Amicus Therapeutics, Inc. (NASDAQ:FOLD)
Q3 2012 Results Earnings Call
November 5, 2012 5:00 PM ET
Sara Pellegrino - Associate Director, Investor Relations
John Crowley - Chairman and CEO
Bradley Campbell - Chief Business Officer
Pol Boudes - Chief Medical Officer
David Lockhart - Chief Scientific Officer
Chip Baird - Chief Financial Officer
Ritu Baral - Canaccord
Anupam Rama - J.P. Morgan
Bill Tanner - Lazard Capital Markets
Mayank Gandhi - Capstone Investments
Good day, ladies and gentlemen. And welcome to the Amicus Therapeutics Third Quarter 2012 Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator instructions)
As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Ms. Sara Pellegrino, Associate Director of Investor Relations. Ma’am, you may begin.
Good afternoon. And thank you for joining our conference call to discuss our third 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; Pol Boudes, our Chief Medical 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.
Today’s prepared remarks coincide with the slide presentation that is now available on our corporate website at www.amicusrx.com. The slides are located in the Investors section under Events and Presentations right below the webcast link to today’s call.
On slide two, we have a reference to forward-looking statements. This conference call and presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to business, operations and financial conditions of Amicus, including, but not limited to, preclinical and clinical development of Amicus’ candidate drug products, the timing and reporting of results from preclinical studies and clinical trials evaluating Amicus’ candidate drug products, the projected cash position from the company and business development and other transactional activities.
Words such as but not limited to, look forward, to, believe, expect, anticipate, estimate, intend, plan, would, should and could, and similar expressions or words identify forward-looking statements.
Although Amicus believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, there can be no assurance that 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 quarterly report on Form 10-Q for the quarter ended June 30, 2012, all forward-looking statements are qualified in their entirety by this cautionary and Amicus undertakes no obligation to revise or update its release to reflect events or circumstances after the date hereof.
So, at this time, it is my pleasure to turn the call over to John Crowley, Chairman and Chief Executive Officer of Amicus.
Great. Thank you, Sara. Good evening, everybody. And thank you for joining us on our Q3 conference call. I’ll direct you to the agenda slide, slide number three of the presentation.
I’ll begin the presentation and go through some of the major corporate highlights for Amicus. And then the bulk of the presentation I’ll turn over to some of our senior team at Amicus, who I’m joined by here this evening.
The Fabry monotherapy program updates I’ll cover briefly and then turn over some of the clinical, including some of the data -- very exciting data from the American Society of Nephrology meeting in San Diego this past weekend to our Chief Medical Officer, Dr. Pol Boudes.
And then we also have our Chief Business Officer, Bradley Campbell, as well as our Chief Scientific Officer, Dr. David Lockhart, who will go through some additional results, especially in our chaperone-ERT program for both Fabry and Pompe.
I’ll then turn the call over to Chip, our Chief Financial Officer and Chip will take us through the 3Q ‘12 financial results and fiscal year ‘12 guidance. And then, I’ll conclude the call with upcoming milestones and final remarks.
Just briefly to turn your attention to slide number four, you’ll see the headline of this slide is related to hurricane, the Superstorm Sandy that struck the East Coast and particularly devastated New Jersey last week.
You’ll see the headline there that the Amicus’ New Jersey facility and operations remained intact and fully functional. I just want to ensure -- assure everybody on this call that we certainly at Amicus took this as with all natural disaster threats very seriously at Amicus.
We came through the storm thankfully fine. We are fully functional and operational. The picture that you see on that slide was actually taken this morning from in front of our building, so you can see some of the work going on at Amicus.
We have 300-kilowatt generator that powers the facility. Thankfully we only lost our power for a short while. We did have our facility’s team in the building here throughout. We did have backup contingency plans, if any of our experiments needed to be moved to places with power, including transferring some of that to a GSK facility temporarily. Thankfully, we didn’t have to do that. We’re only out of the building Monday and Tuesday during the storm and then back in the facility on Wednesday.
So, Amicus, thankfully, made it through the storm well. Certainly many of our communities, including the communities that many of our employees live in were particularly affected and many of our Amicus team are helping the volunteers to the Red Cross and other agencies.
And for any of your interesting in helping any of our friends here in New Jersey, we’d certainly encourage you through whatever means you can to add your support. But, again, thankfully, Amicus came through the storm.
Turning to slide number five, I’ll just give you a brief overview of some of the corporate highlights. So it’s been a great quarter for our Fabry monotherapy program and I think this really reflects, not just a significant progress within that program, but also the clinical execution.
For many of you who attended my presentation earlier in the year at the J.P. Morgan Conference, we highlighted some of the pillars of strength and value as we thought for 2012 for Amicus and one of those was our global clinical expertise, and that’s something that I think is really reflected in these 3Q results.
Again, with Study 011, our Fabry monotherapy study, the first of our Phase 3 is for Fabry monotherapy migalastat. We have our 12-month analysis plan completed and we’ll go through that with you on this call which will be an update.
We are also reiterating our guidance to expect the six month data by the end of this year. We’re expecting that to come in December and we’re also now issuing guidance that we will have the 12-month biopsy data analyzed and released in the first half of 2013.
You saw the released recently too about our Study 012, that’s our switch study, moving people from enzyme replacement therapy to migalastat as a monotherapy. Again, people with responsive mutation in Fabry, we achieved the target enrollment, in fact we actually over-enrolled that study.
