Amicus Therapeutics' CEO Discusses Second Quarter Results - Earnings Call Transcript

| About: Amicus Therapeutics, (FOLD)

Amicus Therapeutics (NASDAQ:FOLD)

Q2 2012 Earnings Call

August 7, 2012, 5:00 pm ET


John Crowley – Chairman, CEO

Bradley Campbell – Chief Business Officer

Chip Baird – CFO

David Lockhart – Chief Scientific Officer


Ritu Baral – Canaccord

Anupam Rama – JP Morgan

Joseph Schwartz – Leerink Swann

Kim Lee - ThinkEquity


Good day, ladies and gentlemen, and welcome to the Amicus Therapeutics second quarter 2012 results conference call. At this time, all participants are in a listen-only mode and later, we will conduct a question and answer session and instructions will be given at that time. (Operator instructions). This call is being recorded. I would now like to introduce your host for today's conference, Sara Pelligrino. Now you may begin.

Sara Pelligrino

Good afternoon and thank you for joining our conference call to discuss our second quarter 2012 financial results. Speaking on today's call we have John Crowley, our Chairman and Chief Executive Officer, Bradley Campbell, our Chief Business Officer, David Lockhart, our Chief Scientific Officer, and Chip Baird, our Chief Financial Officer.

They are all available to participate in the Q&A session, as well. Pol Boudes, our Chief Medical Officer, is on vacation this week.

Today's prepared remarks coincide with the slide presentation that is now available on our corporate website at The slides are located in the Investors section under Events and Presentations right below the webcast link.

On Slide 2, we have a reference to forward-looking statements in this conference within the meaning of the Private Securities Reform Act of 1995 relating to the business, operations and financial conditions of Amicus including but not limited to preclinical and clinical development of Amicus' 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.

Words such as but not limited to , 'believe', '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 its expectations will be realized.

Actual results could differ materially from those projected in Amicus' forward-looking statements due to numerous 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, 2011 and other other filings with the Securities and Exchange Commission.

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.

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

John Crowley

Great, thank you, Sara. Good evening, everybody, and as Sara indicated, we will be using the slides that are up and available to everybody on the call. We got feedback after our last conference call that that was very helpful and hopefully that will be a format that we will continue to follow here at Amicus. So with that in mind, I'll reference Slide number 3 to begin just to give you a sense of the agenda for this call.

I will provide an overview of some of the general Amicus corporate highlights, go through that together with the Fabry program. I'll then turn it over to Brad Campbell, who will take us through the highlights of the Chaperone-ERT Program highlights.

Chip Baird, our Chief Financial Officer, will go through the 2Q 2012 financial results together with updated guidance for full year 2012 and then I'll take the call back for some concluding remark.

So if I can draw your attention now to Slide 4, I'll just provide a couple of updates on Q2 highlights including the very recent development that you've seen in the press release that we sent out just about an hour ago based on a very recent and very positive type-C meeting interaction with the FDA which we think is going to bode very well for this program, so we'll provide some more update and color on that.

But just generally with our Phase 3 Program, we're happy to report that in the second quarter, we completed the six month primary treatment arm and again remember that the study 011, our Phase 3 study for US approval, it's a randomized placebo-controlled study again with a six-month double-blind primary treatment period and then if you'll recall, a six-month open label follow-up period.

We are updating our patient disposition today letting everybody know that at the end of that six-month primary treatment arm, we had 63 of the 67 patients completed. We did have four dropouts, none due to any FAEs or any concerns with the drug. They came off for various other reasons as we expected.

There was a lower than expected dropout rate for this study so we think another point that would further enhance our likelihood of success here. So we end the study with 63 patients. Of those 63 who completed the primary treatment arm, we had a 100% conversion of those patients to voluntarily elect to continue on the study.

So again, half the patients having been randomized to migalastat, half randomized to placebo, patients blinded of course to either. At six months, those patients who had been on migalastat continuing on migalastat. Those patients who had been on placebo continuing onto – coming onto migalastat again blinded to that.

Very importantly as part of the protocols for patients electing to continue into the six-month extension, we do have them consenting to and are collecting 12-month kidney biopsies for these patients and I'll comment here further about the FDA interaction but again, very encouraging type-C that the FDA is going to allow us to not only compare with the six-month primary treatment period to placebo as we've talked about.

We knew that they would require 12-month data for safety for filing approval, of course, but based on the type-C meeting, the FDA has indicated that they will look at six-month data as we've always planned on but also that the FDA would consider not just safety but efficacy at 12 months in the totality of the data.

Again, we remain fully blinded to this data. We do intend to remain blinded and I'll comment a little bit more about that, which will push the unblinding into the fourth quarter. So a delay in unblinding but we think we'll bode very well for the chance of it moving the NDA forward once we do unblind the data.

