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Amicus Therapeutics, Inc. (NASDAQ:FOLD)

Strategic Update Conference Call

November 20, 2013 5:00 PM ET

Executives

Sara Pellegrino – Director, IR

John Crowley – Chairman and CEO

Brad Campbell – Chief Business Officer

Chip Baird – CFO

Analysts

Ritu Baral – Canaccord

Anupam Rama – JPMorgan

Kim Lee – Janney Capital

Joseph Schwartz – Leerink

Operator

Good day ladies and gentlemen. And welcome to the Amicus Therapeutics Strategic Update Conference Call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session with instructions following at that time. (Operator Instructions). As a reminder this conference is being recorded.

Now I’ll turn the conference over to your host Sara Pellegrino, Director of Investor Relations. Please begin.

Sara Pellegrino

Good evening. And thank you for joining Amicus Therapeutics’ Strategic Update Conference Call. Speaking on today’s call we have John Crowley, our Chairman and Chief Executive Officer; Chip Baird, our Chief Financial Officer and Bradley Campbell, our Chief Business Officer.

Today’s slide presentation is currently being webcasted live on our corporate website at www.amicusrx.com in the Investors section under events and presentations.

Turning to slide 2, you will find a reference to our Safe Harbor statements. This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, relating to business, operations and financial conditions of Amicus, including, but not limited to, preclinical and clinical development of Amicus candidate drug products, financing plans, the ongoing collaboration with GSK and the timing and reporting of results from clinical trials evaluating Amicus candidate drug products.

Words such as but not limited to, look forward to, believe, expect, anticipate, estimate, intend, plan, would, should and could, and similar expressions or words identify forward-looking statements. Although Amicus believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there can be no assurance that expectations will be realized.

Actual results could differ materially from those projected in Amicus’ forward-looking statements, due to number of known and unknown risks and uncertainties including the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2012.

All forward-looking statements are qualified in their entirety by the cautionary statement and Amicus undertakes no obligation to revise or update this presentation or reflect events or circumstances after the date hereof.

At with that, it is my pleasure to turn the call over to John Crowley, Chairman and Chief Executive Officer of Amicus.

John Crowley

Great. Thanks Sara. And good evening everybody. This is a really important night for Amicus with the Rare Disease Community and certainly for Amicus shareholders. As I indicated in the quote of our main press release announcing that we’re strengthening our Biologics Business Strategy.

This is indeed a bold step forward for Amicus. It is a bold and broad move that strengthens our positioning in the biologics. And it’s really important if you look on slide 2, and Sara will go ahead and manipulate the slide for the web audience, we’ll also post these up to our website following the call.

There are really four pillars of our broad strategic repositioning here and again this is an evolution from our pharmacological Chaperone CHART platform technology, again a technology that’s been in manned, a proof of concept in both Fabry and Pompe disease and something we as many of you are increasingly excited about the broad potential of this technology.

And we think to really leverage that feeling that going forward and to be a major leader in the Enzyme Replacement Therapy space in the lysosomal storage disorders and perhaps beyond. That it was important that we reposition the company. And to do that we did four major transactions that were all closed and that we’re now announcing simultaneously as part of the foundation going forward.

The first is the Acquisition of Callidus Biopharma. The second is a revised Fabry agreement with GSK Rare diseases. The third is we have restructured and realigned our organization to be better positioned to execute on our biologic business strategy. And we’ve also secured financing that takes our cash balance now well into late 2015, with $40 million in equity and a debt finance in the equity transaction now closed and the debt financing expected to be closed in the coming week.

So, if we flip to the next slide, we’ll go through a little more detail as we get through the presentation. Here I’ll turn it selectively to Chip and Brad to comment specifically on business development activities as well as finance.

So, on the next slide, we see the specific points that we’re going to emphasize here this evening about strengthening the biologics business strategy. So the key takeaway of course that we’re now strongly positioned and well capitalized to advance next generation enzyme replacement therapy.

So, the first point is with the Acquisition of Callidus biopharmaceutical this strengthens Amicus’ Pompe program. The core of our Pompe program is going to be an enzyme replacement therapy. We of course have been developing our own therapy. We’ve analyzed and I’ll talk more about the Callidus program in some of the data that we’ll share here.

But as we got to know the team there and the data and the programs became increasingly excited about the unique characteristics of this Pompe enzyme therapy that we think has the potential to be even further enhanced based on our work that we’ve done with the CHART platform.

