Participants

Lindsey Allen; IR Contact Officer; Amylyx Pharmaceuticals Inc

Justin Klee; Co-Chief Executive Officer, Director; Amylyx Pharmaceuticals Inc

Camilile Bedrosian; Chief Medical Officer; Amylyx Pharmaceuticals Inc

James Frates; Chief Financial Officer; Amylyx Pharmaceuticals Inc

Joshua Cohen; Co-Chief Executive Officer, Director; Amylyx Pharmaceuticals Inc

Craig Suvannavejh; Analyst; Mizuho Securities

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. (Operator Instructions)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, Lindsy 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 in 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 (inaudible) 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 analysts as an organization, 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 central trial results that had showed a meaningful benefit of AMX0035 for people living with ALS and supported an FDA approval.
But as admissions of (inaudible) 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 neuro degenerative diseases. Not long after the PHOENIX trial results in early April, we announced a planned interim analysis results from our study of AMX0035 and will from syndrome.
The 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 the targeting cell death 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 candidate 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 Supranclear Palsy or PSP and AMX0114, our antisense oligonucleotide (inaudible) 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 (inaudible) lowering effects we saw with AMX0035 in the 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 in addition Calpain-2 to a well established target in a number of neurological diseases and published data suggest Calpain-2 is the primary proteolytic(inaudible)
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 the goal of bringing important therapies to communities with high unmet need.
And critically, we currently have the cash runway into 2026 to meaningful milestones in each of these programs. Since founding and much 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 the key clinical programs.

Camilile 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 AM0035 at a cellular level, ensure 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 perk and a atf6. from the literature, these protein cascades act to put the cell in a defensive mode, where most new protein and RNA synthesis is flow or halted, and the cell prioritizes production of chaperone proteins and [cytotoxic] activity.
Prolonged ER stress is a cause of cell death. Mitochondrial dysfunction that occurs in response to stress results in that 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 a (inaudible) cell death. Based on existing literature and our preclinical data, there is a wealth of evidence that sodium phenylbutyrate or PD and (inaudible) can prevent activation of these pathway and reduce the resulting cell death.
In our experiments, we have repeatedly shown that the combination of TBM Purcell outperforms the individual events agents. This research has led us to Wolfram syndrome, a monogenetic disease and was ER stress and mitochondrial dysfunction are driving the underlying disease pathophysiology, aligning with the mechanism of action of AMX0035.
Individuals with Wolfram syndrome generally have mutations in the WFS1 gene that encodes the protein Wolfram. Wolfram and 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 on 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 relative optic nerve atrophy, deafness, diabetes and sedatives and neurodegeneration, ultimately resulting in premature death. The disease have felt the impact of approximately 3,000 people in the US, and possibly more.
Over the last seven years, we have been collaborating with Dr. (inaudible) and his team at Washington University School of Medicine in St. Louis on preclinical research, evaluate the effect of AMX0035 on Wolfram. The main data from this collaboration are published in JCI Insight. We study the compounds and people derive beta cells and neurons harboring the clinical mutations in WFS-1 gene and then in an animal model, harboring a double knockout of the WFS-1 gene.
We observed sizable reductions in cell death and increased insulin production upon glucose administration in beta cells and substantially reduce cell death in neuron. In the WFS-1 knockout mice, we observed that AMX0035 altered the progression of the diabetic phenotype in these animals. We initiated our Phase two Wolfarm syndrome clinical study called Healios in April 2023, following these findings.
And in April of this year, we announced promising data from a planned interim analysis of 8 of the 12 participants enrolled who had their week 24 assistance. Our hypothesis, our priority was at 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 tumors with an AMX0035 resulted in an improvement in beta cell function as evidenced by an increase from baseline and the C-peptide response to a mixed meal challenge, the primary outcome. Improvements and other measures of glycemic control also were reported as part of the interim data.
In addition, we reported some improvement in vision and a subset of participant, which was unexpected, given the visual acuity worsens over time, often leading to blindness according to natural history. These results were supported by improvements or disease stability as measured by clinician and patient reported outcome.
AMX0035 was generally well tolerated and all participants and all continue in the study. Based on the strength of these interim data and the lack of approved treatment options for people living with Wolfarm 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 (technical difficulty)nearly 700,000 people worldwide and effects eye movement, walking and balance speech and swallowing and cognitive function. There are no approved treatments for the sale disease. There is a strong genetic linkage of tau to the disease and clear tau pathology [when brains] from people with PSP were observed post mortem.
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, how was the most change 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 Calpain-2. Decades of scientific literature support and a central role for Calpain-2 in the process of external degeneration.
Calpain-2 inhibition has been studied in models of multiple sclerosis, [contageous] 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 intra sequel delivery to initiate a program designed to effectively and specifically inhibit Calpain-2. In our hands and with collaborators, we have observed (inaudible) and neurofilament biology in multiple cellular experiment.
Having well-defined biomarkers, it's also essential as we progress this compound into the clinic. Calpain-2 is protease known to cleave many substrates, including neurofilament, tau and TDP-43 protein. These proteins, in addition to neurofilament light provide important disease and target engagement biomarker.
We are planning to file an IND and our team is poised to initiate a multiple ascending dose clinical trial of AMX--1414 and people living with ALS in the second half of this year when the IND is cleared.
Now I will turn call over to Jim to discuss financial updates from the quarter.