Again just move down the list here on Pompe, our AT2220 co-administered with ERT. We reported in the second quarter positive preliminary results in that Phase 2 Study, the 010 Study in the first two cohorts, Cohorts 1 and 2 and Bradley will provide an update shortly on where we are in that study but that continues to move very well for us.

Again, very strong financial position ending the quarter with $95.8 million cash and Chip will provide an update to that cash position and full year guidance here shortly.

Certainly having a strong balance sheet giving us the flexibility not only to advance the Fabry program, multiple programs with GSK but allowing us to invest in the rest of our pipeline and again with our restructured arrangement with GSK and expanded collaboration, Amicus now having full US economics for all Fabry products we think will drive significant shareholder value in the years to come.

So a very busy, a very successful first half of the year for us on many fronts as we ended Q2 and now we're moving into an equally busy and hopefully equally successful second half of the year based on the expanded Fabry collaboration with GSK.

Our transitioning and preparing to become a fully-integrated biotech company in the US with commercial operations in Fabry and again advancing the core platform technology, especially the combination program, the ERT plus Chaperone Program that continue to advance at a very fast pace for us.

So those are the highlights. If I could draw your attention then to Slide 5, just to remind everybody again of what we went through in our call a couple of weeks ago announcing the expanded collaboration with GSK.

GSK having increased its investment in Amicus in the Fabry development program for Amicus of course transforming us into a pre-commercial stage US biopharmaceutical company with the intent upon approval of our Fabry drug to launch in the United States. Again this is three separate Fabry programs and products now being developed with our partners at GSK with a migalastat monotherapy program currently in Stage 3.

We have it again with Study 011 results now anticipation the fourth quarter, the co-administration program that's currently in a Stage 2 E013 program that Brad again will provide an update on here shortly, and then now the development of a proprietary next generation enzyme therapy developed with GSK and of course, that enzyme that we went into some depth about over the last several weeks that we now have access to from JCR in Japan.

So I won't continue to go through everything that's on the slide. I highlight all the benefits of this deal but again, we think this is not just transformational for Amicus in terms of becoming a commercial company here very shortly but one that enhances the balance sheet that validates the technology and it expands our already strong relationship with our partners at GSK Rare Diseases.

So turning to Slide 6, again, we have two ongoing studies for migalastat for Fabry disease as a monotherapy. Phase 3 global registration studies, the first being our Study 011, the US registration study with 150 mg of migalastat dose every other day, the first six months of that being placebo-controlled and the primary endpoint versus placebo being the change at six months of the surrogate endpoint of GL-3 in the interstitial capillary of the kidney.

That remains the primary endpoint of course in that six-month primary treatment period and again, we're very encourages that the FDA has indicated that they will consider the efficacy based on the totality of the data including the 12-month biopsies as well. So we think that gives us lots of ways that we can be successful in this study.

We continue to have great confidence in that study together with the Study 012, which is our global registration study, still the same dose, 150 mg of migalastat given every other day. Again, this is a switching study so every patient beginning on ERT, FibraZyme or Replagal. Thirty patients then randomized coming off of ERT coming onto migalastat, patients with known responsive mutation.

Those 30 patients would take migalastat for the 18-month treatment arm of this study. It is a clinical endpoint comparing that switched group to the 20 patients remaining on an enzyme replacement therapy. Kidney function is measured by GFR. We also expect this study to be our Phase 4 – fulfill our Phase 4 commitment here in the United States.

We remain on target for full year enrollment – or full enrollment by the end of 2012. Again, very encouraged. We continue to remain ahead of our enrollment curve and projections in that study and we're still guiding that we'll enroll it by the end of the year. So hopefully that study will remain on track. We've got every confidence that it will.

And as we turn to Slide 7, just to reiterate all the reasons why we remain very bullish on Study 011 given the nature of the design. Again, our Phase 2 experience now with more than 150 years of patient data. Those 17 patients from the Phase 2 extension study continue to remain on migalastat or Chaperone as their only therapy for Fabry disease.

Again, the positive results that we've seen on both renal and the urine GL-3 clearance, the key biomarker in the disease, together with long-term trends toward stabilization of kidney function – all that remains true.

The entry criteria that hopefully we're all very familiar with that was part of patients gaining access to this study, the improved histological methodology, the BLISS methodology (inaudible) to look like they're (inaudible) has just published here recently, one that we think is a more sensitive and more objective advanced measure of the GL-3 inclusion bodies that will be used to gauge the primary endpoint.

And now from what we continue to learn from our Phase 3 observations, the very low dropout rate in this study and the very high 100% conversion rate from patients finishing the primary six-month treatment period into the six-month extension arm. So we think that all bodes well.

