Good morning, ladies and gentlemen, and welcome to the Amicus Second Quarter 2019 Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.

I would like to turn the conference over to your host, Ms. Sara Pellegrino, Vice President of Investor Relations and Corporate Communications. You may begin..

Good morning. Thank you for joining our conference call to discuss Amicus Therapeutics' second quarter 2019 financial results and corporate highlights. Speaking on today's call, we have John Crowley, Chairman and Chief Executive Officer; Bradley Campbell, President and Chief Operating Officer; and Daphne Quimi, Chief Financial Officer.

Also joining for Q&A are Dr. Jay Barth, Chief Medical Officer; Dr. Hung Do, Chief Science Officer; and Dr. Jeff Castelli, Chief Portfolio Officer and Head of Gene Therapy.

As referenced on slide 2, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to our business, as well as our plans and prospects. Our forward-looking statements should not be regarded as representation by us that any of our plans will be achieved.

Any or all of the forward-looking statements made on this call may turn out to be wrong and can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. You are cautioned not to place undue reliance on any forward-looking statements, which speak only to the date hereof.

All forward-looking statements are qualified in their entirety by the cautionary statement and we undertake no obligation to revise or update this presentation and conference call to reflect events or circumstances after the date hereof.

For a full discussion of such forward-looking statements and the risks and uncertainties that may impact them, we refer you to the Forward-Looking Statements and Risk Factors section of our annual report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission and the quarterly report on Form 10-Q for the quarter ended June 30, 2019 to be filed today.

At this time, it is my pleasure to turn the call over to John Crowley, Chairman and Chief Executive Officer.

John?.

Great. Thanks, Sara. And welcome everyone to our second quarter 2019 results conference call. I'm pleased today to host this conference call to describe more fully with our team the great progress that we've made at Amicus during the second quarter and early into the third quarter this year.

It was a great quarter for Galafold, in what continues to be one of the most successful launches for a rare disease medicine ever.

This success for Galafold now puts us on a clear path to achieving our commercial objectives in 2019, but it also lays the foundation for this oral precision medicine to reach as many patients as quickly as possible for many years to come.

Galafold continues to be the cornerstone of our success at Amicus and will also support the advancement of our robust pipeline, including AT-GAA for Pompe disease and what is now the industry's largest rare disease gene therapy portfolio, which are all highlighted on slide 3. So, let me go through the highlights here.

First, there has been continued strength in global revenue and adoption for Galafold, with Q2 being the highest quarter of growth since launch. We are reiterating our full-year guidance of $160 million to $180 million and we announced this morning that we now expect to surpass our target of 1,000 patients on Galafold well before the end of this year.

All of the global launch metrics that we track are on target or exceeding target, including new patient starts, compliance and adherence to therapy, reimbursement and access, new country approval and a broadening prescriber base among others.

Specifically, with respect to compliance and adherence, we continue to see exceptionally high rates, with Galafold continuing now at more than 90% globally. Indeed, the vast majority of patients who have gone on to Galafold remain on Galafold for several years now in some cases.

We have also captured 24% of the global market share of treated amenable Fabry patients with an increasing proportion of previously untreated patients now driving that growth, which Brad will cover further in this call.

Second highlight is the momentum with the enrollment in the opening of new sites in our global Pompe pivotal study known as the PROPEL study. And now, with the majority of patients enrolled in this PROPEL study, we are well on track to complete enrollment by year-end.

Third, we just last week announced the positive two-year interim clinical results for our CLN6 Batten disease gene therapy, showing the potential to halt the progression of a devastating fatal neurologic disease in children. Next is the expanded Penn collaboration, which we announced in Q2 and which we will also highlight in this call today.

Again, this provides Amicus with the industry's largest rare disease gene therapy portfolio, including the majority of all lysosomal disorders and more prevalent rare diseases to this collaboration with UPenn.

And finally, I'll highlight the strength of our balance sheet which we added to in Q2, with the $200 million equity financing to further advance our portfolio and add important new investments in biologics and gene therapy manufacturing, while providing cash runway into 2021.

And in addition, as we highlighted in the press release this morning, we've entered into an agreement with Ultragenyx to in-license exclusive Japanese rights to Mepsevii for MPS VII, a rare lysosomal disorder in Japan.

There is true alignment here between both Amicus and Ultragenyx in the best interest of people living with MPS VII in Japan where we believe that we can leverage our existing Amicus infrastructure, relationships and experience in clinical development, regulatory approvals and commercialization within the lysosomal disorders, and I'll highlight that further on this call.

So, with that overview, let me go ahead and hand the call over to Bradley Campbell, our President and Chief Operating Officer, to highlight the very successful Galafold launch that continues.

Brad?.

Great. Thank you, John. Good morning, everyone. Let me begin on slide five with our snapshot of the Galafold launch through June 30. We remain very pleased with the strong revenue growth this quarter, adoption and launch trajectory of Galafold.

And as John noted, Galafold continues to be one of the most successful rare disease drug launches ever and we're confident that this strengths will continue throughout the remainder of 2019 and beyond. Our second quarter revenue was $44.1 million, which is a year-over-year increase of approximately 107% from the second quarter of 2018.

This was the highest quarter growth since launch. We continue to see exceptionally strong momentum in new countries, including the US and Japan, as well as in our earlier launch countries. We have pricing and reimbursement secure in 24 countries around the world.

And following the recent approval in Argentina, we're now preparing to launch in our first-ever market in Latin America, which is a very important geography for us where we see the potential to deliver Galafold to many more Fabry patients living with amenable mutations.

Additionally, we see continued strength of the approved Galafold label, with 348 amenable variants included in the US and 367 amenable mutations in Europe, with most other labels based on MAA submission in the EU.

And, remember, we had around 260 new patients in the original European label, so we've added almost 100 new mutations to the label since launch, and that number should continue to grow. Moving now to slide six, I'll provide a little bit more detail on the positive momentum across all key global commercial metrics we're focusing on in this quarter.

