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Presentation

Operator: Good morning. My name is Morgan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Amylyx Pharmaceuticals First Quarter 2024 Earnings Conference Call. All participants will be in a listen-only mode. After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]. Please limit your questions to one with one follow-up. If you have additional questions, you may rejoin the queue. Please be advised that this call is being recorded at the company’s request. I would now like to turn the call over to your host, Lindsey Allen, Head of Investor Relations and Communications. Please proceed.

Lindsey Allen: Good morning, and thank you for joining us today to discuss our first quarter 2024 Financial results. With me on the call are Josh Cohen and Justin Klee, our Co-CEOs; Jim Frates, our Chief Financial Officer; and Dr. Camille Bedrosian, our Chief Medical Officer. Before we begin, I would like to remind everyone that any statements we make or information presented on this call that are not historical facts are forward-looking statements that are made based on our current beliefs, plans and expectations and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, our plans with respect to AMX0035 and AMX0114, statements regarding current and planned clinical trials, statements regarding regulatory developments and the expected timing thereof, our business strategy and outlook, and our expected financial performance and cash runway.

Actual events and results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in our most recent filings with the SEC and any other future filings that we may make with the SEC. You are cautioned not to place any undue reliance on these forward-looking statements, and Amylyx disclaims any obligation to update such statements unless required by law. Now I will turn the call over to Justin.

Justin Klee: Good morning, and thank you all for joining us today. The first quarter of this year was a difficult one for Amylyx as an organization and especially for the ALS community. The top-line results from the PHOENIX trial of AMX0035 and ALS were deeply disappointing and surprising given the prior CENTAUR trial results that had showed a meaningful benefit of AMX0035 for people living with ALS and supported an FDA approval. But as a mission-driven, the next steps were clear. We moved quickly to restructure our organization in order to continue our work for one day ending the suffering caused by neurodegenerative diseases. Not long after the PHOENIX trial results in early April, we announced the planned interim analysis results from our study of AMX0035 in Wolfram syndrome, a program we have been developing for nearly seven years.

The data showed stabilization or even improvement across the major outcomes in the trial. These data strengthen our belief that we’ve been investigating for over a decade that targeting Cell Deth [ph] mechanisms is an important approach across many different diseases. It is therefore critical to continue to focus our resources on matching the mechanism of our treatment candidates with the mechanisms of disease and ideally incorporating measurable biomarkers in our development that are consistent with disease progression. In that spirit and in pursuit of our mission, we continue to advance our three key programs that have been in the works for several years. AMX0035 for the treatment of Wolfram syndrome, AMX0035 for the treatment of progressive supranuclear palsy or PSP, and AMX0114, our antisense oligonucleotide targeting Calpain-2 for the treatment of ALS.

For Wolfram, we are seeing early evidence of benefit across multiple organ systems based on well-established outcomes such as c-peptide response. These results are consistent with our prior preclinical studies. We plan to meet with FDA to discuss next steps in the program. The PSP community continues to be excited about our trial because of the tau lowering effects we saw with AMX0035 in a prior Alzheimer’s study. We expect to have data from an interim analysis of this study mid next year. AMX0114 is a potent antisense oligonucleotide targeting inhibition of Calpain-2, a well-established target in a number of neurological diseases and published data suggest Calpain-2 is the primary protease that plays neurofilament light chain. We expect to enroll the first participants in our ALS trial later this year.

Each of these programs address neurodegenerative diseases with well-defined mechanistic rationales, well defined and measurable biomarkers and a foundation of rigorous preclinical data upon which we have based our clinical work, all with a goal of bringing important therapies to communities with high unmet need. And critically, we currently have the cash runway into 2026 through meaningful milestones in each of these programs. Since founding Amylyx more than 10 years ago, we have built a foundation focused on the science behind what drives cell death and degeneration. These pathways remain critically important across many diseases of high unmet medical need and we will continue the work to further our mission. I will now turn the call over to Camille to provide an update on these key clinical programs.

