Yahoo Finance Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) Q4 2023 Earnings Call Transcript
Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) Q4 2023 Earnings Call Transcript February 22, 2024
Amylyx Pharmaceuticals, Inc. misses on earnings expectations. Reported EPS is $0.07 EPS, expectations were $0.2. Amylyx Pharmaceuticals, 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. My name is Jenny, and I will be your conference operator today. At this time, I would like to welcome everyone to the Amylyx Pharmaceuticals Fourth Quarter and Full Year 2023 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the call over to Lindsey Allen, Head, Investor Relations and Communications. Please proceed.
Lindsey Allen: Good morning, and thank you for joining us today to discuss our fourth quarter and full year 2023 earnings. With me on the call are Josh Cohen and Justin Klee, our Co-CEOs; Jim Frates, our Chief Financial Officer; and Dr. Camille Bedrosian, our Chief Medical 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 made 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 RELYVRIO, also known as ALBRIOZA or AMX0035, statements regarding our current and planned clinical trials and regulatory developments and the expected timing thereof, our business and marketing strategy and outlook, expectations regarding results of the global Phase 3 PHOENIX trial of AMX0035 for the treatment of ALS and the impact of those results on the uptake of RELYVRIO or ALBRIOZA, the potential to expand global approvals for AMX0035 and ALS and other neurodegenerative diseases, and our expected financial performance.
Actual events and results could differ materially from those expressed or implied by any forward-looking statements 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 morning. 2023 was a transformational year for Amylyx. It was the first full year that our commercial product RELYVRIO, also known as ALBRIOZA in Canada, was available for people living with ALS. The first full year of launch generated $380.8 million in net product revenue, including $108.4 million in the fourth quarter. We also made great progress on our global expansion, built a pipeline of potential medicines for neurodegenerative disease, and transformed into a profitable company. We continued to have a steady number of new scripts being written in the quarter and our discontinuation rates and net patients on RELYVRIO remained stable from the third quarter. Prescribing remains concentrated with roughly 80 prescribers, mostly at major ALS centers, still representing approximately half of all RELYVRIO prescriptions.
We believe that we have significant room to grow with both the ALS specialists at these centers and with general neurologists. We are proud that one year into our launch, thousands of people with ALS in the US and Canada are being treated with our therapy. We know there are tens of thousands more people to help. To reach them and achieve our goal of having at least 10,000 people on RELYVRIO in the US at any point in time, we are focused on three key initiatives. First, expanding the use of RELYVRIO with physicians that specialize in ALS, who as a group care for about half of all people living with ALS. Second, increasing awareness of RELYVRIO among general neurologists and other physicians who care for the other half of all people living with ALS.
And third, educating on the importance of sustained treatment with RELYVRIO coupled with practical strategies to manage side effects. During Q4, we began rolling out these initiatives and we expect the impact of these efforts will build throughout 2024. On that point, we recently onboarded Dan Monahan as the General Manager and Head of US Commercial. Dan is an accomplished innovative leader with more than 20 years of experience across marketing, sales and market access covering numerous disease states, including his most recent position as VP of CNS Marketing and Portfolio Strategy at Otsuka. We are excited to have Dan leading our US commercial organization and believe his leadership, approach and experience will help us with the goal of bringing the benefits of RELYVRIO to many more people.
Of course, an important aspect of our launch will be our Phase 3 PHOENIX data, we are targeting top line data from PHOENIX during the second quarter of this year or before. We are thrilled to have Dr. Camille Bedrosian, our new Chief Medical Officer, join us on the call today to discuss PHOENIX in more detail. Camille brings nearly 30 years of leadership in developing successful medicines for people living with rare diseases and facilitating global access to them. Her experience will be invaluable as we advance our mission. In addition to our focus on our US launch, we remain committed to bringing the benefits of RELYVRIO to the more than 200,000 people living with ALS worldwide. While the vast majority of people taking RELYVRIO are in the US and Canada, we have leveraged early access pathways in Europe and Israel in 2023, helping people gain access and generating revenue.
We are making progress in Japan and have met with the Pharmaceuticals and Medical Devices Agency to discuss a potential regulatory path forward. We also continue to engage with key stakeholders around the world to identify other potential opportunities for pathways to access. Our long-term goal is to transform ALS from a disease for which symptom management is the standard of care to a disease that is treatable. RELYVRIO is an important tool in that transformation, as it is the first and only therapy in ALS that has been shown to slow disease progression and help maintain functional independence in the same clinical trial and extend overall survival in a longer term post hoc analysis. We have made significant progress in our first full year of launch.
We look forward to continuing our work this year to reach the many more thousands of people living with the ALS in the US, Canada and globally that can benefit from treatment. I will now turn the call over to Jim to discuss our financial results for the fourth quarter and full year 2023.
