Amylyx Pharmaceuticals, Inc. annual report, FY2023

Amylyx Pharmaceuticals, Inc. — FY2023 Form 10-K

Reporting period: Fiscal year ended December 31, 2023. This is an annual filing; the provided filing text does not give a clear standalone Q4 income statement or Q4 revenue figure.

Business context

Amylyx is a commercial-stage biotechnology company focused on neurodegenerative diseases. Its sole commercial product is AMX0035, sold as RELYVRIO in the U.S. and ALBRIOZA in Canada for ALS. The company is also developing AMX0035 for progressive supranuclear palsy (PSP) and Wolfram syndrome (WS), and AMX0114 for ALS.

Financial highlights

Metric	FY2023	FY2022
Net product revenue	$380.8 million	$22.2 million
Cost of sales	$25.4 million	$3.0 million
Research and development	$128.2 million	$93.5 million
Selling, general and administrative	$188.4 million	$127.1 million
Operating income (loss)	$38.8 million	$(201.3) million
Net income (loss)	$49.3 million	$(198.4) million
Operating cash flow	$11.9 million	$(179.9) million

• Revenue was $431.4 million before $50.6 million of gross-to-net adjustments. Revenue growth primarily reflects full-year sales in 2023 versus launches in Canada in July 2022 and the U.S. in October 2022.
• Net income per diluted share was $0.70, compared with a $3.39 loss per share in 2022. The company reported its first annual profit, while accumulated deficit remained $304.9 million.
• Reported operating margin was approximately 10.2% and net margin approximately 12.9%. Cost of sales excludes $11.2 million of 2023 product costs expensed before regulatory approval; management expects cost of sales to rise and gross margin to fall as that inventory is depleted.
• Cash, cash equivalents and short-term investments totaled $371.4 million at year-end; current assets were $464.7 million and current liabilities $82.0 million. Working capital was approximately $382.6 million.
• No outstanding borrowings are disclosed in the provided financial statements. Operating lease liabilities were $4.2 million. Manufacturing and raw-material purchase commitments totaled approximately $195.0 million, payable through 2028.
• Cash increased by $107.7 million during the year. Financing activities provided $3.5 million, compared with $431.8 million in 2022, when IPO and follow-on offerings generated most financing cash. Investing activities provided $92.1 million, largely reflecting investment maturities net of purchases.

Material changes and developments

• Revenue increased substantially and results shifted from a large loss to profit as commercial sales expanded. Operating expenses also rose 53% to $342.0 million, including higher commercial spending, payroll, clinical-trial costs and stock-based compensation.
• Cash from operations turned positive, but working-capital use included a $73.1 million increase in inventory and a $24.7 million increase in receivables. Inventory reached $83.3 million, including $45.0 million classified as long-term; the company recorded $3.3 million of inventory write-downs in 2023.
• The company’s 48-week Phase 3 PHOENIX ALS trial enrolled 664 participants. The filing expected topline results during or before Q2 2024. Health Canada’s conditional authorization requires PHOENIX data, and U.S. approval includes post-marketing studies.
• In October 2023, the EMA’s CHMP confirmed its negative opinion on the EU marketing application; the European Commission confirmed the decision in January 2024. Amylyx said it would seek EU approval again if PHOENIX results are supportive.
• The global Phase 3 ORION PSP trial began in December 2023, with topline results anticipated in 2025 or 2026. The Phase 2 HELIOS WS trial began dosing in 2023, with results anticipated in 2024. The company expected to file an IND for AMX0114 and enter clinical testing in 2024.

Outlook, risks and unusual items

• Management stated that commercial revenue and year-end cash, cash equivalents and short-term investments were expected to fund anticipated operating and capital needs for at least 12 months after the filing date. This is an estimate based on assumptions, not a guarantee; the company expects substantial ongoing development and commercialization spending.
• PHOENIX is a major near-term clinical and business risk. The filing states that unfavorable results could affect U.S. and Canadian approvals, prompt voluntary or regulator-required product withdrawal, and undermine EU resubmission prospects. At a 2022 FDA advisory committee meeting, the company said it would consider removing the product if PHOENIX were unsuccessful.
• Other material risks include reliance on one commercial product, uncertain ongoing market acceptance and reimbursement, competition, the early commercial track record, and dependence on third-party manufacturers. Key AMX0035 ingredients and manufacturing/packaging arrangements include single-source dependencies.
• Gross-to-net revenue estimates involve judgment; three customers represented approximately 81% of 2023 gross product revenue. Deloitte identified estimation of gross-to-net adjustments as a critical audit matter.
• A putative securities class action filed February 9, 2024 alleges misleading statements about RELYVRIO’s commercial results and prospects. Amylyx intends to defend the case; the company said the potential impact could not then be estimated.
• The company reported effective disclosure controls and internal control over financial reporting, and the auditor issued unqualified opinions on the financial statements and internal controls.

Most important facts for investors to verify

• PHOENIX results and subsequent FDA, Health Canada and EU regulatory actions, including whether Canadian conditions and U.S. post-marketing requirements are satisfied.
• Quarterly and geographic RELYVRIO/ALBRIOZA sales trends, net pricing, prescriptions, customer concentration, gross-to-net accruals and reimbursement access.
• Cash use, inventory turnover and remaining pre-approval inventory, including the expected margin impact as inventory is depleted.
• Whether the $195.0 million manufacturing and raw-material commitments, single-source supply arrangements and clinical-program spending remain manageable against liquidity and revenue.
• Progress, costs and trial timelines for ORION, HELIOS and AMX0114, and any changes in management’s stated cash runway.
• Developments in the securities litigation and any resulting financial, operational or disclosure consequences.