At the global level, we estimate Galafold now has approximately 24% global market share of treated amenable patients, which is up from 18% in the first quarter as we continue to add new switch patients as well as previously untreated patients to Galafold.

Next, as John mentioned, compliance and adherence to this oral precision medicine continued to exceed 90% globally. This is really important and we think continues reflect that physicians and patients are having a strong experience with Galafold.

In the United States, we're now approaching a year to the launch and continue to see steady growth from a widening prescriber base of now more than 100 physicians. We also see continued broad reimbursement coverage, along the shorter time from prescriptions to patients receiving drug.

In our international markets, we continue to see strong growth from the EU 5 countries, as well as significant contribution from smaller and midsize markets like Australia, Canada, the Nordics and beyond. And in Japan, we're on track to deliver all of our full year objectives as well.

Globally, we're also very encouraged by the increasing contribution from previously untreated patients, which are now breaking out here for the first time. As of June 30, on a global basis, 64% of patient on Galafold have switched from enzyme replacement therapy and 36% were not previously treated.

Again, this trend is right on target with our strategy for higher initial adoption in switch patients at launch, followed by increasing penetration into the population of diagnosed untreated patients.

So, with the introduction of Galafold to the treatment armamentarium for Fabry disease, we now have grown the treated population by hundreds of patients.

In the medium-term, we see this mix approaching 50-50 between switch and previously untreated patients; and in the longer term, we think the vast majority of Galafold patients could actually have been treatment naïve prior to the launch of Galafold.

We believe that this trend reflects the shifting paradigm globally where Galafold is increasingly becoming a first-line standard of care treatment for Fabry patients with amenable mutations.

And let me just finish by reiterating that new patient starts continue to be very strong and we now expect to exceed our target of 1,000 patients on Galafold well before the year-end. Let me turning now to slide 7 and our comments on our quarterly revenue.

Just as we saw in 201,8 the first half of 2019 has been in line with our expectations for moderate growth in first quarter and higher growth in second quarter. Again, these trends are consistent with Galafold adoption and ordering patterns that we've seen over the past few years.

And while we don't give quarterly guidance, I'll note that, as in previous years, we do continue to expect Galafold revenue reflect non-linear growth in the summer months, with those 90-day orders of this oral precision medicine placed before vacation and holidays, especially in Europe.

And we expect growth to pick up again in the fourth quarter of this year. Turning now to our guidance on slide 8, with the strength in the commercial metrics I just described, we remain highly confident in our guidance range of $160 million to $180 million for the year.

Given the strong trajectory to date, we now expect again we'll hit that 1000-plus patient target well before the end of 2019.

And as we highlighted on last quarter's call and we will reiterate again today, with the majority of our sales continuing to come from outside the United States, we do expect modest foreign exchange headwinds throughout the rest of the year, which we think puts us in the reportable revenue range in the middle of this $160 million to $180 million guidance range.

With this strong momentum, we also remain very confident that Galafold will achieve $500 million in sales globally by 2023. And finally, on slide 9, we continue to believe that Fabry disease may be one of the most under and misdiagnosed human genetic disorders in the world, with a potential to reach $1 billion in sales in peak for Galafold.

The global Fabry market was about $1.4 billion last year, with continued growth expected in the Fabry population, particularly through the increase of newborn screening and other diagnostic initiatives which we are continuing to invest in, as well as recent extension of our Galafold IP that now covers treatment methods through the year 2038.

We're even more confident in the potential to impact thousands of people living with Fabry disease who are amenable to this novel precision medicine. So, with that, let me turn the call back to John to discuss our AT-GAA program in Pompe as well as our gene therapy portfolio.

John?.

Great. Thanks, Bradley. So, here on slide 11, as we look to our Pompe program, I'd like to take a moment to highlight AT-GAA and the PROPEL study as shown in the schematic on this slide, which has now been studied more than a majority enrolled to include both ERT switch and ERT naïve patients.

There has been great interest from patients and physicians and growing momentum here, especially following the two-year data presented at the World Symposium earlier this year, as well as the breakthrough therapy designation, or BTD, granted by the US FDA in the first quarter for AT-GAA and late onset Pompe disease.

This is the first second-generation therapy as well as the first therapy for Pompe disease ever to receive this important BTD designation, with several key features as outlined on the slide. Moving to slide 12, let me highlight here the very successful execution of our Amicus teams around the world in enrolling the pivotal PROPEL study.

We are now active in 29 countries. We plan to include all leading global Pompe treatment centers to ensure a broad depth of physician and patient experience around the world. We are on track to complete enrollment by year-end, with top line data targeted for the first half of 2021.

The PROPEL study, together with the ongoing Phase I/II to study support our strategy to advance AT-GAA as quickly as possible, with the potential, we believe, to become the new standard of care for people living with Pompe disease.

As a reminder, our base case remains that the pivotal PROPEL study will be the basis, together with additional data that we've collected in the Phase I/II study, to support the full approval of AT-GAA. On slide 13, I'll summarize the key accomplishments for the AT-GAA program in 2019 and reiterate a number of our objectives.

Year-to-date, we have presented additional Phase I/II data out to 24 months, again, earlier this year at the World Symposium in Orlando. We were granted BTD and we have passed the halfway mark on target enrollment in our pivotal study. For the remainder of this year, we are on track to achieve target enrollment in the PROPEL study.

We also plan to present six-month safety and functional data from most all of the patients in the fourth cohort, as well as the complete 24-month data from our first three cohorts in our Phase I/II study at the World Muscle Society in Copenhagen in early October. We're also on track to report natural history data this year.

We continue to plan supportive studies including the initiation of our important pediatric study which we expect to begin in the second half of this year.

And on the manufacturing front, an important use of proceeds from a recent equity financing is to accelerate the agreed-upon CMC requirements and the very important related manufacturing work together with our partners at WuXi Biologics.

And while we engage with regulators frequently, I'll remind everybody that we will not be providing any color or expectations on any pending or future regulatory interactions until after they have occurred and only if they materially impact our assumptions from our base case.

