Q3 2024 Amicus Therapeutics Inc Earnings Call
Good morning, ladies and gentlemen, and welcome to the Amicus Therapy Dix third quarter 2024 financial results conference call and webcast.
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.
As a reminder, this conference call 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 now begin.
Andrew Faughnan: Good morning.
Andrew Faughnan: Thank you for joining our conference call to discuss Amicus Therapy Dix third quarter 2024 financial results in corporate highlights.
Andrew Faughnan: We are getting today's call, we have Bradley Campbell, President and Chief Executive Officer.
the Bastian Martel Chief Business Officer, Dr. Jeff Castelli, Chief Development Officer.
Andrew Faughnan: and Simon Hartford.
Andrew Faughnan: Chief Financial Officer, joining for Q&A, is Ellen Rosenberg, Chief Legal Officer.
Andrew Faughnan: As reference on slide two, we might make forward-looking statements within the meaning of the private security litigation format of 1995 relating to our business as well as our plans.
Andrew Faughnan: and Prospects, our forward-looking statements should not be regarded as representation by us that any of our plans will be achieved. Any or all the forward-looking statements may not be called, may turn out to be wrong, it can be affected by inaccurate assumptions we might make, or by known or unknown risks and uncertainty.
Andrew Faughnan: You are caution not to place on due reliance on any forward-looking statements which speak only to the date key robes. All forward-looking statements are qualified in their entirety by its cautionary statement, and we undertake no obligation to revise or update this presentation and conference call to reflect events or circumstances after the date key robes.
Andrew Faughnan: Profalted Custion, a such global heat statement and the risks and uncertainties that may impact them, we refer you to the forward-looking statements and risk factor section on our annual report.
Andrew Faughnan: on Form 10K for the year ended December 31, 2023.
Andrew Faughnan: and the Quarterly Report on Form 10Q.
Andrew Faughnan: with a quarter ended September 30, 2024, to be filed with the securities and exchange commission today. At this time, there's my pleasure to turn the call over to Bradley Campbell, President and Chief Executive Officer, Bradley?
Bradley Campbell: Great, thank you Andrew and welcome everybody to our third quarter 2024 conference call. I'm pleased today to highlight what has been a very successful nine months of the year across our global business and in particular another very strong quarter in Q3.
Bradley Campbell: In this time, we continue to build on our top-line revenue growth momentum, putting us well on our way to our first full year of non-gap profitability, while also advancing our mission of bringing hope to individuals and families affected by rare diseases.
Speaker Change: Thank you. Bye. Bye.
Bradley Campbell: As we did in this morning's press release, let me just highlight several key points here. First, we continued our excellent commercial execution and delivered total revenue of $142 million in the quarter, representing 37% growth year-over-year or 36% on a constant currency basis.
Bradley Campbell: This strong performance has led us to increase our total revenue guidance for the full year to 30-32% from 26-31% previously.
Bradley Campbell: On a year-to-date basis, Gallup Fold revenue growth was 18% year-over-year at constant exchange rates, coming in at the high end of our guidance for this year.
Bradley Campbell: All of this, of course, is against the backdrop of significant growth in people diagnosed with and treated for febrile disease.
Bradley Campbell: We are extremely pleased by the significant difference this medicine continues to make for people living with Fabry disease, with amenable variants, in countries around the world, and we see it serving as the foundation of our business for the next decade and beyond.
Bradley Campbell: Based on Galliford sustained performance, we're also increasing our full year 2024 revenue growth guidance range for a third time this year. We started the year with a growth range of 11 to 16 percent and now we're projecting Galliford growth of 16 to 18 percent.
Bradley Campbell: An important update we announced during the quarter as well was the license agreement with Teva, one of the lead parties in our ongoing IT litigation. This agreement allows Teva to market a generic version of Galafold in the United States beginning on January 30th, 2037.
Bradley Campbell: The settlement reinforces our high confidence in the strength of our case against the remaining litigants as well as the overall strength, breadth, and depth of our IT estate.
Bradley Campbell: And this is a huge milestone for Amicus. It represents a major step forward in ensuring Amicus can continue to support the Fabrate community with Galahold for many years to come.
Speaker Change: Second, let me highlight the continuing strong global commercial launch of POMBILITY and APFOLDA, our novel therapy for late-onset Pompe disease.
Bradley Campbell: Pondering a fold of course has continued to be a huge driver of growth for us this year and as we've mentioned our number one focus continues to be maximizing the number of patients on therapy by year-end.
Bradley Campbell: Therefore, it's great to report that the rate of new commercial patients coming onto Poundability at Folda in 2024 continues to progress exceptionally well.
Bradley Campbell: As of the end of October, there were 203 people living with late-onset Pompe disease treated or scheduled for treatment, and we continue to see the breadth and depth of prescribers increasing across our markets.
Bradley Campbell: We're very pleased with the demand globally for this new therapy, and consistently hear inspiring anecdotes from healthcare professionals around the world on how their patients are responding to Pondylia enfolda, which will help keep fueling the launch throughout the remainder of this year and beyond.
Bradley Campbell: Thank you.
Bradley Campbell: We're continuing to build momentum in our launch countries with strong switch dynamics in the U.S., Europe, and the U.K., as well as seeing great uptake in the naive patients in the market outside the United States.
Bradley Campbell: And we're also making significant progress on the reimbursement front globally. This includes moving patients more quickly through the insurance process in the United States, as we've anticipated.
Bradley Campbell: And for the remainder of the year and into 2025, we will focus on increasing patient access as we gain reimbursement and launch additional countries throughout Europe.
