Q2 2023 Amicus Therapeutics Inc Earnings Call
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Good morning, ladies and gentlemen, and welcome to the Amicus Therapeutics second quarter 2023 financial results conference call and webcast. At this time all participants are in a listen only mode.
We will conduct a question and answer session and instructions will follow at that time as a reminder, this conference is being recorded I would now like to turn the conference over to your host Mr. Andrew Faughnan, Vice President of Investor Relations you may begin.
Thank you Jonathan.
Thank you for joining our conference call to discuss amicus Therapeutics second quarter 2020 financial results and corporate highlights in today's call. We have Bradley Campbell, President and Chief Executive Officer, Scott Mcqueen, Chief Financial Officer, Sebastien, Martel, Chief business Officer, and Dr. Jeffs will cause Kelly Chief Development Officer 'twenty for cube.
Dr Mitchell Goldman Chief Medical Officer, and Alan Rosenberg, Chief Legal officer as referenced on Slide you. We may make forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995 relating to our business as well as our plans and prospects.
Our forward looking statements should not be regarded as representation by us that any of our plans to be cheap any or all of the forward looking statements made on this call may turn out to be wrong. It can be affected by inaccurate assumptions, we might make or by known or unknown risks and uncertainties. You are cautioned not to place undue reliance on any forward looking statements, which speak only as of the date hereof all forward looking statements for quality.
I didn't hear entirety by this cautionary statement and we undertake no obligation to revise or update this presentation and conference call to reflect events or circumstances. After the date hereof for a full discussion of such forward looking statements and our restaurant strategy.
Impact them, we refer you to the forward looking statements and risk factors section of our annual report on Form 10-K for the year ended December 31st 2022, and the quarterly report on Form 10-Q.
Warner ended June 32023 to be filed later today with the Securities and Exchange Commission at.
At this time, it's my pleasure to turn the call over to Bradley Campbell, President and Chief Executive Officer Bradley.
Yeah.
Great. Thank you Andrew and welcome everybody to our second quarter 2023 conference call I'm very pleased to highlight what has been an incredibly successful first half of the year across our global business as we did in this morning's press release, let me highlight several key points.
First Gallophone continues its strong performance and remains the cornerstone of our success.
We remain very pleased with the commercial uptake of <unk> globally with $180 million in revenue for the first half of 2023.
Represents 16% growth from last year on a constant currency basis.
In the second quarter operational growth was 17% year over year at constant exchange rates.
We continue to observe strong trends across our key performance indicators in all key geographies in the second quarter.
With increasing demand through new patient starts from both the switch and naive populations steady growth of in person visits between our field team and fabric treaters around the world and sustained patient compliance and adherence rates of over 90%.
Growth in the second quarter was driven primarily by patient demand and Sebastien will highlight in a moment, we saw new patients starting on <unk> globally throughout the second quarter at rates, we haven't seen since the first few years of work.
Based on <unk> strong first half performance.
We're pleased to be raising our full year 2023 revenue growth guidance range of 14% to 18% at constant exchange rates.
Secondly, we continue to make great progress on our global regulatory filings and have now commenced the commercial launch for possibility in a folder or novel two component therapy for Pompe disease.
Following the EC approval about fold in June the commercial lunch launch is well underway in Germany. Our team is in the process of switching over individuals from clinical studies and expanded access programs to commercial supply.
And we're pleased to share that the first patients have now been dosed with commercial product multiple additional patients having been scheduled to start their infusion in the coming days and weeks importantly, we're well on track to transition to 20 clinical trial and expanded access patients within our 90 day target.
Outside of Germany, we're focused on broader patient access across Europe , as we navigate the country by country pricing and reimbursement process.
And the weakness in the U S. We've been pleased to see an increased level of engagement from the agency in recent weeks and are confident now we are on track for an FDA approval in Q3 and.
And finally, the UK regulatory process for <unk> was initiated in December of last year and we've just received word this morning that the NHRA has approved up foldout.
As a reminder, NHRA previously approved probability and both have received orphan designation.
We now expect the nice final assessment document to come in the next few days at which point it will take about 30 days for the NHS to provide funding to local centers.
To begin commercial infusions.
And with our international launch commenced and poised for regulatory approval in the U S and additional key markets on the horizon, we look forward to providing a real choice and challenging therapeutic expectations for both physicians and the people living with Pompe disease around the world.
Finally, <unk> has maintained a strong financial position as we continue to execute on the global expansion of doubtful and begin the global launch of probability in our fold up importantly, based on the latest assumptions on approvals and launch of <unk> in a folder.
Combined with the strong growth we've seen in Gallup hold in the first half of the year. We are on track to achieve our target of non-GAAP profitability in the second half this year.
Head on slide four we're making great progress across our key strategic priorities for 2023, including sustaining double digit <unk> growth now anticipated growth rate of 14% to 18% at constant exchange rates.
<unk> regulatory approvals.
ATCA by the FDA EMA NHRA and executing successful launch is in those key markets.
