Amylyx Pharmaceuticals, Inc. (NASDAQ:AMLX) Q3 2024 Earnings Call Transcript November 7, 2024 8:00 AM ET

Company Participants

Lindsey Allen - Head of Investor Relations and Communications
Justin Klee - Co-Chief Executive Officer
Camille Bedrosian - Chief Medical Officer
James Frates - Chief Financial Officer
Joshua Cohen - Co-Chief Executive Officer

Conference Call Participants

Charlie Yang - Bank of America Merrill Lynch
Michael DiFiore - Evercore ISI
Graig Suvannavejh - Mizuho Securities USA
Basma Radwan - Leerink Partners
Ananda Ghosh - H.C. Wainwright & Co.
Joel Beatty - Robert W. Baird & Co.

Operator

Good morning. My name is Alan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Amylyx Pharmaceuticals Third Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please be advised this call is being recorded at the company's request.

I would now like to turn the call over to Lindsey Allen, Head of Investor Relations and Communications. Please proceed.

Lindsey Allen

Good morning, and thank you all for joining us today to discuss our third quarter 2024 financial results. With me on the call today are Josh Cohen and Justin Klee, our Co-CEOs; Dr. Camille Bedrosian, our Chief Medical Officer; and Jim Frates, our Chief Financial Officer.

Before we begin, I would like to remind everyone that any statements we make or information presented on this call that are not historical facts are forward-looking statements that are based on our current beliefs, plans and expectations and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

These statements include, but are not limited to, our expectations with respect to avexitide, AMX0035 and AMX0114, statements regarding regulatory and clinical developments, the impact thereof and the expected timing thereof and statements regarding our cash runway. Actual events and results could differ materially from those expressed or implied by any forward-looking statements. You are cautioned not to place any undue reliance on these forward-looking statements, and Amylyx disclaims any obligation to update such statements unless required by law.

Now I will turn the call over to Justin.

Justin Klee

Good morning, and thank you all for joining us. The last few months have been productive in advancing our late-stage pipeline in the effort to fulfill our mission to bring new potential treatments to communities with high unmet needs in neurodegenerative diseases and endocrine conditions. We continue to progress our lead asset avexitide, a GLP-1 receptor antagonist with both FDA breakthrough therapy and orphan drug designations, in diseases with no approved treatment options.

We remain on track to initiate our Phase III trial in post-bariatric hypoglycemia or PBH in the first quarter of 2025, which Camille will discuss a little later. We have also significantly increased our interactions with the endocrine PBH communities and are excited for the potential of this therapy.

In mid-October, we reported positive topline data from our open-label Phase II HELIOS trial of AMX0035 in 12 participants living with Wolfram syndrome. People treated with AMX0035 showed improvement in pancreatic function as measured by the primary endpoint of C-peptide response at 24 weeks. We also saw similar overall improvements or stabilization across all secondary endpoints.

Additionally, the longer-term data being collected demonstrated sustained improvement over time. With these positive data in hand, we plan to meet with the FDA and other stakeholders to inform a Phase III program. Our ORION trial of AMX0035 in PSP is recruiting well, and we continue to expect data from interim analysis mid next year.

And we are looking forward to initiating our Phase I clinical trial of AMX0114, our antisense oligonucleotide targeting calpain-2 in people with ALS. We are in a strong financial position and continue to expect our cash runway to take us into 2026. Our pipeline strategy is focused on addressing orphan conditions and well-defined mechanistic rationales, clear and measurable biomarkers and is built on foundation of rigorous preclinical data. Our progress this quarter, including the positive data we reported in Wolfram syndrome, supports this strategy. Our team remains focused on progressing our pipeline and delivering on our key milestones ahead.

I will now turn the call over to Camille.

Camille Bedrosian

Thanks, Justin. I will briefly review each of our four programs, avexitide in hyperinsulinemic hypoglycemia, including post-bariatric hypoglycemia or PBH, AMX0035 in Wolfram syndrome and in progressive supranuclear palsy or PSP and AMX0114, our Calpain-2 ASO in ALS.

