Amylyx Pharmaceuticals, Inc. — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 30, 2022. Unaudited financial statements; amounts below are in U.S. dollars. Amylyx is a commercial-stage biopharmaceutical company focused on AMX0035 for ALS, marketed as ALBRIOZA in Canada and RELYVRIO in the U.S.
Financial results and liquidity
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $0.345m | $0.285m | $0.345m | $0.285m |
| Operating expenses | $55.0m | $23.2m | $157.1m | $54.7m |
| Operating loss | $54.7m | $22.9m | $156.7m | $54.4m |
| Net loss | $53.8m | $23.1m | $155.7m | $59.6m |
| Net loss per share, basic and diluted | $0.92 | $3.42 | $2.77 | $9.20 |
- Q3 product revenue was $0.345m from Canadian ALBRIOZA sales, which began in July. U.S. RELYVRIO sales began after quarter-end, on October 24. Q3 gross profit was approximately $0.173m, or 50% of revenue, calculated from reported revenue and cost of sales; management expects gross margin to decline as lower-cost pre-commercial inventory is depleted.
- Research and development expense rose 94% year over year in Q3 to $24.9m; selling, general and administrative expense rose 189% to $29.9m. For the nine-month period, R&D increased 130% to $70.6m and SG&A increased 259% to $86.3m, reflecting PHOENIX trial, launch-readiness, hiring, stock compensation and public-company costs.
- Cash and cash equivalents were $107.7m and short-term investments were $54.9m at September 30, totaling $162.6m. Total assets were $181.4m; liabilities were $37.4m. No borrowings or convertible notes were outstanding. Operating lease liabilities totaled $6.8m.
- Nine-month operating cash use was $130.2m, versus $46.6m in 2021; investing cash use was $10.8m versus $49.2m; financing provided $199.6m versus $159.6m. Financing included $196.4m net proceeds from the January IPO. Cash, cash equivalents and restricted cash ended at $108.5m.
- Accumulated deficit was $311.5m. The company reported no material legal proceedings and no dividends.
Material changes and notable items
- FDA approved RELYVRIO for ALS in September 2022; Health Canada granted conditional authorization for ALBRIOZA in June. Amylyx began Canadian sales in July and U.S. sales in October.
- The January 2022 IPO converted all outstanding preferred stock to common stock. Common shares outstanding were 58.5m at September 30; 66.3m were outstanding as of November 7, including shares issued in a subsequent offering.
- On October 11, Amylyx completed a follow-on offering of 7.70m shares at $32 per share, generating approximately $230.8m net proceeds.
- Approximately $25.7m of pre-approval inventory was expensed as R&D. Capitalization of eligible ALBRIOZA inventory began after Health Canada authorization.
- Adoption of lease accounting standard ASC 842 added right-of-use assets and lease liabilities; the company said adoption did not materially affect operating results.
Outlook, commentary and risks
- Management expects cash, investments, follow-on offering proceeds and product revenue to fund operating and capital requirements for at least 12 months after filing. This estimate depends on assumptions, including product sales; management says it can reduce expenses if revenue falls short.
- Management reported encouraging early U.S. prescription and enrollment activity but said it could not yet predict how much would translate into revenue. Canadian provincial reimbursement negotiations and work with private payors were ongoing.
- The EU marketing application remained under EMA review, with major objections outstanding. Amylyx expected a decision in the first half of 2023; the CHMP also planned a neurology advisory meeting. PHOENIX enrollment was complete in the U.S. and ongoing in Europe, with topline results anticipated in 2024. The trial is central to ongoing regulatory requirements, including Canada’s conditional authorization.
- FDA approval followed mixed advisory committee deliberations and concerns about statistical analyses and interpretation of survival results. FDA post-marketing requirements include carcinogenicity, drug-interaction, and kidney- and liver-impairment studies. Amylyx stated it may voluntarily withdraw the product if PHOENIX is unsuccessful; regulators could also require withdrawal.
- Key risks include dependence on AMX0035, uncertain launch uptake and reimbursement, clinical and regulatory outcomes, reliance on third-party manufacturers and suppliers, potential supply-chain disruption, and continued operating losses. The filing also cites COVID-19, inflation, geopolitical uncertainty and capital-market volatility.
- The company reported effective disclosure controls as of September 30. It said new controls for product revenue and commercial inventory were implemented during the quarter.
Investor verification priorities
- Track PHOENIX timing, enrollment and results, and implications for FDA and Health Canada approval conditions and continued marketing.
- Verify U.S. and Canadian prescriptions, net revenue, payer coverage, patient assistance costs and the rate at which launch interest converts to sales.
- Monitor EMA review milestones, outstanding objections and the expected decision timing.
- Reconcile cash burn and operating expense growth against the stated runway, including the impact of commercial build-out and stock-based compensation.
- Assess cost of sales and gross-margin trends as pre-commercial inventory is depleted, and confirm manufacturing capacity and supply continuity.
- Consider dilution from the October offering and equity compensation; compare the reported share counts and subsequent-event disclosures.