Amylyx Pharmaceuticals Inc

NASDAQ:AMLX

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Operator]

Good morning. My name is Kamil, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Amylyx Pharmaceuticals Second Quarter 2021 Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please be advised that this call is being recorded at the company's request. I would now like to turn the call over to Lindsay Allen, Head, Investor Relations and Communications. Please proceed.

[Lindsey Allen, executive]

Good morning, and thank you all for joining us today to discuss our second quarter 2024 financial results. With me on the call today are Josh Cohen and Justin Klee, our co-CEOs; Dr. Camille Bedrosian, our Chief Medical 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 pursuant 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 avexitide, AMX0035 and AMX0114, statements regarding regulatory and clinical developments and the impact thereof any expected timing thereof and statements regarding our cash runway. Actual events and results could differ materially from those expressed or implied by any forward-looking statements. 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, executive]

Good morning, and thank you all for joining us today. As an organization, we have made significant progress over the past few months as part of our continued mission and our goal to deliver important treatment options to the neurodegenerative, neuroendocrine and endocrine communities we serve.

Most notably, last month, we expanded our late-stage pipeline with our acquisition of avexitide and now have 3 assets targeting orphan indications. Avexitide is a Phase III-ready asset with FDA breakthrough therapy designation in diseases with no approved treatment options. Avexitide is a GLP-1 receptor antagonist with orphan drug designation in hyperinsulinemic hypoglycemia. The GLP-1 receptor is one of the key regulators of the glucose-insulin response and an imbalance in this response leads to hyperinsulinemia hypoglycemia, which underlies several conditions and diseases.

So far, avexitide has been studied in 2 indications characterized by hyperinsulinemic hypoglycemia, post-bariatric hypoglycemia, or PBH, and congenital hyperinsulinism.

The first indication, PBH, is a significant but orphan condition that affects the subpopulation of people who have undergone bariatric surgery. Now let me elaborate a little further on the market opportunity ahead.

Despite the introduction of GLP-1 receptor agonist for weight loss, more than 200,000 new bariatric procedures are performed every year, and this number has continued to grow on an annual basis. Over the past 10 years, approximately 2 million people in the United States have undergone the 2 most common types for weight loss, Roux-en-Y gastric bypass and sleeve gastrectomy.

Experts expect surgery to remain a cornerstone of weight-loss therapy given the procedure is highly effective and results in substantial and sustained weight loss, particularly for people with higher BMIs. Evidence also suggests that bariatric surgery reduces the risk of cardiovascular events and the severity of metabolic dysfunction associated liver disease.

Turning to PBH. This persistent condition can develop in people who had received bariatric surgery 1 to 3 years prior and in some cases, even longer post surgery. We estimate that approximately 8% of the 2 million people I referenced, or 160,000 people in the U.S. today, have symptomatic PBH.

Symptomatic PBH is characterized by hypoglycemic events associated with brain glucose starvation, known as neuroglycopenia, including impaired cognition, loss of consciousness and seizures, as well as activation of the autonomic nervous system, presenting is hunger, sweating, tingling, tremors, palpitations and anxiety.

People living with PBH could benefit from a treatment that helps stabilize glucose levels, particularly the dangerously low crashes in blood glucose associated with PDH. Camille will discuss our plans for the Phase III development program for avexitide, which we expect to initiate in the first quarter of next year. There is agreement with FDA on the primary outcome for the pivotal Phase III study for PBH. The outcome, reduction in the composite of Level 2 and Level 3 hypoglycemia events, is clearly linked to GLP-1 receptor antagonism and was already met in the Phase II and Phase IIb clinical trials of avexitide in PBH with high significance.

Camille will also recap the key data, including the statistically significant and clinically meaningful reductions in hypoglycemic events. We are highly encouraged by the greater than 50% reductions in Level 1, 2 and 3 hypoglycemic events that have been demonstrated by avexitide.Avexitide has the potential to be the first-in-class GLP-1 receptor antagonist.

Before I turn it over to Camille, I would like to quickly touch on our cash runway. In the second quarter, we largely completed our restructuring. We expect our cash runway to take us into 2026. Jim will provide additional context. I will now turn the call over to Camille.

[Camille Bedrosian, executive]

Thanks, Justin. Now I will briefly review each of our 4 programs, avexitide and hyperinsulinemic hypoglycemia including post-bariatric hypoglycemia or PBH, AMX0035 in Wolfram syndrome and in progressive supranuclear palsy or PSP, and AMX0114 in ALS.

Avexitide is designed to bind to the GLP-1 receptor on pancreatic islet beta cells and block the effect of GLP-1 to mitigate hypoglycemia by decreasing insulin secretion and stabilizing glucose levels. Avexitide has been studied in 5 clinical trials in PBH. Data from these trials demonstrated highly significant reductions in hypoglycemic events.