We continue to be extremely excited about AT-GAA as well as our preclinical Pompe gene therapy program to build what we believe could be the largest and most valuable franchise in the industry, with the potential to offer solutions to all patients living with Pompe disease globally.

Moving to slide 14, let me provide some more color on our recent deal with Ultragenyx where, again, we have in-licensed exclusive Japanese rights to Mepsevii for MPS VI in Japan. There is true alignment here, again, between both Amicus and Ultragenyx in advancing a treatment and in the best interest of MPS VI community in Japan.

With our existing Amicus infrastructure, relationships and experience in clinical development, regulatory approval and commercialization in the lysosomal field, we believe we can leverage our experience in Galafold commercialization and Fabry and Pompe clinical development to support what is a very small number of patients in an investigator-sponsored study.

This small study in Japan, together with the existing data package from previously completed clinical studies that has supported Mepsevii approvals in other countries, is expected to support a JNDA submission.

There is no upfront payment here and there will be no material impact to our budget assumptions to bring forward this new program, which we believe has the potential to make a very meaningful impact for people living with MPS VI in Japan.

I commend Dr Emil Kakkis and the team at Ultragenyx for their unwavering commitment to the highest quality science and to patients and we're happy to be their partner for this mission in Japan.

Moving on now to slide 16, I'll highlight here our industry-leading portfolio of gene therapies for rare diseases, which we've assembled in less than a year to combine the leading gene therapy technologies, products and minds in this field. We added significantly to this portfolio during the second quarter, with the expanded agreement with Dr.

Jim Wilson and the University of Pennsylvania that's detailed on slide 17. As you'll see here on slide 17, this expanded collaboration with UPenn reflects the extraordinary scientific capabilities at Amicus as well as the success that we've seen with the work that we've done already in collaboration with Dr. Wilson and his team at UPenn.

Underlying this collaboration is the guiding objective to combine the Amicus protein engineering platform with the Penn gene transfer technologies and capabilities to replicate the initial preclinical success we've had so far with preclinical proof of concept for our gene therapy in Pompe disease.

Again, there are three elements to this collaboration. First, Amicus acquired the right to a majority of all lysosomal disorders for all next-generation Penn gene therapy technologies. Second, the existing collaboration, which we announced in October of 2018, has now been expanded from 3 to 6 immediate programs for rare genetic diseases.

With the extension of the agreement and existing programs in Pompe disease, Fabry disease and CDKL5 deficiency disorder, we now have these diseases – Niemann-Pick Type C, MPS IIIB, as well as the next-generation program for MPS IIIA. And finally, the third element of this program is the next-generation research agreement here.

This provides Amicus with exclusive disease-specific worldwide rights to collaborate with the gene therapy program at Penn to develop potentially disruptive new gene therapy platform technologies and programs for 12 additional prespecified rare diseases, including more prevalent rare disorder populations, such as Rett syndrome, Angelman Syndrome, myotonic dystrophy and select other muscular dystrophies, where in many cases we can incorporate the Amicus protein engineering expertise in targeting mutations to enable cross correction to many of them, while also utilizing Penn's next-generation gene delivery technology.

Turning now to slide 18, in addition to the significant momentum across all of our Penn programs, we also reported our first set of clinical data for our gene therapy platform license from Nationwide Children's.

The details of this data set were highlighted in a press release and conference call last week, but I'll briefly highlight the five key takeaways that give us great excitement in the potential for our gene therapy for CLN6 Batten disease as well as our broader platform of intrathecal AAV gene therapies.

First is the meaningful impact that we saw in motor and language function again in children with this fatal neurologic disease that robs them rapidly of their ability to walk, speak, see and think. Second is the evidence now of disease stabilization in seven of the eight children with data and up to approximately two years post gene transfer.

Third is the newly available data on an untreated natural history cohort where all 14 out of 14 patients progressively lost language and motor function over the same period of time.

Indeed, it's remarkable that many of these children treated with gene therapy in our study continue to be able to walk and speak when the natural history suggests that they would have lost the ability to speak and moved into a wheelchair or have become bedridden.

Fourth is the compelling data comparing siblings living with CLN6 Batten disease including three children treated in the study who had untreated siblings, as well as two pairs of siblings that were treated in this study.

And fifth is the favorable safety profile seen with the intrathecal dose of AAV that was administered to all of these patients in the study.

We also believe the interim clinical results validate the broad potential of the Amicus intrathecal AAV platform in other forms of Batten disease, including our own gene therapy for CLN3 Batten disease which is in the clinic And we remain on track to enroll the high dose cohort and to complete enrollment in this clinical study for CLN3 Batten disease by the end of this year.

And again, as we announced a few weeks ago, we have partnerships now in place with the leading contract manufacturing organizations in gene therapy, in addition to plasmid suppliers for our CLN6 gene therapy program and initial clinical and preclinical gene therapy programs.

So, with that important summary, let me go ahead now and turn the call over to our Chief Financial Officer, Daphne Quimi, who will review our second quarter 2019 results.

Daphne?.

Thank you, John. And good morning, everyone. Our financial overview begins on slide 20 with our income statement for the three month period ending June 30, 2019. For the second quarter of 2019, we achieved Galafold revenue of $44.1 million which is 107% increase over the second quarter of 2018.

This includes year-over-year operational revenue growth measured at constant currency exchange rates of the 115%, offset by a negative currency impact of $1.7 million or 8%. Cost of goods sold includes manufacturing costs, as well as royalties associated with the sales of our product.

Cost of goods sold as a percentage of net sales was 12.2% in the second quarter of 2019 as compared to 14.7% for the prior year period. Cost of goods sold as a percent of revenue was favorable as Galafold revenue continues to grow in the United States where we do not owe royalties as well as other countries where we are subject to lower royalties.

We continue to make significant investments in R&D and manufacturing with the ongoing pivotal study and commercial scale up in our Pompe program as well as the expansion of our gene therapy portfolio and capabilities. During the second quarter of 2019, we recorded $71 million in R&D expense as compared to $34.7 million for the prior year period.