Continuing to judiciously invest in the advancement of our best in class next generation Fabry, and Pompe genetic medicines and capabilities as well as our next generation chaperone for fabry disease, and as always maintaining a strong financial position as we carefully manage our expenses and investments on a path to non-GAAP profitability.
With that overview, let me now hand, the call over to Sebastien Martel, our chief business officer to further highlight our commercial performance.
Sebastian.
Thank you Bradley and good morning to everyone on the call that standby, providing you with more detail on that golf ball performance for the quarter.
On slide six for the second quarter 2023, <unk> reported revenue reached $94 $3 million driven by strong patient accruals, particularly in the U S. But also in key European markets and Japan.
The geographic breakdown of revenue during the quarter.
Adjusted of $57 million or 61% of revenue generated outside of the U S.
And the remaining $37 million or 39% coming from within the U S.
We're very pleased to see continued patient growth in countries across our leading markets.
Turning on to slide seven.
Our results in the first half of the year highlighted the strength of our global commercial efforts. The demand organically globally continues to be staring with patients added in all major markets delivering operational growth rate of 16% over the same period in 2022 at constant exchange rates.
From a year over year perspective, the negative impact from foreign currencies with 3% in the periods.
And as a result, GAAP reported revenue growth was 13%.
Got it still continues to be the fastest growing treatment for fabry disease globally.
Peter to report that our monthly net new patient trends continued to increase in Q2, and if you look at the growth net patients when mechanical globally, we've seen significant patient gains when gaslog at the end of the second quarter.
Throughout the first half of 2023, the number of patients coming onto cannot afford it.
Actually exceeded internal expectations and we are therefore, raising our full year 2023 revenue growth guidance.
42, 8% growth at constant exchange rates.
We ended the second quarter with about 60% of the global market share of treated amenable patients and within the global mix, we're seeing stronger uptake in naive populations.
And while we are achieving high market share in countries, where we have been approved the longest.
Also plenty of opportunity to continue to switch patients over to <unk> and continue to grow the market as we penetrate into the diagnosed and treated.
During those segments.
All of that is underpinned by impressive compliance and adherence rates that continue to exceed 90% reiterating our belief that those patients who go on get a cold <unk> got it.
As mentioned on past calls due to various factors, including uneven ordering patterns and ethics.
<unk> the rate of growth within the Euro is typically non linear we expect that to continue throughout 2023.
And to support quarterly forecasting we provide a table showing distribution of revenue by quarter in the past five years in the appendix section.
Our presentation.
On slide eight.
We know that Theres significant patient demand for <unk> and that the segments of the global Kelly bucket made of amenable mutations has the potential to surpass $1 billion.
Revenue in around five years we.
We anticipate sustained growth throughout 2023 to be driven by several key growth drivers first continuing to penetrate into the existing markets.
Sure. They are taken through the diagnosed untreated population and expanding into new geographies and label extensions.
All of these efforts are supported by positive reimbursement and access make any sense around the world.
I'm pleased to share that we continue to make progress in expanding that according to your markets and extending the labels just to name a few examples we recently received reimbursement in Taiwan for individuals over the age of senior.
The fabry market within Taiwan, it's quite sizable with over 350 individuals diagnosed with fabry.
Of note <unk> with designated.
The first in line therapy for all amenable patients living with Fabry disease in Taiwan.
Additionally, we have submitted the marketing authorization application use Eden and we've entered into pricing and reimbursement negotiations for Gaslog in Turkey.
In the longer term, we continue to see significant growth in the family market globally, driven by diagnosing patients through a variety of measures.
Routing high risk screening newborn screening and other diagnostic initiatives, which will continue to support.
<unk> as well.
With that let me now and the call over to Dr. Jeff <unk>, Our Chief development officer to highlight the regulatory updates on our ATM program.
Thank you Sebastian and good morning, everyone.
Starting on slide 10, we remind everyone that late onset Pompe <unk>.
Severe and fatal neuromuscular disease, and one of the most prevalent lysosomal disorders.
Within our low PD individuals' may experience impaired motor function in respiratory difficulties as the disease progresses, but these potentially debilitating symptoms tending to become more serious and problematic over time, and often respiratory failure being a major cause of mortality and low PD.
Multiple publications and natural history studies continue to show that the initial benefits of treatment are often followed by continued long term decline for many individuals.
Recognize that Pompe disease continues to pose a range of health challenges for people affected by the disease and having therapeutic options is crucial.
Moving on to Slide 11, we briefly outline our current regulatory status of <unk>.
<unk> key markets first as noted in June <unk> and up quarter thoughts were approved in the EU and the commercial launch is underway as Sebastian will detail in more in the next section.
And in the U S is probably noted we're pleased to see the increased level of engagement from the agency in recent weeks and remain confident we are on track for approval in the third quarter for both components of Atg.
And finally, just this morning, we were very excited to receive the final full approval and orphan designation for both <unk> bought out by NHRA and now the team can begin launching this important new therapy for people living in the U K with company disease, leveraging that positive reimbursement appraisal from nice.
Yes.
Moving on to slide 12, we remind everyone of our ongoing clinical studies in multiple mechanisms of expanded access that support much of the early demand for <unk>.
