO. For people living with ALS who go through the medical exception process we are pleased that approximately 80% of prior authorization requests have been approved on the first admission. We continue to see a wide range of people living with ALS in terms of time sense initial diagnosis, interested in and gaining access to RELYVRIO. Our team remains engaged with insurers across the country. And we continue to anticipate most plans will formalize their policies during the first half of this year.

Our third priority is ensuring eligible people living with ALS, have positive interactions with their treatment journey with RELYVRIO and ALS clinics have positive interactions with Amylyx. This includes facilitating an organized, clear process to get people prescribe RELYVRIO access to the therapy as quickly as possible and optimizing people’s experience accessing RELYVRIO as best we can. Our team is working expeditiously to get people living with ALS, who have been prescribed RELYVRIO on therapy in the first quarter. On average, it took about 30 days between receiving an enrollment form, and RELYVRIO being shipped down from a little more than 45 days in the fourth quarter. And we expect to make additional progress on this metric in the second quarter with the benefit of more insurers having formal coverage decisions.

In the limited cases where access hasn’t been granted through an insurer, our interim access program and our patient assistance program are available for eligible patients. In the first quarter, roughly 10% of people taking RELYVRIO were part of these programs. We are pleased with the progress we’ve made so far on our goal to ensure that every eligible person living with ALS, has access to RELYVRIO which we see as a potential foundational therapy and neurodegenerative disease. Our launch is off to a strong start. And it is our hope that eventually RELYVRIO will become the most commonly used ALS medication. While we are clearly focused on the launch of RELYVRIO in the U.S. that we also have a large opportunity internationally. ALS is a global disease, affecting more than 200,000 people worldwide interest in ALBRIOZA remains high in Canada, and we continue to negotiate public insurance coverage consistent with the expected public timelines for coverage.

In addition, a few weeks ago, we appointed Masako Nakamura to lead our efforts in Asia Pacific and Latin America, as we pursue additional opportunities to bring AMX0035 to as many people with ALS globally as possible. He brings 30 years of commercial general management and operational leadership experience in the biopharmaceutical industry, with a strong track record of introducing rare disease therapies worldwide across multiple therapeutic areas. We are very pleased that she decided to join our team to further explore opportunities for AMX0035 access around the world. I will now turn the call over to Josh to provide an important update on our R&D pipeline.

Josh Cohen: Thanks, Margaret. We’re very pleased with how quickly we are bringing our important new treatment to people with ALS. Our top focus day-to-day remains the success of our commercial launches. These efforts enable the continued investment needed to bring RELYVRIO to more people living with ALS worldwide. They also enable the research and development needed to advance our pipeline in support of our mission. There’s tremendous scientific interest among the neurodegenerative community to further investigate AMX0035 in other diseases, we have positive randomized clinical trial data and ALS, encouraging biomarker data from the randomized phase two Pegasus study in Alzheimer’s disease and a wealth of preclinical models demonstrating the effects of AMX0035 in reducing neuronal death.

To prioritize which diseases to focus on, we look at the following criteria. Clear unmet need, strong scientific rationale, existing and robust understanding of the natural history of disease, biomarkers to track treatment effects, adjacencies and synergies with ALS, potential to move directly into a phase three pivotal study and interest and support from KOLs. We are excited to announce today our plans to initiate a global pivotal phase three study of AMX0035 in Progressive Supranuclear Palsy, or PSP, a disease which meets all of these criteria. For those of you who may not be familiar with PSP, it is a rare progressive and fatal neurodegenerative disorder that affects body movements, walking and balance, speech and swallowing and eye movement.

It’s typically fatal within just five to eight years. The estimated prevalence is five to seven and 100,000 people worldwide, translating to between roughly 15 to 20,000 people in the United States. There are currently no disease modifying treatments for PSP. In addition to PSP, meeting our criteria for a significant unmet need with a well characterized natural history there is also a strong scientific rationale for the potential use of AMX0035 in treating PSP. PSP is both a disease of rapid and significant nerve degeneration. And its pathology is characterized by significant tau protein deposition in affected regions of the brain and the Pegasus Alzheimer’s study of AMX0035. AMX0035 treatment demonstrated a statistically significant lowering of both phospho tau 181 and total tau in the CSF of people living with Alzheimer’s disease.

AMX0035 is an oral well tolerated FDA approved medication for ALS that has been shown preclinically to protect neurons against degeneration and clinically to lower tau, the Hallmark protein of PSP. This has led to significant and strong support from key opinion leaders in PSP, and we are excited to work with them to test AMX0035 in a phase three study, which I will now outline. In designing and planning the study. We have collaborated with key global academic leaders, people living with PSP and advocacy groups working in this field. With an open IND in hand, we plan to enroll approximately 600 people in a randomized placebo controlled study making this likely the largest PSP trial to-date. We expect to have the study up and running by the end of this year.

We are hopeful that we can provide a new treatment options, especially since there are currently no disease modifying treatments available for this devastating disease. While we prepare to launch our pivotal phase three study, we also remain hard at work in Wolfram syndrome. Earlier this year, we announced Helios, a phase two trial studying AMX0035 in Wolfram syndrome. This study is now enrolling participants. Wolfram syndrome is a disease that leads to multi system failure, resulting in blindness, deafness, diabetes, ataxia, nerve degeneration, and often death in early adulthood. Several papers characterize the disease as a prototypical disease, endoplasmic reticulum stress, and as we have discussed in the past, we believe AMX0035 plays a role in reducing the stress.

