Amicus Therapeutics, Inc. (NASDAQ:FOLD) Q4 2023 Earnings Call Transcript
Amicus Therapeutics, Inc. (NASDAQ:FOLD) Q4 2023 Earnings Call Transcript February 28, 2024
Amicus Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning ladies and gentlemen and welcome to the Amicus Therapeutics' Full Year 2023 Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host Mr. Andrew Faughnan, Vice President of Investor Relations. You may begin.
Andrew Faughnan: Great. Thank you, Didi. Good morning. Thank you for everyone. Thank you for joining our conference call to discuss Amicus Therapeutics' full year 2023 financial results and corporate highlights. Leading today's call we have Bradley Campbell, President and Chief Executive Officer; Sebastien Martel, Chief Business Officer; Simon Harford, Chief Financial Officer; and Dr. Jeff Castelli, Chief Development Officer. Joining for Q&A is Dr. Mitchell Goldman, Chief Medical Officer; and Ellen Rosenberg, Chief Legal Officer. As referenced on Slide 2, we might make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to our business as well as our plans and prospects.
Our forward looking statements should not be regarded as representation by us and any of our plans will be achieved. Any or all the forward-looking statements made on this call may turn out to be wrong and can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. You are cautioned not to place undue reliance on any forward-looking statements, which speak only to the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and we undertake no obligation to revise or update this presentation and conference call to reflect events or circumstances after the date hereof. For a full discussion of such forward-looking statements and the risks and uncertainties that may impact them, we refer you to the forward-looking statements and risk factors section of our annual report on Form 10-K for the year ended December 31st, 2023 to be filed today with the Securities and Exchange Commission.
At this time, it's my pleasure to turn the call over to Bradley Campbell, President and Chief Executive Officer. Bradley?
Bradley Campbell: Great. Thanks Andrew and welcome everybody to our full year 2023 conference call. This year, our call falls a day before Rare Disease Day, so before I dive into our results, I just wanted to take a minute to acknowledge this important day for the rare disease community. This year's theme is achieving true health equity for the nearly 300 million people around the world living with a rare condition. Since our inception, Amicus has been dedicated to serving the needs of those in the rare disease community in extraordinary ways and we are committed to advocating for patient communities and fighting on behalf of those whose voices have not been heard. Rare Disease Day serves as a global call to action to collectively work towards equity and social opportunity, health care, and perhaps most importantly, access to medicines for people living with rare diseases.
So, I just ask that all of you join me in commemorating this important day for the global rare disease community. So, with that, let me to shift into our financial results and outlook and I'm very pleased to highlight what tremendous progress we made across our global business last year and into the start of 2024. As you saw in this morning's press release, I'll highlight several key points before I turn it over to the team to go through more detail. So, first Galafold continues its strong performance and it remains the cornerstone of our success. We are very pleased with the continued uptake of Galafold globally. We now have over 2,400 people living with Fabry disease who take Galafold or were taking Galafold at the end of 2023. For the full year, that translated to Galafold revenue of $388 million globally, representing 18% growth year-over-year, outperforming our expectations and our initial guidance for the year.
Throughout 2023, we continue to observe strong trends across our key performance indicators in all of our key geographies including continued demand through new patient starts from both switch and naive populations in all of our leading markets. We saw steady growth of in-person visits between our field team and Fabry treaters and we've continued to see sustained patient compliance and adherence rates of over 90%. Growth in 2023 was driven primarily by patient demand from net new patient starts, continuing to switch patients in our newer launch markets, and continued penetration into the diagnosed and untreated population, which we expect to continue to be a major driver of growth in 2024 and beyond as the Fabry market continues to see improved diagnosis and medical education and finding patients.
Just to put that in perspective for a minute. As a reminder, just over eight years ago, we estimated there were 5,000 treated Fabry patients and 5,000 patients who are diagnosed with untreated. Today, there are more than 11,000 treated patients. So, the treated market has more than doubled in that time, while the untreated market has also increased to almost 6,000 patients. These underlying market dynamics will provide the opportunity to grow Galafold for many, many years to come, including in 2024, when we expect another great year with 11% to 16% projected growth at constant exchange rates. Second, the global commercial launch of Pombiliti and Opfolda is underway and is off to a great start in the three largest Pompe markets. Our teams have made significant progress in the initial commercial launch in Germany, the UK and the US, and we remain incredibly pleased with the launch so far.
Seven weeks ago at JPMorgan, we shared that 120 patients were on treatment or scheduled for treatment, including 15 new commercial patients. And as we said at the conference, we're not going to give mid-quarter updates, but I can share more color on how incredibly pleased we are with the continued patient and physician demand for this new therapy. The key performance indicators that we talked about last time continue to improve and continue to give us confidence in the strength of this launch. Specifically, the rate of new commercial patients coming on to Pombiliti and Opfolda continues to increase in all three markets, as we progress through the early weeks of the year. We anticipate launches in additional countries will add to that growth through the latter part of the year.