Most notably, the 90-milligram dose, which we intend to study in Phase III, showed a 66% reduction in Level 3 hypoglycemic events in a Phase IIb trial with a p-value of 0.0003 and a 53% reduction in Level 2 hypoglycemic events with a p-value of 0.004. The primary efficacy outcome of our Phase III program will be the reduction in the composite of Level 2 and Level 3 hypoglycemic events. The FDA has agreed on this primary efficacy outcome.

Furthermore, these data were achieved while demonstrating a favorable safety profile. The benefit of avexitide is further supported by 4 additional trials in PBH, which reproducibly showed glucose stabilization and decreased insulin levels, with statistically significant P values. We reviewed these data in depth during our conference call last month. Based on these data, we are actively planning and are on track to initiate a pivotal Phase III program in PBH in Q1 of next year.

For those of you who are not familiar with PBH, the condition affects people who have undergone bariatric surgery. Symptomatic PBH can have disabling effects on quality of life and ability to live independently, especially the neuroglycopenic symptoms. Imagine you are driving and your blood sugar drops without you realizing it, and you have a seizure. As a result your license could be suspended. Or because you could potentially faint and lose consciousness at any time, you have to move in with a friend or relative so they can provide immediate assistance or call 911 if you fall and injure yourself. Imagine being forced to retire mid-career because you have impaired cognition due to sustained low glucose.

These examples are experiences that individuals living with PBH have shared. This is the reality for the 160,000 people that we estimate are currently living with symptomatic PBH. These individuals could benefit from the therapies that might mitigate unexpected or current drops in blood glucose, which can create very problematic health, social and economic issues despite their best efforts with dietary modifications and off-label use of other medications.

We believe the significant unmet need, coupled with the robust avexitide clinical data in PBH contribute to the excitement about our PBH program among endocrinologists. We will work to enroll participants in our Phase III program as promptly as possible such that we will be in a position to share top line data from the program in 2026.

Now turning to the Wolfram syndrome program. We look forward to presenting the top line data for all 12 participants in the HELIOS trial at week 24, including longer-term data available for participants who have reached their week 36 or week 48 visit at that time at the International Society for Pediatric and Adolescent Diabetes Conference this fall. We are engaging with stakeholders, including the FDA, and planning for a single Phase III clinical trial, and we'll provide more details once finalized.

As a reminder, AMX0035 has shown highly significant benefits in glycemic control and the in vivo WFS1 knockout mouse model of Wolfram syndrome. These glycemic results were recapitulated and extended in our clinical trial of Wolfram, including promising data on glycemic, as well as optic and global impression of change outcomes, presented in April.

Recall that Wolfram syndrome is a progressive neurodegenerative disease. While we had anticipated slowing of this progression, in fact, the data suggested stabilization or even improvement across these outcomes.

Now turning to the ORION PSP program. Enrollment in the study is going well. As we have described previously, we intend to conduct an interim analysis of ORION and share data in mid-2025. I would like to describe the planned analysis in a bit more detail.

We have introduced an operationally seamless Phase IIb/III study design. The first part will include approximately 100 people living with PSP. Mid-2025, we plan to adopt an unblinded analysis of top line data through week 24 for these participants. In addition, the available data on participants who have proceeded beyond 24 weeks also will be analyzed. The goal of this analysis is to inform a go-no-go decision. Strong data will encourage us to move seamlessly into the second portion of the study, whereas mixed or negative data will allow us to reprioritize our resources.

As a reminder, AMX0035 has shown highly significant reductions of tau in CSF in a randomized placebo controlled study in Alzheimer's disease. As we have previously discussed, PSP is a tauopathy with a highly significant genetic link between variants and tau and the disease, and with clear taupathology in human samples. AMX0035 is believed to affect intracellular tau, and we believe it is the first agent to be studied in a large trial with the potential to impact intracellular tau pathology.

Finally, our AMX0114 program remains on track. We plan to begin clinical testing before the end of the year. AMX0114 is an antisense oligonucleotide, or ASO, designed specifically to inhibit calpain-2, a protein involved in axonal degeneration and neurofilament biology. We are planning to study this agent in a multiple ascending dose placebo-controlled study in ALS to evaluate the safety and the biological activity of AMX0114.

At Amylyx our goal is to significantly impact diseases of unmet need. And with these 4 programs, we believe we are on track to do so.

I will now turn over the call to Jim. Jim?

[James Frates, executive]

Thanks, Camille. Following PHOENIX top line results, we restructured quickly, which placed us in a strong cash position and enables us to focus on our meaningful near-term clinical milestones.