Now with this very new data based on the recent type-C meeting with FDA, again where the FDA has indicated that they will consider efficacy as well as safety for the six-month and the 12-month endpoints. So we think that, again, enhances the likelihood of our moving very rapidly towards an NDA submission for migalastat.

And again, to be clear, we are pushing by just a couple of months the unblinding of this data and the key reason for this is to maintain the integrity of this study. We still have patients who are in that six-month extension arm. We need to collect the full six-month extension data giving us a full 12-month view into these patients' treatment and with that, we'll be able to have completed all of the biopsies of the 12-month period prior to the unblinding.

We think this could prevent the chance of any bias in the study and it's something that we think would be viewed very favorably by the regulators in submitting data with six and 12-month endpoints but again, we think we could be approved on that six-month primary endpoint that we looked at and talked about for some time now together with also having the ability to look at safety and efficacy at 12-month endpoint.

Slide 8, that just shows you graphically again where we are with the low dropout rate, high conversion to the extension studies. Again, 63 patients having completed of the 67 initially enrolled. The end of the study in 2Q and all of those 63 patients going into the six-month intention study.

Forty of those 63 having already completed the six-month extension arm, so a year of study complete for 40 patients and of those 40, 38 out of the 40 have voluntarily elected to roll into the next year of study. So again, we think at least in terms of drug tolerability and patient compliance, we think that bodes very well for our ability to collect a very, very robust data set as we look towards that hopefully an NDA filing.

So with that overview and some more detailed commentary that I just provided on the Fabry program, let me go ahead and turn it over to Brad who will take us through our innovation continuum with the ERT-Chaperone combination technology and update on some of the Fabry and Pompe program.

Bradley Campbell

Great, thanks, John, and good evening, everybody. So as John stated, our vision is to use the Chaperone-ERT combination platform to create better therapies for patients with the lysosomal storage disorders along with continuum of innovation which is outlined for you on Slide 9.

So we're really focused on solving these broader issues with ERTs to address the unmet need that are still unique to each LSD and our top priority is to improve efficacy and potentially reduce the immunogenicity by combining ERTs with our specific pharmacological Chaperones.

So the first step here has been our Chaperone-ERT co-administration work where we've already demonstrated positive preliminary results from Phase 2 studies in both Fabry and Pompe and the next step along the continuum is the direct combination of our Chaperone's co-formulated with proprietary next generation ERTs which we're already doing in Fabry and I'll touch on a little bit later and as John mentioned, we've already begun to explore in Pompe and other LSDs, as well.

So the overall goal here for both co-administration and co-formulation is to stabilize the enzyme, keep it in its active form, and increase the uptake of active enzyme into key tissues of disease In the case of co-administration, the Chaperone is orally administered just prior to ERT to bind to and stabilize the ERT in circulation. With co-formulation, the Chaperone is combined with the enzyme to keep it stable from the beginning.

So now let me go into a little bit more detail on how we've been validating this platform. For each of our Chaperone-ERT programs, Slide 10, I'll go through a little bit more detail on both the Fabry Study 013 and the Pompe Study 010.

So just a reminder, while our model therapy studies are investigating an oral every other day dosing regimen to Chaperone a patient's own androgynous enzyme, our co-administration studies are using the Chaperone delivered just prior to the ERT infusion to improve the stability of the ERT while still in the circulation.

So for each of these studies, patients will be compared to themselves at two subsequent ERT infusions. Patients come in with C-ERT alone and then come back just prior to the next infusion. They receive a single oral dose of the Chaperone.

Both studies are designed to evaluate safety and whether the presence of the Chaperone increases active enzyme in plasma and in key tissue for skin for Fabry patients and muscle for Pompe patients compared to ERT alone.

So as a reminder, earlier in the year on the left-hand side here, we released positive preliminary results from the first two cohorts of the Fabry Study 013 which is the Phase 2 open label study of migalastat co-administered with the ERT for Fabry disease. Now we've completed the cohorts with migalastat at 150 mg co-administered with FibraZyme and Replagal and also migalastat 450 mg co-administered with FibraZyme

The cohort on migalastat 540 mg co-administered with Replagal's ongoing and a poster with additional results from the study has been accepted for follow-up 2012 scientific conference.

More recently during the second quarter on the right-hand side of the chart here, we announced results from the first two dose cohorts from the Pompe Study 010 evaluating our Chaperone-ERT AT2220 co-administered with Myozyme or Lumizyme. If you recall there that among all four patients in Cohort 1 and all six patients in Cohort 2, we saw increases in active enzyme compared to active ERT alone in the plasma.