I had a schedule with final enrollment expected in this quarter, as well as the updated Phase 2 extension study results we just presented this past week and that Dr. Boudes will take us through here shortly.
So Fabry Phase 2 study, in combination, the 013 study enrollment is now complete for both the Fabrazyme and the Replagal. We will have updated preliminary results, November 8th at the American Society of Human Genetics meeting by the end of this week.
We continue to make great progress, as well as with our Pompe program. We have some good data here on the slides to share with you as well, positive preliminary results in cohorts 1, 2 and 3 that were presented in October at the World Muscle Society meeting in Australia.
And we also expect to have not only enrollment completed that is now, but all four cohort data reports, including that last fourth cohort that’s the highest dose cohort by the end of this quarter.
And also and Dave Lockhart will take us through the immunogenicity work that we’ve been doing especially with the Antitope data that looks increasingly compelling as well.
Just to highlight a little bit too about the corporate and financial strength, we think we’re in a good position, financially especially with the cash raise through our extended collaboration with GSK in the middle part of this year and of course, our equity fund raised back in Q1. So we end Q3 with just over $106 million, cash or cash equivalents on hand.
And we think that gives us a lot of flexibility to continue to advance the Fabry program, but also to make sure that we advance the technology fully and really as we said with the financing at the beginning of the year to fully invest in leveraging this core technology for the development of combination programs directly with enzyme replacement therapies, including building the biologics expertise and capacity in the company to be able to develop these next-generation enzyme replacement therapies, so good financial strength in the company.
I’ll turn your attention to the next slide, slide number six. Talks a little bit about the global Phase 3 registration studies, again two different studies, study 011 for approval in the United States, a placebo controlled study that study also were over enrolled with 67 patients.
And in the next slide, I’ll go through the updated disposition on where are with those patients. But that study continues to go extremely well. Again with data from the six month primary treatment period expected in the fourth quarter of this year in December, as well as the 12-month analysis plan now completed and we’ll go through that as well.
Study 012 that again is our switch study comparing ERT to migalastat. It’s a 1.5 to 1 randomization. We now have 57 patients enrolled in that study. If you recall the target was 50, so at 57, we think that reflects the enthusiasm in the community.
Also in this study you’ll seem we have a significant number of male in the study. We’re reporting this evening that we have 24 male and 33 females enrolled in that study. Again with final enrollment expected by the end of this year and that’s an 18 month study looking at kidney function as a clinical endpoint.
Slide number seven, we have some of the updated patient disposition from the last time we updated this several months ago. As we stated on the last conference call, the six month primary treatment period was completed in June of this year in 63 out of 67 patients. So with that study to the primary endpoint of six month, we had only a handful of patients equaling at 6% drop out rate.
So lower than we had anticipated together with the higher enrollment in the study, all of those 63 patients who went into the six months follow-up period continued on migalastat or they were switched from placebo to migalastat if they had been in that arm.
Both patients and physicians remained blinded as to whether they were on the migalastat or placebo during the first six month, but they all know now that they are on migalastat after the six months period.
51 of those 63 patients have now completed the six-month follow-up period and have received their month 12 biopsies. And as we sit here this evening, 49 of 51 of those patients have currently enrolled in the ongoing voluntary extension studies, which include a Study 011 treatment extension followed by a separate long-term extension setting.
So, increasingly good news about the patient disposition, more patients experience with the drug and at least in terms of safety and compliance, we’re very pleased with where we are with these patient numbers.
And like many of you, we very much are looking forward to and eagerly awaiting the unblinding of the six months data once we have those last patients out of the 12-month part of the study, which again we expect in December of this year.
Let me go ahead to the next two slides and turn the discussion to our Chief Medical Officer, Dr. Pol Boudes who will talk to us about the six and 12-month now analysis plan, as well as the data that you presented, Pol, this weekend that graphically on slide nine, I think shows a very impressive story with GL-3 clearance. So, Pol, I’ll turn it to you.
Thank you very much, John. Hello everyone, and good evening. As John mentioned, the momentum with enrollment in patient disposition in our Phase 3 Fabry monotherapy studies gives us great confidence in the program.
Slide eight provides additional details on the six and 12 months analysis for Study 011. During the last quarter’s conference call we discussed our encouraging type-C meeting with FDA, specifically the agency’s willingness to consider both the six and 12 months efficacy, as well as safety.
As a reminder, the primary end point is interstitial capillary GL-3 at six months and we will compare the number of responders on migalastat hydrochloride versus placebo at month six.
12 months descriptive comparisons include various analyses to support the six months data and I’ve outlined in the bullet here, so you can see we’ll have a very robust data set at months 12 for these comparisons, including 12 months of data in the initial migalastat group, as well as the six months of data in the group that crossed over from placebo to migalastat. And of course, additional safety data, as patients continue with migalastat in the six months extension and the open label expansion study.
Turning to slide nine, you will see updated results that John mentioned from Phase II extension study of migalastat monotherapy, also known as Study 205, which I presented over the weekend at the American Society of Nephrology Kidney Week in San Diego.
Below is a snapshot of changes in interstitial capillary GL-3 in eight a valuable patients who had baseline kidney biopsy from the primary Phase 2 study, as well as Study 205.
The follow-up biopsies in Study 205 were taken at various time points and individual patient values are plotted here. The median treatment duration in Study 205 prior to biopsy was 60 weeks and that 60 weeks just in Study 205 in addition to prior treatments in the primary Phase II studies.
