Jenene Thomas - Director of IR
John Crowley - Chairman and CEO
Matt Patterson - COO
John McAdam - VP of Finance and Accounting
David Lockhart - CSO
Pol Boudes - CMO
Ritu Baral - Canaccord
Joseph Schwartz - Leerink Swann
Amicus Therapeutics, Inc. (FOLD) Q1 2010 Earnings Call May 6, 2010 5:00 AM ET
Good afternoon and welcome to Amicus Therapeutics first quarter earnings call. My name is Huey and I will be your conference facilitator today. All lines have been placed on mute to prevent any background noise. After Amicus remarks there will be a question-and-answer session period. (Operator Instructions) I would now like to turn the program over to our speaker Jenene Thomas Director of Investor Relations.
Good afternoon and thank you for joining me Amicus first quarter 2010 financial results conference call. This conference call contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to the business operations and financial condition of Amicus including but not limited to preclinical and clinical development of Amicus’s candidate drug products, timing and reporting of results for preclinical studies and clinical trials evaluating Amicus’s candidate drug products. The projected cash position for the company on its business development and other transactional activity.
Words such as; but not limited to, look forward to, believe, expect, anticipate, estimate, intend, likely should, incur and similar expressions or words identify forward-looking statements. Although Amicus believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions there can no be assurance that this expectations will be realized. Actual results could differ materially from those projected in the forward-looking statements due to numerous known and unknown risks and uncertainties included in risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2009.
Amicus does not undertake any obligations to publicly update any forward-looking statements through such events or circumstances after the date on which any statement is made or to reflect the occurrence financial dictated events. I am joined on the call by members of the executive team including John Crowley our Chairman and CEO, Matt Patterson our Chief Operating Officer, John McAdam our Vice President of Finance and Accounting and we have David Lockhart our Chief Scientific Officer and Pol Boudes our Chief Medical Officer who will be available to participate in the Q&A portion of the call that will follow up on Amicus remarks. At this time it is my pleasure to turn the call over to Margin. John Crowley, Chairman and CEO of Amicus Therapeutics.
Hi thanks Jenene let me go ahead and begin with some opening remarks and I will share with you all some of my perspectives on some of the key events of the quarter and then I will turn call over the Matt Patterson to provide some more detail on the program activity as well as turning the call after that over the Jack MacAdam who can walk us through the financial results for the quarter.
Let me begin by saying we are very pleased with our progress during the first quarter we meet all of our milestones that we set out to achieve. And also we are able to provide some important new data to update. Most notably we presented back in February at the worldwide by some disease meeting positive data update with our ongoing Phase II extension study with setting with Amigal which is our lead product candidate for Fabry disease. These data which Matt will highlight here in a moment give us added confidence and continued confidence quite frankly in our Phase III program for this product. And of course the Amigal Phase III program remains our number one priority here at Amicus.
We believe we have a very experienced team across all functional areas. A team that’s focused and committed to continuing the solid execution of the program and we plan to achieve our goal of enrolling this study which we recall our O11 study. The US approval study by the end of this year. In addition we are also readying for the commencement of the Study 012 that is our European registration study as well as pursuing a Phase II study of Amigal in combination with existing enzyme replacement therapy.
So you can see we have many reasons to remain enthusiastic about Amigal and its potential to change the treatment paradigm for people living with Fabry disease in the near future. A second milestone for us in the quarter we completed as you all know a register direct offering that yielded net proceeds of about $17 million. This was an important event for us because it not only strengthens our financial position it also allows us to dedicate additional resources to the Amigal global Phase III program in particular we can now begin that 012 study the European registration study earlier than we had planned.
Another update, a key update for us in the quarter, we continue to remain very excited about our CNS franchise and particularly encouraged by our advanced and Parkinson's and Alzheimer's program. We were pleased to report to the additional data from our advanced pre-clinical program for Parkinson's during the quarter and we look forward to continuing this program with the potential to select an IND candidate in that Parkinson's program by the end of this year.
