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March 31, 2023
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Delaware | 71-0869350 | |||||||||||||
| (State or Other Jurisdiction of | (I.R.S. Employer | |||||||||||||
Incorporation or Organization) | Identification Number) | |||||||||||||
| 3675 Market Street, | Philadelphia, | PA | 19104 | |||||||||||
| (Address of Principal Executive Offices) | (Zip Code) | |||||||||||||
| (215) | 921-7600 | |||||||||||||
| (Registrant's Telephone Number, Including Area Code) | ||||||||||||||
1 Cedar Brook Drive, Cranbury, NJ 08512
(Address
Registrant’s Telephone Number, Including Area Code: (609) 662-2000
the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock, par value $0.01 per share | FOLD | NASDAQ Global Market | ||||||
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| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
| Emerging growth company | ☐ | |||||||||||||
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We have filed applications to register certain trademarks in the U.S. and abroad, including Amicus Therapeutics® and designs, At the forefront of therapies for rare and orphan diseases™, Zorblisa™, and Galafold™.
The
·outcomes to differ materially from those expressed or implied in our forward-looking statements:
·
· the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our product candidates including those testing the use of pharmacological chaperones co-formulated and co-administered with ERT and for the treatment of lysosomal storage disorders;
·Enzyme Replacement Therapy ("ERT" or "ATB200" or "cipaglucosidase alfa");
·such therapies;
·candidates, including AT-GAA;
·
·
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·Galafold
·Galafold
·claims, including Hatch-Waxman litigation;
·
·
Wecollaborators;
Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements.
statements, even if experience or future developments make it clear that projected results expressed or implied in such statements will not be realized, except as may be required by law.
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| September 30, |
| December 31, |
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| 2017 |
| 2016 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
| $ | 64,133 |
| $ | 187,026 |
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Investments in marketable securities, current portion |
| 347,388 |
| 143,325 |
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Accounts receivable |
| 5,974 |
| 1,304 |
| ||
Inventories |
| 7,272 |
| 3,416 |
| ||
Prepaid expenses and other current assets |
| 6,246 |
| 4,993 |
| ||
Total current assets |
| 431,013 |
| 340,064 |
| ||
Investments in marketable securities |
| 15,109 |
| — |
| ||
Property and equipment, less accumulated depreciation of $13,273 and $12,495 at September 30, 2017 and December 31, 2016, respectively |
| 9,641 |
| 9,816 |
| ||
In-process research & development |
| 23,000 |
| 486,700 |
| ||
Goodwill |
| 197,797 |
| 197,797 |
| ||
Other non-current assets |
| 4,219 |
| 2,468 |
| ||
Total Assets |
| $ | 680,779 |
| $ | 1,036,845 |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable, accrued expenses, and other current liabilities |
| $ | 53,709 |
| $ | 41,008 |
|
Deferred reimbursements, current portion |
| 6,250 |
| 13,850 |
| ||
Contingent consideration payable, current portion |
| 8,200 |
| 56,101 |
| ||
Total current liabilities |
| 68,159 |
| 110,959 |
| ||
Deferred reimbursements |
| 16,906 |
| 21,906 |
| ||
Convertible notes |
| 161,635 |
| 154,464 |
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Contingent consideration payable |
| 12,900 |
| 213,621 |
| ||
Deferred income taxes |
| 9,186 |
| 173,771 |
| ||
Other non-current liability |
| 2,313 |
| 1,973 |
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Commitments and contingencies |
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Stockholders’ equity: |
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Common stock, $0.01 par value, 250,000,000 shares authorized 165,491,141 and 142,691,986 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively |
| 1,707 |
| 1,480 |
| ||
Additional paid-in capital |
| 1,387,767 |
| 1,120,156 |
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Accumulated other comprehensive loss: |
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Foreign currency translation adjustment |
| (1,367 | ) | 1,945 |
| ||
Unrealized gain on available-for-sale securities |
| (101 | ) | 102 |
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Warrants |
| 16,076 |
| 16,076 |
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Accumulated deficit |
| (994,402 | ) | (779,608 | ) | ||
Total stockholders’ equity |
| 409,680 |
| 360,151 |
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Total Liabilities and Stockholders’ Equity |
| $ | 680,779 |
| $ | 1,036,845 |
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| March 31, 2023 | December 31, 2022 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 160,602 | $ | 148,813 | |||||||
| Investments in marketable securities | 106,507 | 144,782 | |||||||||
| Accounts receivable | 68,178 | 66,196 | |||||||||
| Inventories | 27,004 | 23,816 | |||||||||
| Prepaid expenses and other current assets | 37,406 | 40,209 | |||||||||
| Total current assets | 399,697 | 423,816 | |||||||||
| Operating lease right-of-use assets, net | 28,483 | 29,534 | |||||||||
Property and equipment, less accumulated depreciation of $22,901 and $22,281 at March 31, 2023 and December 31, 2022, respectively | 31,406 | 30,778 | |||||||||
| Intangible assets, less accumulated amortization of $36 and $0 at March 31, 2023 and December 31, 2022, respectively | 22,964 | 23,000 | |||||||||
| Goodwill | 197,797 | 197,797 | |||||||||
| Other non-current assets | 20,172 | 19,242 | |||||||||
| Total Assets | $ | 700,519 | $ | 724,167 | |||||||
| Liabilities and Stockholders’ Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 24,965 | $ | 15,413 | |||||||
| Accrued expenses and other current liabilities | 92,747 | 93,636 | |||||||||
| Contingent consideration payable | 12,668 | 21,417 | |||||||||
| Operating lease liabilities | 8,005 | 8,552 | |||||||||
| Total current liabilities | 138,385 | 139,018 | |||||||||
| Long-term debt | 392,658 | 391,990 | |||||||||
| Operating lease liabilities | 51,349 | 51,578 | |||||||||
| Deferred reimbursements | 5,906 | 4,656 | |||||||||
| Deferred income taxes | — | 4,939 | |||||||||
| Other non-current liabilities | 9,648 | 8,939 | |||||||||
| Total liabilities | 597,946 | 601,120 | |||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity: | |||||||||||
| Common stock, $0.01 par value, 500,000,000 shares authorized, 283,300,585 and 281,108,273 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 2,820 | 2,815 | |||||||||
| Additional paid-in capital | 2,691,836 | 2,664,744 | |||||||||
| Accumulated other comprehensive loss: | |||||||||||
| Foreign currency translation adjustment | (6,543) | (11,989) | |||||||||
| Unrealized loss on available-for-sale securities | (201) | (116) | |||||||||
| Warrants | 83 | 83 | |||||||||
| Accumulated deficit | (2,585,422) | (2,532,490) | |||||||||
| Total stockholders’ equity | 102,573 | 123,047 | |||||||||
| Total Liabilities and Stockholders’ Equity | $ | 700,519 | $ | 724,167 | |||||||
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| Three Months Ended September 30, |
| Nine Months Ended September |
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| 2017 |
| 2016 |
| 2017 |
| 2016 |
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Revenue: |
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Net product sales |
| $ | 10,874 |
| $ | 2,127 |
| $ | 22,201 |
| $ | 2,127 |
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Cost of goods sold |
| 1,790 |
| 344 |
| 3,626 |
| 344 |
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Gross Profit |
| 9,084 |
| 1,783 |
| 18,575 |
| 1,783 |
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Operating Expenses: |
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Research and development |
| 40,641 |
| 32,457 |
| 103,502 |
| 74,163 |
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Selling, general and administrative |
| 21,647 |
| 17,469 |
| 60,090 |
| 52,470 |
| ||||
Changes in fair value of contingent consideration payable |
| (244,250 | ) | (4,110 | ) | (238,622 | ) | 9,228 |
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Loss on impairment of assets |
| 465,427 |
| — |
| 465,427 |
| — |
| ||||
Restructuring charges |
| — |
| 11 |
| — |
| 69 |
| ||||
Depreciation |
| 851 |
| 896 |
| 2,486 |
| 2,336 |
| ||||
Total operating expenses |
| 284,316 |
| 46,723 |
| 392,883 |
| 138,266 |
| ||||
Loss from operations |
| (275,232 | ) | (44,940 | ) | (374,308 | ) | (136,483 | ) | ||||
Other income (expenses): |
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Interest income |
| 1,190 |
| 460 |
| 2,702 |
| 1,098 |
| ||||
Interest expense |
| (4,351 | ) | (1,517 | ) | (12,820 | ) | (3,517 | ) | ||||
Other income (expense) |
| 2,044 |
| (910 | ) | 5,054 |
| (3,199 | ) | ||||
Loss before income tax benefit |
| (276,349 | ) | (46,907 | ) | (379,372 | ) | (142,101 | ) | ||||
Income tax benefit |
| 164,683 |
| 253 |
| 164,578 |
| 706 |
| ||||
Net loss attributable to common stockholders |
| $ | (111,666 | ) | $ | (46,654 | ) | $ | (214,794 | ) | $ | (141,395 | ) |
Net loss attributable to common stockholders per common share — basic and diluted |
| $ | (0.69 | ) | $ | (0.33 | ) | $ | (1.44 | ) | $ | (1.07 | ) |
Weighted-average common shares outstanding — basic and diluted |
| 160,796,841 |
| 140,656,109 |
| 148,963,864 |
| 131,675,690 |
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| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Net product sales | $ | 86,270 | $ | 78,715 | |||||||
| Cost of goods sold | 6,942 | 7,582 | |||||||||
| Gross profit | 79,328 | 71,133 | |||||||||
| Operating expenses: | |||||||||||
| Research and development | 41,499 | 81,517 | |||||||||
| Selling, general, and administrative | 73,957 | 58,116 | |||||||||
| Changes in fair value of contingent consideration payable | 251 | (1,188) | |||||||||
| Loss on impairment of assets | — | 6,616 | |||||||||
| Depreciation and amortization | 1,257 | 1,411 | |||||||||
| Total operating expenses | 116,964 | 146,472 | |||||||||
| Loss from operations | (37,636) | (75,339) | |||||||||
| Other (expense) income: | |||||||||||
| Interest income | 2,199 | 133 | |||||||||
| Interest expense | (11,844) | (8,147) | |||||||||
| Other (expense) income | (5,938) | 1,902 | |||||||||
| Loss before income tax | (53,219) | (81,451) | |||||||||
| Income tax benefit (expense) | 287 | (3,809) | |||||||||
| Net loss attributable to common stockholders | $ | (52,932) | $ | (85,260) | |||||||
| Net loss attributable to common stockholders per common share — basic and diluted | $ | (0.18) | $ | (0.30) | |||||||
| Weighted-average common shares outstanding — basic and diluted | 291,336,750 | 288,481,741 | |||||||||
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| Three Months Ended |
| Nine Months Ended September 30, |
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| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||
Net loss |
| $ | (111,666 | ) | $ | (46,654 | ) | $ | (214,794 | ) | $ | (141,395 | ) |
Other comprehensive (loss)/ gain: |
|
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Foreign currency translation adjustment (loss)/ gain |
| (1,176 | ) | 220 |
| (3,312 | ) | 1,062 |
| ||||
Unrealized (loss)/ gain on available-for-sale securities |
| (131 | ) | 86 |
| (203 | ) | 402 |
| ||||
Other comprehensive (loss)/ income |
| $ | (1,307 | ) | $ | 306 |
| $ | (3,515 | ) | $ | 1,464 |
|
Comprehensive loss |
| $ | (112,973 | ) | $ | (46,348 | ) | $ | (218,309 | ) | $ | (139,931 | ) |
| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Net loss | $ | (52,932) | $ | (85,260) | |||||||
| Other comprehensive gain (loss): | |||||||||||
| Foreign currency translation adjustment gain (loss) | 5,446 | (5,671) | |||||||||
| Unrealized loss on available-for-sale securities | (85) | (338) | |||||||||
| Other comprehensive gain (loss) | 5,361 | (6,009) | |||||||||
| Comprehensive loss | $ | (47,571) | $ | (91,269) | |||||||
| Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Warrants | Other Comprehensive Gain (Loss) | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | 281,108,273 | $ | 2,815 | $ | 2,664,744 | $ | 83 | $ | (12,105) | $ | (2,532,490) | $ | 123,047 | ||||||||||||||||||||||||||||||||||
| Stock options exercised, net | 384,108 | 3 | 2,652 | — | — | — | 2,655 | ||||||||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units, net of taxes | 1,612,975 | — | (12,806) | — | — | — | (12,806) | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 34,894 | — | — | — | 34,894 | ||||||||||||||||||||||||||||||||||||||||
| Issuance of shares in connection with at-the-market offering, net of issuance costs | 195,229 | 2 | 2,352 | — | — | — | 2,354 | ||||||||||||||||||||||||||||||||||||||||
| Unrealized loss on available-for-sale securities | — | — | — | — | (85) | — | (85) | ||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | 5,446 | — | 5,446 | ||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (52,932) | (52,932) | ||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2023 | 283,300,585 | $ | 2,820 | $ | 2,691,836 | $ | 83 | $ | (6,744) | $ | (2,585,422) | $ | 102,573 | ||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Warrants | Other Comprehensive Gain (Loss) | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2021 | 278,912,800 | $ | 2,808 | $ | 2,595,419 | $ | 83 | $ | 4,981 | $ | (2,295,922) | $ | 307,369 | ||||||||||||||||||||||||||||
| Stock options exercised, net | 145,449 | 1 | 858 | — | — | — | 859 | ||||||||||||||||||||||||||||||||||
| Vesting of restricted stock units, net of taxes | 1,075,607 | — | (8,993) | — | — | — | (8,993) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 30,651 | — | — | — | 30,651 | ||||||||||||||||||||||||||||||||||
| Unrealized loss on available-for-sale securities | — | — | — | — | (338) | — | (338) | ||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | (5,671) | — | (5,671) | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | (85,260) | (85,260) | ||||||||||||||||||||||||||||||||||
| Balance at March 31, 2022 | 280,133,856 | $ | 2,809 | $ | 2,617,935 | $ | 83 | $ | (1,028) | $ | (2,381,182) | $ | 238,617 | ||||||||||||||||||||||||||||