Bradley Campbell: On the regulatory front, we're continuing to make great progress on expanding commercial access to Pondilly-Down-Pofolda through our multiple regulatory submissions as well.
Bradley Campbell: Given the strong global launch for the full year 2024, we are now raising our full year global sales guidance to $69 to $71 million in Pond Vility and El Folda, which will be a significant contributor to our growth.
Bradley Campbell: This sets us on a great course to achieve our ambition for POMOPS to become the new standard of care for this devastating disease. We're incredibly pleased to be providing a real choice for people living with Pompe disease and challenging therapeutic expectations for both physicians and their patients.
Bradley Campbell: Finally, as we continue our excellent commercial execution across both therapies, we're pleased to share that we are reducing our non-GAAP operating expenses.
Bradley Campbell: guidance as we continue to judicially manage our expenses. Throughout the first nine months of the year we've exceeded our financial expectations which as I mentioned in this morning's press release has resulted in achieving our full our goal of full year non-gap profitability as we close the third quarter.
Bradley Campbell: And finally, let me touch on slide four, our key strategic priorities for the year. Again, sustaining double-digit Gallifold revenue growth.
Bradley Campbell: And as I mentioned, we've raised the expected annual growth rate of Gallifold to 16-18%.
Bradley Campbell: continuing to successfully execute multiple commercial launches of Pompidou and Alpholda and again we've raised our guidance there as well. Advancing ongoing studies to support medical and scientific leadership in Fabry disease and Pompe disease.
Bradley Campbell: And finally, maintaining a strong financial position as we carefully manage our expenses and investments to achieve non-gap profitability for the full year.
Bradley Campbell: With that, let me now hand the call over to Sbastien, who can further highlight our commercial performance. Sbastien.
Sbastien: Thank you, Bradley. Good morning to everyone on the call. We'll start by providing you with more details on our Galliford performance for the quarter.
Sbastien: On slide 6, for the third quarter 2024, Gallup reported revenue reached $120 million, driven by strong patient demand, particularly from our leading markets.
Sbastien: We ended the third quarter with more than 60% of the global market share of treated Fabry patients with amenable mutations. We're very pleased to see that prescribers continue to position Garifold as the treatment of choice for Fabry patients with amenable variants.
Sbastien: The great news is that there are still many more potential patients eligible for our therapy.
Sbastien: On slide eight we know that there is a significant patient demand for kind of fold in that segment of the global property market made of patients with minimal volumes has the potential to reach up to $1 billion in annual revenue by the end of the decade.
Sbastien: We anticipate sustained growth in 2024 and beyond to be driven by several key drivers.
Sbastien: First the fabry market is growing robustly the significant portion of growth coming from finding new patients and reaching the diagnosed untreated population.
Sbastien: We've seen many new patients go into treatment.
Sbastien: Screening and we continue to see increased patient identification through ongoing medical indication in support of novel screening initiatives.
Sbastien: So it really remains one of the most underdiagnosed rare disease. So the more people that can be identified the more people who may benefit from canaccord.
Sbastien: We're also seeing many diagnosed untreated patients transition from treatments as the need for earlier treatment, especially in females becomes better appreciated.
Sbastien: The other piece is continuing to drive towards market share of treated amenable patients through continued commercial execution.
Sbastien: As noted <unk> currently has more than 60% of global medical market, where we are.
Sbastien: Seeing our most mature market that can reach up to about 80, 590% of market share. So we know that there is the potential to reach those levels in the global market share as well.
Sbastien: And again all these efforts are supported by solid compliance and adherence rates through physician and patient education and support programs.
Sbastien: Additionally, you will continue to make progress on expanding that approach new markets and extending the labels.
Sbastien: Importantly, the profit broadly mentioned, we recently announced in October that we reached a settlement agreement with Teva Pharmaceuticals, and younger and protection of our U S intellectual property for Gaslog.
Sbastien: Thank you Sir entered into a license agreement with Teva granting them a license to market. Its generic version of <unk> in the U S. Beginning in January two.
Sbastien: <unk> thousand 37.
Sbastien: Very pleased by this outcome reinforces our confidence in the strength of our case against the remaining litigants as well as the overall strength breadth and depth of our IP estate, we now.
Sbastien: How have orphan drugs.
Sbastien: Sorry, we now have.
Sbastien: Orphan drug exclusivity in the U S and Europe. In addition to our 62 Orange book listed patents 46 of which provide protection into 2038 can be arm, including 15.
Sbastien: This gives us the opportunity to provide access to <unk> globally for a long time to come and we intend to continue to protect and enforce our broad intellectual property rights.
Sbastien: Looking ahead, we expect steady double digit growth for Gaslog throughout 2024, and we remain confident that with our strong IP protection gap ordered a long runway well into the next decade.
Speaker Change: Turning now to compare disease on slide 10, we outline our global launch progress with commodity channel product.
Speaker Change: For the third quarter of 2024, Mbd channel pulled our reported revenue reached $21 million. This represents an increase of 33% compared to the second quarter of 2024 and provides a strong foundation for the remainder of the year.
Sbastien: In the U S. We continue to see a majority of patients switching from Nicholas I'm about 68% and the remaining from Louisiana.
Sbastien: Beans were switching patients proportionately from both products.
Sbastien: Also seeing a broadening and deepening our prescriptions with more sites coming online and multiple new prescriptions from physicians coming in over Q3.
Sbastien: Outside of the U S. We're seeing patients from all three segments, some switching from Amazon and from next year at appropriate rental rate so the respective market shares and some from the 90 population.