Also importantly, the Callidus Pompe enzyme therapy when we looked at it, when independent consultants working with us looked at it, demonstrated that the timeline to the clinic now with the Pompe next-generation ERT could be advanced – would be advanced by more than a year if we were to acquire this program. So that is the fundamental precept of what drives the Callidus acquisition together with some very other important parts that I’ll here in a moment.

Secondly, we did amend our GSK collaboration that will provide us with global rights to the Fabry next-generation enzyme replacement therapy. Third, broadly we now have three next-generation enzyme replacement therapies that are wholly governed and controlled by Amicus going forward in Fabry, Pompe and MPS-1 each of which is expected to enter the clinic over the next three years, the first are Fabry next-generation ERT that we’ve now fully acquired from GSK entering the clinic in 2014.

With the revision of the GSK agreement, we also did acquires the ex-U.S. clinical and commercial responsibilities for the continuing Fabry mono-therapy program, which we believe NGSK believes will maximize the chances of our success for that continuing Phase 3 program.

And then finally, the last point again we’ve raised $15 million in equity through a pipe transaction with Red Mile and GSK, as well as secure $25 million in debt financing on very favorable terms. And together with the organizational restructuring and realignment and the related cost savings will extend our cash runway to late 2015.

So, if we can turn to slide 7, we like to go through Pompe programs strategic update. And I’ll talk to you a little bit more about Callidus and what we see as the important component of deal and the assets and people that we acquire into Amicus as part of this.

So slide 7, talks about Pompe Disease, as all of you know this is a severe lysosomal storage disease, a neuromuscular disease manifested by a presence of glycogen that builds up in the lysosomes of muscles. And people with Pompe, it ranges from severe infantile to severe adult forms across the spectrum. There is currently an approved enzyme therapy Lumizyme from Sanofi Genzyme.

Our goal throughout has been to develop next-generation enzyme replacement therapy. As you know, in addition to the significant unmet medical need, we’ve already conducted studies combining a Chaperone AT2220 in patients with Pompe, a single dose PK and safety study or study 010. And in that study we showed that in all patients we can stabilize the enzyme, increase the half-life of lumizyme in that proof of concept study and with the higher doses, increased activity in muscle in quadriceps, in that Study 010.

That was an important co-administration proof of concept for us. And together with the learnings that we have from our Fabry next-generation ERT, give us great confidence that the best answer for patients would be a next-generation ERT utilizing the CHART platform.

As we’ve talked about before, we have been developing over the last year or more, our own proprietary next-generation ERT, separate from the addition of the CHART platform, where with the base ERT we were also looking to enhance the glycosylation to improve targeting of the enzyme. As we know the current product Lumizyme has a sub-optimal we believe, glycosylation pattern and level of mannose-6-phosphate that doesn’t lead to optimal uptake of the enzyme.

So in addition to the stabilization and we believe the potential to reduce the immunogenicity and improve tolerability of the enzyme with the addition of a small molecule Chaperone stabilizer. We know that we needed a better enzyme.

And with the Acquisition of Callidus that’s exactly what we’ve done. We’ve brought in a better enzyme that is as good as anything that we were working on developing and it’s more than a year advanced. So, that is the core of the Acquisition of Callidus.

If we turn to slide 8, we can see how the Callidus Acquisition strengthens our Pompe program and position in the Pompe world, really in five different ways. The first is the product itself, the GAA, which is the enzyme deficient and people living with Pompe. The GAA enzyme replacement therapy that we’re acquiring with our Acquisition of Callidus is uniquely engineered Pompe GAA, with what we believe to be optimized glycosylation structure and enhanced tissue uptake in preclinical studies and in the in-vitros that we’re going to show you some of that data here in a moment.

So, we’re acquiring a product. But we’re also acquiring a platform. We think there is great value to the base GAA, the Pompe enzyme with that optimized glycosylation structure. We also have a version of the enzyme with that added a novel IGF2 targeting moiety. It’s a technology that’s applicable to this enzyme and we continue to evaluate whether that could offer even further benefits to patients.

But it’s also a platform that’s applicable to all enzymes in lysosomal storage diseases. And we are going to evaluate and continue to evaluate that for current enzyme therapies and development as well as any other enzymes that we will make, so a product and a platform.

And thirdly, we saw great synergies with the Callidus products and technologies, in fact all assets acquired and technologies from Callidus will complement the Amicus CHART platform. We are also acquiring significant capabilities and leadership.