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| Nine Months Ended September 30, |
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| 2017 |
| 2016 |
| ||
Operating activities |
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Net loss |
| $ | (214,794 | ) | (141,395 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: |
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Amortization of debt discount and deferred financing |
| 7,179 |
| 1,744 |
| ||
Depreciation |
| 2,486 |
| 2,336 |
| ||
Stock-based compensation |
| 17,067 |
| 13,087 |
| ||
Charges to research expense for stock issued in asset acquisition |
| — |
| 4,607 |
| ||
Restructuring charges |
| — |
| 69 |
| ||
Loss on impairment |
| 465,427 |
| — |
| ||
(Gain)/ Loss on disposal of asset |
| (8 | ) | 17 |
| ||
Change in fair value of derivative liability |
| (265 | ) | 324 |
| ||
Non-cash changes in the fair value of contingent consideration payable |
| (238,622 | ) | 9,228 |
| ||
Foreign currency remeasurement (gain)/ loss |
| (4,932 | ) | 2,207 |
| ||
Non-cash deferred taxes and other tax benefits |
| (164,585 | ) | (706 | ) | ||
Changes in operating assets and liabilities: |
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Accounts receivable |
| (4,288 | ) | (863 | ) | ||
Inventories |
| (3,386 | ) | (3,505 | ) | ||
Prepaid expenses and other current assets |
| (3,358 | ) | (2,803 | ) | ||
Other non-current assets |
| (713 | ) | (660 | ) | ||
Account payable and accrued expenses |
| 13,037 |
| (2,920 | ) | ||
Non-current liabilities |
| 637 |
| 684 |
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Deferred Reimbursements |
| (12,600 | ) | — |
| ||
Net cash used in operating activities |
| (141,718 | ) | (118,549 | ) | ||
Investing activities |
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Sale and redemption of marketable securities |
| 230,981 |
| 165,495 |
| ||
Purchases of marketable securities |
| (450,358 | ) | (199,829 | ) | ||
Purchases of property and equipment |
| (3,398 | ) | (5,520 | ) | ||
Net cash used in investing activities |
| (222,775 | ) | (39,854 | ) | ||
Financing activities |
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Proceeds from issuance of common stock, net of issuance costs |
| 243,036 |
| 97,068 |
| ||
Proceeds from unsecured loan agreement |
| — |
| 30,000 |
| ||
Payment of capital leases |
| (212 | ) | (118 | ) | ||
Payment of contingent consideration |
| (10,000 | ) | (5,000 | ) | ||
Purchase of vested restricted stock units |
| (1,067 | ) | (1,010 | ) | ||
Proceeds from exercise of stock options |
| 8,841 |
| 1,456 |
| ||
Payment of deferred financing fees |
| (28 | ) | — |
| ||
Net cash provided by financing activities |
| 240,570 |
| 122,396 |
| ||
Effect of exchange rate changes on cash and cash equivalents |
| 1,030 |
| (363 | ) | ||
Net decrease in cash and cash equivalents |
| (122,893 | ) | (36,370 | ) | ||
Cash and cash equivalents at beginning of year/ period |
| 187,026 |
| 69,485 |
| ||
Cash and cash equivalents at end of year/period |
| $ | 64,133 |
| $ | 33,115 |
|
Supplemental disclosures of cash flow information |
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Cash paid during the period for interest |
| $ | 3,662 |
| $ | 284 |
|
Contingent consideration resolution in shares |
| $ | — |
| $ | 6,115 |
|
Capital expenditures funded by capital lease borrowings |
| $ | — |
| $ | 850 |
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| Three Months Ended March 31, | |||||||||||
| 2023 | 2022 | ||||||||||
| Operating activities | |||||||||||
| Net loss | $ | (52,932) | $ | (85,260) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Amortization of debt discount and deferred financing | 667 | 637 | |||||||||
| Depreciation and amortization | 1,257 | 1,411 | |||||||||
| Stock-based compensation | 34,894 | 30,651 | |||||||||
| Non-cash changes in the fair value of contingent consideration payable | 251 | (1,188) | |||||||||
| Foreign currency remeasurement loss | 5,885 | 673 | |||||||||
| Deferred taxes | (4,939) | — | |||||||||
| Asset impairment charges and other asset write-offs | — | 6,616 | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (1,367) | (1,000) | |||||||||
| Inventories | (3,158) | 1,812 | |||||||||
| Prepaid expenses and other current assets | 1,839 | 3,332 | |||||||||
| Accounts payable, accrued expenses, and other current liabilities | (72) | (14,563) | |||||||||
| Other non-current assets and liabilities | (394) | (1,436) | |||||||||
| Net cash used in operating activities | $ | (18,069) | $ | (58,315) | |||||||
| Investing activities | |||||||||||
| Sale and redemption of marketable securities | 54,944 | 108,328 | |||||||||
| Purchases of marketable securities | (16,747) | (49,244) | |||||||||
| Capital expenditures | (1,942) | (871) | |||||||||
| Net cash provided by investing activities | $ | 36,255 | $ | 58,213 | |||||||
| Financing activities | |||||||||||
| Payment of finance leases | (28) | (20) | |||||||||
| Purchase of vested restricted stock units, net of taxes | (12,806) | (8,993) | |||||||||
| Proceeds from stock options exercised, net | 2,655 | 859 | |||||||||
| Proceeds from the issuance of shares in connection with at-the-market offering, net of issuance costs | 2,354 | — | |||||||||
| Net cash used in financing activities | $ | (7,825) | $ | (8,154) | |||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | $ | 1,507 | $ | (3,377) | |||||||
| Net increase (decrease) in cash, cash equivalents, and restricted cash at the end of the period | 11,868 | (11,633) | |||||||||
| Cash, cash equivalents, and restricted cash at the beginning of period | 153,115 | 249,456 | |||||||||
| Cash, cash equivalents, and restricted cash at the end of period | $ | 164,983 | $ | 237,823 | |||||||
| Supplemental disclosures of cash flow information | |||||||||||
| Cash paid during the period for interest | $ | 11,361 | $ | 7,509 | |||||||
| Cash paid for taxes | $ | 178 | $ | 456 | |||||||
| Capital expenditures unpaid at the end of period | $ | 1,260 | $ | 72 | |||||||
Note
Corporate Information, Status of Operations, and Management Plans
The Company is also investigating a novel treatment paradigm ATB200/AT2221 in patients with Pompe disease, an inherited lysosomal storage disorder caused by an enzyme deficiency that leads to accumulation of glycogen (disease substrate) in cells. In October 2017, the Company announced additional positive results from our global Phase 1/2 clinical study (ATB200-02) to investigate ATB200/AT2221 in patients with Pompe disease. Consistent with previous results, patients who completed six months of treatment with ATB200/AT2221 showed improvements in six-minute walk test (“6MWT”) distance and other measures of motor function, stability or increases in forced vital capacity (“FVC”), and further reductions in biomarkers of muscle damage and disease substrate, with consistent results reported in initial patients who completed nine months of treatment. On September 21, 2017, the Company announced that the FDA granted orphan drug designation to ATB200/AT2221.
The Company was previously developing SD-101in late-stage development as a potential first-to-market therapy for the chronic, rare connective tissue disorder Epidermolysis Bullosa (“EB”). On September 13, 2017, the Company reported that top-line data from the randomized, double-blind, placebo-controlled Phase 3 clinical study (“ESSENCE” or “SD-005”) to assess the efficacy and safetypre-approval inspection of the novel topical wound-healing agent SD-101 did not meet the primary endpoints or secondary endpoints in participants with EB. The Company plans to further analyze and share the Phase 3 ESSENCE results with key stakeholders in the EB community including physicians, patient organizations and regulators. In the interim, in consultation with their physicians, participants in the ongoing extension studies (SD-004 and -006) will have the opportunity to continue being treated with SD-101. Based on the top-line data, the Company has no current plans to invest in any additional clinical studies or commercial preparation activities for SD-101. This event led the Company to assess the carrying amount of the program’s tangible and intangible assets against their respective fair values. Based on the assessment, the Company recognized a loss on impairment of intangible assets in the amount of $463.7 million and $1.7 million in fixed assets recorded within Loss on Impairment of Assets within the Consolidated Statements of Operation. Since the study did not meet the primary and secondary endpoints, the Company has concluded that they will not make the potential milestone payments indicated in the Asset Purchase Agreement to the former Scioderm holders. Accordingly, the Company recognized a gain of $254.7 million in Changes in Fair Value of Contingent Consideration Payable in the Consolidated Statements of Operation for the three months ended September 30, 2017 in order to decrease the liability to zero. The Company also recognized $0.4 million in selling, general and administrative costs and $8.1 million in research and development expenses related to the wind-down of operations for the Phase 3 ESSENCE study and ongoing extension studies SD-004 and SD-006 in the third quarter of 2017. See “—Note 4. Goodwill and IPR&D” for more details.
The Company is also investigating preclinical and discovery programs in other rare and devastating diseases including cyclin-dependent kinase-like 5 (“CDKL5”) deficiency.manufacturing site. The Company believes that its platform technologiesthe comments and its product pipeline uniquely position itobservations received at the forefront of advanced therapies to treat a range of devastating rare and orphan diseases.
On July 12, 2017, the Company entered into an underwriting agreement (“the Underwriting Agreement”) with J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC, as representativesclose of the several underwriters set forth on Schedule 1 thereto, relatingFDA inspection are all addressable. In March 2023, the European Commission ("EC") granted approval for Pombiliti
$2.6 billion as of March 31, 2023 and anticipates incurring losses through the fiscal year ending December 31, 2023. The Company has historically funded its operations through stock offerings, Galafold
® revenues, debt issuances, collaborations, and other financing arrangements.Note the COVID-19 pandemic, business development collaborations, pipeline expansion, and investment in manufacturing capabilities could impact the Company's future capital requirements.
2022.
The Company transacts business in various foreign countries and therefore, is subject to risk of foreign currency exchange rate fluctuations. As such, in June 2016, the Company entered into a forward contract to economically hedge transactional exposure associated with commitments arising from trade accounts payable denominated in a currency other than the functional currency of the respective operating entity. The Company does not designate this forward contract as a hedging instrument under applicable accounting guidance and, therefore, changes in fair value are recorded as other expense in the Consolidated Statements of Operations. The forward contract expired in June 2017.
arisen from named patient sales, the payment terms are predetermined, and the Company evaluates the creditworthiness of each customer on a regular basis. To date,As of March 31, 2023, the Company has not incurred any credit losses.
Significant Accounting Policies
There have been no material changes to the Company’s significant accounting policies during the nine months ended September 30, 2017, as compared to the significant accounting policies disclosed in Note 2 of the Consolidated Financial Statements in the Company’s Annual Report on Form 10-K, as amended,Company's allowance for the year ended December 31, 2016. However, the following accounting policies are the most critical in fully understanding and evaluating the Company’s financial condition and results of operations.
doubtful accounts was $0.1 million.
The Company’sCompany's net product sales consist solelyprimarily of sales of Galafold™Galafold
Company's net product sales disaggregated by geographic area:
| Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2023 | 2022 | ||||||||||||
| U.S. | $ | 28,831 | $ | 24,178 | ||||||||||
| Ex-U.S. | 57,439 | 54,537 | ||||||||||||
| Total net product sales | $ | 86,270 | $ | 78,715 | ||||||||||
Prior to regulatory approval of Galafold™, the Company expensed all manufacturing costs related to Galafold™ as research and development expense. Upon regulatory approval, the Company began capitalizing costs related to the purchase and manufacture of Galafold™.
Operations.
Fair Value Measurements
Goodwill
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at measurement date. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active
markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which is typically based on an entity’s own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.
Contingent Liabilities
On an ongoing basis, the Company may be involved in various claims, and legal proceedings. On a quarterly basis, the Company reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated, the Company will accrue a liability for the estimated loss. Because of uncertainties related to claims and litigation, accruals will be based on the Company’s best estimates based on available information. On a periodic basis, as additional information becomes available, or based on specific events such as the outcome of litigation or settlement of claims, the Company may reassess the potential liability related to these matters and may revise these estimates, which could result in material adverse adjustments to the Company’s operating results.
Recent Accounting Pronouncements
In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The amendments in this Update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. The amendments in this Update also make certain targeted improvements to simplify the application of hedge accounting guidance and ease the administrative burden of hedge documentation requirements and assessing hedge effectiveness. For public business entities, the amendment is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption, including adoption in an interim period, is permitted. The Company is currently assessing the impact that this standard will have on its consolidated financial statements.