This increase was attributed to investments in our AT-GAA Pompe clinical program as well as the clinical and preclinical gene therapy programs that we added to the pipeline in the second half of last year.

Total selling, general and administrative expense for the second quarter of 2019 was $42.6 million as compared to $29.2 million for the prior year period. The increase represents the expanded geographic scope of the ongoing Galafold commercial launch, including launch activities in Japan and the United States.

Net loss for the second quarter of 2019 was $84.6 million or $0.36 per share as compared to a net loss of $61.8 million or $0.33 per share for the prior year period. And as of June 30, 2019, we had approximately 254.5 million shares outstanding. Moving on slide 21, a few comments about our current cash position and 2019 financial guidance.

Cash, cash equivalents and marketable securities totaled $575.7 million at June 30, 2019 compared to $504.2 million at December 31, 2018. The current cash position and total shares outstanding are inclusive of the June 2019 equity offering.

Looking at the remainder of 2019, we are reaffirming our full-year Galafold revenue guidance of $160 million to $180 million. Taking into account our anticipated investments as well as anticipated net cash generated from Galafold revenue, we expect to have approximately $400 million in cash on the balance sheet at the end of 2019.

This projected year-end cash balance reflects all ongoing investments in our operations, including Pompe manufacturing scale up and facilities including our new global research and gene therapy center of excellence in Philadelphia.

With our current cash position and anticipated net cash generated from Galafold's revenue, we have sufficient capital to fund ongoing operations into 2021. As we have noted in the past, potential future business development collaborations, pipeline expansion and investment in manufacturing capabilities may impact our future capital requirements.

This summarizes our key financials for the second quarter of 2019. Additional details can be found in our quarterly report on Form 10-Q. I'm happy to address any questions during the Q&A, but for now I'll turn it back to John..

Great. Thank you, Daphne. I will conclude this morning's call by highlighting the five key strategic priorities on slide 23 that we outlined at the beginning of the year, which we are on track to meet or exceed.

First, with the strength of our global launch of Galafold, we again are highly confident in our full-year 2019 guidance range of $160 million to $180 million.

Second, Pompe and our AT-GAA program continue to be a top priority, now with the majority of patients enrolled in our PROPEL pivotal study and with new data from our Phase I/II clinical study to be presented at the World Muscle Society in October.

Third, we've already reported the positive interim clinical data in CLN6 Batten disease clinical study and we remain on track to fully enroll the CLN3 Batten disease study this year. Our fourth goal is to achieve preclinical proof of concept for our Fabry gene therapy program as well as additional preclinical data for our Pompe gene therapy program.

This Pompe gene therapy program is advancing ahead of schedule and we anticipate selection of a clinical candidate in 2019 to move into IND-enabling studies. And finally, we are committed to maintaining our financial strength.

Our cash runway is sufficient to fund our operating plan into 2021, advancing us several years closer toward our 2023 vision to treat 5,000 patients and achieve $1 billion plus in global revenue. And then, on slide 24, a snapshot of the many milestones already achieved so far with many more to come throughout the remainder of this year.

So, with that, operator, I'll hand the call back to you for Q&A. Thank you..

[Operator Instructions]. Your first question comes from the line of Anupam Rama from JPMorgan. Your line is now open..

Hey, guys. Thanks so much for taking the question and congrats on the all the progress year. I was wondering if we could just revisit the CLN6 update from last week. And we've gotten this question a couple of times after the update.

Can you remind us of the scope of the natural history update we'll be getting later this year? And how should we be thinking about the age distribution in that natural history data set? Thanks so much..

Sure. Thanks, Anupam. I'll have Jay Barth, our Chief Medical Officer, to handle that..

Right now, we have the natural history data we presented on approximately 14 patients. That will continue to be the data set for now as we continue to expand that natural history data. That's a process that happen over time. So, it's hard to pin down exactly when we'll have larger numbers on that.

But from the natural history data that we have currently, there is a clear overlap of the ages of the patients in the treated cohort versus the natural history cohort.

That's the basis of the comparison that we showed between the two, in which all 14 of the natural history patients declined at least two points and reversed as opposed to just one of the eight treated patients over approximately two years, a clear differentiation..

Great. Thanks so much..

I'm sorry. [indiscernible] also comment on the ages, if we expect any future natural history setting. It will be a broad range of ages as we have now. The 14 natural history patients that we have now covers a broad age range that's similar to the treated patients.

And that will continue to be the case in the larger expanded natural history data set once we have that assembled. .

And it will also include quite a number of younger children as well..

Yes, the whole range of younger….

Yes.

Anupam, that makes sense?.

Yep. Great. Thanks so much for taking my questions. .

Thank you very much..

Your next question comes from the line of Ritu Baral from Cowen. Your line is now open..

Good morning, guys. Thank you for taking the question.

Can I start with some of the marketing strategies for Galafold? Now that your percentage of naïve patients seems to be growing and picking up momentum, is there a profile of the sort of early adopter treatment naïve patients? Are you doing anything to specifically target that population, given that they are going to be the ones to sort of likely sustain growth in the forward years?.

Bradley, please..

Sure, yeah. A couple of things. Thanks for the question. So, as a reminder, this is exactly the strategy that we outline at launch, which is focus on switch patients first. They are already – they're coming in every other week for their infusions or getting reimbursed for Fabry disease and that's the pattern we've seen in most markets.

And then, in the medium, longer-term start to see pick up in the diagnosed untreated patients. Certainly, that's part of our strategy. A couple of things to remember. Outside the United States, it really has to go through the physician populations.

I think there part of what you're seeing is, as the physicians get more comfortable in treating their patients, they are more and more willing to put naïve patients on. There is also a phenomenon where you have family members. [indiscernible] disease, you often have four or five diagnosed family members.

And so, we're seeing more and more siblings or parents and children coming on to therapy as one family member has a positive experience. So, I think there's definitely – there's kind of an organic growth going on there.