Sbastien: Exactly what you want to see a stage in the launch.
Sbastien: Given our solid commercial execution in the first nine months of 2024, we're pleased to increase our full year revenue guidance from $62 million to $67 million to $69 million to $71 million for comedy Channel program.
Speaker Change: Moving to slide 11, we're very pleased with launch momentum through the first nine months of the year as Bradley mentioned there are about 203 patients that have been treated or are scheduled for treatment as of late October that's about 196 patients who are being treated we remain very satisfied with ongoing demand for this therapy.
Speaker Change: Our launch of leveraged our highly experienced cross functional teams and we've had great outreach with.
Speaker Change: Opinion leaders, we're seeing an increasing the depth and breadth of prescribers across all.
Speaker Change: Market's indicated to us that physicians are having positive experiences with the therapy and are gaining greater confidence to use it again in patients.
Speaker Change: All core treating centers are engaged and we continue to receive very positive feedback from HCP them other stakeholders as to our business approach.
Speaker Change: Our support patient focus.
Speaker Change: Finally, an important metric to track our progress with access and reimbursement we have a highly experienced team into our team and positive conversations with payers to demonstrate the value of a complete channel program and.
Speaker Change: In the U S. The largest payers put commodity channel product into their respective formularies and we've also seen strong acceptance by Medicare and Medicaid.
Speaker Change: The overall time from prescription to infusion is now down to around 60 days with pay your approval is happening on the 30 days. We believe this will continue to improve.
Speaker Change: Today were launched in Germany, and the UK, the U S, Australia, and Spain, and we're pleased to announce that we now have pricing and reimbursement in the Czech Republic are six months country.
Speaker Change: We remain in active pricing and reimbursement discussions with additional major European markets.
Speaker Change: We continue to be focused on securing broad patient access throughout Europe, and we anticipate further reimbursement agreements over the next six to nine months. This will be a key part in driving the commercial uptake in new countries next year.
Speaker Change: Overall.
Speaker Change: We're very pleased thus far with the launch of Omnichannel pullback across the first wave of countries in 2024.
Speaker Change: Our focus is on maximizing the number of patients on therapy by year end the strength of our clinical data on the depth of experience and talent. We have at amicus gives us great confidence in our ability to make a very real difference for people living with Pompe disease.
Speaker Change: Let me now hand, the call over to Jeff to highlight our clinical and regulatory progress.
Jeff Castelli: Thank you Sebastian and good morning.
Jeff Castelli: On slide 12, we outline how we continue to grow the body of evidence for building a border to our ongoing clinical studies and registry as we continued to execute on expanding commercial access through regulatory submissions.
Jeff Castelli: In addition to the regulatory dossiers already under review in Canada, and Australia. We are pleased to announce that we recently submitted a Japan, new drug application or J NDA for PON building up Florida to the Ministry of Health Labor and welfare in Japan.
Jeff Castelli: For the younger pump a community we continue to enroll the ongoing open label study for children children living with late onset Pompe disease and the open label Rosella study for children living with infantile onset pompe disease.
Jeff Castelli: See this is an important opportunity to support label expansion into these patient segments in the years ahead.
Jeff Castelli: And importantly to address the significant unmet needs in these children.
Jeff Castelli: Through ongoing clinical studies and the amicus Pompeii registry, we continued to generate evidenced on the differentiated mechanism of action and long term impact of possibility not florida across endpoints and patient populations.
Jeff Castelli: Our medical conference presence in scientific publications continue to be an important part of our education efforts.
Jeff Castelli: Finally, as highlighted in the pipeline side in the appendix for our earlier stage pipeline that we continue to focus on novel approaches to next generation therapies in fabry and Pompe diseases.
Speaker Change: That I would like to now turn the call over to Simon Harford, Our Chief Financial Officer to review, our financial results guidance and outlook Simon.
Simon Harford: Thank you, Jeff our financial overview begins on slide 14, with our income statement for the third quarter ending September 32024.
Simon Harford: For Q3, we achieved total revenue of $142 million, which is a 37% increase over the same period in 2023 at.
Simon Harford: At constant exchange rates revenue also grew 36%.
Jeff Castelli: The global geographic breakdown of total revenue during the quarter consisted of $85 million, while 60% of revenue generated outside the U S and the remaining $56 million or 40% coming from within the U S.
Jeff Castelli: Cost of goods sold as a percentage of net sales was nine 4% in Q3 2024 as compared to nine 6% for the prior year period staying relatively flat.
Simon Harford: Total GAAP operating expenses decreased to 107 mentally and for the third quarter of 2024 as compared to $100 million in the third quarter at last year, a decrease of 4%.
Simon Harford: On a non-GAAP basis total operating expenses decreased to 83 million for the third quarter as compared to $90 million in the third quarter of last year, a decrease of 8%, we define non-GAAP operating expenses research and development and SG&A expenses.
Simon Harford: Excluding stock based compensation expense loss on impairments of assets changes in fair value of contingent consideration restructuring charges and depreciation and amortization.
Simon Harford: On a GAAP basis net loss for the third quarter 2020 for reduced to $7 million or <unk> <unk> per share compared to a net loss of $22 million or <unk> for the third quarter of 2023.
Simon Harford: In Q3, 2024, non-GAAP net income with $31 million or a profit of 10 cents per share compared to non-GAAP.
Simon Harford: Net loss of $4 million or a loss of one pass shaft at the third quarter of last year.