As we indicated that the Congress and in this morning press release, there was a 78% median decrease in interstitial capillary GL-3 in patients with amenable mutation and 114% median increase among patients with non-amenable mutation. This is the longest term data presented in patients on migalastat to date and gives us further confidence in the program.
I will now turn things over to Bradley to review patient disposition in the Phase 2 and Phase 2 extension studies.
Great. Thanks, Pol, and good evening, everybody. I’ll refer you now to slide 10, which gives a quick overview of who makes up that data set from Study 205. I’ll refer you to this morning’s press release for further detail on the design of those four Phase 2 studies.
But this essentially shows the patient disposition from the original 27 patients who enrolled in our four Phase 2 studies down to the 17 patients who completed Study 205 with an average of 5.2 years on migalastat as their only treatment for their Fabry disease. So, again, as Pol, and John mentioned, very encouraging data ahead of the unblinding of the six month 011 results later this year.
So, with that, let me transition the conversation to our chaperone-ERT combination platform on slide 11. This highlights our continuum of innovation where we seek to deliver new patients to -- new benefits to patients along this continuum.
In Fabry disease, for example, where upwards of 50%, of the population have amenable genetic mutation, we hope they can take chaperone monotherapy with migalastat as their only treatment for their Fabry disease.
However, for patients who lack the appropriate genetic mutations, who have to stay on enzyme replacement therapy, we believe the direct combination of migalastat plus their ERT can make their enzyme replacement therapy better.
And this is now more than just a preclinical concept, as we continue to generate positive initial clinical data throughout the year in our Fabry co-administration studies, looking at migalastat plus or minus Replagal or Fabrazyme in various doses, as well as our chaperone AT2220 for Pompe diseases in our Study 010, looking at AT2220 plus or minus Myozyme and Lumizyme.
So, with that, let me turn it over to Pol and to David, who’ll walk us through some of that exciting data from our Pompe program.
Thanks, Brad. So beginning on slide 12, I will highlight results presented last month during the World Muscle Society Congress, which are from the first three cohorts in open-label Phase 2 Study 010. This study is a drug, drug interaction study investigating four ascending dose called of chaperone AT2220 co-administered with ERT, in this case recombinant GAA enzyme.
Co-administration is being compared to ERT alone during two subsequent infusions. In addition to safety, we are looking at uptake of active recombinant GAA enzyme into plasma and into muscle tissue with and without chaperone AT2220.
Slide 12, shows increased uptake of active enzyme in plasma, which was observed in 16 out of 16 patients enrolled in the first three dose cohorts. Among this patient, co-administration increased active recombinant GAA enzyme in plasma up to 2.64 versus ERT alone.
Now on slide 13, we show the muscle biopsies from cohort 2 and cohort 3, which were taken in each patient either three or seven days following each inclusions. The results on this slide suggest that co-administration increases recombinant GAA enzyme uptake into muscle versus ERT alone.
This results an important next step for the Pompe ERT combination program and/or ongoing design of subsequent repeat dose studies. In addition, the fourth and highest dose cohort in Study 010 is now fully enrolled and results from all four cohorts continue to be anticipated in the fourth quarter of this year.
Before I hand over the call to David to discuss ex vivo studies on ERT immunogenicity, just a quick reminder that updated preliminary result from Study 013 or Phase 2 chaperone-ERT study for Fabry disease will be included in the foster at the American Society of Human Genetics or ASHG this, Thursday, on November the 8th.
Study 013 is an open-label drug-drug interaction study investigating a single oral dose of migalastat into hydrochlorides either 150 milligram or 450 milligram co-administered with Fabrazyme or Replagal in 23 males with Fabry disease. David?
Thanks, Pol. I’m going to talk about the immunogenicity part of the equation and we’ve talked about this before, and how it’s important for Pompe, as well as for other diseases in the presence of ERT treatment.
In particular, patients who are given ERT develop antibodies and the antibodies, of course, interact directly with the infused protein and that can lead to safety problems, and it can also reduce the efficacy of the infused enzyme.
So we have been doing some studies, as we described before in animals and we saw very interesting -- some interesting findings, but of course, it’s difficult to interpret studies in animals when you are using a human version of therapeutic protein. So we moved to the studies with the company called Antitope and it’s called an EpiScreen assay.
And what it measures is a response, a proliferation response in human T-cells derived from different human beings with different HLA types. And so the T-cell response, the T-cell proliferation response is a necessary part of the human antibody response.
And in the part on slide 14, our data that were generated by Antitope showing what is seen with other human therapeutic proteins. And this is what gives us confidence that this readout is actually meaningful in terms of a human antibody response.
The plot shows the clinical immunogenicity on the X-axis and what this means is, if the fraction of patients who have been given these various therapeutic proteins developed antibodies. And on the Y-axis is the T-cells proliferation response as measured in this ex vivo assay.
So, for example, 50% on the Y-axis would means that 50% of the cells derived from different people with different HLA types, show a T-cell proliferation response and the other 50 do not. So you can see there is actually a range with different human therapeutic proteins with the highest being up around 40% of a response in the Episcreen assay.
So no one had ever done this with Myozyme and Lumizyme, the ERTs for Pompe disease. So, we did, in fact we got a grant from the Muscular Dystrophy Association to do that.
And so what we measured was the T-cell response that is elicited with Myozyme and Lumizyme under different conditions, and also in the presence or absence of AT2220, our pharmacological chaperones that’s designed to bind to and stabilize the enzyme, particularly in the circulation.