Another increasingly important part of our CNS franchise, centers around Alzheimer's program if you recall we announced back in January at the JPMorgan conference that Alzheimer's was our second CNS target and drug discovery program. As you saw from our press release that crossed the wire a short while ago, we have received recently a grant from the Alzheimer's Drug Discovery Foundation, we were honored to have been selected for this grant and we look forward to continuing the further exploration of our chaperone technology for the treatment of Alzheimer’s disease and look forward to continuing to work with the ADDF the Alzheimer’s Foundation on our novel approach to this devastating disease.
Next let me comment a little bit on investigational drug AT2220 which was been in development for the treatment of Pompe disease. As you saw on our press release this afternoon, we have decided not to advance AT2220 for the treatment of Pompe disease as a mono-therapy at this time. The decision was informed by the data from the earlier studies of the molecule as well as the results in the recently completed Phase I study. This was a difficult decision but I think one that reflects the vigor of the science and clinical medicine, here at Amicus and one that we feel is in the best interest of people with Pompe and also of Amicus shareholders.
Importantly we do continue to focus on the potential therapeutic approaches for Pompe disease that do involve chaperone. As we all know there’s significance on that medical need still for this disease and we believe that we can contribute to addressing those needs. We will remain committed to our program of AT2220 and we remain encouraged by the preclinical data that we have seen for investigating the use of that molecule in combination with existing enzyme replacement therapy. As a result we are evaluating the potential for a clinical trial of the combo approach of AT2220 plus ERT in Pompe disease and we expect to provide an update as soon as possible on the fast forward there.
Let me begin my introductory comment by noting that in addition to executing on our plan to advance our lead programs, we remain active on the business development front and we continue to advance multiple opportunities within the rare disease and CNS franchises. We plan to evaluate numerous partnering options with the goal of building on our current strategic and financial foundation and again those are partnering opportunities, potential partnering opportunities in both the rare disease base and the CNS opportunities.
So, as you can see we continue to make progress of our priority programs during the quarter we remain very confident in the chaperone platform technology and we believe we have multiple opportunities to yield both near and long term value for our shareholders while continuing to build a meaningful rare disease and CNS franchises.
With that let me pause and hand it over to Matt who will go in more detail to review our recent progress on the program. Matt.
Thanks John and good afternoon everyone. Let me start off with an updates on the number 1 priority program the global Phase III program for Amigal. As a reminder, we have several for the Amigal program this year. The first is to complete enrollment and study 011 which is the registration trial for the US.
The second is to commence study 012 which is the registration trial for the European Union. Finally we planned to commence Phase II study of Amigal in combination with ERT. Based on solid progress during Q1 we continue to expect each of these goals. We expect to complete enrollment and study 011 by the end of the year largely because of the focused global effort we started last year and continued to manage aggressively.
We previously planned to start studying 012 late in the year but as John mentioned after the completion of the recent financing, we now plan to start that trial sooner which we believe will add volume and momentum to the program overall. Finally, based on continued encouraging pre-clinical results and we still planned on advancing chaperone-ERT combo study into the clinic starting that study this year and that is in Fabry disease.
Let me spend a minute discussing why we remain confident in the Amigal Phase III reprogram. In addition to our agreements with regulatory authorities, we remained very confident this program for two major reasons. First we have designed the Phase-III studies with specific entry criteria that enrich the study population in ways that we believe increase the profitability for positive results from the study.
For example, subjects enrolled in study 011 must have both a genetic mutation that is known to respond to Amigal as well as an elevated base line level of the sub straight which we will measure as the primary end point of the study.
Second, the Phase II and Phase II extension study data give us confidence related to the likelihood the meeting the primary end point and study 011 and a potential for a positive longer term impact on kidney function which is in course the most common cause in morbidity and mortality in Fabry. For example when one performs the Phase III primary end point analysis on the patients from the Phase II study who meet the Phase III entry criteria, the result is very encouraging.