The Co-Founder and Chief Science Officer, Dr. Hung Do is a long-time associate of our founding Callidus over three and half years ago. He’s a former Lead Genzyme scientist and Glycobiologist, A world renowned expert in the development of enzyme replacement therapy who worked in a lead role in the development of Lumizyme more than a decade ago with Genzyme. Dr. Do will join us with this acquisition as Senior Vice President of Biologics. And will essentially help us in making sure that we have the right leadership and capabilities going forward as a biologics company.

And finally, and this is a really important point as well that Callidus program is quite advanced, their Pompe program. As part of the acquisition we will inherit existing contracts and relationships with a world-class GMP biologics contract manufacturing organization.

The Callidus Pompe ERT has already completed successful tech transfer and scale-up is underway. So the existence of that relationship is successful tech transfer we think offers great benefit and further make it the risk of moving a Pompe ERT forward. As we all know with the history of ERTs in the last few years, manufacturing is not something to be taken for granted. And we think it’s an important part of this acquisition.

Slide number 9, and over the coming months we’ll be able to share much more of the preclinical data at the specific science conferences. But we did want to give you some flavor for just how significant of an-advancement we think the Callidus Pompe enzyme replacement therapy is.

So, this will be a build I believe for those, if not I’m sorry. This slide here will show the Lumizyme GAA and the uptake into myoblast muscle cells in an in-vitro setting. You see in the green bar, the uptake of the enzyme, the Lumizyme enzyme. You see in the red curve, you see the Callidus enzyme, the Callidus GAA more than 10 times uptake into the myoblast. And the blue line more than 50 times greater uptake with the Callidus version, with the addition of their platform technology.

So, a couple of key takeaways here, the cell line looks to be much improved in its targeting to cells, the base Callidus enzyme. And in addition, when we add the platform technology which we think to be a further enhancement, we see an even greater uptake well beyond in order of magnitude uptake from the current Lumizyme enzyme.

The preclinical data that’s been generated by Callidus and its jointly been developed and generated through the diligence over the last couple of months that we’ve been doing with the Callidus team, supports this notion of enhanced uptake. Again, we think this is mediated to the mannose-6-phosphate receptor, like all of these lysosomal enzymes it is entirely dependent on the carbohydrate structures.

And with the Callidus enzyme further enhanced in one-iteration of it with the addition of the tag diversion. So again, we think in terms of solving one of the two problems with the existing enzyme therapies that being the efficient uptake of the enzyme into to lysosome and muscle cells. We think this base Callidus cell-line together potentially with the core tagging technology could offer a significant advantage in terms of solving problem number one, which is enhanced enzyme uptake.

Problem number two, as we all know is the immunogenicity and the lack of tolerability of the enzyme replacement therapy that’s currently on the market. That we think can be effectively addressed with the CHART platform. So again, with the addition of our small molecule stabilizing Chaperone, we think this could be a real win-win in developing what we think could be the most optimal product for people living with Pompe.

I’m going to turn over the next slide, slide 10, for Brad Campbell, to discuss the acquisition terms of Callidus.

Brad Campbell

Great, thanks, John. Good evening everybody. Let me quickly walk you through the acquisition terms for Callidus Biopharma. Callidus shareholders will receive $15 million in Amicus common stock which is 7.2 million shares in upfront consideration for the acquisition. After that they will be eligible for $6 million to $10 million in near-term milestones through Phase 2 Pompe development. And a further, $105 million in payments or success based late-stage development regulatory filings and approval milestones spread across three products.

So, with that, let me turn it back over to John to introduce our Fabry update.

John Crowley

So, having described the Callidus acquisition and the rationale and the great synergies there, let me turn to the second pillar of this broad strategic repositioning for Amicus. And that’s a revision to a relationship in the Fabry program is with GSK. And we included a list of the press release quote on slide 12, which is a quote from Dr. Slaoui, who many of you know is the Chairman of GSK R&D and the Rare Disease portfolio along with many other parts of GSK falls under Dr. Slaoui’s leadership.

Again Moncef has been a terrific partner with his colleagues at GSK and helping us to advance these programs. Over the last several months we’ve had discussions. I’ve shared with them our vision, the strategic plan we have been working on to accelerate our CHART platform and accelerate Amicus’ position as the leader in the development of next-generation biologics and enzyme replacement therapies.

The rationale for GSK I think is well expressed in Dr. Slaoui’s quote and I’ll refer you to the second part of this first sentence, where he says, we believe Amicus is well positioned to maintain momentum of the programs, maximizing the potential for success.

So, we believe with our clinical expertise, our relationships in the patient community and our ability to develop the clinical protocols for the next-generation ERT as well as the ability to continue to execute on both existing mono-therapy programs and with this restructuring of the company to be able to afford these programs going forward under the Amicus umbrella with continued support from GSK from a near-equity investment and other activities.