Simon Harford: Cash cash equivalents in marketable securities with $250 million at September 30 of 2024 compared to $286 million at December 31st 2023.
Simon Harford: Turning now to slide 15, we are raising our full year 2024, total revenue guidance range to 30% to 32% from 26% to 31% previously.
Simon Harford: This is driven by the increase of our full year $2024 solid revenue growth guidance from 11% to 16% at the beginning of 2024 to most recently, 14% to 18% and now narrowed to 16% to 18% at constant exchange rates. In addition.
Simon Harford: We are raising the guidance for profitability and not fold of sales to 69% to $71 million for the year.
Simon Harford: Our full year 2024, non-GAAP operating expense guidance has been lowered from $345 million to $360 million down to $340 million to $350 million with our commitment to full year non-GAAP profitability. During the first full year of launch.
Simon Harford: <unk>.
Simon Harford: We are keeping operating expense growth in the low single digits year over year at the midpoint of guidance. As a reminder, we continue to have R&D commitments, including registry studies.
Simon Harford: Fabry and Pompe pay the ongoing Pompeii phase III study in countries not yet reimbursed as well as next generation manufacturing for possibility.
Simon Harford: With our total revenue guidance of 30% to 32% growth we remain comfortably on track for 2024 for our first full year of non-GAAP profitability.
Simon Harford: As a heads up as we begin to think about 2025, we anticipate next year to be a hybrid for profitability at fold our Cogs as we expect to work through the previously Expensed inventory during the first part of 2025 total gross margins for the first nine months of the year 'twenty.
Simon Harford: 24 were approximately.
Simon Harford: So the 19% we expect gross margins in the mid <unk> for the 2025 full year as we begin to recognize possibility or not sold at Cogs through the P&L next year and with that let me turn the call back over to Bradley for closing remarks.
Bradley Campbell: Great. Thanks, Simon Sebastian Jeff you can also see we have been relentlessly focused on commercial execution and performance across the business driven by our passionate team of global employees, who continue to lead us on our patient focused mission as we near the end of 2024 I am confident we have laid a solid foundation for amicus.
Simon Harford: We continue to deliver.
Simon Harford: Transformative therapies in 2025, and the years beyond with that operator, we can now open the call to questions.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, if you have a question. Please press star one on your Touchtone telephone at this time, we request that you only ask one question.
Speaker Change: If you have any additional questions. Please enter back into the queue.
Simon Harford: Thank you.
Speaker Change: Our first question.
Speaker Change: Comes from retail per all of TV Cowen. Your line is now open.
Speaker Change: Hi, guys. Thanks for taking the question this morning.
Speaker Change: Ask about.
Speaker Change: Sorry, your possibility prescribing trends that you mentioned.
Speaker Change: You mentioned that you had improving trends on both sites.
Speaker Change: Prescribers could you go into that a little bit and describe a little more what youre seeing now about U S.
Speaker Change: At which U S prescribers and patients elect to switch specifically what the patients are experiencing and then could you help us just quantify the Japanese market opportunity in Pompe.
Speaker Change: Thanks.
Speaker Change: Sure. So it's a very well articulated one question with three parts I heard.
Speaker Change: So I heard the breadth and depth a little bit more color on breadth and depth and then kind of.
Speaker Change: What we're seeing and hearing around decision to switch and then the Japan opportunity I'll start maybe framing the first ones will ask Jeff to comment a little bit and then Sebastian can provide color on Japan. So in terms of breadth and depth kind of exactly what it says right. So in some markets like the UK, where it's a very concentrated market.
Speaker Change: We had all the key centers prescribing with through the <unk> program and continue to prescribe on a commercial basis, but most other markets, Spain, Germany.
Speaker Change: States have more prescribers and so what you want to see is you want to see both breadth, meaning continuing to have new prescribers prescribed the medicine and depth, meaning they are repeating prescriptions and we're seeing both of those things so more new prescribers using.
Speaker Change: <unk> for the first time, and then more prescribers prescribing multiple prescriptions. So I think thats a great tracker to see how we will continue to spread the use of this product in terms of when they.
Speaker Change: The decision is made I think this is an important part of the ongoing discussion with the community.
Speaker Change: Broadly speaking I think what we've heard and seen as that traditions are want to see some evidence of a decline in their patients and we've talked a lot about that over the course of the year. Once a patient switches I think physicians are looking for 12 months to 24 months.
Speaker Change: Before they're ready to switch and so I think that sets us up well for next year, but maybe just talk about specifically what are what are kind of the signs and symptoms that would be typical for people to follow and then Sebastian just give a quick update on the Japan opportunity.
Speaker Change: Yes, Thanks, Brian and thanks for the question Richard So so I think Brian covered it very well there in terms of that kind of 12 to 24 month period after.
Speaker Change: Starting treatment or switching treatments that physicians of all their patients. They typically see them every six months or so.
Speaker Change: A lot of what they're measuring our sort of quality of life measures how's the patient been doing.
Speaker Change: Their day to day activities. They do still measure a lot of the things we've seen in trials with different measures of respiratory function differently to assess mobility certain.
Speaker Change: Not quite the workup you see in the trial, but it is really that sort of holistic assessment at each visit how the patient is doing.
Speaker Change: But it's certainly even from the guidance. We are seeing has recommended that physicians at least wait 12 months to 18 months before initiating a second switch after that first switch.
Speaker Change: And currently it is sort of.
Speaker Change: If a patient was.
Speaker Change: Declining and they start new treatment they wanted to sort of wait to see or are they declining on the new treatment again.