We ended Q2 with $309.8 million in cash and investments. As a reminder, we acquired avexitide in early Q3 for a purchase price of $35.1 million. Since the acquisition, we have targeted our budget to focus on our major clinical programs. As a result of this work, we believe our cash will take us into 2026, and we will work to manage the company through meaningful clinical data readouts, namely the data readout from our Phase II HELIOS trial in Wolfram syndrome, the interim readout from our PSP program, interim clinical data from our AMX0114 program and the readout of top line data from the avexitide Phase III program.

Now turning to other details of our financial results. Net product revenue was negative $1 million for the second quarter due to adjustments to our gross to net revenue reserve estimates. This was mainly driven by adjustments to our estimates for returns once we stopped our sales.

Cost of sales were $7.4 million for Q2 compared to $5.6 million for the same period in 2023. Cost of sales this quarter were primarily related to estimated losses on firm commitments under commercial manufacturing and supply agreements for RELYVRIO and ALBRIOZA that were established for future production prior to the results from PHOENIX. We do not expect any material COGS moving forward.

Research and development expenses were $23.3 million for the quarter compared to $29 million for the same period in 2023. The decrease was primarily due to a decline in payroll and personnel-related costs as a result of our restructuring and a decrease in clinical expense due to the outcome of the PHOENIX trial.

Selling, general and administrative expenses were $21.6 million for Q2 compared to $43.4 million for the same period in 2023. The decrease was primarily due to a decline in payroll and personnel-related costs and a decrease in consulting and professional services following our decision to voluntarily discontinue the marketing of RELYVRIO and ALBRIOZA.

Restructuring expense was $22.9 million in the quarter compared to 0 for the same period in 2023. The majority of this charge is related to employee severance and termination-related benefits that were paid in Q2, and our restructuring plan was largely completed this quarter. Consistent with our prior expectations, as we move into 2025, we expect total combined spend on R&D and SG&A will be in the range of $30 million to $40 million in cash per quarter.

Finally, in the second quarter, we recorded a net loss of $72.7 million or $1.07 per share, including the restructuring charges. Overall, we're in a solid financial position and believe in our ability to deliver on the clinical milestones that we outlined today.

I'll now turn the call over to Josh to provide some closing remarks.

[Joshua Cohen, executive]

Thank you, Jim. In closing, we are excited about our 4 pipeline programs, upcoming milestones and path ahead. Avexitide has both FDA breakthrough therapy designation and orphan drug designation and is poised to advance into Phase III development in PBH beginning in the first quarter of 2025.

In Wolfram syndrome, we expect the top line data from HELIOS in the fall for all 12 participants at week 24, including longer-term data available for participants who have reached their week 36 or 48 visit at that time. We are engaging the FDA and other stakeholders and planning for a single Phase III clinical trial. We will provide more details on the trial once the design is finalized.

The ORION trial of AMX0035 in PSP is recruiting well, and we continue to expect data from an interim analysis mid next year. AMX0114 is on track to be studied in people living with ALS later this year. And we believe we have the team and resources in place to deliver on 4 meaningful clinical data readouts ahead. We look forward to keeping you updated as we build upon our critical work in orphan neurodegenerative, neuroendocrine and endocrine diseases with high unmet need.

Now I would like to open the call up for Q&A. Thank you.

[Operator]

We will now begin the Q&A session. [Operator Instructions] Your first question comes from the line of Charlie Yang from Bank of America.

[Chen Yang, analyst]

Great. I just wanted to ask about the PSP data in mid next year in terms of the kind of the expectation over there? And then I'm assuming if there's a signal observed, is there -- I guess, is there a path to make an adjustment to a number of patients as needed to further kind of amplify the potential success of this trial and the final readout?

[Camille Bedrosian, executive]

Yes. Thank you, Charlie. This is Camille. As we indicated in our prepared remarks, we will -- the first part of the study is the Phase IIb, where we will analyze the about 100 participants unblinded AMX0035 versus placebo and do a full-on analysis at 24 weeks, and for those who have gone beyond 24 weeks to look at their longer-term data as well.

And based on that result, we will then -- if positive, and strong, we will proceed seamlessly into the Phase III portion of the study. And based on those data, the final sample size will be determined.

[Chen Yang, analyst]

Great. And maybe just one quick follow-up just in terms of the Wolfram opportunity in Europe, how is that going to compare to the U.S?

[Camille Bedrosian, executive]

Yes. So we are certainly aware of endocrinologists who are familiar with Wolfram and have a large, relatively speaking, Wolfram from population. So -- but right now, we are focusing on the U.S. And so we do -- yes, so more to come on that as we do more research.

[Joshua Cohen, executive]

But I would add that Wolfram being a monogenic disease, we do see people at tool from syndrome all around the world. So it is very much a global unmet need.

[Operator]

Your next question comes from the line of Corrine Johnson from Goldman.

