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Amicus Therapeutics, Inc. (NASDAQ:FOLD)

Q2 2010 Earnings Call

August 5, 2010 5:00 PM ET

Executives

Jenene Thomas – Director, Investor Relations

John Crowley – Chairman and CEO

Matt Patterson – Chief Operating Officer

Jack McAdam – Vice President, Finance and Accounting

David Lockhardt – Chief Scientific Officer

Pol Boudes – Chief Medical Officer

Analysts

Geoff Meacham – JPMorgan

Ritu Baral – Canaccord

Joseph Schwartz – Leerink Swann

Operator

Good afternoon. And welcome to the Amicus Second Quarter Earnings Call Conference Call. My name is Sahil, and I’ll be your conference facilitator today. All lines have been placed on mute to prevent any background noise. After Amicus’s remarks, there will be a question-and-answer session period. (Operator Instructions).

I would now like to turn the conference over to Ms. Jenene Thomas, Director of Investor Relations.

Jenene Thomas

Good afternoon. And thank you for joining our second 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. The timing and reporting of results from preclinical studies and clinical trials evaluating Amicus’ candidate drug products, the projected cash position for the company and business development and other transactional activity.

Words such as but not limited to look-forward to, belief, expect, anticipate, estimate, intend, likely, 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 these expectations will be realized.

Actual results could differ materially from projected in Amicus’ forward-looking statements, due to numerous known and unknown risks and uncertainties, including the risks factors described in our annual report on Form 10-K for the year-ended December 31, 2009.

Amicus does not undertake any obligation to publicly update any forward-looking statements to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.

This afternoon, I’m joined on this call by members of our executive team, including John Crowley, our Chairman and CEO; Matt Patterson, our Chief Operating Officer; Jack McAdam, our Vice President of Finance and Accounting; David Lockhardt, our Chief Scientific Officer; and Pol Boudes, our Chief Medical Officer are available represent to you in the Q&A portion of the call that will follow our formal remarks.

At this time, it is my pleasure to turn the call over to John Crowley, Chairman and CEO of Amicus Therapeutics.

John Crowley

Great. Thanks Jenene, and good afternoon to everybody. I will go ahead and start today’s call with some brief opening remark. And then I hand it over to Matt and to Jack McAdam for a review of the programs in the financial information.

We had a very strong second quarter here at Amicus. It was highlighted by our continued solid progress on our number one strategic priority, which is, you all know is the execution of our Phase 3 physical study of Amigal for the U.S. registration. Enrollment in this trial is ongoing. And today we’re reiterating our guidance that we do expect to complete enrolment of this study by the end of this year, which means that we expect to receive and announced the Phase 3 results in the middle of 2011.

This progress is certainly the result of a very significant global effort by the entire Amicus team and we remain confident in the likelihood of the successful outcomes of that study. We are also on track with our other two main objectives in the Fabry program for this year that is the commitment of the European, the E.U. registration study, which we refer to the Study 012.

And also a study evaluating the use of Amigal when co-administered with enzyme replacement therapy and that Matt will go into more details on those in a moment. We continue to have great momentum on our Fabry program and remain enthusiastic about our chances of having a real impact on the treatment option that people living with Fabry disease.

On a different and related note and I’ll go into more of this and some additional commentary toward the end of the call. But we’re also extremely encouraged by what we’ve seen as the significant increase and attention and commitment to the rare disease space and drug development in the very loose and product area more broadly.

We have seen specifically its an important initiative underway, looking at various ways to improve the current regulatory environment for rare disease drug development, as well as a marked increase level of interest from new companies considering investment in the development of these therapies.

And again, I’ll share with you some more thoughts towards the end of the call. But I think these trends are positive for Amicus, as a leader in the rare disease space and certainly for people and their family to leave with these rare devaluating disorder.

Let me turn to brief updates on the program. Now over to Matt.