We also agree that we will be well positioned to execute as a leader in Fabry disease. So we continue with a strong relationship, GSK’s relationship in Fabry, now moves from an active development partner to a strong passive partner.

On the next slide we’ll go through the highlights of the relationship that’s now evolving with GSK but that remains very strong.

Brad Campbell

Great, thanks, John. Now we’re on slide 13, let me walk you through how this revised agreement adds significant value for Amicus shareholders. So, first and foremost going forward, Amicus will now control global drug development, regulatory and commercial activities and importantly, also communication for all of the Fabry products and development both the next-generation enzyme replacement therapy as well as our mono-therapy program.

This brings attractive economics for Amicus including immediate and significant value creation for our shareholders. There is no upfront payment as part of this revised collaboration. And our future payments to GSK will be for downstream, success based, regulatory and commercial milestones and royalties. Importantly, we get global rights to the Fabry next generation ERT which enhance our CHART platform validation and shareholder value.

We also believe that the European and rest of world rights to the migalastat mono-therapy program maximize the likelihood of program success given the regulatory path that’s been defined outside of the U.S. And also, as John mentioned GSK does remain a strong passive partner through their continued equity ownership, importantly that’s shown in their participations in the pipe that Chip will walk through in more detail. But that’s including their $3 million participation in that equity investment in Amicus common stock. And finally, they will continue to provide some FD and program support throughout the collaboration.

So, with that, let me turn it over to Chip, who will walk us through an update our financing and organization restructuring.

John Crowley

If, before we go to Chip, if I can just add some comments here. That’s a terrific summary Brad, thank you. And just on mono-therapy I want to comment to although the shift in focus here is a further emphasis on what we believe to be the greatest opportunity for patients and for shareholders for Amicus to develop next-generation biologics with the CHART platform and now the Callidus programming platform.

We do still continue to have good confidence in the migalastat mono-therapy program. We believe that drug works, we will continue to execute those programs and those studies and see that data in 2014. And an important part for us, if we were to continue as we are with the migalastat mono-therapy programs was to have control over the execution and the communication of those studies and the regulatory interactions.

As many of you know, the 012 Study that’s designed for European approval is fundamentally different than the U.S. Study. It’s a non-inferiority study with a clinical end-point that we’ll readout in 2014. Now we’ve said and GSK has said before us that we think there is a greater likelihood of success in that program.

And with the U.S. program given the more-clear regulatory path, of course we’re still blinded to all of that data in the mono-therapy program. But we do agree with GSK that these programs going forward are – Amicus is well positioned to execute. So we look forward to that data in 2014.

So, let me turn it to Chip for a review of the financial and organizational restructuring.

Chip Baird

Great, thanks, John. So, we’re pleased to report that in conjunction with the Callidus Acquisition and the revised agreement with GSK, we’ve put together a funding strategy that gives us runway through late 2015.

And certainly this enables us to get through the final readout of Fabry mono-therapy program. And to reach that first readout on the Fabry co-form program with the existing cash on hand. We’ve done this in a way that combines equity and debt at an overall attractive cost to capital and manages sensitivity to shareholder evolution.

So the first component of that is a private placement that we closed this afternoon, up $15 million of proceeds to investors Red Mile Group, who has been on, a long-term holder and very supportive of Amicus, as well as GSK who continues to participate pro rata maintaining their percentage ownership.

The specifics of that deal, 7.5 million shares priced at $2 a share, a very small discount to where we’re trading today. And warrant coverage of 1.6 million shares at $2.50 with a narrow 12-month window to exercise those warrants.

So that’s the first piece of our financing strategy. As we looked at the overall landscape the other thing that has become increasingly attractive in our space is debt financing. And we’ve availed ourselves of that. We have a sign-term sheet and expect to close on a $25 million debt financing in the next few weeks. On closing we’ll take down $15 million of funding and we’ll have available $10 million to drop on later in 2014.

All end, it’s a total cost of capital that’s less than 10% and importantly there is no warrant coverage, another favorable terms and structure of the deal. So overall it’s an attractive way for us to bridge to what we’ll see in a couple of slides is a very rich set of milestones coming up over the next 18 months.

The final component to making all the finances work and making sure that we can get there on the capital that we have is properly in line in the organization. And we made a difficult but necessary decision to reduce the headcount by about 14% to remaining 91 employees. That saves us $4 million on a go-forward basis.

We’ve also strengthened leadership team and as John mentioned, Dr. Hung Do will be joining the company to lead our biologics efforts so that we’re positioned from both a capital and organizational perspective.