First, I'll provide an update on our lead program, avexitide for the treatment of PBH. We are actively planning and are on track to initiate a pivotal Phase III program in PBH in Q1 of next year. We expect to share the trial design once finalized and prior to the initiation of the trial. We expect topline data from the program in 2026.

Let me touch a bit further on PBH and the mechanism of action. PBH is a debilitating condition that affects an estimated 8% or approximately 160,000 of the more than 2 million people on bariatric surgery in the last decade. PBH is thought to be caused by an excessive GLP-1 response, leading to persistent and in some cases, progressive hypoglycemia.

Avexitide is designed to bind to the GLP-1 receptor on pancreatic islet beta cells and block the effect of GLP-1 to mitigate hypoglycemia by decreasing insulin secretion and stabilizing glucose levels.

Avexitide has been studied in five clinical trials in PBH. Data from these trials demonstrated highly significant reductions in hypoglycemia events. Most notably, the 90-milligram dose, which we intend to study in Phase III, showed a 66% reduction in Level 3 hypoglycemia events in a Phase IIb trial with a p-value of 0.0003 and a 53% reduction in Level 2 hypoglycemia events with p-value of 0.004.

For context, Level 2 hypoglycemia events occur when blood glucose levels drop below 54 milligrams per deciliter. At these levels, symptoms can include tremors, dizziness and risk of losing consciousness. Level 3 events are defined clinically as requiring third-party rescue. The primary efficacy outcome of our Phase III program will be the reduction in the composite of Level 2 and Level 3 hypoglycemia events. FDA has agreed on this primary efficacy outcome. We look forward to initiating the Phase III program expected in Q1 of next year and topline data anticipated in 2026.

Turning now to the Wolfram syndrome program. As Justin mentioned, we were pleased to present positive topline data for all 12 participants in the Phase II HELIOS trial at week 24, including longer-term data available for participants who reached their week-36 or week-48 visit. These results are encouraging because they suggest treatment with AMX0035 may result in meaningful improvements across multiple measures of disease progression and an otherwise progressive fatal disease with no approved treatment options.

The 24-week data showed improvement or stabilization in all disease measures in the study, including pancreatic function as measured by C-peptide, our primary endpoint as well as additional measures of glycemic control, visual acuity and overall symptom burden from the patient and clinician perspective.

In addition, longer-term data for participants who completed week 36 and week 48 assessments showed sustained improvement over time. With these 24-week and longer-term data in hand, we plan to meet with the FDA and other stakeholders to inform the Phase III program and expect to provide an update in 2025.

Now turning to the ORION-PSP program. Enrollment in the study is going well. As we have described previously and as planned, we are on track to conduct an interim analysis of ORION and share data in mid-2025. This will be an unblinded analysis of topline data for the first part of our Phase IIb/III study with approximately 100 people living with PSP through week-24. We also plan to analyze the available data on participants who have proceeded beyond 24 weeks. This analysis will inform a go/no-go decision on this program.

In ALS, we are pleased to share that we received clearance from Health Canada for our clinical trial application for AMX0114 in people living with ALS. We plan to begin the Phase I multiple ascending dose placebo-controlled trial called LUMINA in Canada in the coming months. We plan to evaluate safety and the biological activity in approximately 48 adults living with ALS and evaluate four dose levels, starting with 12.5 milligrams.

We were pleased to present our plans for the study at the Northeast ALS Consortium Annual Meeting last month. We also submitted an investigational new drug application to the FDA for AMX0114. The FDA restricted dosing to an amount that is lower than our proposed starting dose of 12.5 milligrams and requested additional information, which resulted in a clinical hold in the U.S.