In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of this Update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classificationcombination when assessing whether the instrument is indexed to an entity’s own stock. Part II of this Update addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification®. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. The Company is currently assessing the impact that this standard will have on its consolidated financial statements.
In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting. The amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718 Compensation—Stock Compensation. An entity should account for the effects of a modification unless all the following are met: 1. The fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the modified award is the same as the fair value (or calculated value or intrinsic value, if such an alternative measurement method is used) of the original award immediately before the original award is modified. If the modification does not affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is not required to estimate the value immediately before and after the modification. 2. The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. 3. The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The ASU is effective for all entities for annual periods, including interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The Company is currently assessing the impact that this standard will have on its consolidated financial statements.
In March 2017, the FASB issued ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20), Premium Amortization on Purchased Callable Debt Securities. The amendments shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The ASU is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments should be applied on a modified retrospective basis, with a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently assessing the impact that this standard will have on its consolidated financial statements.
In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, ASU 2017-04 eliminates Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable. ASU 2017-04 also eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU 2017-04 should be applied on a prospective basis. The nature of and reason for the change in accounting principle should be disclosed upon transition. A public business entity that is a U.S. SEC filer should adopt ASU 2017-04 for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently assessing the impact that this standard will have on its consolidated financial statements.
In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. This Accounting Standards Update clarifies the definition of a business. The amendments affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. The amendments in this update are effective for public companies for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted under certain circumstances. The amendments should be applied prospectively as of the beginning of the period of adoption. The Company is currently assessing the impact that this standard will have on its consolidated financial statements.
In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. This Accounting Standards Update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments eliminate the exception for an intra-entity transfer of an asset other than inventory. The amendments in this Update are effective for public business entities for annual periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities in the first interim period if an entity issues interim financial statements. The Company is currently assessing the impact that this standard will have on its consolidated financial statements. The Company has not completed review of the impact of this guidance and does not expect this new guidance to have a material impact on its consolidated financial statements.
In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments are intended to improve the accounting for employee share-based payments and affect all organizations that issue share-based payment awards to their employees. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. For public companies, the amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company adopted ASU 2016-09 on January 1, 2017. Due to the Company’s history of operating losses, the adoption did not result in changes to the Company’s Net loss or Retained earnings and the classification of excess tax benefits on the statement of cash flows for prior periods have not been adjusted. In connection with the adoption of ASU 2016-9, the Company made a policy election to continue its methodology for the development and application of its forfeiture rate.
In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This update requires the recognition of lease assets and lease liabilities on the balance sheet for all lease obligations and disclosing key information about leasing arrangements. This update requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous generally accepted accounting principles. This update will be effective for the Company for all annual and interim periods
beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all public business entities and all nonpublic business entities upon issuance. The Company is currently assessing the impact that this standard will have on its consolidated financial statements.
In May 2014, FASB issued ASU 2014-09, Revenue from Contracts with Customers which along with amendments issued in 2015 and 2016, will replace substantially all current US GAAP guidance on this topic and eliminate industry-specific guidance. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The guidance permits two methods of adoption: full retrospective method (retrospective application to each prior reporting period presented) or modified retrospective method (retrospective application with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures). The Company has elected to adopt the new standard using the modified retrospective approach. ASU 2014-09 will become effective for the Company during the first quarter of 2018.
The Company continues to assess the impact of ASU 2014-09 on its business and financial statements and expects the adoption of ASU 2014-09 to have an impact to its financial reporting disclosures and internal controls over financial reporting (“ICFR”). The Company has developed implementation controls that allow the Company to properly and timely adopt the new revenue accounting standard on its effective date. The Company will make continuous updates to the quarterly and year-end disclosures, with a focus on both status and internal controls over financial reporting.
The Company’s implementation plan includes a phased project plan, an understanding of the new standard and its requirements, assessment of the Company’s revenue streams and specific contracts in the streams. Additionally, the Company continues to monitor modifications, clarifications and interpretations issued by the FASB that may impact its assessment. Upon completion of the Company’s implementation plan and evaluation of the remaining revenue contracts, the Company plans to adopt additional internal controls over financial reporting for any new revenue arrangements. The Company is performing a detailed review of representative contracts and assessing the potential impacts the standard may have on previously reported revenues and future revenues. The Company is also evaluating the potential impact of costs related to obtaining and fulfilling the contracts. The Company is completing its analysis and is on target to complete its assessment of ASU 2014-09 and the impact on the Company’s consolidated financial statements and related disclosures as of January 1, 2018.
Note 3. Acquisitions
Asset Acquisition of MiaMed, Inc.
In July 2016, the Company entered into an Agreement and Plan of Merger (the “MiaMed Agreement”) with MiaMed, Inc., (“MiaMed”). MiaMed is a pre-clinical biotechnology company focused on developing protein replacement therapy for CDKL5 and related diseases. Under the terms of the MiaMed Agreement, the former holders of MiaMed’s capital stock received an aggregate of $6.5 million, comprised of (i) approximately $1.8 million in cash (plus MiaMed’s cash and cash equivalents at closing and less any of MiaMed’s unpaid third-party fees and expenses related to the transaction), and (ii) 825,603 shares of the Company’s common stock, par value $0.01 per share (“Common Stock”). In addition, the Company also agreed to pay up to an additional $83.0 million in connection with the achievement of certain clinical, regulatory and commercial milestones, for a potential aggregate deal value of $89.5 million. The Company evaluated the transaction based on the guidance of Accounting Standard Codification (“ASC”) 805, Business Combinations and concluded that it only acquired inputs and did not acquire any processes. The Company will need to develop its own processes in order to produce an output. Therefore, the Company accounted for the transaction as an asset acquisition and accordingly $6.5 million was expensed to research and development.
Acquisition of Scioderm, Inc.
In September 2015, the Company acquired Scioderm Inc., (“Scioderm”), a privately-held biopharmaceutical company focused on developing innovative therapies for treating the rare disease EB. The acquisition potentially leveraged the Scioderm development team’s EB expertise with the Company’s global clinical infrastructure to advance SD-101 toward regulatory approvals and the Company’s commercial, patient advocacy, and medical affairs infrastructure to support a successful global launch. The acquisition of Scioderm was accounted for as a purchase of a business in accordance with ASC 805 Business Combinations.
On September 13, 2017, the Company reported that top-line data from the randomized, double-blind, placebo-controlled Phase 3 clinical study (ESSENCE, SD-005) to assess the efficacy and safety of the novel topical wound-healing agent SD-101 did not meet the primary endpoints or secondary endpoints in participants with EB. Based on these top-line data, the Company has no current plans to invest in any additional clinical studies or commercial preparation activities for SD-101. For additional information, see “— Note 1. Description of Business.” The associated impairment of Scioderm IPR&D is discussed in “— Note 4. Goodwill and
Intangible Assets.”
Acquisition of Callidus Biopharma, Inc.
In November 2013, the Company acquired Callidus Biopharma, Inc. (“Callidus”), a privately-held biologics company focused on developing best-in-class ERTs for lysosomal storage disorders (“LSDs”) with its lead ERT ATB200 for Pompe disease in late preclinical development. The acquisition of the Callidus assets and technology complements Amicus’ CHART™ platform for the development of next-generation ERTs.
For additional information, see “— Note 4. Goodwill and Intangible Assets.”
Note 4. Goodwill and IPR&D
In connection with the acquisitions, the Company recognized IPR&D of $486.7 million and goodwill of $197.8 million. Intangible assets related to IPR&D assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment on an annual basis and between annual tests if the Company becomes aware of any events occurring or changes in circumstances that would indicate a reduction inconsideration exceeds the fair value of the IPR&D assets below their respective carrying amounts.
Goodwillnet tangible and identifiable intangible assets areacquired. Goodwill is assessed annually for impairment on October 1 and whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. The Company first assesses the qualitative factors to determine if a quantitative test is necessary. If required, or if the Company elects to bypass the qualitative assessment, a quantitative goodwill impairment test is conducted. If it is determined the Company's single reporting unit's carrying value, including goodwill, exceeds its fair value, an impairment loss is recorded for the difference.
The following table represents the changes in IPR&Dclassification to definite-lived intangible asset noting no impairment. Amortization expense for the ninethree months ended September 30, 2017:
|
| (in millions) |
| |
Balance at December 31, 2016 |
| $ | 486.7 |
|
Impairment in IPR&D related to Scioderm |
| (463.7 | ) | |
Balance September 30, 2017 |
| $ | 23.0 |
|
The following table represents the changes in GoodwillMarch 31, 2023 was nominal. Total estimated amortization for the nine monthsfinite-lived intangible assets is estimated to be $2.5 million for the year ended September 30, 2017:
|
| (in millions) |
| |
Balance at December 31, 2016 |
| $ | 197.8 |
|
Change in goodwill |
| — |
| |
Balance at September 30, 2017 |
| $ | 197.8 |
|
Note 5.December 31, 2023 and $3.3 million for the next four years thereafter.
Restricted Cash
If the unrealized loss of an available-for-sale debt security is determined to be a result of credit loss, the Company would recognize an allowance and the corresponding credit loss would be included in earnings.
and sold using established markets. The Company believes that the market risk arising from its holdings of these financial instruments is mitigated as, many of thesein accordance with Company policy, securities are either government backed or of the highesthigh credit rating. Investments that have original maturities greater than 3three months but less than 1one year are classified as short-term, while investments that have maturities greater than 1 yearcurrent.
For the nine months ended September 30, 2017, the Company recognized a loss of $0.2 million, related to derivative instruments not designated as hedging instruments in other expense in the Consolidated Statements of Operations. As the forward contract expired in June 2017, there was no liability in the Consolidated Balance Sheets as of September 30, 2017.
Cash and available-for-sale securities are all current unless mentioned otherwise below and consisted of the following as of September 30, 2017 and December 31, 2016 (in thousands):
|
| As of September 30, 2017 |
| ||||||||||
|
| Cost |
| Gross |
| Gross |
| Fair |
| ||||
Cash balances |
| $ | 64,133 |
| $ | — |
| $ | — |
| $ | 64,133 |
|
Corporate debt securities, current portion |
| 192,851 |
| 5 |
| (75 | ) | 192,781 |
| ||||
Corporate debt securities, non-current portion |
| 15,121 |
| — |
| (12 | ) | 15,109 |
| ||||
Commercial paper |
| 123,880 |
| 11 |
| (10 | ) | 123,881 |
| ||||
Asset backed securities |
| 30,346 |
| — |
| (20 | ) | 30,326 |
| ||||
Money market |
| 350 |
| — |
| — |
| 350 |
| ||||
Certificate of deposit |
| 50 |
| — |
| — |
| 50 |
| ||||
|
| $ | 426,731 |
| $ | 16 |
| $ | (117 | ) | $ | 426,630 |
|
Included in cash and cash equivalents |
| $ | 64,133 |
| $ | — |
| $ | — |
| $ | 64,133 |
|
Included in marketable securities |
| 362,598 |
| 16 |
| (117 | ) | 362,497 |
| ||||
Total cash and marketable securities |
| $ | 426,731 |
| 16 |
| $ | (117 | ) | $ | 426,630 |
| |
|
| As of December 31, 2016 |
| ||||||||||
|
| Cost |
| Unrealized |
| Unrealized |
| Fair |
| ||||
Cash balances |
| $ | 187,026 |
| $ | — |
| $ | — |
| $ | 187,026 |
|
Corporate debt securities, current portion |
| 74,564 |
| 2 |
| (31 | ) | 74,535 |
| ||||
Commercial paper |
| 68,258 |
| 132 |
| — |
| 68,390 |
| ||||
Money market |
| 350 |
| — |
| — |
| 350 |
| ||||
Certificate of deposit |
| 50 |
| — |
| — |
| 50 |
| ||||
|
| $ | 330,248 |
| $ | 134 |
| $ | (31 | ) | $ | 330,351 |
|
Included in cash and cash equivalents |
| $ | 187,026 |
| $ | — |
| $ | — |
| $ | 187,026 |
|
Included in marketable securities |
| 143,222 |
| 134 |
| (31 | ) | 143,325 |
| ||||
Total cash and marketable securities |
| $ | 330,248 |
| 134 |
| $ | (31 | ) | $ | 330,351 |
| |
following:
| As of March 31, 2023 | ||||||||||||||||||||||||||
| (in thousands) | Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||||||||||||
| Cash and cash equivalents | $ | 160,602 | $ | — | $ | — | $ | 160,602 | ||||||||||||||||||
| Commercial paper | 106,109 | 14 | (17) | 106,106 | ||||||||||||||||||||||
| Money market | 350 | — | — | 350 | ||||||||||||||||||||||
| Certificates of deposit | 51 | — | — | 51 | ||||||||||||||||||||||
| $ | 267,112 | $ | 14 | $ | (17) | $ | 267,109 | |||||||||||||||||||
| Included in cash and cash equivalents | $ | 160,602 | $ | — | $ | — | $ | 160,602 | ||||||||||||||||||
| Included in marketable securities | 106,510 | 14 | (17) | 106,507 | ||||||||||||||||||||||
| Total cash, cash equivalents, and marketable securities | $ | 267,112 | $ | 14 | $ | (17) | $ | 267,109 | ||||||||||||||||||
| As of December 31, 2022 | ||||||||||||||||||||||||||
| (in thousands) | Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||||||||||||
| Cash and cash equivalents | $ | 148,813 | $ | — | $ | — | $ | 148,813 | ||||||||||||||||||
| Commercial paper | 144,299 | 82 | — | 144,381 | ||||||||||||||||||||||
| Money market | 350 | — | — | 350 | ||||||||||||||||||||||
| Certificate of deposit | 51 | — | — | 51 | ||||||||||||||||||||||
| $ | 293,513 | $ | 82 | $ | — | $ | 293,595 | |||||||||||||||||||
| Included in cash and cash equivalents | $ | 148,813 | $ | — | $ | — | $ | 148,813 | ||||||||||||||||||
| Included in marketable securities | 144,700 | 82 | — | 144,782 | ||||||||||||||||||||||
| Total cash, cash equivalents, and marketable securities | $ | 293,513 | $ | 82 | $ | — | $ | 293,595 | ||||||||||||||||||
| As of March 31, | ||||||||||||||
| (in thousands) | 2023 | 2022 | ||||||||||||
| Cash and cash equivalents | $ | 160,602 | $ | 233,317 | ||||||||||
| Restricted cash | 4,381 | 4,506 | ||||||||||||
| Cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows | $ | 164,983 | $ | 237,823 | ||||||||||
The Company holds available-for-sale investment securities which are reported at fair value on the Company’s balance sheet. Unrealized holding gains and losses are reported within accumulated other comprehensive income (“AOCI”) in the statements of comprehensive loss.