Younger pump a community we continue to enroll the ongoing open label study in children up to 18 years of age living with Allo PD and at the garden enrolling the open label <unk> study for children living with infantile onset pompe disease.
We have multiple expanded access programs in place in countries, where we are not yet approved in interest and momentum for <unk> continues to grow and we're pleased to be able to provide access to those who are eligible through those programs.
As a reminder, at the time of our first approvals, which were the first in the EU during that last week of June there were approximately 200 patients worldwide being treated with <unk> across the clinical extent extension studies and expanded access programs.
And importantly experience with ATCA is quite broad with approximately 75 centers.
Debating in trials in various access programs around the world.
Finally, as highlighted in our pipeline slide in the appendix for our earlier stage pipeline. We continue to focus on novel approaches for Fabry, and Pompe Bay, including gene therapies to deliver our engineered GLA and G. Trans genes and a next generation Fabry Chaperone program.
With that I'll turn the call back over to Sebastian to discuss the early commercial launch progress ability out of Florida.
Sure.
Thank you Jeff.
Slide 13, we.
Outlined the initial launch progress and market opportunity for <unk> to your pullback in EU.
Ability plus a pull down as approved as the first and only two component therapy available in EU for the treatment of adults living with later onset competitors.
We're very pleased with the strong indication for commodity costs are pulled out.
Which addresses all adults living with LPG.
The EU market represents a sizable opportunity of $450 million plus and is a key market to support these early stages of global launch.
Within Europe to currently around 1300 patients estimated to be on treatments.
That 1300 currently 60 patients are being treated with <unk> plus are pulled out and around 20 of those in Germany and Australia.
As of today.
We are launching Germany with progress being made on all fronts and we're seeing the start of a very strong uptake importantly in Germany, the federal Joint Committee or GBA as classified community as a new active substance as a result, <unk> will undergo benefit assessments under the nub process with a free pricing period after.
Of which there will be negotiation, but final reimburse price.
Based on feedback from key teachers through our clinical development access and medical affairs.
Are you pleased with the progress made towards transitioning patients over to commercial supply.
We've been successful in engaging with the top prescribers in Germany within the first 30 days.
We've also been very pleased with the positive feedback from the expanded access program Cup from both physician and patient perspective.
As I mentioned the first patients have been recently moved to commercial supply and more are scheduled in the coming weeks. So we're well underway to achieving our goal of converting all of the 20 or so expanded access patients and clinical trial extension patients within the first 90 days of launch.
On slide 14, as you know we've been preparing for the commercial launch of mobility customer pull down and I'm, both excited and confident that through our world class commercial and medical organizations were in a very strong position or second successful launch at amicus.
In these early days, we're leveraging this experienced team to transition the first group of clinical trial.
Branded access program patients in EU onto commercial supply given.
Given the significant overlap of treatment centers hospitals, and physicians between fabry and Pompe disease.
We have existing relationships with kols in the commercial infrastructure necessary to support a seamless transition as of today, we've had the first patients infused and multiple additional patients with scheduled to start their infusions.
In these early days, we found an important metric to track us on progress with access and reimbursement.
Really experienced team or engaging and positive interactions with payers to demonstrate the value of complete you've got a pull down to.
Today, we launched in Germany, we're also in active pricing and reimbursement discussions with additional European countries as we focus on securing broad patient access to the EU.
We are working in partnership with physicians to ensure they have all the information they need them ability plus a pullback for their patients and believe the company on therapy is poised to have a significant commercial opportunity in the EU and additional markets as they come online.
As Jeff indicated from the late breaking news, we're thrilled with today's approval NHRA approval portfolio.
Yes, so were granted orphan designation for a pullback like we did with <unk> in the U K.
Market opportunity within the UK includes more than 200 people with competitors is estimated to be on treatments.
45 of these 200 individuals are already on commodity costs are pulled out.
And that's a remarkable number.
Either through a clinical trial or through the early access to medicines scheme.
As we've mentioned previously all leading centers across the U K have requested access mobility, plus a pullback trillions.
No that approval has been granted our team anticipates a transition of all patients in the U K onto commercial product within 90 days.
And importantly that transition will be supported by the very positive nice recommendation for reimbursement of community.
Within the NHS, which is an achievement we are incredibly proud of.
And the guidance nice concluded that the cost effectiveness teammates for community plus a full data showed a positive net health benefits and therefore, as we are coming to <unk> plus a pullback for adults with LAPD as first line and later lines of therapy.
With that I'd like to now turn the call over to definitely with me, our Chief Financial Officer to review, our financial results guidance and outlook Daphne.
Thank you Sebastian and good morning, or afternoon, everyone. Our financial overview begins on slide 16, with our income statement for the second quarter ending June 32023.
In the second quarter, we achieved total revenue of $94 5 million, which is a 17% increase over the same prior year period in 2022.
This includes year over year operational revenue growth measured at constant currency exchange rates of 17% and a negligible currency impacted zero percent.
Cost of goods sold as a percentage of net sales was nine 6% as compared to 10, 2% for the prior year period.