When it comes to longer term impact on real function, we have recently observed encouraging results as well. There represented the focus of the data update from our ongoing Phase II, extension study at the world meeting John, mentioned this past February. I will certainly review that briefly. As a quick reminder 26 subjects completed either 12 or 24 weeks of treatment with Amigal during the initial Phase II studies and 23 of those subjects enrolled in a separate voluntary long-term extension study designed to evaluate the long-term safety and efficacy of Amigal.
It is important to highlights the 15 subjects have been treating with Amigal for approximately two to three years and that eight subjects have been treated with a drug for more than three years. And the significant period of time on the drug is import for several reasons. Most importantly it gives us added confidence in the safety if the drug. Of note to date we still have not observed any drug related serious adverse events.
In addition it allows us the opportunity to evaluate longer term measures of efficacy which in Fabry is primarily focused on kidney function as I mentioned finally it gives us confidence more qualitatively as well considering the patients and physicians are continuing to choose to take Amigal rather than return to enzyme replacement therapy.
Today 19 subjects continue to receive treatment in this ongoing extension study. So returning to the recent data update we presented this update with the focus on renal function which we are measuring in the study by two measures. Estimated glomerular filtration rate or eGFR and proteinuria. To summarize the preliminary data we presented, indicated that eGFR remains stable out two to three years for all subjects continuing in the extension study and that trends of reduced proteinuria continue to be observed in subject identified as responders to Amigal.
What was particularly encouraging to us was that the eGFR result in the study compare excuse me favorably to the previously published eGFR literature in untreated and ERT treated Fabry patients. So in summary the Phase II and Phase II extension study results to date suggest that Amigal is generally well tolerated and then responder treatment resulted, in increased the enzyme levels, decrease GL3 level and what appears to be positive impact on renal function.
Overall, we are very encouraged by the data and believe they further support the expectations of success for the Phase III studies of Amigal and as we said before we believe Amigal has potential to be a very important treatment option for patients suffering with Fabry disease. With that let me transition to the update regarding the Pompe program. As John mentioned earlier, based in part on the result of a recently completed Phase I PK study with AT2220 we decided not to advance this molecule to mono therapy treatment at this time.
This was a challenging and difficult decision for us and that we are confident as it is relatively the correct one for Pompe patients in particular and as John mentioned for shareholders of Amicus. I think it will be helpful to remind you of the evolution of our AT2220 program briefly. As you recall enrollment in the Phase II study was suspended and the IND was put on clinical hold during the first quarter of 2009 based on two patients experiencing serious adverse events.
Deemed to be probably related to drug treatment and the events themselves were categorized as increased muscle weakness. During the rest of 2009, we completed a thorough evaluation of all the data from those patients and additionally, we completed additional pre-clinical work the AT2220 which facilitated to the FDA that proposed a Phase I study in order to further evaluate the pharmacokinetics of AT2220 in multiple which is of course a key target tissue in Pompe disease. The FDA agreed with our proposal and subsequently converted the clinical hold on the AT2220 to a partial hold until they allow us to conduct the study. In the fall of ’09, we initiated this Phase I single oral dose study and healthy volunteers evaluating AT2220 PK in muscles.
We measured the drug in both plasma and muscle tissue which was obtained for biopsies. The AT2220 was generally a well tolerated with no serious adverse events reported. From a PK perspective, we learned several things. First, the AT2220 is rapidly absorbed and rapidly distributed to muscle.
Second the drug exposure in muscle increases proportionally with increase in the dose of AT2220. And finally, perhaps most importantly the pharmacokinetic analysis demonstrated that AT2220 was cleared relatively slowly from muscle tissue. Based on the collective data from this trial, the Phase I trial we just completed and previously completed pre-clinical and clinical study in the AT2220. We decided not to advance AT2220 as a mono therapy for Pompe at this time. Instead we plan to focus on the development of this drug in combination with ERT.
Before moving on to the update related to our work in combo, I want to add a couple of comments. First of all, reiterate what John said which is we remain committed to searching for new ways to treat Pompe especially because we feel there is still significant unmet medical need in this disease.