So the summary is here, you can see all the known therapeutic proteins more to the left of plot. And on the right you can see that Myozyme and Lumizyme alone elicited T-cell response at a pretty high rate. In fact, they are actually near the highest, although, not larger than some, but they are near the highest of any of the human therapeutic proteins that have been measured.
Down below kind of giving way the punch line, I’ll show you this in more detail in a second. You can see that Myozyme and Lumizyme in the presence of AT2220 have a level that is significantly reduced in terms of the T-cell response.
And in fact, it’s down near the dash line, which is generally considered, this isn’t proven, but is generally considered to be the point at which there essentially is not a worry about the antibody response.
So you can see that the addition of 2220 basically takes Myozyme and Lumizyme from a being about its high as any human therapeutic -- human therapeutic proteins are in this assay and bringing it down to a level that’s essentially at the level that is considered to not be a very sizable antibody response.
And if you go to the next slide on slide 15, this is shown in a little bit more detail. The hashed bars are the ones with Myozyme or Lumizyme alone, the four on the -- the four hashed bars to the left of the plot.
You can see there is Myozyme, Lumizyme, Lumizyme that was alive to sit around at 27 degrees for a while and Lumizyme that was incubated at 37 degrees, essentially completely unfolded.
And you can see that either Myozyme or Lumizyme elicit for strong T-cell response and if you let Lumizyme sit around at elevated temperatures that gets if anything a little bit worse.
And then the smaller bars that are next to those four are those experiments, but in the presence of 22, either 2220 alone, just to show that 2220 does not elicit T-Cell response on its own.
And then the next three show Myozyme plus 2220, Lumizyme plus 2220 or Lumizyme incubated at 27 degrees with 2220. And you can see that in all three of those cases, the presence of AT2220 significantly reduces the T-cell proliferation response.
So that is extremely encouraging. That was in fact what we were hoping to see. There does not seem to be a significant difference between Myozyme and Lumizyme in this respect. They are not identical but they are similar.
And also on the far right is a very important control. A33 is another control protein completely unrelated to Myozyme and Lumizyme that is known to elucidate T-cell response. We redid that as a positive control. We see a T-cell response and in the presence of AT2220 that T-Cell response does not reduce.
So AT2220 is clearly not having some general effect. It is not something that blocks T-cell proliferation. The effect is in fact specific for the Pompe enzyme either the Myozyme or Lumizyme form.
So very promising, so far, the next step is to supplement this work with very similar studies, except using cells that are derived from Pompe patients. So these are Pompe patients that have been part of our Phase 2 combination study.
So, we will have Pompe patients with known genotypes, with known HLA types, with known antibody titers and we will see how their cells, how their T-cells respond to the presence of Myozyme and Lumizyme with and without the presence of 2220. That would be an important addition to the study.
Okay. Great. Thanks, David. I’ll turn it over to Chip Baird, our Chief Financial Officer.
Great. Thanks, John, and good evening, everyone. I’ll start on slide 16 by reviewing our third quarter results for the three months ending September 30, 2012. Alternatively, these results appear in tables one and two in the press release we issued earlier today. And additional details can be found in our 10-Q, which was filed later on this evening.
Our third quarter results reflect updated revenue recognition accounting in conjunction with the expanded GSK collaboration, which we entered in July of this year. Payments received from GSK under the agreement are now being recorded in the deferred reimbursements account on the balance sheet.
On September 30, 2012, the deferred reimbursements balance was $27.2 million. This amount includes $4.5 million in cash reimbursed for shared global development cost in migalastat during the third quarter 2012 and the $22.7 million unrecognized balance of the upfront license payment.
Prior to the third quarter of this year, quarterly cash reimbursements were recorded as research revenue and the upfront payment was being amortized each quarter in collaboration revenue.
So, although, we show no research revenue in the third quarter of 2012, we earned $4.5 million in collaboration reimbursement from GSK. This compares favorably to the $4.1 million of research revenue for the three months ending September 30, 2011. I’ll provide a little more information on this updated revenue recognition accounting, which importantly does not impact cash on the next slide.
Moving down to P&L. Total operating expenses for the third quarter totaled $15.9 million, compared to $18.9 million in the year ago period. The year-over-year decrease is primarily attributed to lower research and development expenses related to our Fabry program.
Net loss attributable to common shareholders in the third quarter was $16.3 million or $0.34 per share, compared to a net loss of $9.8 million or $0.28 per share in the year ago period. The difference in the year ago period is attributed to the change in revenue recognition under the expanded GSK collaboration.
So moving to slide 17, I’ll summarize the change in revenue recognition accounting under the expanded GSK collaboration. Prior to the third quarter of this year, payments received from GSK under our cost sharing arrangement for the development of migalastat were recognized as revenue.
In the year ago period, $4.1 million under the GSK cost sharing arrangement was recognized as research revenue. In the third quarter this year, under the expanded agreement, $4.5 million of comparable GSK reimbursements were recognized.
But in this case, they reside in the deferred reimbursements account on the balance sheet. So the cost sharing arrangement remains the same, the deal economics remain the same and there is no cash impact from the accounting change for revenue recognition.
Also impacted with this accounting change is the upfront cash license payment received from GSK back in 2010. Previously, we amortized this on a straight line basis each quarter. Now, we record that unrecognized balance of that upfront consideration from GSK in the same deferred reimbursements account, which is $22.7 million on September 30.