Total GAAP operating expenses decreased to $104 2 million for the second quarter of 2023 as compared to $133 1 million in the second quarter of 2022.
On a non-GAAP basis total operating expenses decreased to $84 million for the second quarter of 2023 as compared to $119 2 million in the second quarter of 2022, primarily reflecting decreased program spend.
We define non-GAAP operating expenses as research and development and SG&A expenses, excluding share based compensation expense loss on impairment of asset changes in fair value of contingent consideration and depreciation.
Within other expenses in the income statement in the second quarter, we recorded approximately $11 million in unrealized foreign exchange losses. This compares to a $7 million gain in the second quarter of 2022.
Currently taking steps to mitigate our future exposure.
Net loss for the second quarter of 2023, with $43 2 million or <unk> 15 per share as compared to a net loss of $62 2 million or <unk> 21 per share for the prior year period.
Driven by the revenue growth is gallophone and careful expense management, we continue to make progress towards our path to non-GAAP profitability in the second half of this year.
As of June 32023, we had approximately 287 million shares outstanding.
Turning now to slide 17, with a focus on achieving non-GAAP profitability and I'm pleased to share that we had revised both our revenue and operating expense guidance for the year.
We are raising full year revenue growth guidance to 2014% to 18% at constant exchange rates driven by patient demand.
We're also reducing our full year 2023, non-GAAP operating expense guidance to $330 million to $350 million. The decrease in operating expenses for 2023 as compared to 2022 will be achieved by continuing to drive efficiencies and expense management.
Offset by continued investment in <unk>.
<unk> clinical studies nonrecurring costs for manufacturing as well as global launch activity.
We anticipate operating expenses to be non linear this year due to the prelaunch and launch expenses. We also expect to see a larger portion of our operating expenses allocated to G&A. This year as we align our resources to support the launch of <unk> and the continued growth of doubtful.
Cash cash equivalents and marketable securities were $265 6 million as of June 32023, compared to $293 6 million.
December 31 2022.
And with that let me turn the call back over to Bradley for closing remarks.
Great. Thanks, Daphne Jeff Sebastian.
As you can see we've been relentlessly focused on execution across our global business and we look forward to embarking on this next phase of amicus as a company with two commercial therapies.
So to all of our employees, who have enabled us to achieve these recent corporate milestones that who are always committed to our patient focused mission of delivering life changing therapies to people in need.
Before I hand, the call over to Q&A as you May have also seen in this morning's filing after 15 incredible years at amicus Daphne our long time, Chief Financial Officer leader and friend has decided to retire shall remain in her current role as CFO until we appoint her successor at which point she will remain on with amicus through the end of the year in order to support a smooth transition.
A search is underway and we've already identified a number of highly qualified candidates.
I also just wanted to add that I am personally grateful to you Daphne for your years of exemplary service here at amicus and in particular for helping lead us on a course to achieve non-GAAP profitability. Later this year on behalf of the <unk> Board of directors and the entire executive team I'd like to take this opportunity to formally thank you you've been a significant part of the growth that amicus and.
Instrumental in guiding us to the sound financial position right today.
With that operator, we can now open up the call to questions.
Certainly ladies and gentlemen, if you do have a question. Please press star one on your Touchtone telephone.
At this time, we request that you only ask one question. If you have any additional questions. Please enter back into the queue. Thank you.
And one moment for your first question.
And our first question comes from <unk> Ahmad of Bank of America. Your line is open.
Hi, guys. Good morning, and thanks for taking my question.
Brad I just wanted to clarify on the timeline that you did.
Forward for Taas backing our protocol and three Q D.
Can you get a sense that there was.
Sponsors that you gave FDA post the Wuxi inflection facility have been.
<unk>.
Agency.
If not what do you think are the remaining gating factors regarding questions around the facility in order to get a profile. Thanks.
Thanks, Greg.
Great question, just as a reminder, we were very pleased with the outcome of the pre approval inspection that Wuxi, we do feel like our responses were all adequate in the color. We provided on the call here today I think is important which is in the last few weeks, we've seen an increased level of engagement from the agency and so that gives us great confidence that we're on track for Q P approval.
Okay.
One moment for our next question.
And our next question will come from.
<unk> Rama.
JMP Your line is open.
Hey, guys. Thanks, so much for taking the question congrats on the progress and definitely missed you at the conference this coming year.
The capital guidance increase maybe from a regional perspective, where is that coming from is it coming from deeper penetration in core countries or progress and some of the new emerging countries.
Yes, Im happy to have Sebastian add a little bit of color, but honestly on apartments coming from all of those things so.
Most importantly, we are seeing is across all of our key geographies as we mentioned on the call.
Rates of net new patient starts at levels that we haven't seen since the first couple of years of launch and so clearly demand for this product is growing.
Sebastian maybe touch on a few of the different growth drivers that <unk> highlighted to give a little bit more color there.
Yes.
For example in the U S alone.
Remember, we launched <unk> 2018.
The current rate of net new patients that we've seen in the second quarter.