So at this point in how that study's progressing, we fully enrolled three out of the four ascending dose cohorts. A few weeks ago, our independent BSMB gave us the go-ahead to move into Cohort 4 and now we're enrolling patients in this highest and final dose cohort of AT2220 and we continue to expect final enrollment and full results from all four cohorts by the end of 2012.

So really importantly significant progress in moving forward with both of our Phase 2 co-administration studies with several important milestones and additional data expected for both programs later this year.

So as we previously discussed, there are really different degrees of unmet need across the group of lysosomal storage disorders that were focused on. For Pompe disease, in particular, remember that immunogenicity is a significant issue where an immune responses occur in a majority of Pompe patients receiving Myozyme infusions which have the potential to limit treatment outcomes with this ERT.

So now I'd like to turn your attention to Slide 11 and here, I'll turn it over to David, who's going to comment briefly on some of the pre-(fungal) work that we're doing to better define this ERT-related immunogenicity. David?

David Lockhart

Hello, everybody. I'm going to introduce you quickly to a new type of assay that we're using to look at the immunogenicity of Myozyme and Lumizyme and it can also be used for other protein therapeutics, as well. We had done previously studies in animals and of course, there's the issue of using a human therapeutic protein in animals to try to assess immunogenicity and there are shortcoming to that sort of approach.

So instead, to complement the animal work, we're using a new type of assay that looks at a T-cell response in cells derived from human beings with different HLA types and we are also supplementing a panel of 50 cell lines derived from healthy bone tiers with a set of cell lines derived also from Pompe patients.

And so as you look at the graph, this assay has previously been used to look at existing human therapeutics and what is found is that the clinical immunogenicity on the X-axis that the percentage of patients who received these different drugs that developed antibodies and then on the Y-axis is the output from the Episcreen assay which measures the T-cell response in terms of proliferation of T-cells and the cytokine secretion profile.

And you can see on this plot that overall, there is a good correlation between what's observed in the (inaudible) assay using human cells from outside the body and the antibodies that are actually seen when patients are given the different drugs and some of the drugs here you'll recognize, Rocephin, Avastin, Interferon Alpha and Beta and so on.

So the correlation with other human therapeutics has been good so we decided to use this assay also with Myozyme and Lumizyme and later with other LSD ERTs as well and you can see that what we've seen so far is that we are seeing that Myozyme illicit a strong T-cell response consistent with the high antibody response that is seen in many Pompe patients

And we will be able to correlate this T-cell response with the HLA type with the observed IgG titer, the antibody titer, that's seen in the patient, and also with the GAA genotype and we'll be able to see which of these things are predictive of a response, of an antibody response to positive ERT and most importantly, which of these things can be reduced in the presence of AT2220.

And the preliminary results are already looking promising. That was with a smaller panel of cells. We're now using the full 50 healthy volunteer panel and then, as I said, we're supplementing that with a unique panel that we've derived from the patients in our Pompe clinical studies.

So more of these data will – we'll have more of these data in Q3 and also be presenting these data at various scientific conferences. So this looks very, very promising so far.

John Crowley

If I could just bring your attention to Slide 12 here before I hand it back to David to review a little bit of data, this is a high-level slide but we really want to make sure that we highlight our expanded relationship with GSK and their partner, JCR.

Remember, JCR is a Japanese biologics company with over 20 years' of developing and commercializing recombinant proteins and as part of this expanded relationship, we now have the ability to develop our co-formulated Chaperone-ERT product which is moving rapidly through pre-clinical development. We're not going to spend a lot of time here because we covered this in good detail when we announced the extended collaboration earlier.

However, let's now turn to Slide 13 and just provide you a quick reminder of why we're so excited about the development of migalastat co-formulated with JR-051 as a proprietary next generation ERT and again, I'll turn it over to David to review the data.

David Lockhart

I'll do this very quickly because we showed these data at the last – on our last conference call but these data show that when Fabry mice – these are Fabry knock-out mice – when they are treated with a single administration of JR-051 co-formulated with migalastat with a 30-minute infusion, so mimicking the infusion situation that is followed with for Fabry patients.

We've been able to measure an increase in the circulating half-life, which we've shown before. We've been able to measure increases in uptake of the enzyme and the key tissue, which we've shown before, and what's shown here is the reduction in the storage material GL-3 in both the heart and the kidney.

So if you look at the darker blue bars, you can see that if you just give 1 mg/kg or a medium dose of JR-051, compare that to what's seen with FibraZyme, there is a reduction in both the heart and the kidney.

If you do exactly the same experiment but with JR-051 co-formulated with migalastat, you can see the light blue bar next to it that there is a significantly greater reduction in the amount of GL-3 and again, this is only after a single co-formulated infusion.