Data on AMX0035, and models of Wolfram syndrome were published in the Journal of Clinical Investigation insight. We believe this study will provide key data to guide future studies and expect top line results from the study next year. Importantly, we are also investing in new ALS research to continue to transform how the disease is treated. We believe that it is going to take a combination approach targeting multiple cellular pathways implicated in disease pathogenesis to make ALS more and more manageable, and ultimately to find a cure. For this reason, we are investigating other therapies with different or potentially complimentary pathways to treat ALS and other neurodegenerative diseases. This includes an antisense oligonucleotide, called AMX114 that our internal R&D team has developed, IND enabling studies of AMX00114 are underway and progressing well.

We continue to expect to build our pipeline, both through internal and external sources. Before turning the call over to Jim, I wanted to share that Phoenix, our phase three study of AMX0035, and people with ALS, continues to progress as planned. In February, we announced that the study was fully enrolled with 664 participants, a reminder that there will be no interim data readout, and we expect data on the primary outcome and several secondary outcomes in mid 2024. Overall survival data will take another year or more to mature and therefore won’t be available until at least mid 2025. I will now turn the call over to Jim to review our financial results for the first quarter.

James Frates: Thanks, Josh. We’re encouraged by the strong interest in demand we continue to see from the ALS community. From a financial point of view, our businesses strong. Net product revenue were $71.4 million for the quarter, compared to net product revenue of $21.9 million for the fourth quarter of 2022 with the vast majority of that revenue from the United States. [indiscernible] net adjustments for approximately 16% and a quarter consistent with our expectations in the 15% to 20% range. Inventory levels at the quarter and we’re as expected, with approximately two weeks of inventory in the channel at specialty pharmacies. [indiscernible] were $5.3 million for the quarter and in the range of our expectation as sales volume grows.

And for modeling purposes, keep in mind that roughly 10% of the people on RELYVRIO receiving it for free through either our interim access program or patient assistance program. Research and development expenses were $24.2 million for the quarter compared to $21.5 million in the same period in 2022. These costs were primarily driven by our phase three Phoenix study and added personnel as we support our programs. Starting in the second quarter, we expect R&D expenses will increase as we incur meaningful expenses to initiate our phase three pivotal study in PSP. You should expect R&D expenses increased this year, in a range of $30 million to $40 million per quarter as we move through the remainder of the year. Selling, general administrative expenses or SG&A were $44 million for the quarter compared to $26.3 million for the same period in 2022.

We’re investing in SG&A to support our strong commercial launch, and expect our spin to settle in around $45 million a quarter for the remainder of the year. Overall, we’re very pleased with our results this quarter, including achieving $1.6 million of net income, just two quarters into our [indiscernible]. I want to pause a moment on our overall financial results with the strong demand for RELYVRIO driving near term profitability ahead of our expectations. We want to reiterate our long term financial goals driving top line revenues as RELYVRIO become standard of care, growing profitability for our investors, and investing in a pipeline that has the potential to provide much needed treatments for neurodegenerative diseases. We’re well-positioned to build a profitable financially strong organization for the long term.

We ended the quarter with cash and short term investments of $345.7 million and 0 debt. We’re currently in a position to fund the programs, we discussed it without the need to raise additional capital. Finally, just a word on guidance. Last quarter, we gave some specific guidance on how the first quarter was going as we reported in Midmark. Since we’re still early in the quarter, it’s premature to provide a specific range of revenue guidance for the second quarter, or for the full year at this time. The road ahead over the next few quarters is fairly simple execute on the launch, and execute on our call and pipeline development programs. I’m excited about the progress that we’ve made, and most importantly, our ability to have a positive impact on the lives of so many people living with ALS.

With that, I’ll turn the call over to Justin for some closing remarks.

Justin Klee: Thanks, Jim. And thank you to everyone for joining us today. We covered a lot of exciting news. Our commercial ramp in the U.S. and Canada is proceeding very well and we will know more on Europe later this year. We’re expanding our clinical pipeline into PSP, a market that is likely as large as ALS with a product that has already been shown to have a favorable safety profile and another disease and that has a demonstrated effect on relevant biomarkers. And we achieved our first quarter of profitability in just the second quarter of our commercial launch in the U.S. We remain committed to our goal to help additional people with ALS and other relentlessly progressive neurodegenerative diseases gain access to new therapies. Now, we’d be happy to take your questions. Operator, please open the call up to Q&A.

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Q&A Session

Operator: We will now begin the question and answer session. [Operator Instructions] The first question comes from [indiscernible] with Bank of America. Please go ahead.

Operator: The next question is from Michael [indiscernible] with Evercore. Please go ahead.

Operator: The next question is from Corinne Jenkins with Goldman Sachs. Please go ahead.

Operator: The next question is from Neena Bitritto-Garg with Citi. Please go ahead.

Operator: The next question is [indiscernible] Marc Goodman you are on the podium right now.

Operator: The next question is from [indiscernible] Securities. Please go ahead.

Operator: The last question comes from Ananda Ghosh with H.C. Wainwright. Please go ahead.

Operator: Thank you. There are no further questions at this time. I’ll turn the call back to Mr. Klee for final comments.

Justin Klee: Thank you all very much for joining us this afternoon. We covered a lot of exciting news, our commercial ramp in the U.S. and Canada is proceeding really well. We’re expanding into another clinical indication, which has a huge unmet need and has a market that is probably likely as large as ALS. And with a product, as we said, that’s already been shown to be safe and well tolerated in a neurodegenerative disease, as well as show quite significant reductions in tau. And maybe one other thing we only talked on briefly, but we achieved our first quarter profitability and just the second quarter of commercial launch in the U.S. which we’re really excited about. We’re a mission driven company. We have many more people to help and many more people to help around the world, both with ALS, and we hope with other neurodegenerative diseases as well.

Achieving profitability is what’s going to allow us to have a sustainable business to keep moving forward and keep helping more and more people with neurodegenerative diseases. So thank you all very much for joining us and for your support, and we hope you have a great rest of your day.

Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.