Camille Bedrosian : Thank you, Justin, and I wish all of you a good morning. I’m going to begin today by providing an overview of the mechanistic rationale for AMX0035 at a cellular level and share why we are so excited to continue studying it in Wolfram syndrome and PSP. I also will discuss the mechanistic rationale of AMX0114 in neurodegenerative diseases. AMX0035 was designed to mitigate neurodegeneration by simultaneously targeting and reducing endoplasmic reticulum or ER stress and mitochondrial dysfunction. ER stress is activated when protein homeostasis is disrupted, leading to the accumulation of misfolded and unfolded proteins in the ER. This activation leads to an adaptive response in order to restore homeostasis. The unfolded protein response pathway is activated by initiating three protein cascade, IRE1, PERC and ATS6.

From the literature, these protein cascades act to put the cell in a defensive mode where most new protein and RNA synthesis is slowed or halted and the cell prioritizes production of chaperone proteins and phagocytic activity. Prolonged ER stress is a cause of cell death. Mitochondrial dysfunction that occurs in response to stress results in bat protein activation to open a pore through which cytochrome c is released. This release in turn activates Caspase-3, which is known to be the execution protein that causes apoptotic cell death. Based on existing literature and our preclinical data, there is a wealth of evidence that sodium phenylbutyrate or PB and taurursodiol or TURSO can prevent activation of these pathways and reduce the resulting cell death.

In our experiments, we have repeatedly shown that the combination of PB and TURSO outperformed the individual event agents. This research has led us to Wolfram syndrome, a monogenetic disease in which ER stress and mitochondrial dysfunction are driving the underlying disease pathophysiology are aligning with the mechanism of action of AMX0035. Individuals with Wolfram syndrome generally have mutations in the WFS1 gene that encodes the protein warfarin. Warfarin spans the ER membrane and is thought to play a role in protein folding and aid in the maintenance of ER function by regulating calcium levels. Therefore, Wolfram syndrome is often characterized in the literature as a prototypical disease of ER stress given the observed activation of the three protein arms of the ER stress cascade.

Also, there is evidence in the literature for mitochondrial dysfunction and the activation of Caspase-3. Wolfram is generally characterized by childhood onset diabetes mellitus, optic nerve atrophy, deafness, diabetes insipidus, and neurodegeneration, ultimately resulting in premature death. The disease is thought to impact approximately 3,000 people in the U.S. and possibly more. Over the last seven years, we have been collaborating with Dr. Fumihiko Urano and his team at Washington University School of Medicine in Saint Louis on preclinical research evaluate the effect of AMX0035 on Wolfram. The main data from this collaboration are published in JCI Insight. We studied the compounds in people-derived beta cells and neurons, harboring the clinical mutations in WFS1 gene and then in an animal model harboring a double knockout of the WFS1 gene.

We observed sizable reductions in cell death and increased insulin production upon glucose administration in beta cells and substantially reduced cell death in neurons. In the WFS1 knockout mice, we observed that AMX0035 halted the progression of the diabetic phenotype in these animals. We initiated our Phase 2 Wolfram syndrome clinical study called HELIOS in April 2023 following these findings. And in April of this year, we announced promising data from a planned interim analysis of eight of the 12 participants enrolled who had their week 24 assessment. Our hypothesis a priori was that AMX0035 could slow beta cell decline, slow deterioration of glycemic control and slow progression of other characteristics of the disease. In actuality, based on the interim data, treatments with AMX0035 resulted in an improvement in beta cell function as evidenced by an increase from baseline in the c-peptide response to a mixed meal challenge, the primary outcome.

Improvements in other measures of glycemic control also were reported as part of the interim data. In addition, we reported some improvement in vision in a subset of participants, which was unexpected given that visual acuity worsens over time, often leading to blindness according to Natural History. These results were supported by improvement or disease stability as measured by clinician and patient reported outcomes. AMX0035 was generally well tolerated in all participants continue in the study. Based on the strength of these interim data and the lack of approved treatment options for people living with Wolfram syndrome, we are planning to engage the FDA as soon as we can initially with these interim data. Turning to our work in PSP, we continue to plan for an interim analysis and expect data in mid-2025.