Jim Frates: Thanks, Justin, and good morning. As mentioned, 2023 was a transformational year for Amylyx. We delivered a strong launch for people living with ALS and we've become a profitable business. In addition, we're developing a significant pipeline to neurodegenerative disease and preparing for long-term growth. Now, let me turn to the financial results for the quarter. Net product revenues were $108.4 million for the fourth quarter compared to net product revenue of $102.7 million for the third quarter of 2023 and $21.9 million for the fourth quarter of 2022. The increase from Q3 to Q4 was primarily driven by an increase in net product revenues in international markets, including revenues generated in Canada and through early access pathways in Europe.
In the US, which represents the vast majority of our revenue, our net product revenue in Q4 were slightly ahead of our revenues in Q3. For the full year, net product revenues were $380.8 million. Gross to net adjustments were approximately 14% in the quarter and 12% for the full year, in line with our expected gross to net range. They were higher in Q4 as a greater proportion of our revenue came from outside the United States. Going forward, we continue to expect gross to net adjustments to be in the range of 12% to 15% until more significant revenues begin to accrue from outside the United States. Channel inventory levels at quarter end were as expected, with approximately two weeks of inventory in the channel at specialty pharmacies similar to what we've seen in previous quarters.
Cost of sales were $9.4 million for the quarter and $25.4 million for the full year, representing roughly 9% and 7% of net product revenues for the quarter and year, respectively due to slightly higher write-offs in the quarter. We continue to expect COGS to be in a range of 5% to 10% of sales. In terms of free goods, roughly the same number of people in the United States received RELYVRIO for free in Q4 as they did in Q3, through either our interim access program or patient assistance program. Going forward, we expect free drug to remain in the range of 10% to 15% of total US prescriptions. Research and development expenses were $44.9 million for the quarter and $128.2 million for the full year. The increase in the fourth quarter was primarily driven by increases in personnel expenses, our global Phase 3 trial in PSP, which was initiated in December of 2023, the open label extension of PHOENIX, and spend related to the advancement of other programs in our portfolio.
We expect quarterly R&D expenses to grow modestly quarter by quarter as we enroll patients in our ORION study and continue to build out our preclinical portfolio. Selling, general and administrative expenses, or SG&A, were $52.2 million for the quarter and $188.4 million for the full year. The increase was mainly driven by increases in personnel and marketing expenses. Again, we expect SG&A to grow modestly as we roll out additional growth initiatives for RELYVRIO in the United States and prepare for additional growth internationally should the PHOENIX study be supportive. Our work this year led to a strong bottom line with $49.3 million in net income for the full year. This represents our first full year of profitability and is a testament to the demand that we see both near and long-term for an efficacious treatment at ALS.
Supported by our operating profits, we ended the year with a strong balance sheet, we had $371.4 million in cash and short-term investments and zero debt. Finally, before I turn the call over to Camille, I'd like to take a moment to reflect on our first full year of launch. We're proud that RELYVRIO has already been prescribed to thousands of people with ALS in the United States and Canada, and our therapy is having a transformative effect on the way people with ALS are treated. We believe we have significant growth opportunities ahead of us as we work to bring our treatment to many more thousands of people. We're focused on delivering for people living with ALS, expanding the use of RELYVRIO and other neurodegenerative diseases, and expanding our research into new mechanisms even as we deliver on our bottom line.
We're in a unique and exciting position as we enter 2024. I'll now turn the call over to Camille.
Camille Bedrosian: Thanks, Jim, and I too wish you a good morning. I am pleased to have this opportunity to speak with all of you today. I joined Amylyx just a few months ago at an important inflection point for the company as we near anticipated top line data from the PHOENIX trial. The Amylyx team has made great strides in redefining how people with ALS are treated and in developing innovative therapeutic candidates for the treatment of neurodegenerative diseases more broadly. Prior to Amylyx, I was the Chief Medical Officer at Ultragenyx, Alexion and ARIAD, and now I'm excited to be a part of this mission driven Amylyx team as we work to change the lives of people living with ALS and other neurodegenerative diseases. Many doctors consider ALS one of the worst diagnoses possible to give a person.
ALS is a disease of being locked in a body relentlessly losing its ability to function independently, while also being conscious of what is going on. Every day, people living with ALS wake up in the morning and discover they will never again independently button their shirt, put in their contact lenses, brush their teeth, or speak with their families. They lose the ability to eat, to hug a loved one, and to walk. Knowing that the next loss is just around the corner, people living with ALS and their families live in a perpetual state of uncertainty and loss. We have shown the trajectory of ALS can be meaningfully changed. RELYVRIO is the first and only ALS therapy to help slow disease progression, maintain functional independence, and extend overall survival in the same trial called CENTAUR.