So, if you move to the right-hand side of the slide here, on slide 17, the cost share of GSK in the third quarter and the unrecognized balance of upfront consideration, total up to that deferred reimbursement balance of $27.2 million at September 30, which is circled in green.
So going forward, on a quarterly basis, the deferred reimbursements balance will increase by the amount of reimbursement that GSK will pay to Amicus through ongoing share development cost. Any future milestones payable by Amicus to GSK will be debited against this balance of deferred reimbursements.
And before I turn it back to John to wrap things up, I’d like to briefly touch on the current cash position and reiterate our full year operating guidance on slide 18.
Cash, cash equivalents and marketable securities at September 30, totaled $106 million compared to $56 million at the end of last year. We continue to expect to end the year with more than $90 million in cash, cash equivalents and marketable securities, which we expect to fund our current operating plan beyond 2013.
In addition, we continue to expect full-year 2012 operating expenses to fall within that upper end of the previously guided range of $37 million to $40 million -- $43 million net of anticipated cost sharing related to the GSK collaboration.
Just as a reminder, GSK is responsible for 75% of development costs for migalastat monotherapy and co-administration in 2012. During the third quarter of this year, GSK also begin investing in 60% of the development cost for our pre-clinical Chaperone-ERT co-formulated product.
This summarizes our key financials for third quarter and the full year 2012 guidance. I’ll be available for the Q&A session or additional questions particularly around the GSK accounting.
And with that, I’ll turn it back to John.
Great. Thank you, Chip. Thanks everyone on the Amicus team for the presentation. I will just end here on slide 19. As you can see, again building shareholder value as the team consistent with our mission to deliver the highest quality therapies for people living with rare and orphan diseases.
We’re very pleased with 2012. It has been a transformational year for Amicus indeed in many different ways. This slide here with our milestone is very similar to the slide that I showed in January at the J.P. Morgan Conference just with the addition of some new work and new programs that we begun this year and announced this year at Amicus.
The check marks in Fabry are milestones that we’ve already delivered and achieved including some of the enrollment achievements within these programs for Study 012 and 013. But we still have to deliver of course the final 013 data, additional preliminary data I should say for Q4 of this year. That will come by the end of the year as well as the Phase 3 Study 011 results for six month data, which we eagerly await.
We’re also announcing of course on this call, as I did in the beginning that the Phase 3 Study 011, 12 month data according the plan that Pol discussed will be in the first half of 2013, which is important because that gets to reconfirming that the six month endpoint is the primary endpoint of this study. But as the FDA indicated this past summer, they are willing to consider safety and efficacy in this study.
So having the 12 months data, we think will further confirm, but we hope to be good data at the six month and in addition the 12 months data could potentially in itself support the filing application here in the United States for migalastat in Fabry disease.
So, many, many different moving parts to the Fabry program. Again, we have our co-formulation program with our partners at JCR Pharmaceuticals and GSK that advances. We expect by the end of this year or early next year to have some updated news on that as well. Many different pieces of Fabry to continue to move forward but so does our Pompe program.
And Pol and David did an excellent job of taking us through some of the Phase 2 study as well as the important pre-clinical and scientific work. And what’s really important there, I think people need to make sure we keep in mind is that, with this combination approach to use of chaperones together with enzyme replacement therapies, either as a co-administration with existing therapies or co-developed with our own proprietary next-generation enzyme replacement therapy products that there are two very important pieces to where we think it could be a benefit to patient, two different parts of the mechanism of action.
Again, the notion that the small molecule combined with the ERT product can confer additional stability on the ERT product. So, step one or one part of the mechanism of action is the increased binding -- the increase activity of the ERT protein through the binding of the small molecule, which we believe could lead to increased uptake of the ERT, of course having a good therapeutic outcome for patients.
But also the second part of the binding of the small molecule to the ERT product and that to reduced the immune profile and the immunogenicity of these proteins. So, more data continues to come in. We’ll have more here with the Cohort 4 data and Pompe by the end of this year.
And finally, we have our Parkinson’s program. We haven’t talked much about that lately, but a busy part of our R&D efforts here at Amicus again with that important link and increasingly recognized link between the Gaucher enzyme and Parkinson’s and we’ll have some additional data completed by the end of this year with our lead molecule in Parkinson’s. So, it continues to be an exciting year and certainly an exciting couple of weeks coming up for Amicus and our shareholders.
And with that Operator, we’re happy to take any questions.
(Operator Instructions) Our first question comes from the line of Ritu Baral with Canaccord. Your line is open.
Ritu Baral - Canaccord
Hi, guys. Thanks for taking the question. Glad to hear, you guys are all doing okay over there. As we look forward to the six months data, can you give us an idea of what -- in addition to the topline responder analysis, you might have available by December. Specifically, could we see something like the inclusion graph that we saw in the extension Phase 2 slide that you put up. I believe it was slide nine, the reduction in GL-3 inclusion?
Yeah. Ritu, we are working with GSK to figure out once we do on blindness study exactly how we want to present it. We’ve indicated that we will have the topline data. You’ll certainly know the results of the study. The exact level of detail, we’re not quite sure about. Much of that would be presented at a scientific conference in the first quarter. But we’ll try to be as detailed as we can and being respectful of science -- the scientific symposia and GSKs needs as well.
Ritu Baral - Canaccord
Got you. And in the study flow, you mentioned that there were two patients who elected not to go from the six month extension into the open-label portion, what was the reason behind that?