Is as strong as what we saw in 2019, so we're really.
Post COVID-19.
As we speak and we are seeing.
Strong.
Strong patient accruals.
This is also.
The case in Europe .
Remember in Europe , we were launched a couple.
Of yours earlier.
So our penetration rates with.
The amenable population is.
Slightly.
<unk>.
Greater and yet we're seeing very strong demand.
A lot of 90 patients actually go on kind of fold.
When theyre Dino so we've essentially established.
Therefore as the.
New first in line treatment for fabry patients with amenable mutations in into those markets.
Yes, maybe other.
The other things I would highlight.
Sorry, I didn't mean to cut you off I was just going to say the other thing I'd highlight is and Sebastian mentioned on the call not only are we seeing great penetration rates were opening up new geographies. So we have some important countries coming onboard this year.
It is also in the backdrop of a very healthy and growing market. So diagnosis continues to be strong and as we find those patients as a reminder, typically you find one ton diagnosed fabry patient newly diagnosed fabry patients because it's an excellent disease that typically leads to four to five additional family members, who are diagnosed so and <unk>.
<unk>, two I think executing incredibly well, which we've continued to do we're also seeing just a healthy growth market and it's Sebastian highlighted where actually the fastest growing of the fabry treatments for patients with amenable mutations.
Thanks for taking our questions.
One moment for our next question.
Yeah.
Our next question will come from Ritu Boral of TD Cowen Your line is open.
Good morning, guys. Thanks for taking the question.
I wanted to go back to.
Wishy inspection I'll follow up.
To the question Brad can you give any.
Additional detail on the point of the increased level of engagement with the agency has had just wrapping all of this up.
Thank you.
There is any possibility of requiring the re inspection.
Or do you feel that the outstanding items are.
Addressable.
Written written or verbal interaction any additional detail would be helpful.
Yes, no we do not believe that there'll be any additional inspections needed at Wuxi, we're very confident we're very pleased with the outcome of the inspection and again just based on the kind of level of Reengagement. We've seen increased level of engagement. We have seen in the last couple of weeks it feels to US as you said that theyre wrapping things up and we feel like we're getting.
Close to two an approval here as we suggested on track for Q3. So we're really excited the team is ready.
We're really pleased to see the U K news. This morning, So I think the momentum is building and really eager to.
The remaining months of the year play out.
Got it and if I can squeeze one more in about how mature baidu. Thanks.
Yes.
Our supply from the open label are German and UK patient sort of sitting with before.
Start on the path to commercial conversion.
Yes, we have our target is about two years of go forward supply remember, we've made quite a bit I'm sorry I meant.
Like how much supply clinic.
How much drug supply do they have.
Oh from the open and they're working through right right got it alright. Thanks for the clarity yes. The good news is <unk>.
Unlike <unk>, where you would typically because it.
Long shelf life et cetera.
To be sitting on kind of three months of supply of Gulf old as we are winding down the clinical studies are transitioning over to two commercial in this case, it's a much tighter.
Supply situation and the clinical operations team at Amicus who of course has already done. This once before with Gallup polled works very closely with the medical affairs team with the sites themselves and so its a really fine.
And precise level of supply and that's what allows us to very carefully manage and have that goal of 90 day transition and in Germany. So far as I've said, even in the first 30 days of launch now where we are making those transitions and we're confident we'll be able to execute that within the first.
90 days and I think likewise in the UK and then the U S. When we see the approval.
Great. Thanks.
Yes, one moment for our next question.
And our next question.
It will be coming from Ellie Merle of UBS. Your line is open.
Hey, guys. Thanks, so much for taking the question.
Just if you could provide us a little bit more color on how youre thinking about new patient start in Germany, and the UK beyond the patient got expanded.
Maybe just 200 I think you said Pompeii patients total in the U K and I think you said 45 are already on <unk>, how should we think about the other 150 patients and maybe what proportion might be our next CFO .
And just the timelines for when you expect a nice reimbursement to kick in from a revenue perspective.
And then in Germany, I know you mentioned you have 20 patients already on <unk>, but just if you could give us a sense of maybe how many.
Patients there are in Germany.
And how you think about the landscape there relative to next year. Thanks.
Sure I'll take.
Some of those and then I'll ask we've actually had some color as well.
Cleverly worded one question.
Multi question.
Perhaps but happy to address all of those so first of all yes. The first priority as we've said in each of those markets because we have such a large bolus of patients is to convert the expanded access and clinical trial patients but of course in parallel we're also working to start to begin.
New patient because well, we should be able to provide more color on that in the November call, but.
Yeah, again first priority low hanging fruit patients on atg already and then in parallel start to bring on new patient starts as well and then maybe Sebastian just give the color that we know based on.
Publicly available information what progress has been with <unk> in those two markets and a sense for how large the German marketed outside the 20 patients already on an FPGA.
Yes, Thanks Bradley.
So.
I can share with you the breakdown between next Gen <unk> design across Europe .
Virtually 80, 20, or 77%, 23% to be precise so the vast majority of patients are still on <unk> again, 77% across Europe and 23% for next year.