Note 6. Inventories
Inventories consist of work in process and finished goods related to the manufacture of Galafold™. The following table summarizes the components of inventories at September 30, 2017 (in thousands):
|
| September 30, 2017 |
| December 31, 2016 |
| ||
Work-in-process |
| $ | 6,937 |
| $ | 3,308 |
|
Finished goods |
| 335 |
| 108 |
| ||
Total inventories |
| $ | 7,272 |
| $ | 3,416 |
|
Inventory manufactured prior to commercialization was expensed to research and development. Inventories are reviewed periodically to identify slow-moving or obsolete inventory based on projected sales activity, as well as product shelf-life. In evaluating the recoverability of inventories produced, the Company considers the probability that revenue will be obtained from the future sale2022 consisted of the related inventory. Inventory becomes obsolete when it has aged past its shelf-life, cannot be recertified and is no longer usable or able to be sold, or the inventory has been damaged. In such instances, a fullfollowing:
| (in thousands) | March 31, 2023 | December 31, 2022 | ||||||||||||
| Raw materials | $ | 13,597 | $ | 10,054 | ||||||||||
| Work-in-process | 5,823 | 9,615 | ||||||||||||
| Finished goods | 7,584 | 4,147 | ||||||||||||
| Total inventories | $ | 27,004 | $ | 23,816 | ||||||||||
Note 7. Debt Instruments
2016 Convertible Debt
On December 21, 2016, the Company issued at par value $250$0.4 million aggregate principal amountas of unsecured Convertible Senior Notes due 2023 (the “Convertible Notes”), which included the exercise in full of the $25 million over-allotment option granted to the initial purchasers of the Notes, in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act (the “Note Offering”). Interest is payable semiannually on June 15 and December 15 of each year, beginning on June 15, 2017. The Notes will mature on December 15, 2023, unless earlier repurchased, redeemed, or converted in accordance with their terms. The Notes are convertible at the option of the holders, under certain circumstances and during certain periods, into cash, shares of the Company’s Common Stock or a combination thereof and may be settled as described below. The net proceeds from the Note Offering were $243.0 million, after deducting fees and estimated expenses payable by the Company. In addition, the Company used approximately $13.5 million of the net proceeds from the issuance of the Convertible Notes to pay the cost of the capped call transactions (“Capped Call Confirmations”) that the Company entered into in connection with the issuance of the Convertible Notes.
The Convertible Notes are governed by an indenture dated December 21, 2016 (the “Indenture”) by and between the Company and Wilmington Trust, National Association, as trustee.
The Convertible Notes are initially convertible into approximately 40,849,675 shares of the Company’s Common Stock under certain circumstances prior to maturity at a conversion rate of 163.3987 shares per $1,000 principal amount of Convertible Notes, which represents a conversion price of approximately $6.12 per share of Common Stock, subject to adjustment under certain conditions. Holders may convert their Convertible Notes at their option at specified times prior to the maturity date of December 15, 2023, only if:
· during any fiscal quarter commencing afterboth March 31, 2017, the last reported sale price of the Company’s Common Stock for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter is equal to or more than 130% of the conversion price of the Convertible Notes on the last day of such preceding fiscal quarter;
· a Holder submits its Convertible Notes for conversion during the five business day period following any five consecutive trading day period in which the trading price for the Convertible Notes, per $1,000 principal amount of the Convertible Notes, for each such trading day was less than 98% of the product of the last reported sale price of the Company’s Common Stock and the conversion rate of the Convertible Notes on such date;
· the Company issues to all or substantially all of the holders of Common Stock rights options or warrants entitling them for a period of not more than 60 calendar days after the date of such issuance to subscribe for or purchase shares of the Common Stock, at a price per share less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance or distributes to all or substantially all holders of the Common Stock the Company’s assets, debt securities or rights to purchase the Company’s
securities which distribution has a per share value of exceeding 10% of the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the date of announcement of such distribution
· the Company enters into specified corporate transactions; or
· the Company has had a call for redemption, the holder can convert up until the second trading day immediately preceding the redemption date
The Convertible Notes will be convertible, at the option of the note holders, regardless of whether any of the foregoing conditions have been satisfied, on or after September 15, 2023 at any time prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date of December 15, 2023.
The last reported sale price of the Company’s Common Stock was equal to or more than 130% of the conversion price of the Convertible Notes for at least 20 trading days of the 30 consecutive trading days ending on the last day of the second quarter. As a result, the Convertible Notes are currently convertible into the Company’s Common stock as discussed above.
Upon the occurrence of a make-whole fundamental change or if the Company call all or any portion of the Convertible Notes for redemption prior to July 1, 2020, the Company will, in certain circumstances, increase the conversion rate by a number of additional shares for a holder that elects to convert its Convertible Notes in connection with such make-whole fundamental change or during the related redemption period.
Upon conversion, the Company may pay cash, shares of the Company’s Common Stock or a combination of cash and stock, as determined by the Company in its discretion.
The Company accounts for the Convertible Notes as a liability and equity component where the carrying value of the liability component will be valued based on a similar instrument. In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components. The equity component is not re-measured as long as it continues to meet the conditions for equity classification.
In accounting for the issuance of the Convertible Notes, the Company separated the Convertible Notes into liability and equity components based on their relative values. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the Convertible Notes. The difference between the principal amount of the Convertible Notes and the liability component represents the debt discount, which is recorded as a direct deduction from the related debt liability in the Consolidated Balance Sheets and amortized to interest expense using the effective interest method over the seven-year term of the Convertible Notes. The equity component of the Convertible Notes of approximately $88.3 million is included in additional paid-in capital in the Consolidated Balance Sheets and is not remeasured as long as it continues to meet the conditions for equity classification. Additionally, the Company recorded a deferred tax liability of $29.8 million in relation to the Convertible Notes.
The Company incurred transaction costs of approximately $7.5 million, including approximately $6.9 million that was paid from the gross proceeds of the Convertible Notes offering. In accounting for the transaction costs, the Company allocated the total amount incurred to the liability and equity components using the same proportions as the proceeds from the Convertible Notes. Transaction costs attributable to the liability component were recorded as a direct deduction from the related debt liability in the Consolidated Balance Sheets and amortized to interest expense over the seven-year term of the Convertible Notes. Transaction costs attributable to the equity component were netted with the equity component in additional-paid-in-capital.
The Convertible Notes consist of the following (in thousands): as of September 30, 2017 and December 31, 2016:
| (in thousands) | March 31, 2023 | December 31, 2022 | ||||||||||||
| Senior Secured Term Loan due 2026: | ||||||||||||||
| Principal | $ | 400,000 | $ | 400,000 | ||||||||||
Less: debt discount (1) | (4,190) | (4,571) | ||||||||||||
Less: deferred financing (1) | (3,152) | (3,439) | ||||||||||||
| Net carrying value of Long-term debt | $ | 392,658 | $ | 391,990 | ||||||||||
Liability component |
| September 30, 2017 |
| December 31, 2016 |
| ||
Principal |
| $ | 250,000 |
| $ | 250,000 |
|
Less: debt discount (1) |
| (83,972 | ) | (90,807 | ) | ||
Less: deferred financing(1) |
| (4,393 | ) | (4,729 | ) | ||
Net carrying value of the debt |
| $ | 161,635 |
| $ | 154,464 |
|
(1)Included in the Company's Consolidated Balance Sheets within Convertible Senior Notes (due 2023)long-term debt and amortized to interest expense over the remaining life of the Convertible Senior NotesSecured Term Loan using the effective interest rate method.
The fair value of the debt at September 30, 2017 was approximately $644.0 million.
Components (In thousands) |
| Three Months ended |
| Nine Months ended |
| ||
Contractual interest expense |
| $ | 1,887 |
| $ | 5,641 |
|
Amortization of debt discount |
| 2,342 |
| 6,835 |
| ||
Amortization of deferred financing |
| 122 |
| 344 |
| ||
Total |
| $ | 4,351 |
| $ | 12,820 |
|
Effective interest rate ofMarch 31, 2023 and 2022, respectively:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (in thousands) | 2023 | 2022 | ||||||||||||||||||||||||
| Contractual interest expense | $ | 11,230 | $ | 7,500 | ||||||||||||||||||||||
| Amortization of debt discount | $ | 381 | $ | 364 | ||||||||||||||||||||||
| Amortization of deferred financing | $ | 286 | $ | 273 | ||||||||||||||||||||||
The Capped Call Confirmations of $13.5 million are expected generally to reduce the potential dilution to the Common Stock upon any conversion of the Convertible Notes and/or offset the cash payments the Company is required to make in excess of the principal amount upon conversion of the Notes in the event that the market price of the Common Stock is greater than the strike price of the Capped Call Confirmations (which initially corresponds to the initial conversion price of the Convertible Notes and is subject to certain adjustments under the terms of the Capped Call Confirmations), with such reduction and/or offset subject to a cap based on the cap price of the Capped Call Confirmations. The Capped Call Confirmations have an initial cap price of $7.20 per share, which represents a premium of approximately 50% over the closing price of the Company’s Common Stock on the NASDAQ Global Market on December 15, 2016, and is subject to certain adjustments under the terms of the Capped Call Confirmations. The Capped Call Confirmations will cover, subject to anti-dilution adjustments substantially similar to those applicable to the Convertible Notes, the number of shares of Common Stock that will underlie the Convertible Notes. The Capped Call Confirmations do not meet the criteria for separate accounting as a derivative as they are indexed to the Company’s Common Stock. The premiums paid for the Capped Call Confirmations have been included as a net reduction to additional paid-in capital.
Note 8. Stockholders’ Equity
Common Stock and Warrants
As of September 30, 2017, the Company was authorized to issue 250 million shares of Common Stock. Dividends on Common Stock will be paid when, and if, declared by the board of directors. Each stockholder is entitled to vote on all matters that are appropriate for stockholder voting and is entitled to one vote for each share held.
As discussed in “—Note 1. Business,” in July 2017, the Company entered into the Underwriting Agreement with J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC, as representatives of the several underwriters set forth on Schedule 1 thereto, relating to the Offering. Under the terms of the Underwriting Agreement,three months ended March 31, 2023, the Company issued and sold 21,122,449an aggregate of 195,229 shares through its at-the-market equity program ("ATM program") at a weighted-average public offering price to the public of $12.25$12.71 per share resulting in grossand received aggregate net proceeds of $258.8$2.4 million. As of March 31, 2023, an aggregate of $247.5 million before deducting underwriting discountsworth of shares remain available to be issued and commissions and offering expenses payable bysold under the Company. ATM program.
As discussed in “—Note 7. Debt Instruments,” on December 21, 2016, the Company issued $250 million aggregate principal amount of Convertible Notes in a private offering. The Notes will mature on December 15, 2023, unless earlier repurchased, redeemed, or converted in accordance with their terms. The Notes are convertible at the option of the holders, under certain circumstances and during certain periods, into cash, shares of the Company’s Common Stock or a combination thereof. Prior to the close of business on the business day immediately preceding September 15, 2023, the Notes are convertible at the option of the holders of the Notes only under certain conditions. On or after September 15, 2023, until the close of business on the second business day immediately preceding the maturity date, holders of the Notes may convert their Notes at their option at the conversion rate then in effect, irrespective of these conditions. The Company will settle conversions of the Notes by paying or delivering, as the case may be, cash, shares of Common Stock, or a combination of cash and shares of Common Stock, at the Company’s election. The conversion rate will initially be 163.3987 shares of Common Stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $6.12 per share of Common Stock). The conversion rate is subject to customary adjustments upon the occurrence of certain events.