Toxicology data from studies showed a greater than 10x safety margin at the starting dose of 12.5 milligrams based on the no observed adverse effect level, or NOAEL, observed by independent toxicology firms. We are working to address FDA comments. We believe the trial can be completed outside of the U.S. if needed. We continue to expect early cohort data from LUMINA in 2025. We are encouraged by our progress this quarter and remain on track to achieve our key expected milestones for our pipeline.

I will now turn over the call to Jim. Jim?

James Frates

Thanks, Camille. Financially, Q3 turned out as we expected. After the closing of our Avexitide acquisition in July, we ended Q3 with $234.4 million in cash and investments. Importantly, we continue to expect our cash runway to take us into 2026 as we work to manage the company through expected meaningful clinical data readouts, namely the interim readout from our PSP program, early cohort data from our AMX0114 program and the readout of topline data from the Avexitide Phase III program.

Now turning to our financial results. Net product revenues were $400,000 for the third quarter and cost of sales were $800,000, both related to true-ups and trailing rebates from our now discontinued commercial sales of RELYVRIO and ALBRIOZA. Research and development expenses were $21.2 million for the quarter compared to $30 million for the same period in 2023. The decrease was primarily due to a decline in clinical expense following the topline data from the PHOENIX trial and a decrease in payroll and personnel-related costs as a result of our restructuring.

Selling, general and administrative expenses were $17.8 million for Q3 compared to $48.7 million for the same period in 2023. The decrease was primarily due to a decline in payroll and personnel-related costs and a decrease in consulting and professional services.

Our restructuring plan is now complete, and we do not expect to record any material amount of restructuring expense going forward. We recorded $36.2 million of expense related to our acquisition of Avexitide during Q3, comprised of the $35.1 million purchase price and related transaction costs. Consistent with our prior expectations, as we move into 2025, we expect total combined spend on R&D and SG&A, excluding stock-based compensation, to be in the range of $30 million to $40 million per quarter.

Finally, in the third quarter, we recorded a net loss of $72.7 million or $1.07 per share. Overall, we believe we're in a solid financial position and believe in our ability to deliver on the critical milestones ahead.

I'll now turn the call over to Josh to provide some closing remarks.

Joshua Cohen

Thank you, Jim. In closing, we are excited about our four pipeline programs, upcoming milestones and path ahead. Our lead asset, avexitide, has both FDA breakthrough therapy designation and orphan drug designation and is on track to advance into Phase III development in PBH beginning in the first quarter of 2025. In Wolfram syndrome, with our positive Phase II topline HELIOS results in hand, we plan to engage with the FDA and other stakeholders as we look to inform our Phase III program with the expectation of providing an update in 2025.

The ORION trial of AMX0035 in PSP is recruiting well, and we expect – and we continue to expect data from the interim analysis mid next year. And we are working towards initiating our Phase I clinical trial of AMX0114 in ALS by the end of the year or early next year and sharing early cohort data study in 2025. We look forward to keeping you updated as we build upon our critical work in orphan neurodegenerative diseases and endocrine conditions with high unmet need.

Now I would like to open the call up for questions.

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Corinne Johnson of Goldman Sachs. Your line is already open.

Unidentified Analyst

Thank you. This is [Omari] on for Corinne. So I have a couple of questions. How should we think about the market size for PBH patients that are efficaciously managed by existing therapy? And then what are the gating factors to initiating the Phase III PBH study?

James Frates

Sure. So in terms of the market, we estimate there are roughly 160,000 people living with PBH. This comes from literature that suggests that between 20% and 40% of people who have a bariatric surgery will ultimately show in mixed meal tolerance testing or in continuous glucose monitoring, abnormal glycemic control. Some of those folks are able to be managed by available therapy. So when you account for that, about 8% of people continue to have persistent PBH and 8% of roughly 2 million surgeries in the last decade gets you to an estimated 160,000 people living with PBH. In terms of the Phase III and gating factors, I'll say we're on track, and I'll pass over to Camille to provide any more detail.