With CENTAUR, we completed a randomized, placebo-controlled study that met its pre-specified primary endpoint. This result led to regulatory approvals in the US and Canada, publications in the New England Journal of Medicine, the Journal of Neurology, Neurosurgery and Psychiatry, and several other peer reviewed journals. The PHOENIX trial will provide additional efficacy and safety data and a larger population of people living with ALS and build on the robust and positive results observed in the CENTAUR trial. PHOENIX enrolled 664 people living with ALS and will evaluate function over 48 weeks using the same primary endpoint as CENTAUR, the ALS Functional Rating Scale Revised, or ALSFRS-R, which is the gold standard measure of disability progression in ALS.
Baseline characteristics show the population enrolled in PHOENIX has substantial overlap with CENTAUR, as was presented at ENCALS in July 2023. The PHOENIX population is within one point of CENTAUR on the baseline ALSFRS-R score and within one month of CENTAUR on baseline times and symptom onset. PHOENIX has the potential to be the largest Phase 3 study in ALS to demonstrate a treatment benefit, which would make RELYVRIO the first and only therapy in ALS to generate positive data in two different trials. This would be an achievement never before seen in ALS, and we are enthusiastic about what supportive data from PHOENIX might mean for people living with this disease. Moving to our R&D pipeline, we are advancing several important programs and have a number of expected milestones coming up in 2024.
We believe targeting neuronal death with RELYVRIO also known as AMX0035, may have applicability across other neurodegenerative diseases. A multinational Phase 3 ORION trial of AMX0035 in Progressive Supranuclear Palsy, or PSP, was initiated in December 2023 and we anticipate top line results in 2025 or 2026. We shared the scientific rationale on AMX0035 for the treatment of PSP in detail in a webinar posted on our website in July 2023. Turning now to our Phase 2 HELIOS trial of AMX0035 and Wolfram syndrome. The trial is now fully enrolled and we expect to report results in the second half of this year. Wolfram syndrome is an ultra-rare genetic disease that leads to multisystem failure resulting in blindness, deafness, diabetes, ataxia, neurodegeneration, and typically death by early adulthood.
There are no approved therapies for Wolfram syndrome. Our R&D team has been collaborating with Washington University for many years to conduct research, which led to our decision to conduct the Phase 2 trial. We are looking forward to what the data from HELIOS would mean for people with Wolfram syndrome, a community where the unmet need is incredibly high. We are also advancing AMX0114, our antisense oligonucleotide candidate targeting calpain-2, through IND-enabling studies and expect to enter the clinic by year end. Calpain-2 is a critical effector of axonal degeneration, which is implicated in the pathogenesis of ALS. Again, I am very excited to be part of Amylyx and look forward to meeting many of you. I will now turn over the call to Josh.
Josh Cohen: Thanks, Camille. As we eagerly await the PHOENIX top line results, we are developing updated clinician engagement and marketing program and believe supportive data would help in all aspects of our launch. And of course, our plan in the event of supportive data will be to re-engage global regulatory agencies, including in Europe, in support of our goal to help more people access the benefits of RELYVRIO as quickly as possible. And to preempt a question that may be on many of your minds, there's no early look into the PHOENIX data and we do not yet know the outcome of PHOENIX today. In addition, we are continually striving to transform and improve the way ALS is treated. And to this end, we are working to accelerate the time it takes to diagnose ALS.
Current data suggest that diagnosis takes about a year from symptom onset and is not a straightforward path. Many people with ALS are misdiagnosed initially and see several specialists before they are accurately diagnosed with ALS, valuable time that could be spent on a therapy that slows neuronal death. To accomplish this, we are developing a novel biomarker panel to assist in diagnosing ALS earlier and we intend to provide results from initial experimentation this year. Lastly, in addition to Camille and Dan, we are thrilled that Linda Arsenault recently joined us as our new Chief Human Resources Officer. She brings over 30 years of leadership and experience, including most recently from Sunovion where she was the Chief Human Resources Officer.
We are excited to welcome her to our team. In closing, we are proud of the achievements we made in 2023. We had a strong start to our launch of RELYVRIO and have reached many thousands of people living with ALS. In 2024, we are planning for PHOENIX top line data anticipated during the second quarter or before, which we believe if supportive will be instrumental to our growth trajectory. We are a profitable company, which enables us to self-fund our R&D pipeline and evaluate RELYVRIO in other neurodegenerative diseases. We have a substantial opportunity ahead of us, both with our commercial launch in the US and globally and with our pipeline. We are intently building a differentiated long-term franchise focused on developing and delivering innovative and impactful treatments for people living with neurodegenerative diseases around the world.
Now, we'd be happy to take your questions. Operator, please open the call up to Q&A.
Operator: We will now begin the question-and-answer session. [Operator Instructions] Your first question is from Geoff Meacham from Bank of America. Please ask your question.
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