[Unknown]

This is Balek for Corinne. 2 from us on the PSP front. The first thing, what to prior studies in PSP suggests for placebo and natural history population at the 24-week time point? And then the second was, what are you thinking about in terms of the threshold for futility at the 24-week endpoint in the interim analysis?

[Camille Bedrosian, executive]

Yes. So as you are alluding, in fact, the progression of the disease is actually quite reproducible. There were 3 relatively large Phase III studies in PSP. Unfortunately, none of which we showed a benefit of the active drug, but it did show that there was reproducible deterioration at a relatively similar rate.

So we do use that as a basis for understanding and looking at the data coming up.

[Joshua Cohen, executive]

And as your other question, too, on the threshold for futility, this is not a formal futility analysis. We're doing a full evaluation of the data. So we'll be looking at kind of a full top line release, essentially a Phase IIb release when we do that interim analysis.

And just highlighting Camille's point as well, when you look at the past larger randomized placebo-controlled studies that have been conducted in PSP, the placebo rate is actually quite strikingly consistent, usually at just under 1 point a month.

[Operator]

Your next question comes from the line of Umer Raffat from Evercore.

[Unknown]

This is [inaudible] on for Umar. I guess, firstly, for Wolfram syndrome Phase III trial, does it need to be placebo-controlled? And secondly, for 0114, are you planning to give incremental data update as it progresses, maybe the timing between Phase II Wolfram trial data this fall and the Phase III PSP interim next year?

[Camille Bedrosian, executive]

Right. So thank you for the questions. This is Camille. Regarding Wolfram, as we indicated in our prepared remarks, we are engaging with stakeholders that include, of course, the FDA. And once our plans are finalized, we'll share those with you.

Just as a reminder, later this fall, we will share data on all 12 participants through 24 weeks and additional longer-term data for those individuals who have gone through week 36 and 48. So we're looking forward to those readouts as well.

And then regarding 0114 as we indicated, we are planning to initiate our multiple ascending dose study in individuals with ALS by the end of the year. And as the study progresses, we'll be able to provide more detailed timing and types of data we'll be sharing through 2025.

[Operator]

Your next question comes from the line of Graig Suvannavejh from Mizuho Financial Group.

[Charles Wayne, analyst]

This is Charles Wayne on for Greg. We were wondering what type of data will you present at the updated data presentation for HELIOS. Should we expect it to be similar to the interim readout earlier this year?

[Camille Bedrosian, executive]

Yes. Thank you. This is Camille again. Indeed, so we do intend to provide longer-term data for those individuals who -- about whom we reported in April of this year, as well as data through 24 weeks for all 12 participants. It's top line data, primary endpoint and key secondary endpoints, and we look forward to sharing those details with you at the upcoming international meeting.

[Operator]

Your next question comes from the line of Marc Goodman from Leerink Partners.

[Unknown]

This is Rudy on the line for Mark. Can you talk about R&D expenses moving into 2025? What is your strategy to build the pipeline going forward with both internal and external assets?

[James Frates, executive]

Yes. Thank you. It's Jim. I think one of the things that is happening in our R&D line, right, as our restructuring has occurred and as the large PHOENIX Phase II winds down, and you can find some detail on those expenses historically in our Qs, that really opens up room for some of the new spending that we have going on.

And currently, the Wolfram study is ongoing. The PSP study is starting to move up into a range where that's going to be consistent as opposed to really growing. And so that leaves us room as we move forward to spend on the 114 study and the new avexitide program.

And then just overall, as we outlined, we expect cash expense, now that's excluding noncash comp to be in the range of $30 million to $40 million a quarter for both R&D and SG&A. So that's how some of the moving parts are going into 2025.

[Operator]

Your next question comes from the line of Joel Beatty from Baird.

[Joel Beatty, analyst]

For the PSP interim analysis, to get data around mid-2025, does that mean completing enrollment around the end of this year? And what gives you confidence on the trial completing enrollment around that time frame?

[Camille Bedrosian, executive]

Joel, this is Camille. We are enrolling quite well, as I indicated in our prepared remarks, and we're tracking towards having data mid-2025. We'll give more information as we march toward that time frame.

[Joel Beatty, analyst]

And then as a follow-up, do you anticipate any more acquisitions after the recent acquisition of avexitide?

[Joshua Cohen, executive]

Yes. I'll say we wouldn't -- we've had a process ongoing for some time where we're evaluating many assets for that -- whether they fit well into our pipeline and have the requisite scientific and clinical and commercial path forward. Today, we're very excited about the assets we have today, and that's our focus. But we're always looking, and I'd say we wouldn't rule out adding additional things at.

[Operator]

There are no further questions at this time. I'll turn the call back to Mr. Klee.

[Justin Klee, executive]

Thank you for joining us today on today's call to discuss our second quarter 2024 financial results. Have a great day.

[Operator]

Thank you for joining today's call. Please disconnect your lines. Thank you.