There is a little more specificity around the balance sheet and the cash position. As you recall, we ended the third quarter with $60 million of cash on hand. We have entered into agreements today and expect to with the debt in the next few weeks to raise an additional $40 million in equity and debt financing. Of that $40 million we should close on $30 million of it before the end of the year. When you combine that with expected fourth quarter spending, we’ll end the year with between $80 million and $85 million of cash on hand.

We’ll provide more detailed financial guidance for 2014 early next year. But we remain on track to take this capital and this operating plan late into 2015.

That’s the summary of the financials. And with that I’ll turn it back to John to talk about the steps on the milestones.

John Crowley

Great. Thanks, Chip. So, on the next slide we’ll just talk about some of the upcoming milestones as we head into hopefully will be a very exciting 2014. We will again continue aggressively to develop the next-generation biologics. We’ve had a lot of preclinical proof of concept data coming in the beginning of 2014 and some important science conferences both for Fabry and for Pompe, next-generation ERTs.

In the first half of ‘14, we will then present the complete 12 and 24-month data from the Fabry Phase 3 mono-therapy study, Study 011. And that is the change with this revised agreement with GSK. We think it’s a better course and a higher likelihood of future regulatory success is to underline the 12-month biopsy data together with the clinical end-point data and the 24-month dataset. And again the extension study piece of that study continues to go well.

In the second half of ‘14, we will then put our first next-generation enzyme replacement therapy with the CHART platform technology into the clinic, our next-generation program in Fabry entering the clinic in the second half of ‘14. We also then expect to get the top-line data from our Phase 3 mono-therapy study, Study 012 which is the switch study from enzyme replacement therapy again in the second half of ‘14.

In the first half of ‘15, we will have initial critical data for the Fabry next-generation enzyme replacement therapy, so a very important proof of concept in humans with a validation we hope of the platform technology in Fabry Disease.

And also as our biologics programs continue to advance in the first half of 2015, we expect to see our Pompe enzyme replacement therapy into the clinic. Looking beyond this, we think in the first part of 2016, there is a potential for our next-generation ERT for MPS-1 to also enter the clinic, which would mean for us, it would be a three-and-three strategy, three enzymes in the clinic each over the next three years, 2014, 2015 and 2016.

Chip commented on the financing, I’ll just say I’m very pleased with how this came together, certainly pleased with the terms of the venture debt and the syndicate that brought that together. And with the equity piece and very grateful for the enormous amount of work and diligence and thoughtfulness from Red Mile Group, from Jeremy, Mike and their team, as well as our continued partners at GSK.

On the next slide, I just do want to highlight although – I’m sorry, we are raising money here. But we do have a strategy going forward. We think with the broad platform technology the CHART platform that we have, our strength in developing next-generation enzyme replacement therapy now for Fabry, Pompe and MPS-1, but with the potential to develop for a broad range of all lysosomal storage disorders where the technologies could be applicable and potentially beyond.

We expect to be very active into and through 2014 on the business development front. We think that will be important to get next-generation therapies to patients. Also for us to be able to leverage best our core technologies and capabilities but also with a financing tool.

And here, as we went public in the spring of 2007, this equity offering is our third equity offering and in the aggregate from institutional investors we’ve raised less than $100 million in those three equity offerings, the largest of which was a $65 million follow-on in March of 2012.

Most of the company’s finance since our IPO has come from business development deals and more than $250 million raised through a series of business development deals. So I think that’s an important note to make.

I will, operator, we’re almost ready to turn it over to questions. I just want to reemphasize, especially with the Callidus Acquisition and the advancement of what we think is a very high quality product platform technology, leadership, manufacturing relationship, a quantum step forward in our ability to deliver a next-generation therapy for people in Pompe Disease. And also to we think next-generation ERTs in many lysosomal storage disorders.

I came into this business almost 14 years ago with a goal to develop an enzyme replacement therapy in Pompe Disease. And I remain personally committed to leading Amicus’ effort in the next-generation of Amicus to make sure that we can develop better ERTs for people who are so much in need. And by better ERTs we hope to build enzymes as we’ve already done in Fabry, Pompe and now with our MPS-1 program, enzymes that are better targeted that are less immunogenic, that are better tolerated, that also potentially have novel routes of administration.

So this strategic transformation for Amicus is important for shareholders but also they’re important for patients and their families and the community. And that’s something we’ll remain incredibly dedicated to. It is a bold move forward with all the different pieces in the pillars of this strategic transformation, but hopefully fortune favors the bold.