Matt Patterson

Thanks, John, and good afternoon, everyone. First, as John mentioned we’re very pleased with the progress in the second quarter. Number one priority remains advancement of our global Phase 3 program with Amigal for Fabry. Starting with Study 011our U.S. registration trial.

As you know, for competitive reasons, we don’t comment on specific enrollment numbers. However, as John noted, we are reiterating our guidance that we expect to complete enrollment in this study by end of this year and as a result we continue to expect to report results in mid 2011.

The progress today and our confidence in the outlook is a result of tremendous operational effort Amicus team is making to enroll this trial over 40 investigational sites worldwide. And this is a large and complex project that we remain focused on continued solid execution.

I think we are on track to commence Study 012, our European legislation study for Amigal before the year end. And this will also be a global study and we expect to work with a similar number of sites for the purposes of enrollment, including many of the same sites working with us on Study 011.

Before the end of the year, we will provide additional updates regarding this study including our timeline estimates for enrollment and results. And finally, we have finalized the protocol for our Phase 2 study of Amigal co-administered with enzyme replacement therapy and expect to begin the study before year end as well.

And we will share the details regarding the design of this trial as well as the timeline for enrollment and data on free note, the FDA finds the final protocol to be acceptable, which should be within the next couple of months.

So, as you can see we have significant momentum on the Fabry program and remained very enthusiastic. And that the overall Amigal franchise and it’s potential to change the treatment paradigm in Fabry disease.

I’ll turn now to our CNS programs. Based on continued progress in the second quarter, we remain excited about the potential of our pharmacological chaperone approach in both Parkinson’s disease and Alzheimer’s disease.

Starting with Parkinson’s. As we’ve discussed previously, we establish initial group of concept in studies of our molecule AT2101 an animal models of Parkinson. Through a significant but there is no chemistry effort in 2009 and early 2010. We were able to identify new compounds that improved significantly on the properties of AT2101. And that we believe had better potential for clinical development.

In Q2, we’ve made excellent progress on new group of concept space of these molecules. And we expect this to continue through this year. We remain enthusiastic about the potential the program and by the end of this year we hope to provide you all with an estimated timelines for the filing of an IMD to start clinical studies.

Along with the Parkinson’s program, we continue to advance our Alzheimer’s program as well. In this program, we’re evaluating several different enzyme targets, each of which represents the novel treatment for as the Alzheimer’s.

Practically on the work we’ve done in the last five years to understand the chaperone mechanism of action diseases of misfolded proteins and lysosomal enzymes, we think this program has saw that potential. We will continue to advance our preclinical work in this program and look forward to keeping you posted on our progress. Of note, this program is funded and part by grant from the Alzheimer’s Drug Discovery Foundation, which is a group we’re about to collaborate with (inaudible) program.

So, as you can see, we continue to make solid progress on the lead programs and are very confident that the technology broadly. And we believe we have multiple opportunities to yield near and long-term value for shareholders, while continuing to fill at a very meaningful rare disease franchise.

And finally, I’ll finish by noting that in addition to executing on our plan to advance on lead programs, we remain active on the business development front and continue to consider multiple different opportunities.

Moving forward, we plan to evaluate various partnering option with the goal of building on our current, strategic and financial foundation.

And with that, I will turn the call over John McAdam, who is going to give you review of the financial results for quarter.

Jack McAdam

Well, thank you, Matt, and good afternoon, everyone. Before I begin the review of the second quarter financial, I’ll comment briefly on our cash position and financial guidance.

We entered the second quarter with $69 million in cash and marketable security. In early July, we had updated our financial guidance and at this time, we reiterate our expectation at cash spend in 2010 will be $45 to $55 million, and our current cash in marketable securities will be sufficient to fund operations and capital expenditure requirement into the second half 2011.

Now, as I move to financial results, I’ll be referring to table one in our press release. Net loss for the second quarter was $11.3 million that compared to a net loss of $13.6 million for the same period in 2009.

Reductions in operating expenses resulting from our Q4 2009 restructure and refocused operating priorities more than offset the $5.4 million year-over-year revenue impact permitting the Shire collaboration agreement.