If you look at.
So you can numbers.
You just.
Quoted them early so 200 patients total 45.
Which is probably the largest.
Number of patients we have in.
And our country.
On clinical trials plus early access.
Yes.
And.
And so as Brian mentioned, we think that given the fact that the six key centers.
All had experience with.
Our ability on a pull down they will have patients transition from either clinical study or <unk>.
They have experienced they've used the product before.
Obviously the feed.
Feedback from patients who have been on it so we think that the.
The uptake in our ability to convert.
<unk> patients from miles I'm all next year.
As is high end.
In this market in.
In Germany, the market is more fragmented than.
And then the U K the number of patients is also higher somewhere between 300 350 total patients.
We did mention here that we've got.
Around 20 ish.
In Germany, and Austria, So those will be.
The first patients onto commercial product, but.
As I mentioned our team.
Has been.
Visiting top prescribers in Germany for a number of weeks now.
And established.
These contacts and we will be working with.
Additionally, two converts and switch patients from their existing treatment onto <unk>, plus a pull down over the next weeks and months.
And I think you had maybe one more question early on.
On the reimbursement process in the UK, So as I mentioned in the call. Once you have NHRA approval. What's remarkable here is we've already had the initial recommendation for reimbursement by nice, which we think is one of the fastest ever to get to that answer prior to NHRA approval.
The process from here should take a few days to week to get to the final appraisal document bye Bye nice the draft is already posted so that should come here relatively shortly and then it takes around 30 days for NHS to provide funding to the local centers and Thats when we will start actually can.
<unk> those expanded access and clinical trial patients, but in the meantime, with the approval.
Our sales team can go out into the field visits to physicians and again, along with medical affairs and clinical operations team can begin scheduling. Those infusions ahead of time. So effectively launch is underway and we are waiting about 30 days for that reimbursement process to kick in at the local centers.
Great. Thanks.
No.
Thanks Al.
One moment for our next question.
And our next question will be coming from Joseph Schwartz.
<unk> Leerink partners. Your line is open.
Great. Thanks, very much for the update I was wondering beyond the EAP.
Conversion.
Those patients to commercial status, how should we be thinking about the cadence of uptake for <unk>.
And what metrics will you be providing us in order to gauge your progress with that.
And are there any analogs that you can think of that might be helpful. For us when envisioning. The launch curve and then can you remind us of your most recent thoughts around pricing and how this.
Relates to the current price of incentive fees products. Thank you.
Yes, Thanks, Joe all good questions.
So as it relates I'll start with the last one first year as a reminder, our pricing philosophy is parity or a modest discount to standard of care and we have shown with <unk>, but that is an incredibly successful strategy. We went through the pricing and reimbursement process with <unk> much faster than industry average and I think it's because the health care.
Our systems are recognizing that we are bringing significant value.
But we're pricing at roughly parity, which takes the pricing decision off the table and focuses on the value of the product and what we saw is that way you can maximize access to therapy and maximize the number of patients on therapy as quickly as possible versus taking time to negotiate for some extra dollars on the price and I think a nice appraisal that we saw here, which.
Again, I think it's one of the fastest ever in our industry is a great reflection of that value that the payers are seeing so we're confident that strategy will be very successful here.
We will roll that out as we go through the process in Europe , and the U S and in other markets.
On the first one in terms of.
In terms of key performance indicators that were share I think what you heard on the call. Today is some of the qualitative things, we'll talk about in terms of getting out to see the key centers in terms of having patients started infusions and convert from clinical trial to two commercial products.
We haven't given any forward looking guidance for this year, just because it's such a stub year, but I think youll hear on the November call that will provide an update on the number of commercial patients on drug so that'll be a nice milestone to wait for in terms of kind of.
Analog that saw unusual to have second generation product launched into the rare disease space I don't know if theyre a great analogs. The one thing I would point to though is kind of.
Thought experiment, perhaps is remember we qualified for that <unk> program in the UK.
About a year ago and within our first year I remember that you can't promote on that product that simply offering it and it's purely demand driven and we were able to get to a 15% to 20% market share.
Through that program alone again with no promotion. So for me that gives you a great perspective on.
Imagine what we can do once we're out there promoting the product. So we will do our best to give good color on how the launch is going and hopefully that gives you a flavor of how we can talk to that over the coming days and weeks and again November I think will be a really important update there.
Thank you.
One moment for our next question.
And our next question will be coming from Dae Gon Ha of Stifel. Your line is open.
Hey, good morning, guys. Thanks for taking my question one clarification. The slides first patients plural has been infused with <unk> product.
Just wanted to clarify that it was more than one and then my actual question was the physician.
Feedback and engagement.
What are you guys hearing in terms of the lineup that physicians will take once next year as I guess <unk> becomes available as I started by it I mean does it get kind of placed out of third line or do you see it being used sort of in the in between <unk> next year as I am onto <unk> any color on that would be helpful. Thanks.
Yes. Thanks.
So first and foremost.
Feedback we've received has been incredibly positive from physicians and we're hearing through them that the <unk>.