Camille Bedrosian

Sure. Thank you very much for the question. Yes. So we are actively working with clinical sites and our clinical team is doing what's needed to initiate and stand up the trial for initiation first quarter of 2025. We're going – it's going very well. There's a lot of enthusiasm. So we're looking forward.

Unidentified Analyst

Thank you.

Operator

Your next question comes from Charlie Yang of Bank of America. Your line is already open.

Charlie Yang

Great. Thanks for taking our questions. I wanted to just touch on PBH as well. Just given what we know about the Eiger, previous agreement with the FDA on this trial design, what are the other factors, like how you are contemplating with in terms of design? And is there a potential to have readout earlier in 2026? Thank you.

Camille Bedrosian

Yes. Thank you very much for the question. So just as a reminder, with avexitide having breakthrough therapy in PBH, there have been a number of interactions with the FDA. And as we read the minutes, we believe agreement with the agency on a trial design. I'll summarize those as Eiger put it, and we're just refining around the edges, and we'll provide the details prior to initiation. The study will use 90 milligrams per day as the dose with the primary endpoint of composite Level 2 and Level 3 hypoglycemia.

And as a reminder, the Phase II and IIb studies conducted already in PBH with avexitide showed highly statistically significant and meaningful improvements and reductions in the hypoglycemia events, both Level 2 and Level 3, notably at the 90-milligram dose level. So we're quite pleased about that aspect. Furthermore, Level 2 and Level 3 hypoglycemia are the endpoints that the trials in diabetes used to evaluate hypoglycemia in that population, and that information is in the guidances for studying antidiabetic drugs. So 90-milligram dose composite endpoint, Level 2 and Level 3 hypoglycemia is the primary endpoint.

As Eiger described it, they had proposed a 90-participant study for 12 weeks, again, randomized placebo-controlled parallel arm study. So – and as I said, we'll be around – that's a good benchmark. We'll be refining it a bit and proceed from there. We will be beginning as soon as possible in Q1 of 2025 for the study and expect by the end of the year to have concluded enrollment at any rate and then data in 2025 – I'm sorry, 2026. Yes, apologies, yes, 2026.

Charlie Yang

Thank you.

Camille Bedrosian

You are welcome.

Operator

Your next question comes from Michael DiFiore of Evercore. Your line is already open.

Michael DiFiore

Hi, guys. Thanks so much for taking questions. Two from me. First one is on avexitide. Just kind of curious on how you think about the risk of hyperglycemia since the GLP-1 antagonists don't address this happening. It could lead to lots of undesirable sequelae. So I just kind of wanted to see how you're thinking about that. And then separately, with regard to AMX0114, any color on why the FDA deemed the 12.5 milligram dose to be too high? Like assuming the trial just runs in Canada and safety seems fine, do you think the FDA will be amenable to allowing future trials to be run in the U.S.? Just thinking on whether this asset could even be commercialized in the U.S. if the FDA still deems that starting dose too high? Thank you.

Camille Bedrosian

Sure. So first, your question about avexitide. As a reminder, avexitide is a GLP-1 receptor antagonist, and it's blocking the ability of excess GLP-1 in the case of PBH to activate the receptor. It's not turning off or reversing the function of the receptor. So it really is returning the glycemic control insulin glucose access to homeostasis. So we don't anticipate hyperglycemia in that setting. Furthermore, we have not observed hyperglycemia – sorry, I'm used to saying hypoglylycemia, either in the toxicology program that was conducted prior to starting the clinical work nor in the clinical trials of PBH. So we do – that is something we looked at. And given the mechanism of action and the pathophysiology of PBH, we do not see that as an issue.

Justin Klee

And I would just add, too, in terms of side effects and profile generally, it's been quite well tolerated. The principal side effects are ones that you often see with injectable peptides, injection site reactions, those sorts of things, but it's been quite well tolerated generally as well.