Secondly, we believe the results for the AT2220 mono therapy program, another good example of how different each of these molecules are and how different each of these diseases are, specifically Fabry, Gaucher and Pompe. For example there are important differences when targeting the kidney versus the spleen versus muscle. Today we know that in Fabry, Amigal has great potential as a mono therapy and hopefully also in combination ERT. In Gaucher and Pompe with the molecules we have today the combination with the ERT approach appears more promising. So we are going to focus on that.
Moving forward we will certainly apply all the lessons we have learnt to the development of new molecules for these diseases and for additional rare disease targets. With that let me move on to the update regarding our chaperone and ERT combination programs which continue to advance in Fabry, Pompe and Gaucher.
In February at the world conference we presented new data from our preclinical studies evaluating the combination of both Amigal with ERT for Fabry and AT2220 with ERT of a Pompe. Specifically the data demonstrated that when a chaperone code administered with ERT we observed prolonged top lines of ERT in the circulation as well as increased enzyme activity in cells and greater substrate reduction in target tissues compared to that seen with ERT alone. These encouraging data give us confidence to perfectly pursue our goal starting with clinical trial the combination approach.
As you may recall from earlier announcements we’ve planned to start this clinical program with Phase II trial Amigal in combination with ERT for Fabry. And we are finalizing the design of the study and we will provide an update on the timing of initiation of this study once we have completed discussions with the FDA. We believe its going to be a valuable component of our overall Fabry program. Specifically we envision an Amigal franchise that could benefit all patients receiving treatment. Patients with a responsive mutation which we estimate will be up to 50% of patients with Fabry could receive Amigal mono therapy.
Patients who do not have responsive mutation from ERT remain the only treatment option to that receive Amigal in combination with ERT that is shown to improve on ERT alone. Either way we envision Amigal as an important new treatment option for patients and physicians. Finally let me turn to our advancements with our CNS programs first start with Parkinson’s disease program.
At the same world conference that we have spoken about couple of times, we presented data from pre-clinical studies that evaluate our Chaperone AT2220 101 in mouse models Parkinson. We continue to be very encouraged by the findings, the studies demonstrated the treatment with AT2220 101 increase the activity of beta-glucocerebrosidase or GCase, prevented accumulation of alpha-synuclein in the brain and improved motor function of the sustained various behavioral tests.
In addition throughout 2009 we put in a significant medicinal chemistry effort. And as a result we are able identify new compounds that improve on the properties of AT2220 101 with a focus on the brain as a target. And importantly that have potential for strong intellectual property protection. As based on all that progress we certainly remain, we certainly are committed continuing our work in Parkinson’s and advancing those new molecules through additional pre-clinical development this year.
And then finally as John discussed briefly we announced in January that we are also exploring the use of Chaperone technology in alzheimers disease this build on the work is done in understanding chaperones for the last five years. Specifically building on the work in the last few years in Parkinson’s and its definitely closely aligned with our understanding of our chaperone mechanism generally. The disease is admissible to proteins and like this on enzymes. And we of course are pleased as john mentioned to receive the grant from the ADDF and we think the work we have going in Alzheimer’s has great potential and we see this brand not only as additional resources but also as measure of validation of our approach in the disease.
We are very much looking forward to working with the ADDF and advancing this program in brief clinical development. So with that I’ll conclude the program updates overall, we’re very encouraged as I said with our progress this quarter and we certainly look forward to provide you additional updates during the course of the year. I’ll just stand by mentioning as John did, that we’re very active on the business development front, exploring opportunities for partnering within and both our rare disease franchise and the CNS franchises. And as always, we’ll review in multiple opportunities for strategic partnerships in these areas. With that, I’ll end my remarks and hand the call over to Jack McAdam, he will review the financial results for the quarter. Jack?