Right. In neither case, was it related to drug or any problems with the drug and in neither case did the physician recommend they come off drug. My understanding is that in both cases it was the patient’s choice related to travel with the study and compliance.
Ritu Baral - Canaccord
I see. So it wasn’t like they’ve chosen to go on to enzyme or anything like that?
To answer, I don’t know what happened to them afterwards if they went on to enzyme or not. I don’t believe they did, but…
You don’t know.
Yeah. But I can’t confirm that.
Ritu Baral - Canaccord
Got you. And then last question, I’ll hop back into the queue. On slide 13, I believe this was the Pompe’s combination study. We saw some very strong dose response in plasma levels. But we see a little more variability when we start going into activity in the muscles and I’ve granted for speaking about very, very small ends here.
But what should we sort of keep in mind as far as the pharmacodynamics between plasma levels of the combination therapy and then the muscle activity enzyme levels that we’re looking at on this slide?
Yeah. Go ahead. I’ll let David comment.
Hi Ritu. This is David. The data from the muscle biopsies is its noisier and it’s expected to be noisier. Because it’s a single member it -- it’s only from a single time point, either day three or day seven and it’s a biopsy from a complex tissue and one that is compromised in people with Pompe disease.
So, we expected to be noisier than what we’re seeing in the plasma, where we get to average over a point that are taken every two hours over a 24-hour period. The encouraging thing, if I can describe a little analysis that we did recently. If you look at the overall data from Cohorts 2 and 3 and you take the data that we have for the biopsies of both day 3 and day 7, their data for 11 patients, where we have the ERT alone or ERT plus 2220.
If we do that six of the 11 showed an increase and probably more importantly the five values that were the largest in magnitude both in a relative and an absolute sense were all increases.
Ritu Baral - Canaccord
So, if that makes sense. There were 11 measurements and the five biggest changes observed for any of the 11 patients were all increases.
Ritu Baral - Canaccord
So, that gives us confidence of that there is a clear overall effect and that we can see an increased uptake in the muscle, but we aren’t able to assign the quantitative values and be able to say that this patient is 20% better than that patient just given the vagaries of the muscle biopsies.
Ritu Baral - Canaccord
And is there any sort of I guess mechanism behind why the overall activity levels look lower at day seven than day three?
Yeah. There is a very good reason for that and we saw that in the animals as well. It’s related to the half life of the enzyme once it gets taken up in the lysosomes. So, the half life of the enzyme is days, so at day three, it’s pretty much peak and by day seven, it’s starting to be turned over.
So even these lysosomal enzymes, guess where they get turned over. They get turned over in the lysosomal, when GA gets taken up in the lysosomal themselves, any given molecule tends to have a half life of somewhere between three and six to seven days. So, when for the biopsies at day three, it’s been taken up and that it should be close to the maximum amount.
By day seven, depending on the tissue, you’re already out at least one or sometimes even two or more half lives. So it should be lower at that point. So, that also -- the fact that the values at day seven are lower than overall than what we see at day three, its actually encouraging that gives us more confidence that the biopsies are a readout that is not being dominated by the noise.
Ritu Baral - Canaccord
Got it. Great. Thanks for taking the question, guys.
And of course, Ritu, we are looking forward to I hear shortly getting into the Cohort 4 data and hopefully that will continue to trend positively.
Great. Thank you.
And our next question comes from the line of Anupam Rama with J.P. Morgan. Your line is open.
Anupam Rama - J.P. Morgan
Hey, guys. Thanks for taking the question. With the ‘13 results being presented at the generics meeting later in the week, can you talk about where you are in the planning process for potential multi-dose study and potential timing of initiation of that study? Thanks.
Yeah. That’s something that we are actively planning with our colleagues at GSK in fact, Marc Dunoyer is here, the head of GSK rare diseases, all day today and all day tomorrow with us on a number of these program plans.
So, we spent a lot of time thinking about that. And we don’t yet have guidance for that Anupam. I think at the beginning of the year or in 2013, we’ll be able to provide a very clear view of how we see that program as a co-administration with either Fabrazyme or Replagal, at a very high level we see that as a multi-dose study, longer-term study.
Now, whether that is a study that would be sufficient to expand the label, we’re not that something that we need to look at this final data set here and combined that with some regulatory discussions. But I hope very shortly to have a point of view on that. The good news is the date is very positive and gives us the reason to believe that this is going to be a significant benefit for patients. We’ll have the Poster Presentations at the end of this week. And I’m eager to talk to you after we have this specific data out there.
Anupam Rama - J.P. Morgan
Great. Thanks for taking my question.
Thank you. Our next question comes from the line of Bill Tanner with Lazard Capital Markets. Your line is open.
Bill Tanner - Lazard Capital Markets
Hi. Thanks for taking the question. Maybe for you John or anybody in your team, if I just think about the patient disposition and the 011 Study and apply Occam’s Razor. I mean, just looking at the retention what’s -- what would cause this trail to actual fail, because one would assume that there is a relationship between patients wanting to stay in a trail and the way they feel that that would be somewhat related to the therapeutic effect of the drug?
Yeah. Look, there are two questions really. Bill, I think one, your question of what would cause the study to fail. And secondly, what would give an indication is to whether or not the drug is working. We’re -- if you take the totality of everything we know. We’ve had patients from that Phase 2 extension study, everyone of whom is been on that drug for five to six years in some cases I think 6.5 years now.