So, with that, operator, we’re happy to take any questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions). First question is from Ritu Baral of Canaccord. Your line is open.

Ritu Baral – Canaccord

Hi guys, thanks for taking the question. A couple questions on the Callidus enzyme. What preclinical work have been generated to date and what I guess, what is the extent of the immunogenicity data that has been generated to date that we might see in the early part of next year?

John Crowley

Sure, Ritu. I’ll just state that we’ve done extensive preclinical studies. Callidus has done some before our discussions around the acquisition and then together with the diligence we’ve done some pretty extensive studies.

They’ve been conducted for efficacy they’ve been conducted in the Pompe knock-out animals that are traditionally accepted. And we’ve looked at a range of doses and formulations. We’ve looked at it with and without the tag. We’ve looked at it with and without Chaperone. And we’re very, very encouraged by what we saw. And that was a key part of the proof of concept for us going forward together with the body of knowledge that we’ve developed.

I’ll reserve for the coming weeks and months anymore of a preview of that data, I think it’s important to preserve the integrity. So it could be presented at the right scientific conferences. We and the experts we retained, we’re very encouraged by what we saw.

Ritu Baral – Canaccord

As far as the FDA required preclinical tox work, pre IND work, how much of that is complete at this point and what’s left to do?

John Crowley

Sure, the processes have begun and I’ll let Brad comment a little bit on that.

Brad Campbell

Yes, there were two. As John mentioned we’re well underway from a manufacturing perspective. And so that will take us into the early part of next year. Once that material becomes available we’ll start the preclinical tox packages – tox programs which would lead us up to getting into the clinic in the first part of ‘15.

So that piece is still yet to do. But the first piece is getting manufacturing in place. And as John mentioned the relationships with WuXi are strong and in place and moving forward swiftly. And so, as we roll-out that plan we’ll give you more detail.

Ritu Baral – Canaccord

Got it. And turning to the Fabry’s program, what expenses and burn are you going to be assuming going forward in 2014 from the ongoing 012 study?

John Crowley

Chip, do you want to comment?

Chip Baird

Yes, sure. Thanks, Ritu. So as you recall under the – until today arrangement, the prior arrangement it was 40-60 cost share. So starting in 2014 we’ll adopt the 100% of those costs. But as we looked at this and as we looked at budgets and the timelines to final read-outs on mono-therapy which we continue to expect in the second half of next year.

The incremental investment to get there and to get there only in 100% was actually comparably modest in the single digits million dollar range. So it’s an incremental investment and it’s as John alluded to before, I think it gives us multiple shots in goal from a regulatory perspective. And we think a better and higher probability of success in territories outside the U.S. from a regulatory perspective. So, on balance, that was compelling to us. And I think the model and we’ve done from an MPV perspective supports that as well.

Ritu Baral – Canaccord

And that’s because most of the costs have already been incurred as far as enzyme?

Chip Baird

Yes, most of – as you know the studies are fully enrolled. And so we’re coming out to the final readouts from 011 and 012. And again that’s a lot of it and from an MPV perspective you’re looking at a much larger market size. And potentially a more streamlined regulatory path.

John Crowley

Yes, to be clear Ritu, and we looked at what is the driver of revising our relationship with GSK. But it was a component. And when we looked at that and running that program through and being able to control the governance and then communication, given the nature of that study, the regulatory pathways that are much more clear in Europe and the fact that the size of the market is much larger ex-U.S. almost twice the U.S. market in the aggregate.

It seems like a very important opportunity to us. And as Chip indicated I think a pretty judicious bet on our part. And if the data is good, we think it will continue to be a very, very valuable program with an approved – potential for an approved drug there in short order.

And if the study should suffer a set-back, we’ve already well positioned the company with the key value driver going forward. It’s going to be the development of these next-generation biologics, including Fabry, which enters the clinic next summer.

Ritu Baral – Canaccord

Got it. Last question, how do you see the Fabry market right now, I mean, from what I understand, most of the shortages – the enzyme shortages have resolved. What are the dynamics that you think you’ll be facing?

John Crowley

Yes, Bradley, go ahead please.

Brad Campbell

Sure. So, yes, I think you’re right Ritu. Most of that has been resolved. And I think you continue to see sort of the fight for share go on between the two players that are out there today.

Right now, or at least in 2012, sales were around $875 million as reported by those two companies so the market is growing again. And you’ll recall the mono-therapy we think could be applicable for half of that market going forward and our next-generation ERT could be applicable for the other half of the market.