Equity Incentive Plan
The Company’s Equity Incentive Plans consist of theCompany's Amended and Restated 2007 Equity Incentive Plan (the “Plan”"Plan") and the 2007 Director Option Plan (the “2007 Director Plan”). The Plan provides for the granting of restricted stock units and options to purchase common stock in the Company to employees, directors, advisors, and consultants at a price to be determined by the Company’s boardCompany's Board of directors.Directors. The Plan is intended to encourage ownership of stock by employees and consultants of the Company and to provide additional incentives for them to promote the success of the Company’sCompany's business. The 2007 Director Plan is intended to promote the recruiting and retention of highly qualified eligible directors and strengthen the commonality of interest between directors and stockholders by encouraging ownership of common stock of the Company. The Board of Directors, or its committee, is responsible for determining the individuals to be granted options, the number of options each individual will receive, the option price per share, and the exercise period of each option.
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
|
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||
Expected stock price volatility |
| 82.5 | % | 81.6 | % | 83.1 | % | 81.3 | % | ||||
Risk free interest rate |
| 1.8 | % | 1.2 | % | 2.0 | % | 1.5 | % | ||||
Expected life of options (years) |
| 5.89 |
| 6.25 |
| 6.21 |
| 6.25 |
| ||||
Expected annual dividend per share |
| $ | 0.00 |
| $ | 0.00 |
| $ | 0.00 |
| $ | 0.00 |
|
Beginning in the third quarter of 2017, the average expected life was determined using our actual historical data versus a “simplified” method used in prior quarters. The “simplified” method of estimating the expected exercise term uses the mid-point between the vesting date and the end of the contractual term. In earlier quarters, we did not have sufficient reliable exercise data to justify a change from the use of the “simplified” method of estimating the expected exercise term of employee stock option grants. The impact from this change was not material.
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2023 | 2022 | |||||||||||||||||||||||||
| Expected stock price volatility | 59.3 | % | 62.3 | % | ||||||||||||||||||||||
| Risk free interest rate | 3.9 | % | 1.5 | % | ||||||||||||||||||||||
| Expected life of options (years) | 5.5 | 5.3 | ||||||||||||||||||||||||
| Expected annual dividend per share | $ | — | $ | — | ||||||||||||||||||||||
|
| Number of |
| Weighted |
| Weighted |
| Aggregate |
| ||
|
| (in thousands) |
|
|
|
|
| (in millions) |
| ||
Options outstanding, December 31, 2016 |
| 15,497.5 |
| $ | 7.37 |
|
|
|
|
| |
Granted |
| 3,279.5 |
| $ | 6.37 |
|
|
|
|
| |
Exercised |
| (1,451.2 | ) | $ | 6.10 |
|
|
|
|
| |
Forfeited |
| (1,113.8 | ) | $ | 9.59 |
|
|
|
|
| |
Options outstanding, September 30, 2017 |
| 16,212.0 |
| $ | 7.13 |
| 7.2 years |
| $ | 129.5 |
|
Vested and unvested expected to vest, September 30, 2017 |
| 15,338.3 |
| $ | 7.1 |
| 7.1 years |
| $ | 122.9 |
|
Exercisable at September 30, 2017 |
| 8,679.2 |
| $ | 6.7 |
| 6.0 years |
| $ | 73.0 |
|
| Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Years | Aggregate Intrinsic Value | |||||||||||||||||||||||
| (in thousands) | (in millions) | |||||||||||||||||||||||||
| Options outstanding, December 31, 2022 | 19,064 | $ | 11.31 | |||||||||||||||||||||||
| Granted | 4,854 | $ | 11.94 | |||||||||||||||||||||||
| Exercised | (384) | $ | 6.91 | |||||||||||||||||||||||
| Forfeited | (81) | $ | 10.97 | |||||||||||||||||||||||
| Expired | (16) | $ | 15.51 | |||||||||||||||||||||||
| Options outstanding, March 31, 2023 | 23,437 | $ | 11.51 | 7.0 | $ | 22.8 | ||||||||||||||||||||
| Vested and unvested expected to vest, March 31, 2023 | 21,395 | $ | 11.45 | 6.9 | $ | 22.1 | ||||||||||||||||||||
| Exercisable at March 31, 2023 | 12,395 | $ | 10.94 | 5.3 | $ | 19.4 | ||||||||||||||||||||
(collectively "RSUs")
A summary of non-vested RSU activity under the Plan for the ninethree months ended September 30, 2017March 31, 2023 is as follows:
|
| Number of Share |
| Weighted |
| Weighted Average |
| Aggregate Intrinsic |
| ||
Non-vested units as of December 31, 2016 |
| 744.4 |
| $ | 7.86 |
|
|
|
|
| |
Granted |
| 2,348.7 |
| $ | 5.69 |
|
|
|
|
| |
Vested |
| (210.9 | ) | $ | 8.57 |
|
|
|
|
| |
Forfeited |
| (191.9 | ) | $ | 6.27 |
|
|
|
|
| |
Non-vested units as of September 30, 2017 |
| 2,690.3 |
| $ | 6.03 |
| 2.68 years |
| $ | 40.6 |
|
On December 30, 2016, the Compensation Committee approved a form of Performance-Based Restricted Stock Unit Award Agreement (the “Performance-Based RSU Agreement”), to be used for performance-based RSUs granted to participants under the Amended and Restated Amicus Therapeutics, Inc. 2007 Equity Incentive Plan, including named executive officers. Certain awards under the form of Performance-Based RSU Agreement were granted in January 2017. The table above includes 401,413 market performance-based restricted stock units (“MPRSUs”) granted to executives. Vesting of these awards is contingent upon the Company meeting certain total shareholder return (“TSR”) levels as compared to a select peer group over the next three years. The MPRSUs cliff vest at the end of the three-year period and have a maximum potential to vest at 200% (802,826 shares) based on TSR performance. The related share-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized straight-line over the vesting term. The estimated fair value per share of the MPRSUs was $8.08 and was calculated using a Monte Carlo simulation model. The table above also includes 401,413 performance based awards that will vest over the next three years based on the Company achieving certain clinical milestones.
For the nine months ended September 30, 2017, 210,911 of the RSUs vested and all non-vested units are expected to vest over their normal term.
| Number of Shares | Weighted Average Grant Date Fair Value | Weighted Average Remaining Years | Aggregate Intrinsic Value | |||||||||||||||||||||||
| (in thousands) | (in millions) | |||||||||||||||||||||||||
| Non-vested units as of December 31, 2022 | 9,717 | $ | 13.07 | |||||||||||||||||||||||
| Granted | 2,762 | $ | 11.94 | |||||||||||||||||||||||
| Vested | (2,532) | $ | 12.20 | |||||||||||||||||||||||
| Forfeited | (517) | $ | 9.68 | |||||||||||||||||||||||
| Non-vested units as of March 31, 2023 | 9,430 | $ | 13.16 | 2.4 | $ | 104.6 | ||||||||||||||||||||
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| ||||||||
|
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| ||||
Equity compensation expense recognized in: |
|
|
|
|
|
|
|
|
| ||||
Research and development expense |
| $ | 2,390 |
| $ | 2,109 |
| $ | 7,456 |
| $ | 6,011 |
|
Selling, general and administrative expense |
| 3,110 |
| 2,229 |
| 9,611 |
| 7,076 |
| ||||
Total equity compensation expense |
| $ | 5,500 |
| $ | 4,338 |
| $ | 17,067 |
| $ | 13,087 |
|
Note awards:
| Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2023 | 2022 | ||||||||||||
| Research and development expense | $ | 8,490 | $ | 9,365 | ||||||||||
| Selling, general, and administrative expense | 26,404 | 21,286 | ||||||||||||
| Total equity compensation expense | $ | 34,894 | $ | 30,651 | ||||||||||
|
| Level 2 |
| Total |
| ||
Assets: |
|
|
|
|
| ||
Commercial paper |
| $ | 123,881 |
| $ | 123,881 |
|
Asset-backed securities |
| 30,326 |
| 30,326 |
| ||
Corporate debt securities |
| 207,890 |
| 207,890 |
| ||
Money market funds |
| 2,464 |
| 2,464 |
| ||
|
| $ | 364,561 |
| $ | 364,561 |
|
|
| Level 2 |
| Level 3 |
| Total |
| |||
Liabilities: |
|
|
|
|
|
|
| |||
Contingent consideration payable |
| $ | — |
| $ | 21,100 |
| $ | 21,100 |
|
Derivative liability |
| — |
| — |
| — |
| |||
Deferred compensation plan liability |
| 2,134 |
| — |
| 2,134 |
| |||
|
| $ | 2,134 |
| $ | 21,100 |
| $ | 23,234 |
|
tables:
| (in thousands) | Level 2 | Total | ||||||||||||
| Assets: | ||||||||||||||
| Commercial paper | $ | 106,106 | $ | 106,106 | ||||||||||
| Money market | 6,631 | 6,631 | ||||||||||||
| $ | 112,737 | $ | 112,737 | |||||||||||
| (in thousands) | Level 2 | Level 3 | Total | |||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Contingent consideration payable | $ | — | $ | 12,668 | $ | 12,668 | ||||||||||||||
| Deferred compensation plan liability | 6,281 | — | 6,281 | |||||||||||||||||
| $ | 6,281 | $ | 12,668 | $ | 18,949 | |||||||||||||||
|
| Level 2 |
| Total |
| ||
Assets: |
|
|
|
|
| ||
Commercial paper |
| $ | 68,390 |
| $ | 68,390 |
|
Corporate debt securities |
| 74,535 |
| 74,535 |
| ||
Money market funds |
| 1,829 |
| 1,829 |
| ||
|
| $ | 144,754 |
| $ | 144,754 |
|
|
| Level 2 |
| Level 3 |
| Total |
| |||
Liabilities: |
|
|
|
|
|
|
| |||
Contingent consideration payable |
| $ | — |
| $ | 269,722 |
| $ | 269,722 |
|
Derivative liability |
| 265 |
| — |
| 265 |
| |||
Deferred compensation plan liability |
| 1,479 |
| — |
| 1,479 |
| |||
|
| $ | 1,744 |
| $ | 269,722 |
| $ | 271,466 |
|
See “—Note 7. Debt Instruments” for the carrying amount and estimated fair value of the Company’s Convertible Notestables:
| (in thousands) | Level 2 | Total | ||||||||||||
| Assets: | ||||||||||||||
| Commercial paper | $ | 144,381 | $ | 144,381 | ||||||||||
| Money market | 5,808 | 5,808 | ||||||||||||
| $ | 150,189 | $ | 150,189 | |||||||||||
| (in thousands) | Level 2 | Level 3 | Total | |||||||||||||||||
| Liabilities: | ||||||||||||||||||||
| Contingent consideration payable | $ | — | $ | 21,417 | $ | 21,417 | ||||||||||||||
| Deferred compensation plan liability | 5,458 | — | 5,458 | |||||||||||||||||
| $ | 5,458 | $ | 21,417 | $ | 26,875 | |||||||||||||||
the liability (other than quoted prices), such as interest rates that are observable at commonly quoted intervals. The carrying value of the Senior Secured Term Loan due 2026
approximates the fair value.2022.
As discussed in “—Note 3. Acquisitions,” on July 5, 2016, the Company entered into the MiaMed Agreement with MiaMed. MiaMed is a pre-clinical biotechnology company focused on developing protein replacement for CDKL5 and related diseases. Under the terms of the MiaMed Agreement, the Company agreed to pay up to an additional $83.0 million in connection with the achievement of certain clinical, regulatory and commercial milestones, for a potential aggregate deal value of $89.5 million. The MiaMed Agreement was accounted for as an asset acquisition and as such the Company determined that a liability for future milestone payments is not required to be recorded until the actual contingencies are met and will be recorded to research and development expenses when the contingency is resolved.
Operations.
As discussed in “—Note 1. Business,” on September 13, 2017, the Company reported that top-line data from the randomized, double-blind, placebo-controlled Phase 3 clinical study (ESSENCE, SD-005) to assess the efficacy and safety of the novel topical wound-healing agent SD-101 did not meet the primary endpoints or secondary endpoints in participants with EB. Based on these top-line data, the Company has no current plans to invest in any additional clinical studies or commercial preparation activities for SD-101. As such, the contingent consideration related to Scioderm is no longer payable as of September 30, 2017.