Speaker Change: If they were stable they wait to see if they remain stable are showing improvement so it's sort of somewhat patient by patient but.
Speaker Change: We're definitely seeing that the majority of switches are coming in that 12 to 24 month period.
Speaker Change: Okay.
Speaker Change: Thanks, Jeff.
Speaker Change: Just real quick on the Japan opportunity.
Speaker Change: Yes, Thanks Ritu for the question so we're.
Speaker Change: In the property World we're used to.
Speaker Change: Being a very sizable market that is actually the second largest market for fabry disease.
Speaker Change: It's not the case will compare disease. It is.
Speaker Change: Can be speaking.
Speaker Change: Walter opportunity competitiveness is less prevalent in Japan the.
Speaker Change: The market is also very fragmented we estimate that there were about 100 patients currently treated for companies in Japan.
Speaker Change: Thanks.
Speaker Change: Thanks, guys. Thank you.
Speaker Change: Our next question comes.
Speaker Change: From an <unk>.
Speaker Change: Rama of Jpmorgan. Your line is now open.
Speaker Change: Hey, guys. Thanks, so much for taking the question.
Speaker Change: I just wanted to dig in a little bit on the previously sort of untreated patients that are now on California, I think the slide set around 60%.
Speaker Change: Can you speak to what Youre seeing about these previously untreated patients in some of your core regions or more legacy regions versus some of the emerging market regions. That's my one question.
Speaker Change: Yes, Thanks a lot.
Speaker Change: I'll just take.
Take that one I think.
Speaker Change: In our.
Speaker Change: Key markets so.
Speaker Change: U S Europe, Japan as an example, we're still finding significant numbers of new patients and remember also there is a significant pool of diagnosed untreated patients.
Speaker Change: We came into the year.
Speaker Change: With updated figures estimating about 18000 diagnosed patients about 11, sorry, 17000 diagnosed patients 11000 treated in fixed diagnosed untreated. So part of the phenomenon is penetrating into that diagnosed untreated market, but with advances in low cost genetic testing.
Speaker Change: I think significant adoption of family screening, where you find typically four or five family members. When you find an index fabry patient that's led to diagnosing a whole host of new patients as well as we have at the JP Morgan will give some updated numbers there, but I think overall.
Speaker Change: What youre seeing and I think the more.
Speaker Change: Developed countries is significant level levels of.
Speaker Change: Diagnosis.
Speaker Change: The other thing is we are still switching patients were at very high market share is 80 plus percent, but in our newer launch regions, which tend to be sort of Latin America Southeast Asia, Some middle East North Africa regions. There is still a significant switch opportunity as well. So I think two growth drivers there, but again I think thats solid underpinning of.
Speaker Change: For us as a market growth.
Speaker Change: Thanks, so much for taking our question.
Speaker Change: Thanks Rhonda.
Speaker Change: Thank you. Our next question comes from <unk> Ahmed of Banc of America Securities. Your line is now open.
Speaker Change: Hi, guys. Good morning, Thanks for taking my question.
Speaker Change: Yes.
Speaker Change: As it relates to IP.
Speaker Change: Are there still.
Speaker Change: I will now.
Speaker Change: So I'm wondering if you could get.
Speaker Change: Any kind of better outcome than the one that you've just announced the settlement with and then just a point of clarification as it relates to dropout rates for Dallas can you tell us if those rates have.
Speaker Change: The same or changed much at all recently.
Speaker Change: Thanks, very much so yes, so on both of those so as we said on the call. We're very pleased with the settlement with Teva.
Speaker Change: Reinforces our confidence in the strength of the case against the remaining litigants into your question there are two ore and loop them.
Speaker Change: However.
Speaker Change: We will continue of course to vigorously prosecute enforced the IP and remain very confident long term potential based on this outcome.
Speaker Change: I will say that because we're still in litigation with Aurobindo in particular, we can't comment on the litigation strategy, but of course, we pointed people to the statistics would say that the majority of these types of cases ultimately there was a settlement with the parties I would not expect an earlier or excuse me a later date.
Speaker Change: To your question and again I won't comment more than that other than we're very confident in where we are and I think everybody is very pleased that this gives us an opportunity to continue to support California for many years to come.
Speaker Change: On your second point on compliance and adherence for gallon fold actually we review these numbers quite regularly what's interesting is the rate of <unk>.
Speaker Change: Just continuation has actually gotten smaller and smaller on a broader base.
Speaker Change: That's what's given US just continued sustained.
Speaker Change: Patient growth effectively when patients come on <unk>, they tend to stand Gulf old, which is a fantastic place to be.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Ellie Merle of UBS. Your line is now open.
Ellie Merle: Hey, guys. Thanks for taking the question.
Ellie Merle: Thinking about your pipeline I guess, what's your focus.
Ellie Merle: As you think about building out your clinical pipeline from here.
Speaker Change: I'm more focused on internal development work or are you looking externally with business development and then I guess as you think about business development.
Speaker Change: Are there specific modalities or stages of development.
Speaker Change: Just how youre thinking about that strategy overall thanks.
Speaker Change: Sure I'll start with framing the overall strategy then maybe just talk a little bit about our internal program. So overall of course, we continue to focus on growing the business and I think we've delivered another strong quarter here, which is great and that will continue to be a focus for and I guess, we do believe because of the great infrastructure. We have built to support <unk> and <unk> there is an opportunity to be.
Speaker Change: Bring assets and I think we've said over the next kind of 12 to 24 months.
Speaker Change: We would be looking to bring in first.