Thanks, Matt. And good afternoon everyone. Before I review the first quarter financial results I’ll comment briefly on our cash balance and financial guidance. We entered the first quarter with $81.4 million in cash and marketable securities.
In January, we provided financial guidance and at this time we reiterate our expectations that cash spend in 2010 will be $40 to $50 million and that current cash and marketable securities will be sufficient to fund operations into the second half of 2011.
Now to move to the financial results. I’ll be refereeing to Table 1 in our press release. Net loss for the quarter was $13.2 million as compared to a net loss of $12.5 million for the same period in 2009. Reductions in operating expenses resulting from our Q4 2009 restructuring and refocused operating priorities largely offset the $4.6 million year-over-year revenue impact to permitting the Shire collaboration agreement.
R&D expense in the first quarter of $8.9 million which included $0.7 million of stock compensation was lower the $11.9 million of R&D expense in the prior year quarter. The decrease is primarily due to lower personnel cost associated with our Q4 2009 work force reduction, a decrease in consulting costs and decreased activity with the negotiate program. Our first quarter 2010 G&A expense of $3.9 million which included $1 million of stock compensation was lower than the $5.2 million of G&A expense incurred in the first quarter of 2009. The decrease in G&A was largely attributable to lower personal cost associated with that 2009 workforce reduction as well as decreases in third quarter party with third party legal and consulting fees.
Interest income for the first quarter was $0.01 million as compared to $0.05 million in the comparable quarter last year. This decrease was driven by lower effective interest rates and decreased cash and cash equivalent balances.
As John mentioned earlier during the first quarter we raised $17.1 million of net proceeds through a registered direct offering of 4.95 million shares of common stock and wants to purchase an additional 1.85 million shares of common stock
We allocated $3.3 million of our net proceeds to the warrants which we then classified as a liability on our balance sheet. Each quarter the warrant liability would be mark-to-market with changes recorded as the non-cash, non-operating line item in our P&L. The change in fair value of our warrant liability during the first quarter of 2010 was $0.02 million.
So that covers the financial update for the first quarter. If there are any other areas you would like to cover, we’d be happy to address them in the Q&A portion of the call. And with that I will turn things back to John.
I will be very brief and wrap it up before we move to the Q&A session. So hopefully as you can see a lot of activities a lot of momentum continuing and we continue to hit all the milestones that we laid out. We continue focus as our number one priority the enrolment of the Fabry 011 study and the momentum around the Amigal molecule and a lot of different clinical programs which will be an important component to building near term shareholder value for sure.
But we also continue to significantly invest in the platform both in rare diseases but then also increasingly in our CNS programs in Parkinson’s and Alzheimer’s which will also be a pivotal part of building long term shareholder wealth. So, with that let me remind folks that our Chief medical officer Pol Boudes and our chief scientific officer David Lockhart are also here with Matt, Jack and I and we are happy to take any of your questions.
Thank you, sir. Ladies and gentlemen, (Operator Instructions). Our first question in queue comes from Ritu Baral with Canaccord. Please go ahead. Pardon me your line is open.
Ritu Baral - Canaccord
Can you give me some little more granularity on the European study, I guess have you started picking fights and would you have a partner investigator at this point?
We have done a lot of work on that, a lot of sites we planned that I will certainly overlap with the 011 study lead to. That’s something we are certainly deep in the process of developing protocols, we have the relationships with all of the sites that we would expect to use as a result of all of our again more than 40 sites globally being used for the 011 study. So, all of that prep work is been in place for sometime.
Ritu Baral - Canaccord
And as far as the combo studies that you will be doing, the ERT combo studies. How does the on going shortages is various enzyme therapies affecting your plans through that study both planning wise and enrollment and design wise?
Yes, we expect these to be pretty small studies for proof of concept extending from the preclinical to now the clinical proof of concept. So, with the combo studies, I don’t expect that to have a significant impact the drug shortage, there is still a number of patients that still have access to Fabrazyme or Replagal certainly. So, I don’t expect that have an impact and some we take into consideration as well, but I don’t think that will repeat the progress on the combo studies.