And importantly, for our new commercial patients, we continue to see prescriptions proportionally coming from Nexviazyme and Lumizyme, as well as naive patients in ex-US markets. So that means in the US, the majority of new patients are switching off of Nexviazyme and coming on to Pombiliti and Opfolda, whereas in Europe, where Lumizyme has the majority market share, most of our switch patients are coming from that therapy, and we're seeing an increasing number of naive patients as well, so all the patient segments are performing as we would expect. In a moment, Sébastien will provide further color on the ongoing launch of these key performance indicators, but overall, we're very pleased by the launch and the great momentum we're seeing across each of our markets.
Throughout 2024, we'll continue to focus on increasing patient access by expanding into additional European countries, as we navigate the country-by-country pricing and reimbursement process and focus on additional regulatory submissions as well. We are incredibly pleased to be providing a real choice for patients and challenging therapeutic options for both physicians and people living with Pompe disease. Third, Amicus has maintained an incredibly strong financial position as we continue to execute on the expansion of Galafold and advance the global launch of Pombiliti and Opfolda. We are pleased to share today that as we promised, we delivered our first quarter of non-GAAP profitability in the fourth quarter of 2023. This is obviously a significant milestone as we now look to deliver our first full year of non-GAAP profitability in 2024, supported for the first time by well over $0.5 billion in combined product sales, as well as prudent expense management to really significant milestones in the evolution of Amicus as a biotechnology company in the rare disease space.
Our key strategic priorities for 2024 are laid out in the slide four. As we laid out last month, we are focused on achieving our key strategic priorities for 2024, including: number one, again, sustaining that double-digit Galafold revenue growth of 11% to 16% at constant exchange rates, continuing our successful launch of Pombiliti and Opfolda and executing multiple successful new commercial launches throughout the year, advancing our ongoing studies to support our medical and scientific leadership in Fabry and Pompe disease, and finally, maintaining our strong financial position as we carefully manage our expenses and investments in order to achieve a full year of non-GAAP profitability. With that, let me now hand the call over to Sébastien, who can give further highlights on our commercial performance.
Sébastien?
Sebastien Martel: Thank you, Bradley. Good morning or good afternoon to everyone on the call. I'll start by providing you with more details on our Galafold performance for the year. On slide 6, for the full year 2023, Galafold reported revenue reached $387.8 million. Galafold growth in 2023 was primarily driven by strong patient demand, particularly from our leading markets. Turning to slide 7. Our results in the full year highlight the strength of our global commercial efforts. The demand for Galafold globally continues to be strong with patients added in all major markets, delivering operational growth of 18% over the same period in 2022 or 17% at constant exchange rates. We finished the year strongly, with fourth quarter 2023, Galafold reported revenue of $106.6 million, up 21% or 19% at CER.
We're pleased to share that 2023 was the strongest year for net new Galafold patients since 2019. Our leading markets such as the UK, the US, EU 5 countries and Japan remain the biggest drivers of patient demand and gives great confidence in the growth this product has over the long run. As Brian mentioned, we ended the year with more than 2,400 patients on Galafold, which is roughly over half of the global market share of treated amenable patients. Galafold that's captured 60% to 65% of the global market share of treated amenable patients. But the good news is there are still many more patients to put on to therapy. Within the global mix, which is about 43% switch and 57% naïve, we're seeing stronger uptake in naive populations. So we continue to achieve high market shares in countries where we've been approved the longest there's still plenty of opportunity to continue to switch patients over to Galafold and keep on growing the market as we penetrate into the diagnosed and treated and newly diagnosed segments.
All of that is underpinned by sustained compliance and adherence rates that continue to exceed 90%. Reiterating our belief that those patients who go on Galafold for them to please stay on Galafold. As mentioned on past calls, due to a variety of contributing uneven ordering patterns and FX fluctuations, the rate of growth within the year is typically nonlinear. Additionally, we've historically seen Q1 revenues come in slightly below prior Q4 due to the timing of orders and the reauthorization process in the U.S. and we expect that to continue into 2024. So within the table. On the right hand side of the slide, we've provided a five-year historical snapshot of the percentage of Galafold sales, and after each quarter during a given year. Interestingly, the average of quarterly sales distribution over the last five years corresponds precisely to what we achieved for the full year 2023.