Speaker Change: Derisked later stage or commercial assets into the portfolio and then call. It 24 months and beyond when we're really generating strong positive free cash flows I think we will have an opportunity to also begin investing in the pipeline again.
Speaker Change: Jeff do you want to talk a little bit about our hope for what might come out of our internal pipeline.
Jeff Castelli: Yeah, Thanks, Brad and thanks, Alex for the question in terms of our internal research efforts, we developed some.
Jeff Castelli: Really exciting trans genes for fabry, and Pompe disease with proteins that are much more active potent stable than the wild type proteins.
Jeff Castelli: And as you know we've been looking to deliver those through various approaches our original focus was.
Jeff Castelli: Yeah.
Jeff Castelli: With DNA construct so that still is our lead area that were looking but we're also looking at other ways to deliver those proteins are trans genes, whether that be through lipid nanoparticles or other purchase so.
Jeff Castelli: Our focus there is absolutely fabry is the main focus as well as continuing to look at Pompeii secondarily, but we think theres a real opportunity for next generation Fabry treatment.
Jeff Castelli: Especially for people that are non amenable to fabric currently on enzyme replacement therapy.
Jeff Castelli: In terms of the future I think maybe I'll turn it over to Sebastian to talk about BD and how that might influence what we're doing on the internal pipeline I will say, we pay close attention to every single product medicine approach out there for fabry and Pompe.
Jeff Castelli: That is something that we're obviously very keen on but we also have a broader approach of disease areas of interest. So Sebastian we've got turnover here.
Jeff Castelli: Yes.
Sebastian: We've developed a framework.
Sebastian: Looking at specific therapeutic area.
Jeff Castelli: And indications of interest.
Jeff Castelli: We're looking at.
Jeff Castelli: Adjusting fees, we're looking at.
Jeff Castelli: Rare.
Jeff Castelli: Renal rare cardio metabolic.
Jeff Castelli: But also rare neuromuscular underwritten mortgage.
Jeff Castelli: Broad therapeutic areas.
Speaker Change: Okay, great. Thanks.
Jeff Castelli: Thank you.
Speaker Change: Our next question comes from Joe Schwartz of Leerink Partners. Your line is now open.
Joe Schwartz: Hi, Thanks, it looks like around 17 patients were added from the end of July to the end of October versus.
Joe Schwartz: Around 30 in prior quarters. So I'm wondering what is driving this and how things are trending in the fourth quarter and how should we be thinking about the cadence of new patient adds as we get into 'twenty. Five have you started to think about.
Joe Schwartz: Expectations for 'twenty five it looks like the street assumes sales of around $145 million and Thats about a doubling of sales year over year. So what do you make of.
Jeff Castelli: The activity in terms of patient demand.
Jeff Castelli: This quarter and going forward. Thank you.
Speaker Change: Yeah. Thanks, Joe So a few things so we did a very strong Q3, which is great.
Joe Schwartz: From a from a revenue perspective, I think that if you look at the <unk>.
Speaker Change: Topline number of new prescriptions I think your numbers you've quoted that Rite aid would also call you to the number of patients who've been treated which is up to 196.
Speaker Change: We're kind of closing the gap on the insurance process, which Sebastian talked to earlier as we think about.
Speaker Change: What happened in Q3, a few things Q2, you had both the Spanish launch and Youre still switching a number of clinical trial patients and so Q3. It was really just kind of bad debt.
Speaker Change: Ongoing launch in the various countries that are out there we will have more of that in Q4, we don't have any new launch countries as expected. Although we do expect to get to some reimbursement outcomes, which would lead to launches going into next year in terms of next year of course, it depends on the rate of patients that we finished this year with it also depend.
Speaker Change: The launch sequence that Sebastian talk too we have a number of countries that are coming on in the back half of next year. We also have ongoing reimbursement discussions and while those are kind of playing out over a six to nine months period of course. The goal is speed to launch, but you also want to make sure that you have a sustainable one.
Speaker Change: No a lot more about that as we get to the end of the year and then we get more clarity on what next year looks like but super pleased with the launch so far and very excited to be raising guidance for this year.
Speaker Change: Helpful color. Thank you.
Speaker Change: Thanks, John.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Doug on Heart of Stifel. Your line is now open.
Speaker Change: Great. Good morning, Thanks for taking our question as well and congrats on the progress.
Speaker Change: I wanted to circle back on the BD side of the story.
Doug: Now that we're done with the elections, there is a lot of chatter around FTC and device context. So on the BD front. When you think about these late stage pre commercial assets I guess whats. The driver here. Ultimately are you more focused on getting to GAAP profitability and significant cash flow before pulling the trigger or is there something thats.
Doug: You're on your radar already that you might think about partner Trey there once you get over the hurdle.
Doug: non-GAAP profitability and just a clarification for Jeff on the pipeline. These genetic approaches are these the same ones that you guys had for Caritas that you guys are retaining or are these defaults versions that are separate from what we had seen some caritas. Thanks so much.
Speaker Change: Yes, Don Thanks, a lot for the question and.
Doug: From a from a objective perspective I think the point is that we've built an infrastructure at amicus that now is self sustainable based on our current business, which was part of the goal.
Doug: And therefore, we think we can add to that by bringing in products that are de risked <unk> already launched.
Doug: Really focus on topline growth, while maintaining I think our financial district that discipline around the bottom line. So I think thats. The way, we think about b focusing on later stage products first and then as I mentioned as we go along over the next few years.