And in the United States, of course, you do have a different ability to educate patients, and so we're doing what I think many others in the industry do in terms of having educational meetings with physicians and patients. I think that's the way to provide a more direct education, if you will.

And all of those thing, I think, together, and in particular I think the positive experience that we can infer from the high compliance and adherence rates, it just gives the diagnosed untreated population more and more confidence in coming on to Galafold. .

Would it be – as you move forward, are you targeting maybe patient groups more or patient awareness campaigns or something like that?.

I think in the United States, we're certainly doing that. The compliance and regulatory framework outside the US prevents you from going directly to patient groups with that kind of information. But in the US, yes, we are. And you had number two around are there specific kind patients we're targeting.

And, look, what we've estimated in almost all of our major markets is there are roughly equal number of diagnosed untreated patients. So, very clearly, there are patients out there who meet the treatment guidelines who should be on treatment who, for whatever reason, were choosing not to.

And we think that small molecule like Galafold, with the growing body of evidence, real-world evidence becomes more and more appealing to that population..

Got it..

Just to add to that, we think with this treatment naïve population increasingly be an important part of the Galafold adoption if – in addition to the already diagnosed but untreated patients. It's also the newly diagnosed patients and also the misdiagnosed patients, people just discovering that they have Fabry disease.

And there, we're beginning pilot studies to look into IBS clinics, multiple sclerosis clinics where you see high rates of misdiagnosis for what is actually Fabry, we believe. So, I think lots more potential there.

And again, in line with the product characteristics of Galafold, the high adherence, compliance rates and the increasing awareness that Fabry disease really is one of the largest human genetic disorders..

That's super helpful. And then – so many questions. I'm going to be picky.

Can you go over for us the statistics around the PROPEL study, especially around superiority? Just can you confirm that the comparison is – if it's to baseline or across arms? And then, what are your powering assumptions?.

Sure. I'm not sure what we've disclosed publicly, but I'll let Jeff speak to that. Jeff is in our gene therapy center of excellence and research center down in Philadelphia with Hung. So, Jeff, I'll let you speak to why this study is so well powered..

Sure. Thanks, John. And thanks, Ritu, for the question. So, the power for PROPEL, it's approximately a 100 patient study. It is stratified by naïve and switch and it's 2:1 stratification within naïve and switch, AT-GAA to standard of care ERT. The powering assumptions were based on our Phase I/II study data on six minute walk.

And those switch and naïve patients will be looked at our – effect that we had in our treated patients. We compare that to what's been reported out in the medical literature for patients either starting on standard of care or treated longer-term with standard of care which would be comparable to the switch patients.

And based on that, we came up with a set of assumptions that gave us over 90% power to show superiority for AT-GAA versus standard of care on six minute walk..

So, it's a cross arm comparison, not compared to baseline..

Correct. So, in a way, we'll be looking at each patient's change from the time they start the study to complete 12 months, but then you're actually comparing across treatments. You're looking at their relevant change from start of treatment to end for each patient..

Got it. And then, sorry, one last very quick question for Daphne. Daphne, I think across all my [indiscernible] these companies, I feel like you guys have been hit most by forex and it might tie into the uptake that – the very, very robust uptake you guys have had in the UK and the pound and Brexit and your headquarters.

Any impact that we should be thinking about through the end of the year in case you actually know what's going on?.

Yeah. Foreign currencies are very hard to forecast and predict. But we do have a very large percent of our revenue comes from euro based and pound based transactions. So, that's why we seem to be hit as you said on a larger part with foreign currency. We do have a natural hedge in the UK because our headquarters are there.

So, on a net P&L basis, there is a natural hedge there. We do have a larger exposure on the euro on a net P&L basis. But, again, really it's driven by the fact that a larger portion of our business right now is outside the US..

And any potential business disruption with potential Brexit given the headquarters?.

No. We've already put our plan in place. So, we are prepared for whichever eventuality Brexit ends up, whether it's a smooth transition or if it's a hard Brexit. We are prepared..

Yeah. We've spent a lot of time on that, Ritu. So, we're going to be in really good shape there..

Great. Thanks for taking all the questions..

Thank you..

Your next question comes from the line of Tazeen Ahmad from Bank of America. Your line is now open..

I think that might be me. Good morning, guys. Thank you for taking my questions. Maybe, John, if we could follow-up on PROPEL again, I know that you had in your prepared remarks that enrollment is going well. [indiscernible] can you give us a sense of when [indiscernible] might come out? That's question one.

Question two is, Sanofi looks like they would be reading out their study, their pivotal study for their follow on [indiscernible] ahead of yours. With that in mind, it seems like they are focusing more on lung function, so their primary endpoint, although they are looking at 6-minute walk as the secondary.

What do doctors tell you about their preference for looking at lung function versus 6-minute walk? And in the event that, let's say, Sanofi is able to show statistical results for both lung function and 6-minute walk, how do you think that would impact the perception physicians have about undermet need? Thanks..

Sure. Again, we've not done and not compared directly to that – what do they call it, neoGAA program. That program has been in development for quite some time at Sanofi. They have two results are known and I'll refer you to that.

We think our results, certainly, for our drug, compare quite favorably to what's known about the standard of care or any other drug that's ever been in development. So, with that said, Jay, I'll turn it to you for – we spent a lot of time with the KOLs in the world.

We see again a tremendous amount of excitement based around the Phase II data that we've shown to date that's quite distinct from any other program including, we believe, that Sanofi program in development. So, Jay, do you want to comment on what the doctors say in terms of 6-minute walk versus FVC or other endpoints..

Sure. As you said, John, we have spent a lot of time with the clinical experts in the field in designing the PROPEL study and they are very supportive of the primary endpoint as the 6-minute walk test, as are regulators. It's perfectly acceptable to them. We have shown very good data on the 6-minute walk test in our Phase I/II study.

So, that supports that as well. The 6-minute walk test is not just a measurement of walking ability, of ambulation. It really is a comprehensive test that includes pulmonary function, cardiac function as well as skeletal muscle function.