We would expect a similar trend to occur this year. So, as an example, we expect Q1 sales of the current year to be around 22% of full year sales for Galafold. On Slide 8, we know that there's a significant patient demand for Galafold and the segment of growth of the global Fabry market made of patients with amenable mutations as the potential to reach up to $1 billion in annual revenue by the end of the decade. We anticipate sustained growth in 2024 and beyond to be driven by several key growth drivers. First, continuing to increase patient identification through ongoing medical education screening and improved diagnosis. As you know probably is one of the most under diagnosed rare disease. So the more patients are identified for more patients can be eligible for Galafold.
Second the other piece is continuing to drive Galafold's market share of treated amenable patients through continued commercial execution. As noted, Galafold currently has 60% to 65% of the global amenable market. What we're seeing in our most mature market is that we can reach up to about 85% or 90% of market share. So we know that there's potential to reach two levels in the global market share as well. Importantly, as Bradley highlighted earlier, this is a robustly growing Fabry market with a significant portion of growth coming from finding new patients and penetrating into the nine diagnosed untreated population. Just within the 2,400 patients on Galafold for the end of 2023 about 1,400 of these individuals were naive to any treatments before coming on Galafold.
We've been successful in finding new patients through newborn screening and other diagnostic initiatives as well as artificial intelligence through our partnership with [indiscernible]. And again all of these efforts are supported by solid compliance and adherence rates from physicians and patient education and support programs. We'll continue to make progress on expanding Galafold into new markets and extended the labels. There are still some markets in that time some in the Middle East and Asia Pacific regions where Galafold is either newly reimbursed or we expect reimbursement. Also important to note here, we have often exclusivity in the US and Europe in addition to our 57 orange-bophystic patents 41 of which provide protection into 2038 and beyond including 11 composition of matter patents.
This provides us with the opportunity to provide access to Galafold globally for a long time to come. We intend to continue to protect and enforce our broad intellectual property rights. Looking ahead we expect steady double-digit growth for Galafold throughout 2024 and we remain confident that our strong IP protection will provide Galafold a long runway well into the next decade. Turning now on to Pompe Disease on Slide 10. we outline our global launch progress with Pombiliti and Opfolda. So full year 2023, Pombiliti and Opfolda reported revenue reached $11.6 million for the full year and $8.5 million for the fourth quarter. At the beginning of the year, 2024, 120 patients were on treatment or scheduled for treatment, of which approximately 105 were from our clinical trial and early access programs, and 15 from competitor ERTs or naive to treatment.
We've been pleased with the continued demand for this new therapy. As Brad said, and as anticipated, I would say, the rate of new commercial patients coming onto Pombiliti and Opfolda continues to increase across all three markets. In the US, we continue to see a majority of patients switching from Myozyme, roughly about 75% of the switches we've seen, and the remaining 25% coming from Lumizyme. This means we're switching patients proportionally from both products. Outside of the U.S., we're seeing patients switching from all three segments, from Myozyme, Nexviazyme and naive population, at a proportional rate, exactly what we want to be seeing at this stage. Our launch has leveraged our highly experienced cross-functional teams, and we've had great outreach with KOLs. We're seeing an increase in depth, as well as breadth of prescribers, across all three markets and in particular, see a growing number of prescribers who are not part of our clinical studies or expanded access programs.
All core treating centers have been engaged with, and we have had very positive feedback from HCPs and other stakeholders as to our business approach, support and patient focus. Finally, we find an important metric to track is our progress with access and reimbursement. We have a highly experienced team who are engaging in positive conversations with payers to demonstrate the value of Pombiliti and Opfolda. In the US, and with the start of the new year, many of the large payers have already put Pombiliti and Opfolda onto their respective formularies, and we've also seen strong acceptance by Medicare and Medicaid as well. Today, we're launched in Germany, the UK, the US, and Austria. We're also in active pricing and reimbursement discussions with additional major European markets as we focus on securing broad patient access throughout the EU.
More than 10 reimbursement dossiers have been submitted. Overall, we're starting off the year strong, and we're very pleased with the building momentum on patient demand. Over the course of 2024, our focus will be on maximizing the number of patients on therapy by year-end. So, in summary, we're very pleased with the launches of Pombiliti and Opfolda across all the first wave of countries, the strengths of our clinical data, the depth of experience and talent we have at Amicus gives us great confidence in our ability to make a real difference to people living with Pompe disease. We believe amicus is in a great position for our second successful launch. And with that, I will hand the call over to Jeff Gatseli, our Chief Development Officer, to discuss the ongoing clinical studies as well as regulatory timelines.
Jeff?
Jeff Castelli: Thank you, Sebastian, and good morning, everyone. On Slide 11, we remind everyone that we continue to build the body of evidence for Pombiliti and Opfolda through our ongoing clinical studies as we also continue to execute on expanding commercial access through regulatory submissions. As we enter the second phase of launch, in addition to the various reimbursement dossiers that we have or that we are in the process of submitting, we also have multiple ongoing or planned regulatory submissions for marking and approval in new geographies throughout this year. For the younger Pompe community, we continue to enroll the ongoing open-label ZIP study for children living with late-onset Pompe disease and the open-label RZELA [ph] study for children living with infantile-onset Pompe.