Doug: You can think of the sequence of non-GAAP profitability to GAAP profitability to positive free cash flow is playing out over that period of time I think then we'll be able to have our own resources to really start funding our pipeline as well. So that's kind of generally how we think about the financial component to it and Jeff maybe just clarify what specifically were focused on.
Doug: With our current technologies.
Jeff Castelli: Yes, so in terms of the internal work we're doing it is similar to the contracts. We had worked on previously as part of Amicus and then what was going to go into Caritas, we've even as we've been focusing R&D resources and efforts on our core businesses in California, and Palm up we have refined those contracts made them even.
Doug: Italy, better with some new AI technologies, and we've also been looking at alternative ways to deliver them.
Doug: I'd say the lead approach is still in AAV with one of those contracts in February but still early in most resource is still focused on our later stage programs.
Doug: So yes, we are.
Doug: We took the decision of course, when we moved away from gene therapy to really really slimmed down those efforts and focus on the core commercial business, which we are delivering on again, our goal would be kind of in the next year or two to generate some important proof of concept data that might allow us then to move.
Doug: Closer to the clinic and again as Jeff said focused primarily on Fabry Pompe and fabry in particular because of course, we can't treat about.
Doug: Two thirds to half of the population, who don't have amenable mutations with Cal fold, so that could be an exciting.
Doug: Approach going forward, but again that is all.
Doug: Low priority right now and we're just moving things along kind of behind the scenes until we can fund them in a more significant way.
Speaker Change: Makes sense. Thanks, Eric Thanks, very much guys. Thanks, Doug Yeah.
Doug: Okay.
Speaker Change: Thank you.
Speaker Change: Our next caller comes from Dennis Devine of Jefferies. Your line is now open.
Dennis Devine: Hi, good morning, Thanks for taking our questions and congrats on the strong Q3.
Dennis Devine: I had a question around Pompeii and.
Dennis Devine: Q4 guidance assumes Q4 would be generally flattish or possibility I was just wondering how much conservatism is baked into this guidance and if there's anything notable worth calling out in terms of inventory or timing of truck shipments that may have benefited Q3. Thank you.
Speaker Change: Yes. Thanks for the question Dennis you know again, there is some incremental growth baked in there.
Dennis Devine: The question is kind of how much.
Speaker Change: New patients do we add over the course of the quarter there arent any new launches. This quarter again, we think there's going to be some reimbursement breakthroughs. We did see CECI out as an example get to reimbursement recently, although that those patients won't come on until next year. So it really just kind of depends on the rate of new patient adds as we go through the course of the quarter and that will tell us kind of where we are.
Speaker Change: Within that range, but there is some incremental growth baked into that guidance.
Speaker Change: Got it thanks, and then maybe as a follow up as you think about the trajectory of the pump launch.
Doug: Just kind of.
Doug: I guess the messaging more around steady.
Doug: Steady growth or do you see any point of acceleration in terms of new patient adds.
Speaker Change: Yes, thanks for the question again.
Speaker Change: Don't give guidance, yet, but I do think a couple of factors will determine how that plays out. So first of all you've got the rate of new patient.
Speaker Change: New patient starts in the existing markets and we do think in the U S. As an example, you're going to have a fairly sizable number of patients who are now moving into that kind of one to two years one next year.
Speaker Change: So it could be a great opportunity to start to switch those patients.
Speaker Change: And I mean patients who've been on next slide nine for a year or two and then you also have the rate of new countries launching and Thats in part dictated by the reimbursement process, which we already talked about and then part dictated by the regulatory process. As an example, some submissions we've made Australia, Canada, Japan.
Speaker Change: And we think will come online in the back half of next year. So still some moving pieces I do think over time, you will see youll start to see momentum build.
Speaker Change: As you have more markets and the ability to draw from more patients, but again, what kind of see how this the rest of this year plays out and more color on the rate of those new launches as we go into the next year.
Speaker Change: Perfect. Thanks, so much.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Kristin Scott of Cantor Fitzgerald. Your line is now open.
Kristin Scott: Hi, everyone. Congrats on a great quarter and not just from the revenue side, but from all of the operational updates as well.
Speaker Change: Hoping you can comment more on some of these main drivers that have led to some of the tightening of the operating expense guidance you are providing today. Thank you.
Speaker Change: Thanks, Kristen Simon do you want to take that.
Speaker Change: Yeah.
Simon Harford: Really I think it's fair to say that we continue to manage operating expense as we said we wanted to do extremely tightly.
Speaker Change: Year on year. So we have really limited I would say.
Speaker Change: Head count additions because we have the infrastructure that we've talked about and placed that was built to support fab brand when we didnt need to add significant additional numbers since we launched <unk>.
Simon Harford: I would say.
Speaker Change: Tim you however to deliver importantly on all the things in the Opex that we need to do from a activity perspective, such as <unk>.
Doug: Some of the registry studies.
Doug: The adolescent LAPD.
Doug: <unk>.
Doug: Some of the sort of remaining expenses related to open label extension so.
Doug: All of that is is taking place from an activity perspective, but we look at all opportunities really to to work with that the overall management team.
Doug: Employees to ensure that we're managing opex tightly and Thats, what youre seeing as a result to the lowering of that non-GAAP operating expense guidance, which obviously is also helping.
Doug: The bottom line because as you know we've talked about full year non-GAAP profitability in reality as the first nine months of this year, we'd already achieved $45 million of non-GAAP profitability said, that's what's going on currently.
Doug: Yes.
Speaker Change: Thank you.
Speaker Change: Next question comes from Jeffrey Hung of Morgan Stanley. Your line is now open.