Experience from.
For patients who has also been very positive. So we feel like everything is going really well.
Yes to clarify that your first question. It has multiple patients have been converted which is great and multiple patients have been scheduled for their infusions and we're working to schedule the remaining conversions.
Within that 90 day target, so really really good progress as we've gotten started here.
And then sorry.
Sorry remind me the second part of your question in terms of positioning yes. So so reminder, in Europe with <unk>.
Indication statement is for all patients.
Late onset pompe disease patients and so well positioned and we think this will be a great treatment option for all of those patients.
Remember, though that the vast vast majority of the market opportunity here is patients currently on <unk> and so you should see just like we saw with <unk> you should see the vast majority of the growth in all of our markets coming from patients, who we switched from <unk> or <unk> frankly too.
<unk> two <unk> and I think that's an important point right, which is the indication is for.
For all patients with LAPD.
In.
In Europe , who are on label and that means that we can target any patient on therapy or frankly, any any new patients diagnosed there has already been diagnosed.
And just to add to what you were saying, Brian I think to give a little bit of color on the global opportunity from a patient standpoint.
Our 3500 to 4000 patients being treated worldwide for.
Competing needs today.
Estimate depending on like you're you've got somewhere between 100 to 290 patients put on treatment every year. So.
Commercial opportunity as of this point is really.
Looking to switch patients whether they are on <unk> or whether they are on next time.
This is the main.
Patient group that we're going to go after.
And the last thing I'll say there is remember the real promise of this medicine is that we're the only product in a well controlled clinical study that shows that patients who are on an existing IRT.
Ken switched to ATCA and see improvement in six minute walk and forced vital capacity. So we think thats a truly differentiated component for this therapy and we're just so pleased and eager to get this out to as many patients as possible as quickly as possible.
Great. Thanks for that color and Daphne. Thanks, so much for your service.
And we'll now go next.
Yeah.
And our next question will be coming from Jeff hung of Morgan Stanley Jeff Your line is open.
Congratulations on the NHRA approval of Tilda and congrats to Daphne on her upcoming retirement.
You've reduced expenses to support your path to non-GAAP profitability can you just talk about the importance of that relative to further bolstering your pipeline and advancing your nextgen pipeline programs. Thanks.
Yes.
So the vast majority of R. R.
<unk> expenses go towards both the ongoing clinical studies to support.
Post marketing commitments in <unk>.
The remaining clinical studies extensions in Pompeii disease also manufacturing until recently when now we have a commercial product. So that ends up showing up in cost of goods, but that's the vast majority and then of course, the G&A that goes along with that we do have some modest spend towards the pipeline and we are making I think good progress there.
I think you should expect to hear us talk more about the pipeline as we come into next year, but you should know that this law.
Laser focus on non-GAAP profitability does it include a modest amount of investment in the pipeline. That's an important part of the future of <unk> and again, we'll talk more about that probably coming into next year.
Thank you.
One moment for our next question.
And our next question will be coming from <unk> Richter of Goldman Sachs. Your line is open.
Hi, This is John for <unk>. Thank you for taking my question.
First one galliford in your view how much of the drilling that you need to get to your prior guidance of 1 billion peak sales will galliford there'll be driven by new patient diagnoses like genetic screening.
Cleaning et cetera.
Is the nice patients are already diagnosed and switch patients and on Atg. If you could provide some more color on the reimbursement process in Germany. Thank you.
Yes so.
A couple of points there. So if you think about just the market today for fabry the global market you've got.
A little over $2 billion in global sales.
And.
Here, we are sitting at.
With guidance of $3 $75 million to $388 million, if you assume a third to half of the patients on drug today have amenable mutations then you've got another maybe doubling of the current revenue base just by existing diagnosed and treated patients today, so lots of opportunity to continue to switch patients which is.
Some of that come through market expansion and some of that comes through execution in our existing markets. We also know if you look kind of globally the global.
That that sort of over $2 billion in global sales represents about 11000 treated patients.
And we believe theres roughly another five or 6000 diagnosed untreated patients and so again, if you take that kind of a third to a half number that's an additional call it 3000 or so dire.
Diagnosed untreated patients who have a mental mutation. So another significant chunk of existing patients today, I think that gets you sort of well towards that.
Peak market opportunity that we've talked about but then Sebastian and Jeff have highlighted in previous calls we're seeing significant growth in the underlying diagnosis may be 10% or so a year and so you put all those together I think it's easy to see a way towards $1 billion product opportunity here.
And then you had asked a little bit about Germany, maybe Sebastian do you want to talk to the dynamics in Germany again.
Yeah, Thanks, Bryan so.
As I mentioned in Germany.
The GBA as classified mobility as a new active substance.
Very pleased with that.
And as a result of that designation.
Ability will undergo benefit assessment under the <unk> process, we have.
Six months free pricing periods.
And after that there'll be negotiation book final reimbursed price. So you should expect to see at agreed upon published price sometimes around Q3 of 2024.
We.
We think we've set.
Competitive price for the for the combination of <unk> plus a full day.
Versus other competitors rfps available in the German market.