So, we think we have a great opportunity to bring new products into that space. And it continues to be a large and growing market going forward. So we see both of these as important opportunities for Amicus in the future.

Ritu Baral – Canaccord

Great. Thanks for taking the questions.

John Crowley

Thank you, Ritu.

Operator

Next question is from Anupam Rama of JPMorgan. Your line is open.

Anupam Rama – JPMorgan

Hi guys, thanks for taking the question. And just two quick questions. Just trying to get a little bit more color on sort of the negotiations with GSK? Who approached who here? Did you guys proactively want to get the global rights to both the enzyme and mono-therapy? And second question, the Callidus website indicates that probably the next latest stage enzyme is a Gaucher’s enzyme. I’m just wondering if you had some initial thoughts of how that might fit in with what you’re already doing in Gaucher’s Disease. Thanks.

John Crowley

Yes, let me take the first one on the – we have had a very strong relationship with GSK as development partner. Over the end of the summer, early fall is we work with our board to finalize our strategic plan and our recommendation that we strengthen our position as a biologics company and more aggressively advance the CHART platform.

It was very important to us that our first program into the clinic is one where we can control clinical development as Dr. Slaoui said in his quote. We believe Amicus is well positioned to execute on these programs giving our existing relationships and experience. So we began those discussions with GSK in the early part of the fall, about broadly restructuring the relationship and with a series of lengthy discussions that I have beginning with Moncef, and then eventually our business development team.

So, it was kind of an evolving strategy for Amicus and here for GSK as well. But again, they are increasing their equity investment to maintain their 19.9% ownership. They have what we hope to be very valuable future upsides in these program through their royalty on both the next-generation Fabry ERT and the mono-therapy program and the milestones as well.

So, we believe GSK will continue to be a strong passive partner, they will continue as our largest shareholder. So it’s a different relationship with one that we think maximizes the chances of success in most Fabry programs.

As far as your second question about Callidus, they do have the Gaucher Enzyme that they’ve also engineered. The enzyme is different than any one, you’re obviously familiar with the Gaucher space, I believe the Shire and Pfizer products are largely similar to the Genzyme product.

Callidus looked at this bit differently. They haven’t really set data and we’re not really seeing it here tonight. But we do think there is value in their platform applicable to diseases beyond Pompe. And they’ve also begun work and have data on other enzymes beyond Pompe and Gaucher. So there is a pipeline that is developing as well that will inherit all of that.

Anupam Rama – JPMorgan

Great. Thanks for taking our question.

John Crowley

You bet.

Operator

Our next question is from Kim Lee of Janney Capital. Your line is open.

Kim Lee – Janney Capital

Good afternoon. Thanks for taking the questions. First, can you clarify again the timelines for migalastat and other pipeline programs? I think you mentioned that you’re going to have some data in the first half of ‘14 for Fabry. Can you clarify those? Thanks.

John Crowley

Yes, there are two data points for mono-therapy program, the migalastat mono-therapy program. The first is the complete 12 and 24 month dataset which is the final data. All pulled together, the complete dataset that we expect in the first half of 2014, for study of 11. The second dataset and this is again for ex-U.S. approval in Europe. This is the top-line data from the Stage 3 mono-therapy study 012 and we expect that in the second half of 2014.

Kim Lee – Janney Capital

Great. Can you go over timelines that you expect for the other pipeline candidates as well?

John Crowley

Yes. For our next generation enzyme replacement therapy into the clinic, and again this is the JCR enzyme that we’ve been parted with for some time now. Now with GSK on and the co-development and the enzyme replacement therapy that was developed by JCR originally as they buy a similar to Fabryzyme and now we think improved with the addition of the Chaperone through the CHART platform.

That again has been scaled to large bioreactor scale that’s completed I think virtually all of the tox studies, so that they’re much advanced program. And we expect that first next-generation ERT into the clinic in the second half of 2014.

Our second program now advanced more than a year from our internal program is the next-generation Pompe enzyme replacement therapy. That we expect into the clinic in the first half of 2015. And then our third enzyme replacement therapy that we’ve been developing internally here at Amicus, we expect at some point in 2016 to be eligible to enter into the clinic, enhance our three, in three-strategy in the biologics.

Kim Lee – Janney Capital

Great. Thanks for that clarity. Also, one last question here, so what do you think has changed for GSK that they are now taking a passive role in the Fabry program versus an active role in development and commercialization?