OK, so that looks very promising. Clearly the small molecule is making it so that there is more activity from the enzyme and there's more activity where it matters and in a way that matters, namely in the heart and kidney and that it results in a reduction in the storage material and as in lysosomal storage diseases, the main job of the therapy is to reduce the storage material.

If you go to the right, we figured that it would be possible to do even better by giving more of the enzymes, not just stopping at necessarily the doses that had been used in previous studies with FibraZyme and Replagal but to go to a higher dose of JR-051 and then to combine the higher dose of JR-051 with migalastat and you can see that the higher dose of JR-051 on its own does a better job at reducing the GL-3, so that's very encouraging.

And the best job of all is with the higher dose of JR-051 in combination with migalastat and you can see in the heart even after only the single co-formulated infusion that the levels are nearly back down to wild-type levels.

And in the kidney where GL-3 reduction is always the most difficult, it's never been shown that the GL-3 levels can be brought back down to wild-type levels but with the higher dose of JR-051 plus migalastat, it's closer than it's ever been observed before getting to within about 25% of the wild-type levels.

So very encouraging and this is something that we are going to continue and I'd just remind you that as part of the Fabry program, immunogenicity is also important. So we'll have more to say about that in the future, as well. So it's not only boosting the activity of the enzyme, reducing the sub-straight even further but also reducing the immunogenicity and that's important for both Fabry and Pompe.

John Crowley

Great, onto Brad?

Bradley Campbell

Thanks, so let me just close up the program update section by saying that we are extremely pleased with the progress we've made and encouraged by the data that we've generated so far and the goal now is to really look to rapidly advance the co-formulated Chaperone-ERT products as the next generation therapy along with continued innovation.

So with that, let me turn the call over to our Chief Financial Officer, Chip Baird, who will review the financial results for the fourth quarter – excuse me, for the second quarter and full year 2012. Chip?

Chip Baird

Great, thanks, Bradley, and good afternoon, everyone. I'll start on Slide 14 by reviewing our second quarter 2012 financial results for the three months ending June 30, 2012. Alternatively, these results appear in Table 1 of the press release we issued early today and additional details can be found in our 10-Q to be filed later on today.

So for the quarter, total revenue was $10.7 million compared to $4.0 million in the prior period. Our total revenue consists of research revenue and collaboration milestone revenue recognized under our collaboration with GSK for migalastat.

Research revenue for the second quarter 2012 was $5.5 million up from $2.4 million in the year ago period. That increase is due to higher reimbursement rate from GSK for shared development costs for migalastat which was 50% in 2011 and 75% here in 2012.

As a reminder, each quarter GSK reimburses us for a portion of our actual spending fees or obligations. Amicus and GSK reconcile each parties (inaudible) in migalastat program on a quarterly basis to ensure that the costs are shared in accordance with the arrangement.

Onto the arrangement, research earning is expected to fluctuate quarter-to-quarter relative to the proportion of total migalastat expenses and a percentage we're responsible for paying under the arrangement.

Moving on to collaboration and milestone revenue for the second quarter of 2012 was $5.2 million compared to $1.7 million in the year ago period. This was primarily based on milestone revenue of $3.5 million recognized during the second quarter of 2012.

Collaboration revenue in both periods reflected the recognized portion of the $33.2 million up-front payment received from GSK upon signing the agreement back in 2010. This up-front payment is being recognized on a straight-line basis.

Total operating expenses in the second quarter of 2012 were $20 million, an increase from $18.2 million in the prior year period. The total operating expenses consist both of research and development as well as general and administrative expenses.

R&D expenses for the period were $13.8 million including $921,000 to stock-based compensation expense. This compares to $11.6 million in R&D expense including $651,000 to stock-based compensation expense in 2011. The year-over-year increase in R&D expenses were primarily attributable to higher contract research and (inaudible) costs within the Fabry program.

General administration – G&A expenses for the second quarter of 2012 was $5.8 million including $836,000 of stock-based compensation expense. This compares to $6.7 million of G&A expense for 2011 including $3.2 million of stock-based compensation in the prior year period. The decrease in the second quarter 2012 expense was due to the decrease in stock option compensation expense versus the year ago period.

Moving down to P&L, non-operating income expense consists primarily in the change in valuation of a warrant liability which is a non-cash expense along with interest income, interest expense, and other miscellaneous items.

In the second quarter of 2012, we had a non-operating income of $4,000. That compares to non-operating income of $2.1 million in the second quarter of 2011. The change between the two periods is due to the change of the valuation of the warrant liability.

As a reminder, warrants were issued in connection with our March 2010 registered direct offering of common stock and were recorded as a liability at their fair value on the issuance date. The fair value of these warrants increases or decreases with the change in our stock price.