On October 4, 2017, the Company announced positive results from the global Phase 1/2 clinical study (ATB200-02) to investigate ATB200/AT2221 in patients with Pompe disease. As a result of these positive results, the probability of success of ATB200 was increased from 32.0%-45.0% at June 30, 2017 to 58.0%-100.0% at September 2017, which drove the increase in fair value of the liability. With these data, the Company plans to continue a series of collaborative discussions with regulators in the US and EU, and expects to provide an update in the first half of 2018. This event was considered in the calculation of the Contingent Consideration as of September 30, 2017.
|
|
|
|
| |||||
|
| ||||||||
|
|
|
|
|
| ||||
|
| ||||||||
Contingent Consideration Liability | Fair Value as of March 31, 2023 | Valuation Technique | Unobservable Input | Range | ||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Discount rate | 11.2% | |||||||||||||||||||||||||
| Clinical and regulatory milestones | $ | 12,668 | Probability weighted discounted cash flow | Probability of achievement of milestones | 88% | |||||||||||||||||||||
| Projected year of payments | 2023 | |||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (in thousands) | 2023 | 2022 | ||||||||||||
| Balance, beginning of the period | $ | 21,417 | $ | 20,339 | ||||||||||
| Changes in fair value during the period, included in the Consolidated Statements of Operations | 251 | (1,188) | ||||||||||||
| Milestone payment payable in cash | (9,000) | — | ||||||||||||
Balance, end of the period (1) | $ | 12,668 | $ | 19,151 | ||||||||||
|
| Three Months Ended September 30, |
| Nine Months Ended September 30, |
| |||||||
|
| 2017 |
| 2016 |
| 2017 |
| 2016 |
| |||
|
|
|
|
|
|
|
|
|
| |||
Balance, beginning of the period |
| $ | 265,350 |
| $ | 276,300 |
| 269,722 |
| 274,077 |
| |
Payment of contingent consideration in cash |
| — |
| — |
| (10,000 | ) | (5,000 | ) | |||
Payment of contingent consideration in stock |
| — |
| — |
| — |
| (6,115 | ) | |||
Changes in fair value during the period, included in Statement of Operations |
| (244,250 | ) | (4,110 | ) | (238,622 | ) | 9,228 |
| |||
Balance, end of the period |
| $ | 21,100 |
| $ | 272,190 |
| 21,100 |
| $ | 272,190 |
|
Deferred Compensation Plan- Investment and Liability
The Deferral Plan provides
Foreign Currency Exchange Rate Exposure
In June 2016, the Company entered into a forward contract to economically hedge transactional exposure associated with commitments arising from trade accounts payable denominated in a currency other than the functional currency of the respective operating entity. The Company did not designate this forward contract as a hedging instrument and carried the liability of $0.3 million as other current liability in the Company's Consolidated Balance Sheet as of December 31, 2016. The forward contract settled in June 2017. Accordingly, there is no liability as of September 30, 2017.
Note Sheets.
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| Three Months Ended September 30, |
| Nine Months Ended September 30, |
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(In thousands, except per share |
| 2017 |
| 2016 |
| 2017 |
| 2016 |
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Numerator: |
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Net loss attributable to common stockholders |
| $ | (111,666 | ) | $ | (46,654 | ) | $ | (214,794 | ) | $ | (141,395 | ) |
Denominator: |
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Weighted average common shares outstanding — basic and diluted |
| 160,796,841 |
| 140,656,109 |
| 148,963,864 |
| 131,675,690 |
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share:
| Three Months Ended March 31, | ||||||||||||||
| (in thousands, except per share amounts) | 2023 | 2022 | ||||||||||||
| Numerator: | ||||||||||||||
| Net loss attributable to common stockholders | $ | (52,932) | $ | (85,260) | ||||||||||
| Denominator: | ||||||||||||||
| Weighted average common shares outstanding — basic and diluted | 291,336,750 | 288,481,741 | ||||||||||||
Weighted average common shares outstanding includes outstanding pre-funded warrants with an exercise price of $0.01.
|
| As of September 30, |
| ||
|
| 2017 |
| 2016 |
|
Options to purchase common stock |
| 16,212 |
| 15,773 |
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Convertible debt |
| 40,850 |
| — |
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Outstanding warrants, convertible to common stock |
| 3,110 |
| 3,110 |
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Unvested restricted stock units |
| 2,690 |
| 839 |
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Vested restricted stock units, unissued |
| 50 |
| — |
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Total number of potentially issuable shares |
| 62,912 |
| 19,722 |
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Note 11. Commitments and Contingencies
Since October 1, 2015, three purported securities class action lawsuits have been commenced in the United States District Court for New Jersey, naming as defendants the Company, its Chairman and Chief Executive Officer, and in one of the actions, its Chief Medical Officer. The lawsuits allege violations of the Securities Exchange Act of 1934 in connection with allegedly false and misleading statements made by the Company related to the regulatory approval path for migalastat. The plaintiffs seek, among other things, damages for purchasers of the Company’s Common Stock during different periods, all of which fall between March 19, 2015 and October 1, 2015. It is possible that additional suits will be filed, or allegations received from stockholders, with respect to similar matters and also naming the Company and/or its officers and directors as defendants. On May 26, 2016, the Court consolidated these lawsuits into a single action and appointed a lead plaintiff. The lead plaintiff filed a Consolidated Amended Class Action Complaint on July 11, 2016. On August 25, 2016, the defendants filed a motion to dismiss in response to the Consolidated Amended Class Action Complaint. This motion to dismiss was fully briefed on October 28, 2016 but has not been decided. Lead plaintiff and defendants have reached an agreement in principal to fully and finally settle all claims asserted in the Consolidated Amended Class Action Complaint. On June 29, 2017, the Court granted preliminary approval to the settlement. In connection with the Court’s preliminary approval, the settlement amount was paid into the plaintiff’s fund. The settlement is immaterial to the Company’s consolidated financial statements and is subject to final court approval. A fairness hearing to determine whether the settlement will be approved is now scheduled to occur on November 9, 2017. The settlement amount was covered under insurance.
On or about March 3, 2016, a derivative lawsuit was filed by an Amicus shareholder purportedly on Amicus’ behalf in the Superior Court of New Jersey, Middlesex County, Chancery Division, against various officers and directors of the Company. Amicus itself is named as a nominal defendant. The derivative lawsuit alleges similar facts and circumstances as the three purported securities class action lawsuits described above and further alleges claims for breach of state law fiduciary duties, waste of corporate assets, unjust enrichment, abuse of control, and gross mismanagement based on allegedly false and misleading statements made by Amicus related to the regulatory approval path for migalastat HCl. The plaintiff seeks, among other things, to require the Amicus Board to take certain actions to reform its corporate governance procedures, including greater shareholder input and a provision to permit shareholders to nominate candidates for election to the Board, along with restitution, costs of suit and attorney’s fees. On February 7, 2017, the complaint was dismissed by the Court without prejudice.
These lawsuits and any other related lawsuits are subject to inherent uncertainties and the actual cost will depend upon many unknown factors. The outcome of the litigation is necessarily uncertain and we could be forced to expend significant resources in the defense of these suits, and we may not prevail.
Note 12. Subsequent Events
On October 4, 2017 the Company announced positive results from the global Phase 1/2 clinical study (ATB200-02) to investigate ATB200/AT2221 in patients with Pompe disease. These clinical results were featured at the 22nd International Congress of the World Muscle Society in a late-breaker poster. With these data, the Company plans to continue a series of collaborative discussions with regulators in the US and EU, and expects to provide an update in the first half of 2018. This event was considered into the calculation of the Contingent Consideration as of September 30, 2017, as discussed in “—Note 9. Assets and Liabilities at Fair Value.”
| As of March 31, | ||||||||||||||
| (in thousands) | 2023 | 2022 | ||||||||||||
| Options to purchase common stock | 23,437 | 19,304 | ||||||||||||
| Unvested restricted stock units | 9,430 | 10,351 | ||||||||||||
| Total number of potentially issuable shares | 32,867 | 29,655 | ||||||||||||
Next Generation Programs Batten disease. with access to the financial, technical, clinical, and commercial resources necessary to develop and market clinical and preclinical studies, including the cost of manufacturing Pompe Enzyme Replacement Therapy ("ERT" or "ATB200" or "cipaglucosidase alfa"); Three Months Ended Nine Months Ended Projects 2017 2016 2017 2016 Third party direct project expenses Migalastat (Fabry) $ 3,265 $ 2,726 $ 8,644 $ 9,503 SD-101 (EB-Epidermolysis Bullosa) 9,660 3,503 15,424 6,979 ATB200 + AT2221 (Pompe Disease) 10,456 5,946 29,594 12,535 Fabry CHART (Fabry Disease) 14 91 143 282 CDKL5 178 6,490 287 6,490 Total third party direct project expenses $ 23,573 $ 18,756 $ 54,092 $ 35,789 Other project costs (1) Personnel costs 11,410 9,782 34,162 27,349 Other costs (2) 5,658 3,919 15,248 11,025 Total other project costs $ 17,068 $ 13,701 $ 49,410 $ 38,374 Total research and development costs $ 40,641 $ 32,457 $ 103,502 $ 74,163 Three Months Ended Nine Months Ended 2017 2016 2017 2016 Expected stock price volatility 82.5 % 81.6 % 83.1 % 81.3 % Risk free interest rate 1.8 % 1.2 % 2.0 % 1.5 % Expected life of options (years) 5.89 6.25 6.21 6.25 Expected annual dividend per share $ 0.00 $ 0.00 $ 0.00 $ 0.00 new ERP system will facilitate better transactional processing, enhanced reporting and oversight, and function as an important component of our transactional and reporting controls and procedures. 31.2 32.1 MANAGEMENT’SMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSpatient-focusedpatient-dedicated biotechnology company engagedfocused on discovering, developing, and delivering novel medicines for rare diseases. We have a portfolio including the first oral monotherapy for Fabry disease that has achieved widespread global approval and a differentiated biologic for Pompe disease that is under regulatory review. We are committed to discovering and developing next generation therapies in Fabry and Pompe diseases.discovery, developmentUnited States ("U.S."), European Union ("E.U."), United Kingdom ("U.K."), and commercializationJapan, with multiple additional approvals granted and applications pending in several geographies around the world.diverse setnovel, two-component, potential best-in-class treatment for Pompe disease. AT-GAA is currently under regulatory review. In October 2022, the U.S. Food and Drug Administration ("FDA") deferred action on the BLA for cipaglucosidase alfa, citing the inability to complete the manufacturing site inspection prior to the PDUFA action date. In the second quarter of novel treatments2023, the FDA completed the required pre-approval inspection of the manufacturing site. We believe the comments and observations received at the close of the FDA inspection are all addressable. In March 2023, the European Commission ("EC") granted approval for patients living with devastating rare and orphan diseases. Our lead product, migalastat HCl is a small molecule that canPombiliti™ (cipaglucosidase alfa) to be used as a monotherapy and in combination with miglustat for adults with late-onset Pompe disease ("LOPD"). In April 2023, the Committee for Medicinal Products for Human Use ("CHMP") of the European Medicines Agency ("EMA") adopted a positive opinion on Opfolda™ (miglustat), the enzyme stabilizer component of AT-GAA. The regulatory submission process for AT-GAA in the U.K. was initiated in December 2022.(“ERT”("ERT") used in combination with miglustat for adults with LOPD. In April 2023, the CHMP adopted a positive opinion on Opfolda™ (miglustat), the enzyme stabilizer component of AT-GAA. Additionally, multiple expanded access mechanisms are in place around the globe, including in the U.S., U.K., Germany, France, Japan, and others.disease. MigalastatDiseaseapproved for usegranted accelerated approval by the FDA in the European Union (“EU”) in May 2016August 2018 under the brand name Galafold™Galafold® for the treatment of adults with a confirmed diagnosis of Fabry disease and an amenable galactosidase alpha gene ("GLA") variant based on in vitro assay data. The FDA has approved Galafold® for 350 amenable GLA variants. Galafold® was approved in the E.U. and U.K. in May 2016 as a first-line therapy for long-term treatment of adults and adolescents, aged 16 years and older, with a confirmed diagnosis of Fabry disease and who have an amenable mutation.mutation (variant). The approved label includes 331 Fabry-causingE.U. and U.K. labels include 1,384 mutations amenable to Galafold® treatment, which represent up to half of all patients with Fabry disease. As of September 30, 2017, weIn countries where mutations are provided only on the amenability website, these 1,384 amenable mutations are now available. Marketing authorization approvals as well as approvals for adolescents aged 12 years and older weighing 45 kg or more have been authorized to commercialize Galafold™granted in 33over 40 countries and over 260 Fabry patients are receiving Galafold™ compared to approximately over 150 Fabry patientsaround the world, including 4 new approvals in June 2017. We remain confident in our guidance to achieve over 300 patients on Galafold™ therapy by the end of 2017. Additionally, we are preparing a New Drug Application (“NDA”) submission for migalastat under Subpart H, which provides for accelerated approval.2023. We plan to submit an NDA to the FDA for migalastat for Fabry disease in the fourth quarter of 2017.We are also investigating a novel treatment paradigm ATB200/AT2221 in patients with Pompe disease, an inherited lysosomal storage disorder caused by an enzyme deficiency that leads to accumulation of glycogen (disease substrate) in cells. In October 2017, we announced additional positive results from our global Phase 1/2 clinical study (ATB200-02) to investigate ATB200/AT2221 in patients with Pompe disease. Consistent with previous results, patients who completed six months of treatment with ATB200/AT2221 showed improvements in six-minute walk test (“6MWT”) distance and other measures of motor function, stability or increases in forced vital capacity (“FVC”), and further reductions in biomarkers of muscle damage and disease substrate, with consistent results reported in initial patients who completed nine months of treatment. On September 21, 2017, the Company announced that the FDA granted orphan drug designation to ATB200/AT2221.We were previously developing SD-101 in late-stage development as a potential first-to-market therapy for the chronic, rare connective tissue disorder Epidermolysis Bullosa (“EB”). On September 13, 2017, we reported that top-line data from a randomized, double-blind, placebo-controlled Phase 3 clinical study (“ESSENCE” or “SD-005”) to assess the efficacy and safety of the novel topical wound-healing agent SD-101 did not meet the primary endpoints or secondary endpoints in participants with EB. We plan to further analyze and share the Phase 3 ESSENCE results with key stakeholders in the EB community including physicians, patient organizations and regulators. In the interim, in consultation with their physicians, participants