PSP approximately 7 in 100,000 people worldwide and affects eye movement, walking imbalance, speech and swallowing and cognitive function. There are no approved treatments for this failed disease. There is a strong genetic linkage of tau to the disease and clear tau pathology when brains from people with PSP were observed postmortem. Multiple pathways, including ER stress and mitochondrial dysfunction, have been implicated as contributors to tau dysfunction and aggregation. In the clinical trial of Alzheimer’s disease, AMX0035 has been shown to target multiple pathways of neurodegeneration and significantly reduced CSF total tau and phospho tau levels. Out of 288 measured proteins, tau was the most changed by AMX0035. We believe AMX0035 has strong scientific rationale and PSP based on these considerations.

We also remain committed to the ALS community and are developing AMX0114, our antisense oligonucleotide or ASO, targeting inhibition of for Calpain-2, decades of scientific literature support in the central role of Calpain-2 in the process of axonal degeneration. Calpain-2 inhibition has been studied in models of multiple sclerosis, Huntington’s disease, Parkinson’s disease, chemotherapy induced peripheral neuropathy, spinal cord injury and Alzheimer’s disease to name a few with repeatedly positive effects across the literature. In considering targeting Calpain-2, specificity and cellular localization are critical given that there are at least a dozen calpain. We leveraged ASO technology targeting the CNS or central nervous system by intrathecal delivery to initiate a program designed to effectively and specifically inhibit Calpain-2.

In our hands and with collaborators, we have observed rescue of cellular degeneration and neurofilament biology in multiple cellular experiments. Having well-defined biomarkers is also essential as we progress this compound into the clinic. Calpain-2 is a protease known to cleave many substrates, including neurofilament, tau, and TDP43 proteins. These proteins in addition to neurofilament light provide important disease and target engagement biomarkers. We are planning to file an IND and our team is poised to initiate a multiple ascending dose clinical trial of AMX0114 in people living with ALS in the second half of this year when the IND is cleared. Now I will turn the call over to Jim to discuss financial updates on the quarter.

Jim Frates: Thank you, Camille. As you’ve heard, over the last two months, we took swift and comprehensive action to restructure our organization, including an approximately 70% workforce reduction to focus on delivering data from our three key programs in Wolfram syndrome, PST and ALS. These actions provide us with the expected crash runway into 2026, giving us time to report additional data from each of our clinical trials. I’ll now review our financial results for the quarter and our expectations on the impact of the restructuring on the quarters ahead. Net product revenues were $88.6 million for the first quarter, down from $108.4 million in the fourth quarter of 2023. For context, the rate of new prescriptions being written as well as refills of existing prescriptions started to decline immediately after our announcement on March 8th that our PHOENIX study did not meet its primary or secondary endpoints.

For modeling purposes, you should anticipate us reporting no meaningful revenues after March 8th. Cost of sales were $116.4 million for the quarter. This included noncash charges of approximately $110.5 million associated with the write down of inventory and the loss on CMO purchase commitments related to the decision to voluntary discontinue the marketing authorizations in the U.S. and Canada. We may report revenue in COGS in the months ahead due to the timing of true ups related to our final accrual estimates as we wrap up sales for RELYVRIO and ALBRIOZA, but expectation is that any future revenues and COGS will be immaterial as we have discontinued our commercial sales. Research and development expenses were $36.6 million and selling, general and administrative expenses were $57.8 million for the quarter.

With our restructuring, we expect our total operating spend to move down over the next few quarters as we wind down commercial operations and focus our R&D. As we move into the next year, we expect total spend on R&D and SG&A will be in the range of $30 million to $40 million per quarter, in line with our spend prior to the build out of our commercial organization, which was happening in the first two quarters of 2022 in preparation for potential approvals in the U.S. and Canada. As a result of the changes to our organization announced on April 4th, we also expect to incur severance and related expenses of roughly $19.1 million. These charges will be largely recorded in the second quarter with some occurring in Q3. As a result of these actions, in the first quarter, we recorded a net loss of $118.8 million or a net loss per share of a $1.75.

We had $373.3 million in cash and investments as of March 31, 2024 with an expected cash runway into 2026, funding us through key milestones including anticipated data readouts for AMX0035 in Wolfram syndrome and PST and AMX0114 in ALS. I’ll now turn the call over to Josh to provide some closing remarks.