We see this as an important opportunity to support label expansions into these patient segments and provide access to these kids much in need in the years ahead. Through ongoing clinical studies and the Amicus Pompe registry, we expect to continue generating evidence on our differentiated mechanism of action and long-term data supporting the impact of Pombiliti and Opfolda across endpoints and patient populations. I am very excited to announce that we have actually now begun enrolling patients into the amicus Pompe registry globally. And here in February, we once again had a very engaging conference and a significant presence at the 20th Annual World Symposium that was held in San Diego. Amicus had 11 posters and an oral presentation highlighting our continued work across Fabry and Pompe disease.
Of note Amicus was honored with the WORLDSymposium 2024 New Treatment Award for Pombiliti and Opfolda, which recognizes companies that have made important achievements in advancing treatments for lysosomal diseases and have obtained regulatory approval. It's an honor to achieve an award based on our scientific innovation, but even more importantly the meaningful difference we can make in the lives of so many people living with these rare diseases. Finally as highlighted in the pipeline slide in the appendix for our earlier stage pipeline. We continue to focus on novel approaches for Fabry and Pompe day including delivery of our engineered GLA and GAA transgenes and the next-generation Fabry-Chaperone. With that, I would like to now turn the call over to Simon Harford, our Chief Financial Officer to review our financial results, guidance and outlook.
Simon?
Simon Harford: Thank you, Jeff. Our financial overview begins on slide 13 with our income statement for the full year ending December 31, 2023. We had a very successful year full year, achieving total revenue of $399 million, which is a 21% increase over the same period in 2022. At constant exchange rates, revenue grew strongly 20%, a global geographic breakdown of total revenue for 2023 consisted of $250 million or 63% of revenue generated outside the United States and the remaining $147 million or 37% coming from within the US. Cost of goods sold as a percentage of net sales was 9.3% for the full year 2023 as compared to 11.7% for the prior year period. Total GAAP operating expenses decreased to $439 million in 2023 as compared to $503 million in 2022, a decrease of 13%.
On a non-GAAP basis, total operating expenses decreased to $342 million for 2023 as compared to $413 million in the prior period, a decrease of 17%. We define non-GAAP operating expense as research and development and SG&A expenses excluding stock-based compensation, loss on impairment of assets, changes in fair value of contingent consideration and depreciation. Net loss for the full year 2023 reduced to $152 million or $0.51 per share including a $14 million or $0.05 per share expense related to the extinguishment of prior debt following our Blackstone refinancing that compared to a net loss of $237 million or $0.82 per share for 2022. In the fourth quarter as Bradley mentioned, we achieved our goal of non-GAAP profitability, which was $2.6 million.
Cash, cash equivalents and marketable securities were $286 million as of December 31, 2023 and that compared with $294 million at the end of 2022. Turning now to slide 14. I'm pleased to share our full year Galafold revenue growth guidance of 11% to 16% at constant exchange rates. Our full year 2023 non-GAAP operating expense guidance is $345 million to $365 million. We are pleased to share that amidst a launch year, we have kept operating expense growth minimal. As a reminder, we continue to have R&D commitments including registry studies in both Fabry and Pompe, the ongoing Pompeii Phase 3 study in countries not yet reimbursed as well as next generation of manufacturing for Pombiliti. There is very minimal investment in preclinical activities, which we expect to continue in 2024.
Following the achievement of non-GAAP profitability in Q4 of 2023, we anticipate to achieve non-GAAP profitability for the full year of 2024 driven by our first year of well-over $0.5 billion in combined revenue, as well as continued prudent expense management. As we think about profitability throughout the year, we anticipate a similar non-GAAP profit in Q1 2024 as we saw in Q4 2023. And non-GAAP profit is expected to build sequentially quarter-over-quarter after that. And with that, let me turn the call back over to Bradley for our closing remarks.
Bradley Campbell: Great. Thanks Simon, Jeff, Sebastian, as well a huge thanks to all of our employees around the world, who I know continue to work tirelessly for people living with rare diseases. Looking 2024, we will continue to drive significant top-line revenue growth supported by sustained double-digit Galafold performance and the successful ongoing global commercial launch upon building up for that, which puts us on track for our first full year of non-GAAP profitability. As I said in my opening comments, Amicus is at a major inflection point. We are strongly positioned to continue to advance our mission of delivering groundbreaking new medicines to thousands of people living with rare diseases around the world and creating value for our shareholders. With that, operator, we can now open up the call to questions.
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