Net loss attributable to common shareholders for the three months ended June 30, 2012 was $9.3 million or $0.20 per share compared to a net loss of $12.6 million or $0.37 per share for the same period in 2011. Weighted-average common shares outstanding were $46.9 million and $34.9 million for the three months ended June 30, 2012 and June 30, 2011 respectively.

If everyone could turn to Slide 15, I'll update you on our cash position and our full year 2012 operating expense guidance. Our cash, cash equivalents, and marketable securities at June 30 totaled $95.8 million compared to $56 million at the end of December 31, 2011.

With the strengthening of our balance sheet in the third quarter of this year to the $18.6 million equity investment from GSK as well as the receipt of a $3.5 million milestone payment, we expect to end the year with more than $90 million in cash, cash equivalents, and marketable securities. We anticipate that this cash will be sufficient to fund our current operating plan beyond 2013.

We continue to expect full year 2012 operating expense within the upper end of the previously guided range of $37 million to $43 million net of anticipated cost-sharing related to the GSK collaboration.

As a reminder, GSK is responsible for 75% of the development costs of migalastat monotherapy and co-administration in 2012. During the second half of this year, GSK will also begin investing in 60% of the development costs for our Chaperone-ERT co-formulated product. However, that's a program that's in pre-clinical development and these costs are not expected to be material for Amicus for the remainder of the year.

As we mentioned in our conference call a few weeks ago, we are committed to building a commercial infrastructure using this stepped-up approach triggered by key de-risking events. So we're looking to see positive results from our Phase 3 Study 011 of migalastat monotherapy prior to committing significant resources towards the commercial launch.

This summarizes our key financials for the second quarter and the year 2012. I'll also be available for the Q&A session if there's additional questions on an of the numbers here. With that, I'll turn things back to John.

John Crowley

Thanks Chip and Brad and David before you. So hopefully you get the sense that a lot of activity remains at Amicus. On Slide 16, I'll just summarize some of the key activities. The check marks that you see in Fabry Pompe indicate the milestones we've already delivered on and again, to summarize for the Study 011, it is a change in guidance from Q3 to Q4.

However, it's based on the encouraging type-C guidance that we received from US FDA and again, this will allow the last patient to complete the six-month follow-up period study and will allow us to collect that complete data for all 63 patients prior to the unblinding. So we think this will provide for an even more robust data set and further increase the likelihood of a successful NDA filing.

Again, we remain extremely encouraged now that we've completed the primary six-month treatment period and have seen 100% conversion, 63 of 63 patients completing the primary six-month period moving now into the voluntary six-month extension arm.

So all of this taken together we think is a positive for Amicus. We like the FDA's indication that it will consider efficacy as well as safety data at both the six and 12-month period. We think all of this is a great example, too, of our strong working relationship in our Fabry program with our partners at GSK.

We will look forward to all the data that will come in Fabry, very encouraging, and likewise in Pompe, that program combination study moves forward together with the results on the immunogenicity studies that David highlighted for us, as well.

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

Question-and-Answer Session


Thank you, sir. (Operator instructions). And our first question comes from the line of Anupam Rama with JP Morgan. Your line is open.

Anupam Rama – JP Morgan

Hey, guys, thanks for taking the question. In your type-C meeting with FDA, did you have a chance to share any of the Phase 2 extension data and if you did, to what extent did those data have influence in the FDA accepting 12-month safety and efficacy endpoints?

John Crowley

Well, we certainly kept the FDA up-to-date, Anupam, on all of the data that we had collected in that extension study. It's been made public, of course, so it was available to FDA. I think that is one piece of the puzzle. Certainly from a safety standpoint, the drug continues to have an excellent side effect profile and in terms of the encouraging trends that we've seen in kidney and renal function, we think that's very positive, as well.

We think, too, that while we're very confident in hitting the primary endpoint and seeing the appropriate P-value compared to placebo at the six-month endpoint, we do know from our Phase 2 studies that at 12 months, you saw an even further GL-3 clearance in the patients who remained on migalastat.

So that taken together leads us to believe that it could be an even more robust data set at 12 months that could enhance the whole NDA package and hopefully make it a smoother NDA process. So for all of those reasons together with GSK, we thought it a wise investment to wait a couple of months on the unblinding.

Anupam Rama – JP Morgan

And did you talk to any physicians about sort of the advantages of having a 12-month safety efficacy data in the label and what marketing indications this may have?

John Crowley

We haven't yet discussed that with physicians in designing that (inaudible). We did get significant feedback from physicians that six months would be an appropriate period compared to placebo to see a change. Obviously more data over longer period of time we think will give further confidence to physicians in prescribing this drug.