Ritu Baral - Canaccord
Great. And I guess when can we expect the first CNS drug to be in patients or like an IND filed and accepted?
Yeah, well Parkinson’s, has been a program of ours for well over three years now going on 40 years and this year we are in the final stages of the late preclinical development leading to candidate selection. We hope by the end of this year early next year. So, we are not yet giving guidance to when a lead molecule would be in the clinic but we continue to build on the preferred concept studies and then prepare for what would be IND related activity for the right time.
Thank you. Our next question in queue comes from Joseph Schwartz with Leerink Swann. Please go ahead with your question.
Joseph Schwartz - Leerink Swann
Hi, thanks for taking my question. I was wondering, if I’m reading this right that looks like for the 26 or 23 patients, excuse me. For the 23 patients that were in the open label extension study as of the license from world meeting in February may have dropped off given that you have 19 today, I was wondering what happened to those four patients? Was it a safety or efficacy reasoning that led them to leave Amigal treatment and where did they go?
No, certainly not safety. Again we have certainly not safety we have not seen a single serious adverse event with it. There were different reasons for each of those four and Matt if you want to provide more granularity on that?
It's a little bit of mixed bag Joe but as I recall couple of them were capital too and didn’t really have much of a response wasn’t really responders to the drug anyway so they their dropping out was a logical thing and maybe they continue to form it and they needed to even and I think couple of others were just termed personal reasons and desire to longer participate in the study and the activity associated with it or in one case I think at least it was a desire to try to get on ERT but it's a bit of mixed bag, I can work and give you more detail.
But what the nice thing is it was a really interesting kind of almost negative control for us because a number of I think maybe three of the four patients had non responsive mutations and we had actually recommended some time ago that they not continue with the therapy.
They wanted to and their physicians consented to it we agreed to continue them on the drug Joe, but after collecting more data they agreed it didn't make sense, wasn't in the patients' interest to continue so working with doc’s we move them out of the study.
But again it really kind of confirms the important pharmacogenetic nature of what we do and identifying responsive mutation and give us yet even more confidence for why we have got the right patients now in the Phase III study and none of those patients would qualify for our Phase III study for instance.
Joseph Schwartz - Leerink Swann
Can you give us a finer sense of how enrollments are going in the 011 study or how many types are pass the IRB stage actively in the patients?
Yeah. Then you know for a whole host of reason primarily competitive. We don’t provide that level of granularity except to say that we’re still confident and we’re reiterating the guidance that the study will be fully enrolled by year end. Again, there are more than 40 sites in six continents and we’re managing all of that with our clinical team here in the United States and we do it in partnership with CRO outside of the United States and we continue to see good progress in all the different parameters that we look at in terms of site selection, IRB clearance, contract work and ultimately patient randomization still. So far, we continue to on track.
Thank you. Our next question is queue comes from Geoff Meacham with JPMorgan. Your line is now open.
Geoff Meacham - JPMorgan
Hi. This is Christian Gordy on behalf of Geoff Meacham. Thanks for taking my question. I have a couple of question. Starting with 011 trails, is there a plan for any interim analysis for 011?
To no, we don’t have any plans for an interim look.
In terms of the Phase II combo trial, I know you just stated it’s a proof of concept, could you elaborate a little bit on the design of the trials, the number of patients in that trial that’s there?
Yeah. We, we haven’t yet finalized that. So we’re not going to comment on that Christian but it is a study where the goal would be to extend it from pre-clinical to clinical proof of concept. In terms of hitting the end target, elevating the deficient enzyme, we do that with a model therapy. Here, what we want to do is show was a patient gets their ERT, that we can show and that the pharmacokinetics change in that we can potentially get more of it to target itself. So I will look at a number of different parameters both on safety and efficacy.
Thank you. (Operator Instructions) At this time there appears to be further questions in the queue. Ladies and gentlemen thank you for your participation and have a wonderful day. You may now all disconnect.
Great thank you all have a nice day.
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