in the ongoing extension studies (SD-004 and -006) will have the opportunity to continue being treated with SD-101. Based on the top-line data, we have no current plans to invest in any additional clinical studies or commercial preparation activities for SD-101. This event led to the need to assess the carrying amount of the program’s tangible and intangible assets against their respective fair values. Based on the assessment, we recognized in the Consolidated Statments of Operations, a loss on impairment of intangible assets in the amount of $463.7 million and $1.7 million in fixed assets recorded within Loss on Impairment of Assets. Since the study did not meet the primary and secondary endpoints, we concluded that we will not make the potential milestone payments indicated in the Asset Purchase Agreement to the former Scioderm holders. Accordingly, we recognized a gain of $254.7 million in Changes in Fair Value of Contingent Consideration Payable in the Consolidated Statements of Operations for the three months ended September 30, 2017. We also recognized $0.4 million in selling, general and administrative costs and $8.1 million in research and development expenses related to the wind-down of operations for the Phase 3 ESSENCE study and ongoing extension studies SD-004 and SD-006 in the third quarter of 2017.On July 12, 2017, we entered into an underwriting agreement (the “Underwriting Agreement”) with J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC, as representatives of the several underwriters set forth on Schedule 1 thereto, relating to an underwritten public offering of the our common stock (the “Offering”). Under the terms of this agreement, we issued and sold 21,122,449 shares at a price to the public of $12.25 per share, resulting in gross proceeds of $258.8 million, before deducting underwriting discounts and commissions and offering expenses payable by the Company. The Offering closed on July 18, 2017 and we received net proceeds from the Offering, after deducting underwriting discounts and commissions and offering expenses payable by us, of $243.0 million.Our StrategyOur strategy is to internally develop or acquire first-in-class or potentially best-in-class therapies that have the potential to provide significant benefits for individuals living with rare and devastating diseases. We intend to leverage our global capabilities to develop and commercialize our robust pipeline. Since the beginning of our last fiscal year, we made significant progress towardfulfilling our vision to build a leading global biotechnology company focused on rare and devastating diseases. Highlights of our programs include:·Global capabilities. We have established a world-class international commercial infrastructure, with key leadership in place to execute the international launch of migalastat HCl that is currently underway.·Commercial success. We received full approval in the EU of migalastat HCl under the brand name Galafold™ and commenced the first commercial launch in Germany on May 30, 2016. We have achieved success with reimbursement in 12 EU member states and other parts of the world on a commercial basis or through our expanded access programs (“EAPs”). We continue to advance additional regulatory submissions in multiple countries around the world.·NDA Submission under Subpart H. We are preparing an NDA submission under Subpart H, which provides for accelerated approval by the FDA, for migalastat HCl for Fabry Disease. We intend to base our NDA on existing data, including reduction in disease-causing substrate (GL-3), as well as the totality of data from completed clinical studies. We plan to submit our NDA in the fourth quarter of 2017 and will begin initial commercial planning efforts to support a potential US commercial launch.·Pompe clinical study. We have reported a positive cascade of data from a clinical study to evaluate Pompe disease patients treated with our novel treatment paradigm ATB200/AT2221.·Patient-centricity. We continue to focus on improving the lives of patients living with rare and devastating diseases, which has always been a critical component of the values of our corporate culture. The needs of patients in the rare disease community are at the center of our innovative science, our commercial organization, and our clinical programs.Our Commercial Product and Product CandidatesMigalastat for Fabry DiseaseMigalastat HCl (which we may refer to as “migalastat”) is in development for all patients with Fabry disease as a monotherapy for patients with amenable mutations and in combination with ERT for all other patients. Migalastat was approved for use in the EU in May 2016 under the brand name Galafold™ as a first-line therapy for long-term treatment of adults and adolescents aged 16 years and older with a confirmed diagnosis of Fabry disease and who have an amenable mutation. The approved label includes 331 Fabry-causing mutations, which represent up to half of all patients with Fabry disease. Outside of the EU, Israel, Canada and Switzerland, migalastat is an investigational product.We have launched Galafold™ in several European markets, including countries such as France, Germany, Italy, Switzerland and the UK, on a commercial basis, as well as in select other European markets through reimbursed EAPs, and recognized net product sales of $10.9 million in the three months ended September 30, 2017 as compared to $7.2 million in the second quarter of 2017. We are currently pursuing the country-by-country pricing and reimbursement process in the EU member states. We have received marketing approval in Israel, Canada and Australia, and we have regulatory submissions under reviewlaunch GalafoldJapan.Based on a series of discussions withfor adolescents aged 12 years and written communication received from the FDA, the FDA has informed us that we may now submitolder.NDA for migalastat. We planorally administered monotherapy, Galafold® is designed to submitbind to and stabilize an NDA to the FDA for migalastat for Fabry diseaseendogenous alpha-galactosidase A ("alpha-Gal A") enzyme in the fourth quarter of 2017. An additional Phase 3 study previously requested by the FDA to assess GI symptoms is no longer required before an NDA submission. We are preparing the NDA submission under Subpart H, which provides for accelerated approval. We intend to base our NDA on existing data, including reduction in disease-causing substrate (GL-3), as well as the totality of data from completed clinical studies. Progressive accumulation of GL-3 is believed to lead to the morbidity and mortality of Fabry disease, including pain, kidney failure, heart disease and stroke.Forthose patients with non-amenable mutations, we are leveraging our CHART™ technology and advanced biologics capabilities to developgenetic variants identified as amenable in a proprietary Fabry ERT for co-formulation with migalastat. Master cell banking has been completed and process development work has commenced. MigalastatGood Laboratory Practice ("GLP") cell-based amenability assay. Galafoldmutations,variants, and at this time, it is not intended for concomitant use with ERT.and CHART™ platform to develop AT-GAA, a novel treatment paradigm ATB200/AT2221, for Pompe disease. This ERTAT-GAA consists of a uniquely engineered recombinant human acid alpha-glucosidaserhGAA enzyme, ATB200, or cipaglucosidase alfa, with an optimized carbohydrate structure to enhance lysosomal uptake, administered in combination with apharmacological chaperone (AT2221)AT2221, or miglustat, that functions as an enzyme stabilizer. Miglustat binds to and stabilizes ATB200 preventing inactivation of rhGAA in circulation to improve activity and stability. We acquired ATB200 as well as ourthe uptake of active enzyme targeting technology through our purchasein key disease-relevant tissues, resulting in increased clearance of Callidus Biopharma, Inc. (“Callidus”accumulated substrate, ("glycogen").The small molecule pharmacological chaperone AT2221 Miglustat is not an active ingredient that contributes directly to GAA substrate reduction but instead actsglycogen reduction.stabilize ATB200. AT2221 bindsenrollment (“Switch”) and stabilizes ATB20023% had never been treated with any ERT (n=28) (“Naïve”). Nearly all patients from the PROPEL study continue to be treated with AT-GAA in the circulation to improveextension clinical study. The clinical data from the uptake of active enzyme into key disease-relevant tissues. The novel combination has been patented for method of use, and ATB200, following significant manufacturing scale-up, is our first biologic to enter clinical development. In preclinical studies, administration of ATB200/AT2221 resultedPROPEL study, the extension study as well as the Phase 1/2 study were included in increased tissue GAA enzyme levels and decreased substrate reduction, as comparedthe AT-GAA submissions to the standard of care.Throughout 2017FDA and the EMA.have reported a cascade ofpositive long-term data from a Phaseour ongoing phase 1/2 clinical study ATB200-02, to investigate our novel Pompe treatment paradigm in Pompe patients. The primary objective is to evaluate the safety, tolerability, pharmacokinetics (“PK”), and pharmacodynamics (“PD”) of ATB200/AT2221Phase 3 open-label extension study, respectively. Phase 1/2 and 3 study participants treated with AT-GAA for an 18-week primary treatment period followed by a long-term extension. The three patient cohorts, enrolling up to ~20 total patients across all cohorts, are ambulatory ERT-switch patients (Cohort 1), non-ambulatory ERT-switch patients (Cohort 2),48 months and ERT-naïve patients (Cohort 3).As of our latest interim analysis reported in October 2017, patients who completed six months of treatment with ATB200/AT2221 showed improvements in the 6MWTup to 2 years, respectively, demonstrated persistent and durable effects on six-minute walk test distance and other measures of motor function and muscle strength, stability, or increasesincrease in FVC,forced vital capacity, and further reductions in biomarkers of muscle damage and disease substrate,substrate.consistent results reportedmiglustat for adults with LOPD. In April 2023, the CHMP adopted a positive opinion on Opfolda™ (miglustat), the enzyme stabilizer component of AT-GAA. The regulatory submission process for AT-GAA in initialthe U.K. was initiated in December 2022.who completed nine monthsfor both LOPD and infantile-onset Pompe disease ("IOPD") populations.treatment.On October 4, 2017our long-term commitment, we reported additional interim data from our clinical study ATB200-02 at the 22nd International Congress of the World Muscle Society. Highlights included safetyare also continuing discovery for next-generation genetic medicines for Pompe disease.tolerability data in all 20 patients (maximum of 72 weeks) as well as PD (muscle damage biomarker and disease substrate biomarker) data for 20 patients (15 ERT-switch patients and five ERT-naïve patients). To date, adverse events have been generally mild and transient. Importantly, ATB200/AT2221 has resulted in a low rate of infusion-associated reactions (IARs) following 400+ infusions (three events of IARs in two patients; < 1% of all 400+ infusions with an IAR). As previously reported, the clinical PK profile has been consistent with previously reported preclinical data. Reductions were observed in biomarkers of muscle damage (creatine kinase (CK) enzyme, alanine aminotransferase (ALT), and aspartate aminotransferase (AST)) in a majority of ERT-switch patients and ERT-naïve patients, and across the three biomarkers, mean reductions from baseline were approximately 25-35%, 5-25% and 40-55% for the ambulatory ERT-switch (n=11), non-ambulatory ERT-switch (n=4) and ERT-naïve (n=5) patients, respectively. Reduction was also observed after up to 58 weeks in a biomarker of glycogen substrate - urine hexose tetrasaccharide (Hex4) - in a majority of ERT-switch patients and all ERT-naïve patients, with mean reductions from baseline of approximately 40%, 35% and 55% for the ambulatory ERT-switch (n=11), non-ambulatory ERT-switch (n=4) and ERT-naïve (n=5) patients, respectively.As of the last interim analysis in October 2017, functional outcomes data from baseline to month 6 were also available for 18 of the 20 patients enrolled (one patient dropped out of the extension study due to travel burden and family considerations, while month 6 assessments are pending in one patient due to an incomplete visit). Muscle function improved in 16 patients and was stable in two patients at month 6. Muscle function improved in 10 out of 10 patients with available data at month 9. Mean 6MWT distance improved in both ERT-naive (+42 Meters at Month 6 (n=5) and +75 Meters at Month 9 (n=2)) and ERT-switch (+35 Meters at Month 6 (n=9) and +37 Meters at Month 9 (n=8)). Other motor function tests showed mean improvements consistent with 6MWT distance. All four non-ambulatory ERT-switch patients showed improvements in upper extremity strength (elbow and shoulder) from baseline to Month 6 as measured by quantitative muscle testing and manual muscle testing. Pulmonary function at Month 6 showed FVC improved in ERT-naive patients with a mean absolute change in percent predicted FVC of +4.2% at month 6 (n=5) and +5.0% at month 9 (n=2) and was generally stable in ERT-switch patients with mean absolute change in percent predicted FVC of -1.0% at month 6 (n=8) and -2.0% at month 9 (n=7). Maximal inspiratory pressure (MIP) and maximal expiratory pressure (MEP) were generally stable or increased in both ERT-naïve and ERT-switch patients.CDKL5a potential first-in-class protein replacement therapy approachtherapies for CDKL5 deficiency disorder ("CDD"). We are collaborating with the LouLou Foundation to assess the natural history of the disease to identify endpoints for potential use in future studies. We also have a number of additional gene therapies in clinical and preclinical studies. CDKL5 is adevelopment, including potential gene on the X-chromosome encoding the CDKL5 protein that regulates the expressiontherapies in multiple forms of several essential proteins for normal brain development. Genetic mutations in the CDKL5 gene result in CDKL5 protein deficiency and the disorder manifests clinically as persistent seizures starting in infancy, followed by severe impairment in neurological development. Most children affected by CDKL5 deficiency cannot walk or care for themselves and may also suffer from scoliosis, visual impairment, sensory issues, and gastrointestinal complications.thatto build stockholder value and provide uspharmacological chaperone therapeutics, ERTs, and other technologies or products.products with a focus on rare and orphan diseases. We are exploring potential collaborations, alliances, and other business development opportunities on a regular basis. These opportunities may include business combinations, partnerships, the strategic out-licensing of certain assets, or the acquisition of preclinical-stage, clinical-stage, or marketed products so long as such transactions areor platform technologies consistent with our strategic plan to develop and provide therapies to patients living with rare and orphan diseases,diseases.Three Months Ended March 31, (in thousands) 2023 2022 Change Net product sales $ 86,270 $ 78,715 $ 7,555 Cost of goods sold 6,942 7,582 (640) Cost of goods sold as a percentage of net product sales 8.0 % 9.6 % (1.6) % Operating expenses: Research and development 41,499 81,517 (40,018) Selling, general, and administrative 73,957 58,116 15,841 Changes in fair value of contingent consideration payable 251 (1,188) 1,439 Loss on impairment of assets — 6,616 (6,616) Depreciation and amortization 1,257 1,411 (154) Other (expense) income: Interest income 2,199 133 2,066 Interest expense (11,844) (8,147) (3,697) Other (expense) income (5,938) 1,902 (7,840) Income tax benefit (expense) 287 (3,809) 4,096 Net loss attributable to common stockholders $ (52,932) $ (85,260) $ 32,328 (in thousands) Three Months Ended March 31, Projects 2023 2022 Third party direct project expenses $ 2,644 $ 3,620 AT-GAA (Pompe Disease) 15,776 26,978 Gene therapy programs 235 17,692 Pre-clinical and other programs 365 93 Total third-party direct project expenses 19,020 48,383 