So certainly we think it could also not only enhance the NDA but our ability to effectively compete against other products in the marketplace.

Anupam Rama – JP Morgan

Cool. Thanks for taking my question.

John Crowley

Hey, you bet.


Thank you. Our next question comes from the line of Ritu Baral with Canaccord. Your line is open.

Ritu Baral – Canaccord

Hi, guys. Thank you for taking the question. Forgive me if I dropped off for a second because of the signal, but can you comment on whether the FDA might accept positive statistically significant (inaudible) as a provable endpoint (inaudible) miss the trend (inaudible)? What was your sort of general impression on that scenario from your discussion?

John Crowley

You cut out a little bit there, Ritu, I think. Let me just rephrase it and make sure I heard the question correctly. I think you were saying that if we were to miss the physical significance, the P-value at six months versus placebo, would the FDA consider filing on the efficacy data at 12 months at which point, of course, all of that is going to include data for people who have all been on drug. Is that the question?

Ritu Baral – Canaccord


John Crowley

Yes, you cut out again but I think that's what your question is so...

Ritu Baral – Canaccord


John Crowley

OK, good, good, so that's very much – and that's the primary rationale while we are waiting for unblinding and why we think it's very encouraging, the feedback from the FDA on this type-C guidance that they would consider approval endpoints based on the six-month data and then presumably if we were to miss it at six months that they would consider the totality of the data and the full package based on 12-month efficacy.

So that's why we're very encouraged by the feedback and why we are taking a couple of months extra to unblind the study to make sure that the data has the highest degree of integrity possible, for instance, preventing any potential for bias in the analysis period from the unblinding to last patient out of the 12-month period.

David Lockhart

Ritu, this is David, if I could just add that it's – the assessment is always based on the totality of the data. The nice thing about having the data at 12 months is that for roughly half of the patients, then we will have data at both six and 12 months and then for the other half of the patients who've been on placebo for the first six months, we will have six-month treatment data for them.

So the data package at 12 months is substantially larger and as people who believe that the drug actually does what it's supposed to do, that we believe that that works in our favor.

John Crowley

So again, we're encouraged by this. I think it is an expression of enhanced flexibility from the FDA that I think comports with the spirit and letter of the new guidelines you're seeing (inaudible) regarding innovations and rare diseases and accelerating approvals in rare diseases. So we again think it's very encouraging.


Thank you. Our next question comes from the line of Joseph Schwartz with Leerink Swann. Your line is open.

Joseph Schwartz – Leerink Swann

Oh, hi, thank you. I was just wondering if we can continue on that line of thought and maybe you could expand a little bit on why do you think the FDA is now focused on 12 months versus six months and what was different in those meetings versus your prior interactions with the FDA?

Brad Campbell

And just to be clear, it's not that the FDA (inaudible) six months. The FDA is still very interested in the six month (inaudible). Joe, you might want to mute your phone. I'm just getting some feedback there for others.

To be very clear about this, the FDA has not said that they will look only at 12-month efficacy for approval. It's that they will consider both the six-month and the 12-month. So to Ritu's prior question, to frame it that if for some reason we didn't reach statistical significance for six months, that we would also have a fuller data package in 12 months.

So I think that's a very, very important – that's why it's such an added advantaged we believe and why we think it weighs heavily in favor of holding off a few months on the unblinding so that we can continue with a full data package to those 63 patients.

John Crowley

Yes, and remember the primary efficacy endpoint should still be effective six months during the placebo period. That is the primary efficacy endpoint.

Brad Campbell

So what John is saying, what the FDA was saying is that there is a more complete data package at 12. Typically the FDA likes to see safety data for chronic disease treatment. They like to see safety data for 12 months, so that's something we had always expected. But the primary efficacy end point, so the six-month data, you can think of the 12-month data as being supportive, secondary and then of course there will be the full 12 months of safety data across all the patients.

John Crowley

So again, it will be a very robust data set that we'll have.

Joseph Schwartz – Leerink Swann

OK, great. That's helpful. Thank you for the clarification. And so could you explain to us a little bit more about why GSK returned the US rights to (inaudible) and now how you'll be addressing the commercialization there given that's still not too far away?

John Crowley

Well, again, to be clear, they didn't return the US rights. This was a comprehensive extension of our deal, Joe, where they bought up their equity in the company, of course, investing another nearly $20 million in the equity investment.

We agreed to advance the next generation proprietary ERT. They contributed the ERT to that collaboration. We contributed the chaperone component. And we did acquire the US rights in the expanded collaboration here and, again, the rationale is that there was significant value.