R&D expenses in the first quarter of 2010 was $8.1 million representing a decrease of approximately $5.4 million or 40%, compared to same period in 2009. With variance is primarily attributable to lower personal cost associate with the workforce reduction completed in Q4 of last year. A decrease in consulting costs and a reduction in the contract research in manufacturing cost associate with the reduced [probability] of activity in our Gaucher program.

Our second quarter 2010 G&A expense was $4 million, representing a decrease of $1.2 million, a 23% from a prior year level, variance is primarily due to a lower personal costs associated with the aforementioned workforce reduction, as well as decrease in legal and consulting fees.

Now as you recall, we raised $17.1 million of net proceeds to the register direct offering of common stock and warrants in the first quarter of 2010. $3.3 million of those proceeds were allocated to the warrant and classified as the liability in our balance sheet at that time. Each quarter that more liabilities is mark-to-market with changes reported at non-cash, non-operating item in our P&L.

In the second quarter, the change in fair value of our one liability was $1.4 million. That covers the financial updates for the second quarter. If there are any other areas you’d like to cover, we’d be happy to address them in the Q&A portion of the call.

And with that, I’ll turn things back to John for some additional comments.

John Crowley

Great. Thanks, Jack. So I hope, as you often see we continue to make progress in the second quarter and focus the momentum on our number one strategic priority, which is enrollment of the 011 U.S. registration study and continue to invest in advance other programs of value at Amicus, including our CNS programs that have the strong linkages to diseases at misfolded protein, pharmacological chaperone, and Parkinson’s and Alzheimer’s, specifically and will also advancing the technology in co-administration with enzyme replacement therapy.

Before I turn back to Q&A. Let me just be briefly again the overall environment related to rare diseases and why I think Amicus is very uniquely positioned to benefit from these development. There are many new initiatives underway both in industry and in government that are focused on the development of new treatments for rare diseases.

Just as one example, back on July 21st, that was to testified on behalf of the biotechnology industry organization BIO, at US Senate Committee on Health, Education, Labor, and Pensions, the bipartisan, full committee hearing focused on pediatric rare and neglected disease drug development on Capitol Hill. So it’s a great opportunity to provide backbone and respective on the current state of drug development and also have the opportunity of that hearing.

On behalf of the industry to make a series of recommendations to the committee members regarding the establishment of additional incentives for companies to develop more treatment for rare neglected diseases. We expect to continue to advance that public policy dialogue and I would hope to be and to make sure that Amicus is at the forefront of those discussions in defining with the new paradigm is going to be.

I won’t go into any specific details today. But it’s clear that in the 27 years, since the Orphan Drug Act was passed that we’ve made enormous progress. But that we have much further to go as an industry in addressing dramatic on net patient need. The change that was brought up by the European Drug Act and certainly improved the lives of millions of people in this country and abroad, and in many respective, actually helped to launch an entire industry and establish the global rare disease efficacy movement.

But I think that each of us who are committed to this European Drug Development pace including stakeholder at the FDA and those responsible for seeing that the agency is appropriately funded, have the responsibility to continue the aggressive development and progress. So that we can bring that next generation therapies to patients desperately need them.

I think that’s debate and those discussions will continue. We’ve got a committed effort by a number of folks and the patient group at the FDA, we have IH in industry and I think increasingly sell on Capitol Hill. And we have seen that with the announcement just a few months ago of the establishment of a rare and neglected disease pocket in the House of Representatives. And we hope to participate in the announcement shortly in the pockets in the U.S. senate as well.

So much going on. I think that will help to shape the environment and hope that Amicus will be at the forefront of that again.

So with that, let me go ahead and see if there are any question (Technical Difficulty) and as a reminder, Pol and David are both here to answer any questions. So operator, we’re happy to open it to any questions.

Question-and-Answer Session

Operator

Thank you, sir. (Operator instructions) Our first question comes from Geoff Meacham from JPMorgan.