Camille Bedrosian

Yes. And then with regard to 114, I'll begin and Josh may want to have additional comments. So the FDA, we will have some interactions with the FDA to address their questions and understand more of their thinking, given that the independent toxicologists who reviewed the data believe that 12.5 milligrams and determine the fact that 12.5 milligrams is 10x below the NOAEL observed in the nonclinical toxicology program. So we're very confident in the overall safety profile of 114 and certainly, Health Canada has given us the green light to proceed, which we are going to do with all speed. With regard to whether we can go in the U.S., yes, we're confident that ultimately, we will be able to.

Joshua Cohen

Yes. And I'd just add, Mike, you've probably seen as well, I think with several RNA therapeutics, there's been kind of a move to do kind of first trials outside of the U.S. often for very similar dose level reasons as we're encountering here.

Michael DiFiore

Very helpful. Thank you.

Operator

Your next question comes from Graig Suvannavejh of Mizuho Securities. Please go ahead.

Graig Suvannavejh

Okay. Thank you very much. Thanks for taking my questions. And congrats on the continued progress. I did want to go back to the proposed Phase III trial design for avexitide in PBH. I think Camille and the team, you are proposing that you go with a primary endpoint that is the composite of Level 2 and Level 3.

And I just want to get thoughts around maybe a clarification as to why in PBH you've chosen to include Level 2. I believe Eiger had previously proposed focusing just on Level 3, and they were concurrence around that. So just trying to maybe get a sense of whether including Level 2 hypoglycemia, what that does around giving increased confidence on trial success? Thanks.

Camille Bedrosian

Yes, sure. So I don't recall specifically that Eiger wanted to limit to Level 3. The Phase II and IIb study look at Level 2 and Level 3 hypoglycemia events and the reduction in those hypoglycemia events. And the composite of Level 2 and Level 3 actually, as the diabetes world knows well, is a well-established endpoint for antidiabetic drugs to see if there are problems with hypoglycemia in that setting.

The composite just gives us an opportunity as well to capture all the events that might be occurring that are clinically meaningful. The Level 2, of course, is based on a blood glucose level, starting with a CGM and then a finger stick if the blood glucose by CGM goes below a certain level and alarms. And the Level 3 is a clinical one where the individual is just unable to rescue themselves from the dire consequences. And one can precipitously drop, so go from Level 2 to Level 3 before even realizing.

Justin Klee

And only other comment to add on the top two, in the Phase II and Phase IIb, strong effects were seen on both the Level 2 and Level 3. So we see the drug to be promising against both of those, not distinct to either one.

Graig Suvannavejh

Great. Thank you. And then maybe just my follow-up with respect to your PSP trial and the interim readout. I apologize if I may have asked this in the past, but with regards to a go/no-go decision in PSP, could you just remind us what you're looking for and what would be considered to be good enough to feel comfortable with moving forward with the Phase III portion? Thank you.

Camille Bedrosian

Sure. Thank you, Graig. So at a high level, we'll be looking at the interim data to demonstrate that AMX0035 shows clear clinical activity in PSP. The primary endpoint is a change from baseline in PSPRS, the rating scale for progression of function and decline in function in PSP from baseline. And there is – that is an established endpoint, and there are very strong placebo data that are recapitulated over a number of previous trials in PSP. So we will have a benchmark against which to compare.

And we will be doing unblinded look. So we also will be comparing against placebo. We'll be looking at biomarker data and also information out beyond 24 weeks as well. So based on those data and how they all line up, we'll be able to make a decision regarding the potential of AMX0035 in PSP.

Justin Klee

And I'll just – Graig, I know you know this well, but reminding everyone too that the rationale for the PSP trial was based off of our prior study with AMX0035 in a trial of about 100 participants with Alzheimer's disease. And in that study, there were very strong reductions in both total tau and phospho-tau 181 measured in CSF, both by ELISA as well as some proteomics work that we did, and we published that earlier this year as well.

Graig Suvannavejh

Thank you.

Operator

Your next question comes from Marc Goodman of Leerink Partners. Please go ahead.