Josh Cohen : Thanks, Jim. In closing, we believe we are well positioned to advance our compelling science driven pipeline forward to key value generating milestones. The interim data from our Phase 2 HELIOS trial of AMX0035 for the treatment of Wolfram syndrome demonstrated early evidence of benefit on well-established outcomes such as c-peptide that are supported by prior results, including in the mouse model of the disease. Based on these compelling interim data, we are acting swiftly to engage with the FDA to discuss next steps for the program. We expect top-line data on all 12 participants at Week 24 in the fall of this year. Our Phase 3 ORION trial of AMX0035 for the treatment of PSP is progressing and we continue to anticipate data from an interim analysis in mid-2025.

And we are excited to advance AMX0114 into the clinic for the treatment of ALS in the second half of this year. Calpain-2 is a well-recognized target with decades of scientific literature supporting its essential role in the process of axonal degeneration. We have an opportunity with this study to assess safety as well as biomarkers of target engagement and the disease process. We are in a strong financial position to deliver on all of these milestones and generate important data for each of our programs. Our pipeline is supported by more than a decade of our own research and bolstered by promising preclinical and clinical data. Our strategy from here is clear. We continue to follow the science, advance our pipeline, and work tirelessly for communities that continue to wait for new solutions and better support.

Now we’d be happy to take your questions. Operator, please open the call up to Q&A.

Operator: [Operator Instructions]. Your first question comes from Corinne Jenkins with Goldman Sachs. Your line is open.

Corinne Jenkins: Good morning, guys. Maybe a couple from us. Just first, in terms of the cash runway guidance into ’26, I guess, what specific trials and then readouts would be embedded within that guidance? And then how should we think about the trial design and your expectations for the Phase 1 study of AMX0114? And then when can we get that data?

Jim Frates: Hey, Corinne. Maybe I’ll start, it’s Jim. Maybe I’ll start with the expectations that are built into the numbers. And, as we outlined, that will, we expect that that will give us kind of, sort of continued operating mode in each of the programs that we have. So, with Wolfram’s continuing to move forward with this study that we’re in now and an and an additional study between now and the end into 2026. It’ll allow us to continue to execute on the PSP study and to begin the clinical studies on AMX0114, with of course, some cushion in there as well as we move forward. So, I think, sort of full operations moving forward on the three programs we’ve outlined.

Josh Cohen : And I might just add to we do expect that the cash runway be enough to have, important kind of data milestones for each of the programs during that time frame. Back to Camille on AMX0114.

Camille Bedrosian: Thanks, Josh. Thanks, Corinne. Yes. So AMX0114, as we said in the prepared remarks, will be a multiple ascending dose study in individuals with ALS. And in terms of when we’ll have data, we’ll report along the way and keep you updated on when we expect to have the data.

Josh Cohen : Yes. And I might and I’d just add to that, one thing nice with the AMX0114 program in general too is, you know, Calpain-2 is a protease. So, there’s many proteins that it’s known to cleave, which provide important biomarkers at target engagement. And also, biomarkers in the ALS field have generally moved, along quite a lot, particularly with neurofilament which Calpain-2’s biology has been heavily linked to. So, I think as we go forward into the study, I think we have a lot of promising things to measure, and that can even be measured fairly early.

Operator: Your next question comes from Marc Goodman with Leerink. Your line is open.

Unidentified Analyst : Hi. Thanks for taking my question. This is Rudy on the line for Marc. Can you maybe provide more color on the measurement of disease progression in Warfarin syndrome? And in a Phase 2 HELIOS study, which of the measured endpoints are the most important, and how do you decide which one will be used in a potential, like, pivotal program? Thanks.

Camille Bedrosian: So as, we described in the prepared remarks and actually during our webinar as well, we had a number of endpoints that we evaluated. And in fact, the natural history study by Ray et al showed that there was inevitable progression of and deterioration of beta cell function, deterioration of neurons leading to vision visual loss, retinal ganglion cells loss. And so those are important considerations with Wolfram syndrome. And, what we showed in the interim data for HELIOS was that, in fact, not only did we slow progression, but we actually improved beta cell function through an increase in c-peptide, which is a well-established and objective endpoint and measure of beta cell function used extensively in the diabetes field.