So, those patients you had 17 of the 23 go into that study. Years later you have 16 of 17 still taking migalastat as their only treatment for Fabry diseases, never having gone to or gone back to ERT. And now that we have this long-term data, this biopsy data, we are very excited about that Pol presented this past weekend.
And if you extrapolate that, take it forward then to the ‘11 study, certainly we are very pleased with compliance, the safety profile, whatever we can and can’t read into this study and we are going to look at the data and see where that takes us. We are very convinced that this a good drug for people with amenable mutations. We are very convinced that we designed the very best study to show that.
So, where the study could go wrong, obviously you could have some variability in the biopsies and where the samples are taken and how they are read. However, when we have been through this with lots of folks with ourselves a lot as well, but we’ve controlled for that as best we can.
The size of the biopsy sample, the number of biopsies, the number of capillary is taken, the quantitative nature of the barasoni methodology. So, all in we feel really, really good about this study. There are lot of studies that you kind of dread getting to that final data point and turning over the big card.
We are actually very, very much looking forward to it. We think the drug is hopefully is going to help a lot of people with these amenable mutations. And we think we designed a very good study to show that. And hopefully, we will meet the p-value at the primary end point. And then we are also eager to see the 12 months data.
Together with the 012 study, I think the fact that we are able to get people two thirds of the people who presented for this study to agreed to give up ERT, their only drug for a fatal genetic disease for a study that doesn’t even yet have it pivotal data. It’s pretty remarkable in drug development with the size of patient population we are studying, with 57 people enrolled in 012. So you take step back and take the totality of it. We feel really good about this program. I will let David or someone else want to comment?
Hi, Bill. This is David. The thing that -- the thing that -- the worst thing that could make a trial fail is safety, fortunately we don’t have any concerns on that front.
Bill Tanner - Lazard Capital Markets
So, that’s the most important thing. The second most important thing is potentially something that maybe went by a little too quickly in session today. It’s on slide nine, so the thing that is worse -- the worst thing for the P value is having patients in the placebo group crossing over and scoring as responders.
And remember, there are females in this study and females are with Fabry disease or Mosaic that you’re taking a small biopsy of inhomogeneous tissue and there can be noise. So, that’s why slide nine is really important.
Look at the three on the right, those are all three females. They have had biopsies approximately a year apart. They have non-amenable mutations, so they are sort of are surrogate for being the placebo group and not one of them would have scored as a responder.
So, on the left hand side or the people with responsive mutations and four out of five show a reduction of 50% or more, five out of five show a reduction, four out of five or 50% or more. Go to the right, we have three females, which is the hardest possible case. Those are ones with non-amenable mutation. So we don’t expect them to show a reduction.
With three out of three, they do not score as responders. So it’s four out five in the left, zero for three on the right, which is exactly what if those proportion hold up, there is -- I don’t know what the P value will be but there will be a lot of zeros after the decimal point. So, I think that part of slide nine is really the most -- one of the most important new bits of data that we’re showing.
Bill Tanner - Lazard Capital Markets
Right. And just -- and for John or the rest of the team, just in terms of the FDA what’s -- and I appreciate that this is I guess theorizing or hypothesizing how flexible the FDA might be. I mean if the company -- if the trial "fails," but you see obviously you’ve had good retention and then perhaps in some subgroups, presumably you’re going to approach the FDA to see how willing they would be to be flexible, but let’s say they were not. I mean this is something that if the data are sufficiently encouraging in the subset of patients, you would think about revisiting?
Well, absolutely. I think yeah. It is -- there are lot of ways we think to get this drug approved. Certainly, the fastest and cleanest path would be for all of the zeros on the P value at the end of the year. But then also, remember this would -- we designed this study and designed the biostatistics around this including the primary endpoint and the nature of the biopsies in a pre-PDUFA V world, now post-PDUFA V.
And I worked very closely in the bio-Board member helping to make sure that we had very strong language in there, new pathways for accelerated approval, specific to diseases with unmet medical need, especially in the orphan world. So, I think what you’re seeing from FDA, I think you’ve seen it with a number of our peer companies just for the past few months is an increasing openness from FDA to consider this dramatic unmet need in some of these diseases and to take the totality of a data.
We hope that’s not the argument that we have to lead with, but in addition to the six months’ data, we’ll have the 12 months’ data. In addition to all of that, we’ll have the 012 study, again that’s now already fully enrolled with a clinical endpoint. So, that’s yet another way to potentially get the drugs approved. We have a significant number of secondary and tertiary endpoint including urine GL-3 that we could look at.
So I think, yeah, there are lots of different ways, if we were to miss the P-value on this study at six months that we can still get this drug approved. Especially as we sit here tonight and you’ve got well over a 100 people around the world who are taking migalastat as their only medicine for Fabry, many of whom have given up their lifeline of ERT to take that drug.
So I -- hopefully, we’ll have a very, very strong body of evidence to move toward approval. But one step at a time, let’s turnover this big card in the next couple of weeks and see where we’re at then.
Bill Tanner - Lazard Capital Markets
Yeah. Okay. Thanks. Good luck for that.
Yeah. Thank you. Thank you, Bill.
Thank you. (Operator Instructions) Our next question comes -- is a follow-up from the line of Ritu Baral from Canaccord. Your line is open.
Ritu Baral - Canaccord
Thanks for taking the follow-up, guys. Can you discuss a little further what the regulatory path for the combo therapy program might look like? Is there any potential at any point to have to do some sort of factorial study and right now, would the plan be to move forward with approved enzymes and at what point might the JCR enzymes come into play?