Speaker Change: Hi, This is Michael on for Jeff hung. Thank you for taking my questions and congrats on the strong quarter.
Speaker Change: How far into 2025 for converting a folder previously expense inventory, how far would that like that inventory be able to K for next year and like can you provide any commentary on the potential for a next gen manufacturing when would you expect that could start to.
Doug: Impact gross margins.
Speaker Change: I'll take the second one first and then Simon I'll have you talk to the first one so next gen.
Speaker Change: Factoring is something we are investing in and we've talked about that.
Speaker Change: Before we think we can reduce cost of goods by maybe 20% to 30%, although we're still working through that process.
Doug: Robley, a kind of.
Doug: Back half of the decade kind of impact so we haven't given formal guidance there, but that's still a few years out before that starts to hit.
Doug: Commercial supply chain and it has a real impact that may be signed to talk to the near term drivers next year.
Doug: Yes.
Doug: In terms of that.
Doug: Heads up on Cogs in the sort of mid or should I say gross margin in the mid 80% range next year, that's really driven by the fact that that expense inventory will run out in the early part of next year and therefore, that's why we call it a hybrid.
Doug: We will see as we've said previously full year impact of possibility all fold.
Doug: Sort of gross margin rolling through in 2026, but we wanted to at least make you aware of what we see at this point in time is the difference compared to 2024 in 2025.
Doug: Hence that.
Doug: Segment.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Gil Blum of Needham and company. Your line is now open.
Gil Blum: Hi, everyone. Thanks sure.
Gil Blum: Im taking a question.
Gil Blum: So.
Gil Blum: As it relates to genetic medicine in February.
Gil Blum: Kind of a recent feedback from the FDA regarding potential for accelerated approval.
Gil Blum: This is pretty interesting.
Gil Blum: Wondering what you guys think in weather.
Gil Blum: Current dynamics could push our program for genetic medicine in February a little faster than expected. Thank you.
Speaker Change: Yes, it's a good question I think as it relates to the other therapies that are out there in development, we really see those as impacting patients with non amenable mutations just based on the data that we've seen and so we're really excited about <unk> continued to grow for amendable patients, but we would love to have something for that other part of the popular.
Gil Blum: Asian from a regulatory perspective, I think broadly you are seeing some flexibility on the part of the agency, which we think is exciting hard to know what's going to happen with with other therapies.
Gil Blum: We just read the same things you do but again I think if any of those are able to get across the finish line there.
Gil Blum: They are almost certainly for non amenable patients.
Gil Blum: And so eager to see if we can do something on their own.
Gil Blum: In the coming years to address that population as well.
Speaker Change: That makes sense.
Gil Blum: Yeah.
Gil Blum: Thanks Scott.
Gil Blum: Thank you.
Speaker Change: Our next question comes from <unk> Richter of Goldman Sachs. Your line is now open.
Speaker Change: Thank you good morning.
<unk> Richter: Would it be possible to give us some further commentary on the competitive dynamics persist next slide assignment in the U S and ex U S. Just given the appreciable growth in the <unk> sure.
<unk> Richter: For that asset percentages last earnings thank you.
Gil Blum: Yes, Sebastian maybe talk a little bit to kind of the proportionality in terms of how we're getting patients to switch to.
Gil Blum: <unk> ability to a folder.
Gil Blum: And.
Gil Blum: Sort of what we're seeing as things evolve in those two markets.
Speaker Change: Yes, Thanks, Brian.
Brian: I'm sorry for the question.
Gil Blum: As I mentioned earlier.
Gil Blum: We are seeing in the U S. As in terms of switch dynamics is pretty much a reflection of the current <unk>.
Gil Blum: Respective shares of <unk>.
Gil Blum: And next year in the U S. So.
Gil Blum: At this point.
Gil Blum: Based on Q3 reported numbers.
Gil Blum: On accounts for about 60% of.
Gil Blum: Some of your sales in the U S.
Gil Blum: Is still 40%.
Gil Blum: Okay.
Gil Blum: From luminous time.
Gil Blum: I did say that we've got slightly more than two thirds of our switches coming from from next Gen <unk>, which.
Gil Blum: Which is.
Gil Blum: Great indication that.
Gil Blum: As we said all along that there is.
Gil Blum: There is potential for us.
Gil Blum: To switch.
Gil Blum: A proportion of mixture on patients over time.
Gil Blum: We are.
Gil Blum: We're seeing also that.
Gil Blum: Ex U S. It's actually the reverse situation. So there is still more miles on them next year.
Gil Blum: So.
Gil Blum: Roughly 60% miles on ex U S.
Gil Blum: 40% mix shifts.
Gil Blum: And so here, we tend to see a greater proportion of switches coming from <unk>.
Gil Blum: You wouldn't be surprised.
Gil Blum: We also have the benefit of.
Gil Blum: Seeing some 90 patients moving straight onto onto Youll pulled out.
Speaker Change: Thank you that was our last question I would now like to pass it to Bradley for closing remarks.
Gil Blum: Al.
Bradley Campbell: Great. Thanks, everybody have a great day and thanks for listening to the conference call.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Bradley Campbell: Okay.
Bradley Campbell: [music].
Bradley Campbell: Okay.
Bradley Campbell: Yes.
Bradley Campbell: Yes.
Bradley Campbell: Yes.
Bradley Campbell: [music].
Bradley Campbell: Yeah.
Bradley Campbell: Okay.
Bradley Campbell: [music].
Bradley Campbell: Okay.
Bradley Campbell: [music].
Bradley Campbell: So.
Bradley Campbell: Dan.