We did give up our rights to milestones and royalties, so very significant value that was exchanged here as well. And in addition, throughout the relationship in the last 1.5 years, I think GSK has grown increasingly confident in Amicus' ability to utilize our experience in scientific and medical affairs and patient efficacy to lay a foundation for the commercial infrastructure and again, with that, give Amicus independence of pricing in the United States.

So for all of those reasons, I think it made very, very strong strategic sense, certainly for GSK as well as for Amicus to extend and expand the collaboration. Does that answer the question, Joe?

Joseph Schwartz – Leerink Swann

Yes, I think that's very helpful, thank you. And just one more, if I could ask another, and that would be could you remind us of your patent – your path position on migalastat and are you planning on expanding beyond those that have been granted? For example, could you patent the pharmacogenomics lookup table and at what point in this patent process would that add to the lifecycle?

John Crowley

Sure, so we have issued patents around the method and use of pharmacological chaperones that we've talked about here. Those are issued from what we licensed from Mount Sinai with further extensions that will take us into the early 2020s on that.

In addition, we have the protections, the orphan drug laws in the United States of seven years of exclusivity. We do have manufacturing patents around the process and scale up that are pending.

We've also filed certain other patent applications that we believe have the potential to further extend beyond the method and use patents that we would have. We are also looking to, for instance – what you indicated, Joe, the pharmacogenetic lookup table, other unique aspects that were unintended or unforeseen as we began the research that we think could be incorporated into the label that could significantly enhance the intellectual property of the programs.

But typically, oftentimes in these orphan spaces you just see the protections of the Orphan Drug Act. We think we have that and quite a bit more, so we've built a very significant series of patents and a strong patent strategy around the program, not just in Fabry but broadly for what we're working on here.

Brad Campbell

So two other pieces – this is Brad – two other pieces of color there. In addition to what John mentioned, we're also – have also found dosing and administration patents that go later into the 2020s, 2027 and 2028.

And remember, too, through combination therapy that extends the patent license as well. So for example, coformulation patents, which we're filing now, we expect to take us at least to 2033, so a significant patent portfolio built around the monotherapy first and then extending out all the way into the 2030s.

Joseph Schwartz – Leerink Swann

It would seem as if you've added a lot to the art. So that's good to hear. OK, thank you.

John Crowley

We spend a lot of time and a lot of money, quite frankly, on patents and development and patent (inaudible).


Our next question comes from the line of Kim Lee with ThinkEquity. Your line is open.

Kim Lee – ThinkEquity

Good afternoon. Thanks for taking the question. I just wanted to delve a little more into your conversations with the FDA. And can you give us a little more color on who actually suggested the 12-month efficacy and safety data? Now was it the FDA who brought that up or you brought that up?

And who – and what do you think the FDA saw in your data set so far that would lead them to possibly want to see 12-month efficacy data? Thanks.

John Crowley

Yes, again, to be clear, we and GSK, everybody remain completely blinded to the O11 study. So the FDA didn't see anything in that. What the FDA has seen is the long-term extension study data that continues to have encouraging trends in renal function, together with all the histological measures.

They've of course, looked at the Blitz methodology and the recent Bitz publication. The FDA and GSK and Amicus I think were very pleased with the low dropout rate in the study and the high conversion past the primary end point which is at six months and remains at six months in the study and saw the ability to get a very robust data set because of that high 100% conversion rate in patients in that second six-month period, so a full year of data.

I think all of that taken together – we've always expected that we would have some added data at 12 months certainly for safety purposes but actually now being able to look to six months and/or 12-month efficacy for approval we think is a great benefit for this program, especially since we didn't have to wait a full six months further for unblinding. It is just a couple months delay in unblinding. Does that makes sense, Kim?

Kim Lee - ThinkEquity

Yes, no, I appreciate the clarify. And if I may, one last question for (inaudible). Can you tell us – you've given the weighted average common shares outstanding. Can you give us the exact shares outstanding for this Q2?

David Lockhart

Yes, at the end of 2Q is 46.3 million shares outstanding.

Kim Lee - ThinkEquity

Great, thanks.

David Lockhart



Thank you. This does conclude our question-and-answer session. I'd like to turn it back to management for any closing remarks.

John Crowley

Great, thank you, Operator, and I think that was a good call and hopefully a lot of updates and some added color and hopefully even more confidence in our lease program and monotherapy for Fabry disease and also hopefully folks get the sense that all of the technology and programs at Amicus continue to progress together with a very strong balance sheet.

So we're excited about the second half of the year and very excited to see more and more data in all of these programs. So it'll be a busy five months coming up. Great, have a good day.


Thank you, ladies and gentlemen, for attending today's conference. This does conclude the call. You all may disconnect and have a good day.

John Crowley

Great, thank you.

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