And the prices again very much in line with the pricing policy that Brendan mentioned earlier on.
One moment for our next question.
And our next question will be coming from <unk>.
Christa cluster cluster of Cantor Fitzgerald Your line is open.
Hi, good morning, and congrats on the additional approval. This morning, and also sending my best to Daphne I know, it's early days in Europe , but can you talk about what have been the biggest selling point in terms of generating interest over other therapies now that you have an approval in place beyond the prep work.
For examples of the mechanism the full data set across the different patient populations open label certain endpoint that they are focusing on or is it really just a combination of this thank you.
At the top.
Sorry about that I will hit the top line and then maybe Jeff talk about the broader data that we've showed in previous.
Calls so from a label perspective, clearly the most important two data points are the six minute walk.
Test and the forced vital capacity, which as I mentioned before we've shown significant differentiation, where the only therapy that's shown improvement.
Improvement in those measures in patients who switch from existing IRT to ATCA and so I think that's a really powerful story and one that.
Physicians will clearly focus on but I do think another important part of this is they're really broad data set that we published now in various places won't necessarily show up in the label, but as we continue our medical education strategy, we'll be able to share those so maybe Jeff talk about what we've already published across those other endpoints.
Seven.
Any other color you might want to provide.
Yes, Thanks, Brian and thanks, Christopher the question as Brian noted the key there is showing the improvement on six minute walk and FTC in the switch patients in a controlled trial, but it is really that consistency across endpoints.
We've shown some of that previously at a high level, we're going to continue to really focus on that here.
And upcoming conferences just to show that.
The range of improvements that we're seeing across endpoints for these patients.
And I'd say the other thing is the emerging durability data as well.
Now showing out to four years from our phase one two that the initial improvements observed across naive patients which patients in those trials have been maintained.
Long term. So we think that that's going to be a continued focus of physicians and our strength. So far of what we've seen with with atg, but whats really strong core of data I think the MLA is also something that.
Gives people a reason to believe in some of those clinical observations that there is a very differentiated MLA.
Also something that I think we're going to continue to provide publications and more information there as we continue to learn about the MLA.
Okay.
And one moment for our next question.
And our next question will be coming from Ethan Makowski.
Needham <unk> company your line is open.
Good morning, and thanks for taking our question just a quick one.
The current SG&A spend so.
Youre currently relying somewhat on the existing sales force for gallon sold but we've definitely seen an uptick in SG&A.
Give us an idea now that youre rolling out.
Hum.
Looking at our U S launch how much more.
The SG&A spend increase should we expect in the near term. Thank you.
Daphne I'll, let you talk to the accounting.
Treatment.
As described in a lot of that change from a infrastructure perspective, what we've said before is we literally have hired less than a dozen employees globally to support the launch of <unk>.
T J that includes.
Some amicus assist which is R. R Tech management hub in the United States, the patient education liaisons, some direct marketing and medical affairs people, but hugely levered role.
Existing commercial infrastructure, but.
Maybe daphne talk to the trends that.
The question was speaking to.
Sure. So I would remind everyone in prior years, we had a portion of the.
The support for GAAP, both California, and now 80 GAA in the research and development line, but now as we are aligning resources to support two commercial products. Some of that spend is now shifting from the R&D line to the SG&A line.
It is a bit of a REIT.
The classification issue when you look at current year versus prior year.
So it's not actually the true increase.
Exactly.
Yes, thanks, Daphne so.
Should not expect to see significant additional increases in G&A. It was really more of a change in the classification for some of those employees.
Who support the global business.
Thanks Vince.
Very helpful.
Thank you one moment for our next question.
And our next question will be coming from <unk> Ahmad Bank of America. Your line is open.
Hi, guys. Thanks for taking my follow up.
Brad just to maybe put people's minds at ease in terms of going back to the GAA question about your timeline for <unk>, just because the producer has officially passed.
Are you getting your confidence that they will the FDA well provide an answer.
And also as we head into the later part of August I think the assumption is that.
And the folks at FDA kind of shut down for holiday lift.
Clifton.
Or is there any anything to read into that thanks, yeah. Good questions back to the and we will provide as much color as we can here. So the confidence really comes from two places. The first is if you remember back when we announced the inspection we estimated that if you look on average.
Even though we don't have a specific <unk> date on average it takes about 30 days from the inspection to finish the inspection report and then it's about 60 to 90 days for the agency to complete their review and so we're kind of right in that zone.
So we feel very comfortable that it's kind of in the timeline that we've seen when you look on average and then the other piece that gives us good confidence to your point about.
About whether the FDA is around or not as we have seen in the last couple of weeks and increase in the engagement by the review division and that gives us good comfort that they are wrapping up their work and again, we expect a decision here in Q3, and we're very confident in that.
Okay. Thanks, Brad.
Thanks.
Okay.
And that was our last question I'd like to turn the call back to Bradley Campbell for closing remarks.
Great. Thank you everybody for tuning in today and hope everybody has a great day take care.
Ladies and gentlemen. This concludes today's conference. Thank you and have a great day.
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