Amylyx Pharmaceuticals, Inc. — Q3 2023 Form 10-Q
Reporting period: Three and nine months ended September 30, 2023. Amounts are in U.S. dollars; financial statement amounts below are in millions unless noted. The filing was signed November 9, 2023.
Business context
Amylyx is a commercial-stage biotechnology company whose only product revenue is from AMX0035, marketed as RELYVRIO in the U.S. and ALBRIOZA in Canada for ALS. The company is also developing AMX0035 for PSP and Wolfram syndrome, and AMX0114 for neurodegenerative diseases.
Financial performance
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Net product revenue | $102.7 | $0.3 | $272.3 | $0.3 |
| Cost of sales | $5.2 | $0.2 | $16.1 | $0.2 |
| Research and development | $30.0 | $24.9 | $83.3 | $70.6 |
| Selling, general and administrative | $48.7 | $29.9 | $136.1 | $86.3 |
| Operating income (loss) | $18.7 | $(54.7) | $36.9 | $(156.7) |
| Net income (loss) | $20.9 | $(53.8) | $44.5 | $(155.7) |
| Diluted EPS | $0.30 | $(0.92) | $0.63 | $(2.77) |
Q3 operating margin was approximately 18.2% and nine-month operating margin approximately 13.5%, calculated from reported figures. Reported cost of sales was low relative to revenue partly because inventory costs incurred before regulatory approvals were expensed to R&D; management expects cost of sales to rise and gross margin to decline as that inventory is depleted. Interest income was $4.2 million in Q3 and $11.8 million for nine months, up from $0.6 million and $1.1 million, respectively.
At September 30, 2023, cash and cash equivalents were $135.3 million and short-term investments were $219.8 million, totaling approximately $355.0 million. Current assets were $434.1 million and current liabilities $45.6 million. Total liabilities were $48.2 million, principally lease liabilities; the filing reports no borrowings. Stockholders’ equity was $418.4 million. Accumulated deficit was $309.7 million.
For the first nine months, operating activities used $1.6 million of cash, compared with $130.2 million used in the prior-year period. Net income and non-cash stock compensation were offset largely by working-capital investment, including a $46.6 million inventory increase and a $14.0 million increase in accounts receivable. Investing activities provided $71.1 million, mainly from investment maturities; financing activities provided $3.3 million. Cash, cash equivalents and restricted cash increased $72.7 million to $136.0 million.
Changes versus the prior comparable period
- Commercial sales drove net revenue to $102.7 million in Q3 and $272.3 million year to date, versus $0.3 million in each 2022 period, when U.S. RELYVRIO sales had not yet launched.
- The company shifted from substantial operating and net losses to income in both 2023 periods.
- Q3 R&D increased 21% and SG&A increased 63% year over year. For nine months, they increased 18% and 58%, respectively, reflecting staffing, commercialization, PSP trial preparation, public-company costs and preclinical activity.
- Inventory rose to $56.7 million from $9.8 million at year-end 2022, including $24.3 million classified as long-term. Accounts receivable increased to $29.4 million from $15.3 million.
Outlook, risks and unusual items
- Management expected existing cash, investments and U.S. and Canadian product revenue to fund anticipated operating and capital needs for at least 12 months after filing, while cautioning that assumptions could prove inaccurate. No specific revenue or earnings guidance is provided.
- Topline results from the 664-participant Phase 3 PHOENIX ALS trial were expected in Q2 2024. The trial is important to additional regulatory support; the filing warns that unfavorable results could jeopardize existing approvals, and the company previously stated it may voluntarily remove the product from the market if PHOENIX is unsuccessful.
- In October 2023, the EMA’s CHMP confirmed its negative opinion on the EU marketing application after re-examination. The European Commission was expected to make the final decision by year-end 2023. French compassionate access was granted in October.
- Management planned to initiate the global Phase 3 ORION PSP trial by the end of 2023; HELIOS Wolfram syndrome topline results were anticipated in 2024. AMX0114 IND-enabling studies were scheduled for completion in 2024.
- The company had approximately $211.1 million of commitments for raw materials and manufacturing services, expected to be paid through 2028. It also recorded $3.1 million in royalty expense for the first nine months; no further royalties remained to accrue under the ALS Association and ALS Finding a Cure agreements.
- Key risks include dependence on AMX0035 and successful commercialization, PHOENIX outcomes and post-marketing obligations, reimbursement and market acceptance, manufacturing and supply-chain reliance, and the EU regulatory outcome. The filing reports no material legal proceedings. Management said disclosure controls were effective and reported no material internal-control changes during the period.
Investor facts to verify
- Subsequent PHOENIX results and regulatory responses in the U.S. and Canada, including any effect on existing product authorizations.
- Final European Commission decision following the CHMP’s negative opinion.
- Sales trajectory, payer access and gross-to-net adjustments; Q3 net revenue followed $9.2 million of gross-to-net deductions.
- Inventory utilization, shelf life and the expected increase in cost of sales as pre-approval inventory is depleted.
- Cash use, manufacturing commitments, and whether management’s stated liquidity runway remains achievable as commercialization and clinical spending continue.