John Crowley

Yes. I think I can’t speak for GSK but I will refer you to Dr. Slaoui’s quote. I think hopefully it’s very clear on what’s their intent and their revolving business strategy in this segment of rare diseases is. And again, his statement that we believe Amicus is well positioned to maintain momentum in the programs, maximizing their potential for success with internal expertise and established relationships within the rare disease community.

So I think hopefully it’s a recognition of our ability to execute, communicate, work with regulatory authorities and based on all of that and our expertise and relationship to be able to potentially commercialize these products.

Kim Lee – Janney Capital

Great, thank you.

John Crowley

Sure.

Operator

(Operator Instructions). Next question is from Joseph Schwartz of Leerink. Your line is open.

Joseph Schwartz – Leerink

All right, thanks very much for taking the question. I was wondering, I’m sorry if I missed this, as I got on late. But could you talk a little bit about the approach that Callidus has in their technology relative to what others are using to try to get around the specific challenges in Pompe? And where are you in terms of generating toxicity data in order to be able to expose individuals for certain amounts of time? And what do you think the Phase 1 study questions that you’ll seek to answer will be set could help us begin to ascribe some value to these early programs?

John Crowley

Yes, thank you Joe. We actually did go through that in great detail in the call and in the first part of the Q&A. So, I’ll just highlight it here and then, be happy to visit with you offline and make sure that we’re…

Joseph Schwartz – Leerink

Sorry about that.

John Crowley

No, no worries. I’d refer you to slide 8, again we think there is really five key components to the Callidus Acquisition, the product, the platform, the technology synergies. And this is very important, where their ability to make enzymes, optimize enzymes together with their core tagging technology is a real complement of the CHART platform.

And then also Dr. Hung Do and his leadership, the Co-founder and Chief Science Officer of Callidus, who is joining us as our Senior Vice President in Biologics, he was a former lead scientist at Genzyme working on the Lumizyme program for many years, coming to us.

And then, also Amicus, acquiring the existing contracts and relationships with the world-class GMP biologics manufacturing company. The Pompe enzyme, the Callidus enzyme already completed tech transfer and scale-up. So all of that we think enhances the likelihood of success, then.

On slide 9, again we just highlighted some data here in the in-vitro setting although there is a significant body of preclinical work that Callidus has generated that’s not been shared publicly that we’ve been privy to, and also co-generated data with them over the diligence period. But as you see on slide 9, again, there is really two challenges as you alluded to Joe, with the current Pompe therapy that need to be addressed.

One, is improved uptake of the enzyme through the mannose-6-phosphate receptor into the lysosome of the muscles with people living with Pompe. So uptake challenge is number one.

Number two, and we think that – let me just comment, I think the Callidus, the way they’ve engineered their cell-line, I think it’s quite clever and brilliant in terms of the uptake.

And you see that here in the slide number 9, where the red line represents in this myoblast uptake study, the Callidus cell-line with more than 10 times the uptake of Lumizyme in this in-vitro experiment. We’ve also seen significantly – significant improvements over Lumizyme in Pompe knock-out animals and we’ll be sharing that data at science conferences coming forward.

But even beyond the core GAA, the Pompe enzyme that Callidus has developed, when you also add their proprietary platform technology, which may not be necessary but could be a current or future add-on that we can put to it. And we are looking at both options as we move forward in manufacturing.

With that addition of that tag, the variant of the IGF 2tag Callidus enzyme you saw more than 50 times the uptake of Lumizyme. So we think it’s a very elegant way to approach probably number one, which is the problem with uptake of the enzyme, which is entirely carbohydrate and targeting dependent.

Number two, these enzymes as we know are highly immunogenic in the production of antibodies and the lack of tolerability is a significant issue for patients.

The Callidus technology doesn’t directly address that but that’s exactly what the Amicus CHART platform technology is designed to do using a small molecule stabilizer to enhance the stability of the enzyme and reduce its immune profile and potentially improve its tolerability. And that’s why we think this is such a great synergy of technologies.

We’re happy offline, Joe, to go through much more detail with you as needed.

Joseph Schwartz – Leerink

Okay, great. Thanks again.

John Crowley

You bet.

Operator

Thank you. There are no further questions at this time. I’d like to turn the call over to management for any closing remarks.

John Crowley

Great, thank you, operator. And thank – and then we had quite a few people on the line listening and hopefully you get the sense that these are four really important pieces of new Amicus. And something we intend to execute on with intense focus through the end of this year and heading into 2014 and the years beyond. And hope we can make a tremendous difference for people living with these diseases. And build a tremendous line of shareholder value from the base that we have today. So thank you everybody, happy to follow-up separately. Good night.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may now disconnect. Have a wonderful day.

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