So, we think it's a more comprehensive way of looking at the effects of the drug than merely FVC, which is a single element of pulmonary function testing. Of course, we are doing FVC as well. That's expected by regulators. And we're very comfortable with that as well based on our Phase I/II data.

But looking at the whole picture, we feel the 6-minute walk test is a very good and, for our purpose in the PROPEL study, the preferable primary endpoint..

How do you feel about the – sorry. Go ahead, sorry. .

No. Again, just to remind everybody, we e have a very, very differentiated technology, which we think is a very distinct not only Phase II clinical data set, but all the preclinical work both at Amicus and at the NIH. So, we remain very, very confident in our approach, but please go ahead. I'm sorry..

No. Thanks for that.

I just wanted to follow up and ask what your thoughts are without knowing the exact powering of how you're looking at everything which you at least expect both 6-minute walk and lung function to move in the same direction even if both of them may not be statistically significant?.

Yeah, Jay..

Generally speaking, they do. We've seen that on our Phase I/II data. And I think that we're looking for a directional similarity on the FVC as supportive of the primary endpoint, the 6-minute walk test..

Okay. Great. Thank you..

Great. Thank you..

Your next question comes from the line of Whitney Ijem from Guggenheim. Your line is now open..

Hi, guys. Good morning. Thanks for taking the question. First one, I guess maybe on the Pompe gene therapy side, you alluded to progress – significant progress on that front.

Is there any color you can give us on where you're headed either vector or modality or mode of delivery wise in that program?.

Sure. Thanks, Whitney. Maybe Jeff and Hung, I'll let you guys comment on what we've developed with Dr. Wilson's lab, the results we've seen and again just reiterate that we expect to have all that completed in the second half of this year, ready for the IND-enabling study. So, Jeff and Hung, please..

Sure. I'll start and then Hung will chime in.

We've reported earlier this year at ASGCT, our first initial data from our Pompe gene therapy program where we're combining an Amicus design transgene that is really optimized for targeting and cross correction and that novel transgene was put into the AAVs from Penn and we put that gene therapy into mice and showed really quite remarkable glycogen reaction in all tissues including in the spinal cord and the brain, which is really important to address in Pompe.

In that study, we delivered that gene therapy just as an IV injection into the mice. So, we are really excited to progress that forward. We said we are on track to have a clinical candidate selected this year and then quickly move into IND-enabling studies. So, right now, in terms of route of administration, it is likely to be systemic.

There is a chance we could add in a direct into the CSF administration as well if we need to. There's a chance we think we could adequately target the CNS, also systemically. So, that's one of the things we are still working out.

But really excited the progress to date on this approach of really designing the transgene for optimal cross correction and direct transduction with the Penn's technologies into all the key issues as well.

So, Hung?.

Yeah. The only thing I would add to that is, on top of what Jeff has said, is that we are working actively with Jim's group at UPenn to really develop a good process for manufacturing this material for both the IND tox studies, but further for clinical supply in the future..

Great.

And then, second question for me, just on Mepsevii in Japan, you alluded to the JNDA, what needed to go in, but did you talk about timelines around that? And in terms of market opportunity there, can you remind us how many patients there are? And then, third part of this one question is, should we expect similar type deals going forward as you kind of look to leverage your ex-US commercialization capabilities? Thanks..

Sure.

Bradley, you want to take that?.

Yeah. Sure. Thanks, Whitney, for the question. We're really excited here. I think from an overall timeline perspective, what we've said is the IIS study is fully enrolled. It's a 52-week study, and so the next milestone really would be the JNDA submission and we'll provide an update on that when it goes in.

But good news is the study is enrolled and so we're waiting to see data there. Just a little bit of an overview of MPS VII, which is the indication for Mepsevii. It's one of the rarest MPS disorders. So it's only about 200 patients in the developed world, who've been diagnosed. And so, it's a small population.

But I think really what it reflects is a great acknowledgement of the team we've built in Japan, the capabilities from a regulatory and commercial and clinical experience. And also, I think a great combination between two leading companies in the rare disease space in Ultragenyx and in Amicus.

So, I wouldn't expect to see more than very modest revenue from this product. But, again, because we have the infrastructure in place, it's really truly leveraged on our side, which we think is great. And again, it aligns very well with our mission and with Ultragenyx's mission..

But we do.

To the last part of your question, Whitney, I do expect this to be an example of how Amicus has built an infrastructure, clinical, commercial regulatory, in Japan with about 30 full time Amicus employees now in Japan to demonstrate to potential partners going forward that we may become a partner of choice in the rare diseases development and/or commercialization of products in Japan.

And we would expect with similar model to follow potentially in other geographies in the world. Great. Thank you.

operator?.

Your next question comes from the line of Mike Ulz from Baird. Your line is now open..

Hi, guys. Thanks for taking the question. And congrats on all the progress as well. I just had a question on Galafold. So, you're starting expansion in Latin America with recent approval in Argentina. Maybe you can just talk about your broader plans in Latin America? And then secondly, when will you start to book revenues in that region? Thanks..

Yeah. So, thanks, Mike, for the question. Latin America, as you know, is a really – it's a large geography. It's an important geography traditionally for the rare diseases. For Fabry disease, it's an important part of our development program. The regulatory infrastructure down there and timelines has changed in a number of the markets.

So, I think it's taken a little bit longer there. But we really see that as kind of a next year and years-after growth driver. We do have a handful of patients that we've mentioned before that are on name patient sales in Latin America and we will continue to see that as a modest impact.

But, really, I would see this as kind of a next year and beyond growth driver for us. And as Argentina, Brazil, Colombia, Chile and others, so there's a number of markets there that have good reimbursement and diagnosis rates for Fabry disease. It's just a matter of going through the regulatory process, which we're now well underway..

Great. Thank you..

Thanks, Mike..

Your next question comes from the line of Mohit Bansal from Citigroup. Your line is now open..

Hi, guys. This is Keith on for Mohit. Thanks for taking our questions and congrats on the progress this quarter. Just on the Galafold launch, looks like it's tracking really well ahead of expectations.