James 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, PSP and ALS. These actions provide us with the expected cash 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 8, where PHOENIX study did not meet its primary or secondary endpoints. For modeling purposes, you should anticipate us reporting no meaningful revenue after March 8.
Cost of sales were $116.4 million for the quarter. This included non-cash 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 voluntarily discontinue the marketing authorizations in the US and Canada. We may report revenue and COGS in the months ahead due to the timing of true-ups related to our final accrual estimates as we wrap up sales for delivery on [Albireo's].
But the 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 next year, we expect total spend on R&D and SG&A will be in the range of $30 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 US and Canada.
As a result of the changes to our organization announced on April 4, 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 $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 and Wolfram Syndrome and PSP and AMX0114 in ALS.
I'll now turn the call over to Josh to provide some closing remarks.

Joshua Cohen

Thanks, Jim. In closing, we believe we are well positioned to advance our compelling, science driven pipeline forward to key value generating milestones. Interim data from our Phase two 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 three 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 generation. 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 q-and-a.

Question and Answer Session

Operator

(Operator Instructions)
[Cory Johnson], Goldman Sachs.

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 readout should be embedded with in that guidance? And then how should we think about the trial design and your expectations for the Phase one study of AMX0014 and then when can we get that data? Thanks.

James Frates

Hey, 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 continued operating, continued operating mode in each of the programs that we have. So, with Wolframs continue to move forward with this study that we're in now and then in an additional study between now and the end of into 2026.
It will 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, you know, sort of full operations moving forward on the three programs we've outlined.

Great.

Joshua 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(inaudible) AMX0114

Camilile Bedrosian

Thanks, Josh, thanks, Corrine And 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 when we expect to have the data.

Joshua Cohen

I might just add to that on one thing nice with the 114 program in general, too, is Capai2 is a proteus, and there's many proteins that it's known to cleave, which provide important biomarkers at our current engagement and also biomarkers in the ALS field have generally moved along quite a lot, particularly with neurofilament, which Calpain-2s biology has been heavily weight to. So, I think as we go forward into this study, I think we have a lot of promising things to measure and that can even be measured fairly early.

Camilile Bedrosian

Thank you.

Operator

Marc Goodman, Leerink.

Hi, thanks for taking question. This is Rudy on the line for Mark. Can you maybe provide more color on the measurement of disease progression? Wolfram syndrome in a Phase two Healios study, we should be measured on (inaudible)are the most important and how do you decide which one will be used in a potential like pivotal program? Thanks.

Camilile Bedrosian

Thank you. 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 at all showed that there was inevitable progression of that and deterioration of beta-cell function, deterioration of neurons leading to visual loss, retinal ganglion cells loss.
And so those are important considerations with Wolfram Syndrome. And what we showed in the interim data for Healios was that in fact, not only did we slow progression, but we actually improve beta cell function to 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 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 has substantial evidence of improvement. So, certainly we will be keeping an eye on those measures going forward.

Got it. Thanks for the color.

Operator

Craig Suvannavejh, Mizuho Securities.

Craig Suvannavejh

Hi, good morning. Thank you for taking the questions. I have got 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 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 the Calpain-2. So, I'm just wondering of that dozen, what gives you the confidence that Calpain-2 is the right one to go after in ALS? Thanks.

Camilile Bedrosian

Yes, sure. So, Wolfram, we continue very encouraged by the data that we've seen with the 8 of the 12 patients, who are in the study and expect, as we said second half of this year. And (inaudible) have the data at 24 weeks for all 12 participants. We continue encouraged.
So, and as Dr. Yurano said, during the webinar, he also is very encouraged, not only by what has been seen in the 8 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 return you.

Joshua Cohen

So with regard to Calpain, and I think it's mostly literature based on that choice. Calpain-2 is the most orderly express Calpain and also the Calpain that is most associated with axonal degeneration. When people talk about Calpains being associated with axonal degeneration, usually referring to Calpain-2 from time to time Calpain won that, 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 axonal degeneration, as well as connecting this to neurofilament biology. So, I think 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 will continue to present preclinical data on 114. And what you can see is that targeting Calpain-2 in variety of model systems has quite a substantial effect on lowering neurofilament 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 be other Calpains. This is also very potent ASO has delivered interest equally. So, we have, we expect to have good brain closure as well.

Craig Suvannavejh

Thanks.

Operator

(Operator Instructions)
Joel Beatty, Baird.

This is Ben Burud on for Joe. B Thanks for taking the question on the company's plan to engage with the FDA. Has that meeting been scheduled yet.

Camilile Bedrosian

As we said, we are moving swiftly to meet with the FDA based on the interim data of 8 individuals of the 12 in our Healios study. And when we have the information from our meeting, we certainly will share those with you.

Got it. Thank you.

Operator

Thank you. There are no further questions at this time. I will 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.