Geoff Meacham – JPMorgan

Hey, guys. Thanks for taking the question. I know, Matt you said, you didn’t gave any patient numbers. But I wonder if you can talk about maybe what the supply constraint Fabry has done for Amigal study? And I have a couple of follow-ups.

Matt Patterson

Yeah. It’s obviously been a very challenging situation for the Fabry patient community. Of this directly as it relates to our study, I would say that it has had a positive impact and we’ll continue to have a positive impact upon that short exit. And That’s because as a reminding of this trials enrolling patients have either never treated with ERT or have not been treated for six months.

So we have seen that has evidence for patients to maybe we are considering going on ERT, who don’t have that option, who have decided to participate. Our patients who can’t get a full dose and have decided they would like to come off and make themselves available for the study. So it has – it does have an impact. But its just one part of the global effort to find patients in the newer criteria.

John Crowley

Okay. Geoff, its John. I can just add to that one other thing. I think it also, this is a very competitive statement, well and I think if needed any competitors impact of other patients coming onboard in very unique geographies around the world where they may have never access to the drug even when supply is not an issue. And I think that work to our benefits. Remembering that we’re opening more than 40 clinical site, have opened and in the process of opening on six continents. So, it’s a pretty far reaching.

So, using the ability of other companies to come in and address patient needs and help us up to step-up with doctors to be able to offer in therapy and clinical study.

Geoff Meacham – JPMorgan

Okay. And then, assuming that you -- it has -- help with enrollment a little bit here. Would you guys ever takes a view that you could upsize the trial, the power for new end points or maybe kick start the new study this would respect the more sites?

John Crowley

I don’t. I mean the study is extremely well powered to meet the end points that’s defined. I mean, the only the next level of end point you look at in Fabry of course is, function and that’s really, we are going to look at that but that’s a longer term end point.

So, I think, we’re, I think its just increases -- the overall adventure increases the chances we can stay on timeline and meet our goals with Study 011. It does make things a bit more interesting for Study 012, which as you recall involves taking patient to our honor regiment of ERT and switching them to either Amigal or to stay on at ERT. So that’s something that we’re monitoring very closely and as we think about the timeline associated with 012.

Well that could have an impact on enrollment 012 and we will try to avoid any delays there. It does potentially change the dynamic too with speaking to the authorities globally about their willingness to except different sets of data earlier on. So, we’re thinking seriously about how to do that and make sure that we can bring Amigal to a broad range of patients as fast as possible in light of the storages and the stress that’s putting on the patient in medical community.

Geoff Meacham – JPMorgan

Okay, guys. Thanks.

John Crowley

Thank you, Geoff.

Operator

Our next question comes from Ritu Baral form Canaccord.

Ritu Baral – Canaccord

Hi, guys. Thanks for taking the question. Another question on enrollment. Are you still finding new Fabry mutations, as you continue to enroll? And are you able to sort of characterize this mutations as you go along?

Matt Patterson

Hi, Ritu. Its Matt. We are, especially as you go to some of the more remote locations. We’ve identified some as a part of study, and we thought about it before most fabrications already have and genocide in the past. But some have not. And in some cases, we are identifying new mutations.

But it’s a part of our screening process for the study that even afford the genocides in the medical record we reconfirm that as a part of the study effort and a screening process. So, we’re uncovering some. But we put in so much effort at a time to research the mutation spectrum and identify those that would give responders. Its pretty rare to finding the new one.

Ritu Baral – Canaccord

Okay.

John Crowley

Its very much the exception but we do.

Ritu Baral – Canaccord

And is the profile sort of genetic profile was the mutations coming in sort of all the distribution of them coming in as expected?

John Crowley

Yeah. Partially.

Ritu Baral – Canaccord

Various disease and?

Matt Patterson

Yeah. I think on every parameters that we will look at for qualification into the study. I think its very much as we would have predicted and hoped for.