Basma Radwan

Hi. Good morning. This is Basma on for Marc. Thank you for taking our question. Can we have another question about the ORION study? You said you're going to be measuring the p-tau and the total tau. So is it only going to be CSF-based biomarker data? Or are you also planning to look at the tau PET in order to make your decision for the biomarker? Also, we have a follow-up about avexitide?

Camille Bedrosian

Great. So for the PSP study, we'll primarily be looking at the CSF compared to baseline. And as Justin just indicated, we saw a very strong signal in the Alzheimer's disease study that was recently published in dramatic reductions in both tau and phospho-tau in the CSF.

Basma Radwan

Great. Thank you. Regarding the Phase III avexitide, are you planning to include an active arm with standard of care? Or is it only against placebo? Thank you.

Camille Bedrosian

Yes. So really, there are no approved therapies for PBH. What is used as a – throughout the management of people with PBH is a medical nutrition therapy, which is actually quite a draconian diet, eating small meals every couple of hours, restricting the type of food that's eaten, high protein, complex carbs, no sugar, et cetera, and can be very, very difficult for people to follow, although that's certainly what they strive to do.

Other medications or drugs are used, but with very little effect. And the people that we are studying and that for which avexitide has been studied so far are those who've tried these other approaches with little, no success. So people will continue their medical nutrition therapy, and it will be placebo versus avexitide.

Basma Radwan

Thank you.

Operator

Your next question comes from Ananda Ghosh of H.C. Wainwright. Please go ahead.

Ananda Ghosh

Hey, guys. Good morning. I just have one question on avexitide. Can you briefly talk about the pharmacokinetic profile for the 90-milligram dose of avexitide with respect to the hypoglycemic events? That is how fast those symptoms occur post the events and how fast avexitide counters them based on their PK?

Joshua Cohen

Yes. So avexitide pharmacodynamically and I guess also pharmacokinetically, reaches therapeutic range at about an hour post dosing. It remains in therapeutic range for about a complete day or about 24 hours or you're just short of that. So we do get coverage over the course of the day with the 90 mg dose. In terms of pharmacodynamically, there have been PK/PD modeling, which do suggest that the onset of this is pretty quick. And in fact, some of the earliest studies of the drug were single-dose crossover studies and met statistical significance on glucose and insulin with a single dose, again, suggesting that the onset of effect is pretty clear and fast. And I think it also makes sense in the context of the receptor where you're competing with endogenous GLP-1, which essentially happens instantaneously.

Ananda Ghosh

All right, great. Thanks.

Operator

Your next question comes from Joel Beatty of Baird. Please go ahead.

Joel Beatty

Hi. Thanks for the update. How do you think about balancing kind of remaining cash among, say, your lead program, avexitide, the other programs, which may potentially have a lower probability of success as well as the potential for business development?

James Frates

Yes. Joel, it's Jim Frates. Thanks for a financial question. I was getting a little lonely here at the table talking all about the science. Well, I think as we've made it clear since – as we've hopefully made it clear, since we acquired avexitide, we view that as our lead asset. The clinical data that we've seen, the safety profile, the opportunity in the market, its late stage of development, clearly make it the most valuable and potentially impactful for patients in the near-term.

That said, our other three major programs are all have very important scientific validation work already done. And we're quite far along in the development of each of those where we're close to important milestones. So we'll be making sure that our cash runway gets us through the Phase III data on avexitide, most importantly. And if we have to tighten our belts in other places, we can do that. But I think with our current plans, as we've outlined, I think we're on track with data that we've seen in each of the programs. But it's something we work on every day.

Joel Beatty

Thank you.

James Frates

You are welcome.

Operator

There are no further questions at this time. I'll turn the call back to Mr. Klee. Please go ahead.

Justin Klee

Thank you for joining us on today's call to discuss our third quarter 2024 financial results. Have a great day.

Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and you may now disconnect.