Could you characterize the 24% of global market that you're capturing just in terms of US versus rest of world? And then, looking forward, what your thoughts on the balance of amenable patients? I know you mentioned conversions, but in the medium term, what are your expectations in terms of capturing worldwide market share? And I just have one follow-up.

Thanks..

Yeah. So, for that global market share, 24% now, obviously, our earlier launch countries, EU 5, et cetera, have a higher market share today and the US is a lower market share. That's really just a matter of timing from a launch perspective.

We do, however, you'll see in the Q, breakout the revenue now between international, US and, over time, we think that probably peaks out at about a third of revenue – global revenue coming from the United States when we're on kind of mature phase, but we'll continue to grow to reach that distribution as the market – US matures.

Your second question was around the switch and naive dynamics.

Is that right?.

Yeah. That's right..

Yeah. So, again, that's a really important marker for us – a commercial metric for us to follow. We're always focused on switch patients first because they were captive in the market. They were coming in to see their physicians every other week, already getting reimbursed.

But we knew, in every market we've looked in, we see this big number really equal to the treated number of diagnosed untreated patients. So, there's clearly demand in the market for more treatment options. And we really see Galafold as uniquely suited to meet that in similar ways that some of the oral products in MS.

They've really grown that market, that treated market, and PAH as well. So, lots of examples of where you see in the long term an oral entrance into an injectable space really growing the market. So, yeah, just as you alluded to, we would see, in the kind of medium term, the next few years that that percentage of switch and naïve get to about 50-50.

And then, really, in the long-term, our vision is, this product could really substantially grow the market to the point where the majority of patients might have been diagnosed untreated patients in the end.

So, it kind of right on track with strategy and we'll keep following that as an important measure of our strategy and our success in the market..

Okay. That's helpful.

And then, just on the global compliance and adherence rate of 90%., do you think that it's driven by disease severity and patient population? Or do you – or should we expect to drop off at later time in point as the launch gets going? And then, just one more on AAV CLN6, the eighth child who showed no evidence of disease stabilization, was there no response at all or was it just not hitting a threshold? And how did their progression compare to natural history? Thanks..

Brad, take the Galafold question..

Sure. Yes. So, from a Galafold perspective, sorry, just – I was paying attention to CLN6..

Yeah. Those are two very different questions. Sorry. Go ahead.

What was the first one, Keith?.

Sorry about that. Just about the global compliance..

Yeah. Got you. So, for the global compliance and adherence, what's driving that? So, first of all, now we are multiple years on in Germany, for example, from launch. And we continue to sustain that 90 plus percent compliance and adherence. And on the one hand, that's by no accident.

We've spent a lot of time in every market in making sure that physicians and patients understand the importance of adherence. And every market has different rules around how you can support that. In some cases, we have nurses. And in some cases, it is physician education.

In some cases, like in the United States, we have a case management team that helps support that process, but we have a number of – we have an app, for example, that helps patients remember to take their drug. So, we have a number of strategies and tactics to help actively support that.

On the other hand, you have to infer that if, after so many years in the market, patients are staying on drug at over 90%, it has to reflect some level of satisfaction and experience on the part of physicians and patients. So, yeah, we'll continue to watch it.

It is higher than almost any other drug we've seen, but again it's something we actively try to support. So, I would suspect that will continue going forward..

Jay, do you want to take the eighth child in the CLN6 program..

The oldest patient was treated at 79 months did show a decline. Over the 24 month period, a 2 point decline. As to say how that compares to natural history, we can't really say that at this point because we're still in the process of collecting more natural history data that would allow us to do a mass comparison to this patient.

So, in terms of whether there is any effect here or not, I really can't say at this point, but it's something we will be able to do once we have more comprehensive natural history and able to a mass comparison even for that oldest treated patient..

Okay. Great. That's so helpful. Thank you guys..

Your next question comes from the line of Debjit Chattopadhyay from H.C. Wainwright. Your line is now open..

Hey. Good morning and thank you for taking my questions. Maybe I can start off on the gene therapy side, given the collaboration with Dr.

Wilson, what are your thoughts on capsid engineering with respect to liver-directed gene therapy, especially centered around the dose and how those might be incorporated going forward?.

Sure. Debjit, tanks for the question.

Jeff, Hung?.

Yeah. So, we're working closely with Jim and his team on all of their AAVs that they've developed as well as they're working on new AAVs. I would say, we're always interested in looking at new either engineered or discovered AAVs. Right now, as we've articulated, previously our approach is not necessarily just studying the liver.

We are looking to address liver, cardiac, muscle, even into CNS to transduce cells and then to use cross correction to even further deliver that protein to all the cells in those tissues. But for other programs down the line, we certainly could be interested in other AAVs with different tropisms..

So, in your prepared remarks, you kind of said you won't necessarily comment on any regulatory discussions.

But with your upcoming World Muscle data on AT-GAA, if that exceeds expectations, would you consider engaging the regulators especially considering a pivotal study would be pretty much enrolled by the end of the year?.

John, is that a question Jay is going to take?.

Okay. Hey, operator. Sorry this is Jeff and Hung in Philadelphia, I just got a text that the Amicus Group in Cranbury got disconnected..

Yes. I'm sorry for the delay, but they’re dialing back in now. Give me one second..

Hey, operator..

We’re now connected..

Yes. I don't know what happened there. This is John Crowley. It's all right. It's never happened before. We got disconnected. So, we're back on the call. Sorry about that..

Hey. This is Debjit.

Can you hear me?.

Yeah. Debjit. Sorry about, I don't know what happened..

Hey. No worries. I didn't realize I'm going to be that destructive..

I'm pretty sure it is Verizon. Not you. .

Well, at least you can hear me now.

Should I repeat my question? I'm not sure if you guys got that?.

We cut out yeah after your question on capsid engineering that I turned over to Jeff Castelli and Hung..

Okay. So, my next one was – I kind of pointed to your prepared comments that you wouldn't necessarily comment on any regulator discussions.