So that will be an important consideration as well as quite to our excitement, we actually saw some improvement in vision as well in these adult individuals who’ve had many years of progressive visual loss. So, we will, as we said, meet with the FDA shortly to be able to understand how they view the totality of evidence and substantial evidence of improvement. So certainly, we will be keeping an eye on those measures going forward.

Unidentified Analyst: Got it. Thanks for color.

Operator: Your next question comes from Graig Suvannavejh with Mizuho Securities. Your line is open.

Graig Suvannavejh: Good morning. Thank you for taking my question. I have one just in particular around the expectation of getting the final data with respect to Wolfram. And I’m just wondering, is there any potential that what you see in the final changes, the interpretation of the findings of your interim data? And then secondly, just maybe on your calpain program, you had mentioned that there are perhaps a dozen different calpain and you’ve chosen Calpain-2. So, I’m just wondering, of the dozen, what gives you the confidence that Calpain-2 is the right, one to go after, in ALS? Thanks.

Camille Bedrosian: Yes. Sure. So, on Wolfram, we continue very encouraged by the data that we’ve seen with the eight of the 12 patients, who are in the study and expect, as we said, second half of this year in the fall, we’ll have the data at 24 weeks for all 12 participants. We continue to encourage, so, you know and, as Dr. Urano said during the webinar, he also is very encouraged not only by what has been seen in the eight individuals at 24 weeks, but going forward as well. So, stay tuned, and we look forward to sharing those data with you. With regard to calpain, maybe Josh will start, and then I’ll continue.

Josh Cohen : So, with regard to calpain, I think it’s mostly literature based on that choice. Calpain-2 is the most neuronally expressed, calpain and also the calpain that is most associated with external degeneration. When people talk about calpain as being associated with external degeneration, they’re usually referring to Calpain-2, from time to time, Calpain-1, but typically Calpain-2. And I’d say the other thing that, just gets us very excited with this target, it is one of these targets with just decades of literature. There’s so much, kind of lab-to-lab replication. There’s so many different models and experiments that have shown that inhibiting this can slow external degeneration as well as connecting this to neurofilament and biology. So, I think, that that certainly makes us, quite excited to go after the target, and quite excited to hopefully move into clinic later this year.

Justin Klee: And I’ll just add that, we’ve presented some posters. We’ll continue to present the preclinical data on AMX0114. And, what you can see is that targeting Calpain-2, in variety of model systems, has quite a substantial effect on lowering your filament levels as well as on helping with cell viability. So, I think it’s just further confirmation of the literature that Josh was saying that inhibiting Calpain-2 is in fact the, calpain that you’d like to inhibit. And I think what one of the challenges has been historically is your point that there are a large variety of calpain and so targeting just one specifically has been challenging. We think that’s the strength of using an antisense oligonucleotide is that we can be very certain that we are targeting Calpain-2, not the other calpain. This is also very potent ASO, and it’s delivered intrathecally. So, we have, we expect to have good brain exposure as well.

Operator: [Operator Instructions]. Your next question comes from Joel Beatty with Baird. Your line is open.

Unidentified Analyst : Hi. This is Ben Baluch [ph] on for Joel Beatty. Thanks for taking the question. On the company’s plan to engage with the FDA, has that meeting been scheduled yet?

Camille Bedrosian: As we said, we’re moving swiftly to meet with the FDA based on the interim data of eight individuals out of the 12 in our HELIOS study. And when we have the information from our meeting, we certainly will share those with you.

Operator: Thank you. There are no further questions at this time. I’ll turn the call back to Mr. Klee.

Justin Klee: Thank you, operator, and thank you all for joining us on our call today and for your support. We hope you have a good day.

Operator: Thank you for attending Amylyx Pharmaceuticals’ First Quarter 2024 Earnings Conference Call. This concludes the call. You may now disconnect. Have a wonderful rest of your day.