Amylyx Pharmaceuticals, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Financial statements are unaudited. Amylyx is a commercial-stage biotechnology company whose marketed product, AMX0035, is sold as RELYVRIO in the U.S. and ALBRIOZA in Canada for ALS.
Financial performance and liquidity
Amounts below are in millions, except per-share data.
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Net product revenue | $71.4 | — |
| Cost of sales | $5.3 | — |
| Research and development | $24.2 | $21.5 |
| Selling, general and administrative | $44.0 | $26.4 |
| Operating loss | $(2.1) | $(47.8) |
| Net income (loss) | $1.6 | $(47.8) |
| Diluted earnings (loss) per share | $0.02 | $(0.93) |
| Net cash used in operating activities | $(5.1) | $(40.6) |
- Revenue was $84.6 million gross, less $13.1 million of gross-to-net adjustments. The ending reserve for those adjustments was $11.4 million.
- Derived gross profit was $66.1 million, or approximately 92.6% of net revenue. This reported margin benefited from approximately $3.2 million of product costs expensed before regulatory approval that were excluded from current-period cost of sales; management expects cost of sales to rise and gross margin to decline as that inventory is depleted.
- R&D expense increased 13% year over year, while SG&A increased 67%, primarily reflecting added personnel, commercialization activity and public-company costs. Interest income rose to $3.7 million from $0.1 million.
- Cash, cash equivalents and short-term investments totaled $345.7 million at March 31, 2023, compared with $346.9 million at December 31, 2022. Current assets were $389.1 million and current liabilities $51.6 million. No borrowings are reported; operating lease liabilities totaled $5.8 million.
- Cash and restricted cash increased $52.0 million during the quarter. Investing activities provided $56.0 million, principally from investment maturities; financing activities provided $1.0 million, chiefly from employee equity exercises. Operating cash use was $5.1 million.
Material changes and business developments
- Q1 2023 was Amylyx’s first reported profitable quarter, with $71.4 million in product revenue versus no product revenue in Q1 2022. Net income included $3.7 million of interest income; operating activities still used cash.
- PHOENIX, the Phase 3 ALS trial, completed enrollment at 664 participants in February 2023. Topline results are expected in mid-2024.
- AMX0035’s European marketing application remained under EMA review. Management expected a CHMP opinion mid-year and a decision in the third quarter of 2023 at the earliest.
- Management planned a global pivotal Phase 3 trial in progressive supranuclear palsy (PSP). The HELIOS Phase 2 Wolfram syndrome study dosed its first participant in April 2023, after quarter-end, with topline results expected in 2024.
- At March 31, inventory was $23.1 million, including $10.1 million of long-term raw materials. The company recorded $2.5 million of royalty expense in cost of sales under grant agreements.
Outlook, risks and contingencies
- Management said existing cash, investments and early product revenue were expected to fund anticipated operating and capital needs for at least 12 months from the filing date. This is an estimate based on assumptions; the company expects significant commercialization and development spending and may need additional capital.
- There is no numeric revenue or earnings guidance in the filing. Management expects R&D and SG&A expenses to increase as it develops additional indications, runs trials and supports commercialization.
- PHOENIX is a key clinical and regulatory risk: its results may affect Canadian approval conditions and could lead regulators to restrict or withdraw existing approvals; the company also disclosed the possibility of voluntary withdrawal if results are unsuccessful.
- Other principal risks include uncertain market acceptance and reimbursement, competition, reliance on third-party manufacturing and supply, potential supply-chain disruption, and the pending EU review. U.S. approval includes post-marketing study requirements; Canadian authorization is conditional.
- The company reported no material legal proceedings and no material subsequent events requiring disclosure. It reported effective disclosure controls as of March 31, 2023 and no material change in internal control over financial reporting during the quarter.
Key facts for investors to verify
- Whether RELYVRIO and ALBRIOZA revenue, gross-to-net adjustments and payer coverage develop as expected; Q1 revenue was the first full reported quarter of product sales.
- How cost of sales and gross margin evolve as pre-approval inventory is consumed, and whether royalty and patient-access costs change.
- PHOENIX topline timing and results, and the implications for U.S. and Canadian regulatory status.
- EMA review outcome and timing, along with the planned PSP trial and Wolfram syndrome study progress.
- Cash burn, commercialization and trial spending, and whether the stated at-least-12-month runway remains reasonable as expenses grow.