Ritu Baral – Canaccord

And just one follow-up. Do you have any ongoing sort of talks with FDA, even during the enrollment period given the extended Fabry drug shortage? And sort of any initiatives on the orphan drug review. Specifically, you’ll have the FDA approach to about a possible extended access program, after the Phase 3 has finished enrollment?

Matt Patterson

We haven’t had that conversation specifically, Ritu. But I expect that that is very likely in particular. I mean, they are very interested in helping us. As you hear in this program and get to the finish line. But I suspect that’s very likely to be a conversation once the enrollment is complete. And we go into the process of analyzing data and getting an MDA prepared and filed, whatever we can do to help by enroll and treating patients, and getting them treatment in light of the existing shortages and something certainly we’ll cooperate with them. Work with the agency closely on. So, we have a regular and open dialogue. But we haven’t talked about extended access program to share with them.

Ritu Baral – Canaccord

Have you guys discussed the current end points with FDA at all? Have they sort of downside US office and one of the big things with the new initiative on reform to orphan drug review is flexibility on end points and issues like that?

Matt Patterson

We already have been granted accelerated approval for this program. And we’re already committed to serve at end point. I think those were the right moves and those were the type of things that we’re putting in with the various public policy initiatives, Ritu. But I think this program will actually be a good example of it. And when the drug is approved, we’re hopeful that it will be based this type of end point which should be a good example I think of moving programs forward aggressively.

Ritu Baral – Canaccord

Great. Thanks guys.

Matt Patterson

Thank you.

Operator

Our next question comes from Joseph Schwartz from Leerink Swann.

Joseph Schwartz – Leerink Swann

Hi. Thanks for taking the question. I was wondering, you gave your latest thought on the opportunity to -- interim work at the base line ample for patients kidney histology to see if you are able to give example that would be robust enough to see what you like to be?

Matt Patterson

Hi, Joe. Its Matt. We don’t have any update on that today. That opportunity is still is in front of us. And I think really we don’t expect to report results from that as the really to get the answer is that if we felt that learn something that management needed to revisit the redesign or study, certainly that would be something that we would share with you all and we provide that as soon as we had any information.

But where we stand today, we are not planning or giving updates specific to that opportunity. And its safe to say that as long as there are no announced changes to the study that we believe we’re on track and feeling confident about the design that we have started with.

Joseph Schwartz – Leerink Swann

Okay. And I think, you announced that with further delays to enhance their clinical portion of their application. So just wondering if could be any impact on your enrolment or any aspects of your program from the decision?

Matt Patterson

No. I don’t think in the very near-term it has any impact. We don’t have any view of course into the regulatory discussions which are having on that product. But I don’t think there is any near-term impact for us.

Joseph Schwartz – Leerink Swann

Okay. And then just curious you talked a little about the AT2201 agent, which you may have new molecules that makes some improvements on the medicine of chemistry. I’m just curious. What is the update on the program there and do you have any plan to file an IND (inaudible) agent foreseeable future.

Matt Patterson

You mean for the Parkinson’s program, Joe?

Joseph Schwartz – Leerink Swann

Exactly.

Matt Patterson

Yeah,. Right now we’re in the process of net indicator building on that group of concept data that we had with AT2101 Plicera with the new molecules that look like they have much better characteristic specifically in treating in neurodegenerative disorder like Parkinson’s and get in the brain better and get out more quickly.

We’re running through the final preclinical works with those molecules. And we have that data we’ll take a look at it and evaluate, whether that makes sense or that leave molecule into the clinic and we’ll have an update for further time.

Joseph Schwartz – Leerink Swann

Great. Thank you.

Matt Patterson

Thank you.

Operator

And I’m sure, there are no further question at this time.

Matt Patterson

Great. Thank you all for listening. Have a great day.

Operator

Ladies and gentlemen, thank you for participating in today’s conference. This concludes our program for today. You may all disconnect and have a wonderful day.

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Source: Amicus Therapeutics, Inc. Q2 2010 Earnings Call Transcript
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