But given your upcoming WMS data on AT-GAA, if that exceeds expectations and considering a study would be fully enrolled, would you consider engaging the agency on accelerating the BLA?.

We, as you know, have breakthrough therapy designation. We are constantly in a very positive dialogue with the agency. The base case in any of the assumptions remains that we complete the pivotal study PROPEL and that remains the basis for full approval in US and Europe..

And then, any read-throughs from the compelling CLN6 update into CLN3 and [indiscernible] whether superphysiologic expression could be detrimental in CLN3?.

Yeah. We think actually very positive read-through for the AAV intrathecal platform that we have at Amicus, particularly into CLN3, the largest of the Batten’s diseases.

Jay or Jeff, you guys want to comment on why we think this read through to CLN3 and then why also we don't think there is a concern with any over expression?.

Sure John. I will start..

Please go ahead..

Yes. So, with CLN6 and CLN3, they are both different mutations, but both cause neuronal liposomal dysfunction, are both proteins that are within the cell. So, we think the read through is quite significant from CLN6 to CLN3 in terms of our ability to address a certain number of neurons both in the spinal cord and the brain.

In CLN6 and the benefits we see there, that should be directly transferable to CLN3. In terms of – and also, all of the information we've learned across safety, manufacturing, with our CLN6 program is also transferable towards CLN3. We have seen no evidence in any of our studies of any concerns around over expression of the target transgene.

It has been reported in a few cases in gene therapy across the whole field, but by and large, most of the concerns have been around the AAV vector safety itself and we’ve seen a really good safety profile for our gene therapy to date. .

Appreciate it. Thank you so much..

Thank you..

Your next question comes from the line of Kristen Kluska from Cantor Fitzgerald. Your line is now open..

Hi. Good morning, everyone. And thanks for taking my question. I just wanted to touch on the draft guidance that was published yesterday on Fabry disease. Well, this is just the draft version. Were there any surprises or notable items you picked up on as you're moving your preclinical gene therapy asset forward? Thank you..

Sure. Thanks, Kristen. We did read that, of course. I'll let that Jeff and Jay comment on that. .

I'll start. And, Jeff, please chime in. Really no surprises there. It's very consistent with the strategy that have carried forward in our Fabry program. We see a lot of the types of approaches that we have taken and that we plan to take in our future gene therapy program in Fabry.

So, nothing there that really changes the direction that we have set for gene therapy program..

Yeah.

Jeff, anything to add?.

No. Perfectly summarized by Jay..

Alright. Yeah. Kristen, for Fabry, we're very excited about the potential for what we're developing for gene therapy, particularly for patients with non-amenable mutations who – their only option today are the enzyme replacement therapies. We think that could be a great potential opportunity to help people who are not eligible for Galafold.

But again, we do think for any product in development in Fabry, as we saw with Galafold, given the nature of the disease and the approved therapies to date, that is certainly going to be a comprehensive approach toward approval..

Great. Thank you so much..

Thank you..

Your next question comes from the line of Salveen Richter from Goldman Sachs. Your line is now open..

Yes. Hi. Thank you for taking the question. This is Maryana Breitman for Salveen. I actually had a question on the data that was released early on CLN6. There, it looks like there is – in a few patients, there is a sort of slight increase in Hamburg score that then goes down.

And I was wondering whether there is some biomarker or MRI data that can explain that phenomenon? How do you guys think about it? Thank you..

Right now, there's a search for a biomarker in CLN6. Because it’s a membrane around protein, there's no obvious biomarker yet. But it's something that we're working on with others who are in the field. In terms of MRI data, the MRI data were collected within the study. It's something that we're collecting now ourselves to analyze that.

So, I can't speak to that. But in terms of the increase that we noticed in a couple of patients, there is the possibility of an increase in score for some patients depending on what their baseline scores were.

There’s also some variability in the test, given the fact that it depends on patient effort, which may be slightly different from – at a certain visit based on other factors such as illnesses or recent seizures, for example. Overall, I think the way to look at the data is over several time points, not at any one individual time point.

And what we see over the seven of the eight patients, at least, it's very consistent measurements of their Hamburg motor language score either for the younger patients, stability, maintaining the same scores over time. For the patients that are a bit older with somewhat lower scores, having some changes in the score initially, but then stabilizing.

I think it's a pattern over a longer period of time that really is informative about the effect of the gene therapy treatment, not any one measurements. So. I hope that helps. And that's how we look at it..

Got it. Thank you..

Thanks, Maryana. .

Our last question will come from Yun Zhong at Janney. Your line is now open..

Hi. Thank you for taking the question. And just a quick one, high level question on the gene therapy programs. Apparently, you have put together a really broad portfolio. And I wonder when you consider, for example, prioritize certain programs over others.

Would that be completely dependent \on the data or you will take a strategic consideration, thinking about your – the product where – programs outside the gene therapy portfolio. Thank you.

Sure. Thank you. I think with any of our programs, it will be based on the strength of the data and the impact we think we could have for patients given the platforms that we're developing together with the unmet need in the patient community. I think those are the two most important factors.

But we've still seen a lot of capacity internally, R&D, leveraging with Dr. Wilson, is doing leveraging with our partners at Nationwide and Sanford Health are doing to be able to put as many of these programs through preclinical development and hopefully into the clinic.

Again, we're also expanding our partnerships in manufacturing for gene therapies as well as planning to build our own process science center of excellence and gene therapy manufacturing center of excellence and we'll have more news on that in the months ahead as well.

So, we're making sure we have the full infrastructure together with all the capital – including the capital we've just raised – to be able to put as many of these programs forward into the clinic and hopefully through the clinic as possible..

Great. Thank you..

Thank you..

At this time, I would now like to turn the conference back to Mr. John Crowley, Chairman and CEO, for closing remarks..

Great. Operator, that’s all we have today. obviously, an excellent quarter for Galafold, for all the programs at Amicus and quite a busy fall ahead of us into the second half of this year. Thank you, everybody. Have a great day..

This concludes today's conference call. Thank you and have a great day..