Yeah. So there are a lot of factors that we’ll have to look at. Obviously, we think that migalastat will get approved first as a monotherapy for Fabry disease. We do think that for persons with non- amenable mutation who would still need to take one of the approved ERTs, Replagal or FibraZyme, that we can improve the characteristic of those drugs.
Now, whether we would move for an extensive Phase 3 program to expand the label, or whether we would do a study to help inform doctors about the drug-drug interaction and how they might be used together. We haven’t made that decision yet. There’s a couple of other pieces data that we need to get yet, Ritu.
And one of those is something within our control and that’s how quickly we think we could move our own proprietary next generation ERT that again combines migalastat with our proprietary ERT from our partners at JCR and GSK. So again, just indulges another month or two to have that plan pull together. And I’m confident by the beginning of the year in 2013, we’ll be able to articulate a pretty clear path forward for that program.
Ritu Baral - Canaccord
Got it. And last question. What -- I guess what was the strategy behind the shift in accounting. Chip, if you could address that, is there anything new as part of the agreement or any other new accounting rules that I guess?
Ritu, I have to tell you, Chip was eagerly hopping that somebody would ask a question about the detailed FASB accounting rules that prompted this change. Yeah, Chip, go hard at it.
Thanks, Ritu. No. It’s really a function of the subtle change in the collaboration as we expected it back in July. So under the old collaboration, most of the payments flowing from GSK to Amicus are now under the new collaboration. There is the potential in the future that Amicus could owe GSK some milestones, mostly related to approval and sales-based milestones around the co-formulation product.
But as a result of that, that put us into a different revenue recognition category, which are related to AFC and the different accounting standards stats. So that really is what mediated the change and that something we’ve gotten by and with [ENY] on and talked to their international office on.
So we really just wanted to make sure that that’s not the big story here. The cash effect, there is no change. The economics is no change, and so that’s really where we stand today.
Ritu Baral - Canaccord
Okay. That makes sense. Thanks. I thought I heard you angling for a question there, if anybody can oblige to be me, so thanks guys.
Feel free to get back in the queue if further accounting question. Great.
Thank you. And our next question comes from the line of Mayank Gandhi with Capstone Investments. Your line is open.
Mayank Gandhi - Capstone Investments
Hi. Good evening. Thank you for -- can you hear me, okay?
Yeah. We can. Thank you.
Mayank Gandhi - Capstone Investments
Yeah. Thanks for taking the question. I just want to go back to slide number nine. Its obviously very encouraging data, but if you look on the left side one of the other takeaway is also that the -- there is a fairly good correlation between the response on the baseline GL-3 inclusion. In other words, patients have had higher baseline inclusion also seem to be responding stronger. And they only feel -- “feel” patient, number three has very low baseline GL-3. So my question is in study ‘11, how do you actually control for that or like -- is there anyway of controlling for that, I guess?
Right. Yeah. There is. There is a very good way to control for it. So what we did in that study, which we did not do for these patients that you’re looking at on slide nine in the Phase 2 -- what we did to control for this, primarily for the female patients, is to make sure that the patients qualifying, number one, of course, have to have Fabry disease.
Number two, they have to have one of the known responsive genotypes to make them amenable to this treatment. And number three, specific to your question, they have to present with a minimum threshold of GL-3 burden in -- we measure it in urine, but it correlates very tightly with the GL-3 in kidney, as you’d see on biopsy. So that’s how we controlled for it. They have to have at least four times the upper limit of normal of GL-3, as they screened for this study.
And what that meant in practice because men typically have a higher load of GL-3 in the kidney with Fabry disease. About two-thirds of the men who presented with amenable mutations passed the GL-3 screen, only one-third of the females who presented had sufficient GL-3 load to qualify them for this study.
So for patient, I guess, number three here in the middle who showed the mean 34% decrease, while that’s a good decrease, admittedly, it’s from a very low baseline already. It’s very likely that that patient would not have qualified for Phase 3 study. So that’s how we controlled for that.
And so the one important part of the analysis is that every patient is compared to themselves. So wherever you start to score as a responder, there has to be a 50% reduction from wherever you start. So if somebody starts higher in an absolute sense, they have to come down. They have to have a larger absolute reduction and it has to be more than 50% in order to score as a responder. Similarly, if they start at a lower level, then they have to come down less in an absolute sense. And it just has to be 50% or more from wherever they started.
And when you look at the -- I actually would be careful saying that the ones who started higher showed a bigger response. There is essentially a floor here just based on, if you take a biopsy and you stain the material and you do microscopy, there can be things that are occasionally scored as potential inclusions so that a minimum score could be expected to be a little bit above zero , around 0.1 to 0.2.
And that was seen in the paper that we had published already with Professor Barisoni. So my interpretation of these is that for most of the patients, they’re basically getting near full clearance. That is coming down essentially as far as they can come down. So if you start higher, it’s a larger difference but that’s because there is a floor. Does that make sense?
Thank you. And I’m not showing any further questions at this time. I’d like to turn the call back over to Mr. John Crowley for closing remarks.
Great. So thank you, Operator, and thank you, everybody, for listening. Thanks to the analysts for the questions. It was a very, very strong Q3. It’s been a terrific 2012. And I’m hopeful that it will be terrific Q4. And I’m expecting that by the end of the year, we’ll have the chance to speak again. Thank you.
Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone, have a good day.
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