Other project costs Personnel costs 18,252 25,675 Other costs 4,227 7,459 Total other project costs 22,479 33,134 Total research and development costs $ 41,499 $ 81,517 transformationgrowth of Galafold®.development-stage companydefinite-lived intangible asset.biotechnology company. and Estimates and Business Combinationsquarterthree months ended September 30, 2017March 31, 2023 to the items that we disclosed as our significant accounting policies and estimates described in “—"—Note 2. Summary of Significant Accounting Policies”Policies" to the Company’sCompany's financial statements as contained in the Company’sCompany's Annual Report on Form 10-K as amended, for the fiscal year ended December 31, 2016. However, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our financial condition and results of operations.Revenue RecognitionThe Company recognizes revenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when persuasive evidence of an arrangement exists, title to product and associated risk of loss has passed to the customer, which is typically upon receipt by the end customer, the price is fixed or determinable, collection of the amounts due are reasonably assured and the Company has no further performance obligations.The Company’s net product sales consist solely of sales of Galafold™ for the treatment of Fabry disease in the EU. The Company has recorded revenue on sales where Galafold™ is available either on a commercial basis or through a reimbursed early access program. Orders for Galafold™ are generally received from pharmacies and the ultimate payor is typically a government authority.The Company records revenue net of estimated third party discounts and rebates. Allowances are recorded as a reduction of revenue at the time revenues from product sales are recognized. These allowances are adjusted to reflect known changes in factors and may impact such allowances in the quarter those changes are known. Allowances as of September 30, 2017 are immaterial.Inventories and Cost of Goods SoldPrior to regulatory approval of Galafold™, the Company expensed all manufacturing costs of Galafold™ as research and development expense. Upon regulatory approval, the Company began capitalizing costs related to the purchase and manufacture of Galafold™.Inventories are stated at the lower of cost and net realizable value determined by the first-in, first-out method. Inventories are reviewed periodically to identify slow-moving or obsolete inventory based on projected sales activity as well as product shelf-life. In evaluating the recoverability of inventories produced, the probability that revenue will be obtained from the future sale of the related inventory is considered and inventory value is written down for inventory quantities in excess of expected requirements. Expired inventory is disposed of and the related costs are recognized as cost of product sales in the consolidated statements of operations.Cost of goods sold includes the cost of inventory sold, manufacturing and supply chain costs, product shipping and handling costs, and provisions for excess and obsolete inventory, as well as royalties payable. A portion of the inventory available for sale was expensed as research and development costs prior to regulatory approval and as such the cost of goods sold and related gross margins are not necessarily indicative of future cost of goods sold and gross margin.Research and Development ExpensesWe expect to continue to incur substantial research and development expenses as we continue to develop our product candidates and explore new uses for our pharmacological chaperone technology. Research and development expense consists of:· internal costs associated with our research and clinical development activities;· payments we make to third party contract research organizations, contract manufacturers, investigative sites, and consultants;· technology license costs;· manufacturing development costs;· personnel-related expenses, including salaries, benefits, travel, and related costs for the personnel involved in drug discovery and development;· activities relating to regulatory filings and the advancement of our product candidates through preclinical studies and clinical trials; and· facilities and other allocated expenses, which include direct and allocated expenses for rent, facility maintenance, as well as laboratory and other supplies.We have multiple research and development projects ongoing at any one time. We utilize our internal resources, employees and infrastructure across multiple projects. We record and maintain information regarding external, out-of-pocket research and development expenses on a project-specific basis.We expense research and development costs as incurred, including payments made to date under our license agreements. We believe that significant investment in product development is a competitive necessity and plan to continue these investments in order to realize the potential of our product candidates.The following table summarizes our principal product development programs, including the related stages of development for each product candidate in development, and the out-of-pocket, third party expenses incurred with respect to each product candidate (in thousands):
September 30,
September 30,
Recent Accounting Pronouncements(1) Other project costs are leveraged across multiple projects.(2) Other costs include facility, supply, overhead, and licensing costs that support multiple projects.Stock Option GrantsIn accordance with the applicable guidance, we estimate the fair value of each equity award granted. We chose the “straight-line” attribution method for allocating compensation costs and recognized the fair value of each stock option on a straight-line basis over the vesting period of the related awards.We use the Black-Scholes option pricing model when estimating the grant date fair value for stock-based awards. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility was based on our historical volatility since our initial public offering in May 2007. We will continue to use a blended weighted average approach using our own historical volatility and other similar public entity volatility information until our historical volatility is relevant to measure expected volatility for future option grants. Beginning in the third quarter of 2017, the average expected life was determined using our actual historical data versus a “simplified” method used in prior quarters. The “simplified” method ofestimating the expected exercise term uses the mid-point between the vesting date and the end of the contractual term. In earlier quarters, we did not have sufficient reliable exercise data to justify a change from the use of the “simplified” method of estimating the expected exercise term of employee stock option grants. The impact from this change was not material. The risk-free interest rate is based on U.S. Treasury, zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. Forfeitures are estimated based on expected turnover as well as a historical analysis of actual option forfeitures.The weighted average assumptions used in the Black-Scholes option pricing model are as follows:
September 30,
September 30,Restricted Stock Units (“RSUs”) and Performance-Based Restricted Stock UnitsThe RSUs awarded are generally subject to graded vesting and are contingent on an employee’s continued service on such date. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. We expense the cost of the RSUs, which is determined to be the fair market value of the shares of our common stock, par value $0.01 per share (“Common Stock”) underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse.On December 30, 2016, the Compensation Committee approved a form of Performance-Based Restricted Stock Unit Award Agreement (the “Performance-Based RSU Agreement”), to be used for performance-based RSUs granted to participants under the Amended and Restated Amicus Therapeutics, Inc. 2007 Equity Incentive Plan, including named executive officers. Certain awards under the form of Performance-Based RSU Agreement were granted in January 2017. The table above includes 401,413 market performance-based restricted stock units (“MPRSUs”) granted to executives. Vesting of these awards is contingent upon the Company meeting certain total shareholder return (TSR) levels as compared to a select peer group over the next three years. The MPRSUs cliff vest at the end of the three-year period and have a maximum potential to vest at 200% (802,826 shares) based on TSR performance. The related share-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized straight-line over the vesting term. The estimated fair value per share of the MPRSUs was $8.08 and was calculated using a Monte Carlo simulation model. The table above also includes 401,413 performance based awards that will vest over the next three years based on the Company achieving certain clinical milestones.Results of OperationsThree Months Ended September 30, 2017 versus September 30, 2016Net Product Sales. Net product sales were $10.9 million for Galafold™ for the three months ended September 30, 2017 as compared to $2.1 million for the three months ended September 30, 2016. Galafold™ was approved for sale in the EU in May 2016 and has been launched in over than ten European markets, as well as in select other European markets through reimbursed EAPs. We began to recognize revenue in the third quarter of 2016.Cost of Goods Sold. Cost of goods sold includes manufacturing costs as well as royalties associated with sales of our product. Cost of goods sold as a percentage of net sales was 16.5% for the three months ended September 30, 2017 as compared to 16.2% for the three months ended September 30, 2016.Research and Development Expense. Research and development expense was $40.6 million during the three months ended September 30, 2017, representing an increase of $8.1 million or 24.9% from $32.5 million for the three months ended September 30, 2016. The increase in research and development costs was driven primarily by a $6.2 million increase in costs related to the EB program and $4.5 million related to increase in the Pompe program. The increase in EB program includes accelerated clinical research costs related to the wind-down of operations for the Phase 3 ESSENCE study and ongoing extension studies SD-004 and SD-006. The increase in Pompe program costs was related to expenses associated with product manufacturing as well as expenses related to the ongoing Phase 1/2 clinical trial. The overall increase in research and development expense related to EB and Pompe programs was partially offset by the one-time expense recorded in the third quarter of 2016 of $6.5 million associated with the acquisition of the CDKL5 asset.Selling, General and Administrative Expense. Selling, general and administrative expense was $21.6 million during the three months ended September 30, 2017, representing an increase of $4.1 million or 23.4% from $17.5 million for the three months ended September 30, 2016. The increase was primarily due to efforts to support the ongoing commercial launch of Galafold™.Changes in Fair Value of Contingent Consideration Payable. For the three months ended September 30, 2017, we recorded gain of $244.3 million representing a change of $240.2 million from the $4.1 million of gain for the three months ended September 30, 2016. The change in the fair value from the three months ended September 30, 2016 to the three months ended September 30, 2017 resulted primarily from a decrease in the change attributable to the Scioderm, Inc. (“Scioderm”) contingent consideration of $251.1 million and an increase in the change attributable to the Callidus contingent consideration of $10.9 million. The fair value and change in fair value are impacted by updates to the estimated probability of achievement, assumed timing of milestones and adjustments to the discount periods and rates. The decrease in Scioderm contingent consideration was due to the results announced in September 2017 that the study did not meet the primary endpoints or secondary endpoints in participants, and, as a result, the contingent consideration is no longer payable.Loss on Impairment of Assets: For the three months ended September 30, 2017, we recorded $465.4 million as impairment charges to assets, which primarily included $463.7 million in IPR&D. The impairment was assessed after the announcement of the results from the Phase 3 ESSENCE study.Depreciation Expense. Depreciation expense was $0.9 million for the three months ended September 30, 2017 and ended September 30, 2016.Interest Income. Interest income was $1.2 million for the three months ended September 30, 2017, representing an increase of $0.7 million from $0.5 million for the three months ended September 30, 2016. The increase in interest income was due to the overall higher average cash and investment balances as a result of our financing transactions.Interest Expense. Interest expense was approximately $4.4 million for three months ended September 30, 2017, representing an increase of $2.9 million from $1.5 million for the three months ended September 30, 2016. Interest expense was higher due to the $250 million convertible debt offering completed in December 2016.Other Income/ Expense. Other income for the three months ended September 30, 2017 was $2.0 million, as compared to expense of $0.9 million for the three months ended September 30, 2016. The increase was primarily due to unrealized gain on foreign exchange transactions.Income Tax Benefit. Income tax benefit for the three months ended September 30, 2017 was $164.7 million, as compared to $0.3 million for the three months ended September 30, 2016. The increase was primarily due to the reduction of the deferred tax liability of $164.7 million related to Scioderm IPR&D as a result of the announcement of the Phase 3 ESSENCE study.Nine Months Ended September 30, 2017 versus September 30, 2016Net Product Sales. Net product sales were $22.2 million for Galafold™ for the nine months ended September 30, 2017 as compared to $2.1 million for the nine months ended September 30, 2016. Galafold™ was approved for sale in the EU in May 2016 and has been launched in over than ten European markets as well as in select other European markets through reimbursed EAPs. We began to recognize revenue in the third quarter of 2016.Cost of Goods Sold. Cost of goods sold includes manufacturing costs as well as royalties associated with sales of our product. Cost of goods sold as a percentage of net sales was 16.3% for the nine months ended September 30, 2017 as compared to 16.2% for the nine months ended September 30, 2016.Research and Development Expense. Research and development expense was $103.5 million during the nine months ended September 30, 2017, representing an increase of $29.3 million or 39.5% from $74.2 million for the nine months ended September 30, 2016. The increase in research and development costs was driven primarily by $17.1 million increase in costs related to the Pompe program and $8.4 million increase in costs associated with the EB program. The increase in EB program includes accelerated clinical research costs related to the wind-down of operations for the Phase 3 ESSENCE study and ongoing extension studies SD-004 and SD-006. The increase in Pompe program costs was related to expenses associated with product manufacturing as well as expenses related to the Phase 1/2 clinical trial. In addition to program costs, personnel costs increased by approximately $6.8 million in support of our programs. The overall increase in research and development expenses related to EB and Pompe programs was partially offset by the one-time expense recorded in the third quarter of 2016 of $6.5 million associated with the acquisition of the CDKL5 asset.Selling, General and Administrative Expense. Selling, general and administrative expense was $60.1 million for the nine months ended September 30, 2017, representing an increase of $7.6 million or 14.5% from $52.5 million for the nine months ended September 30, 2016. The increase was due to efforts to support the ongoing commercial launch of Galafold™.Changes in Fair Value of Contingent Consideration Payable. For the nine months ended September 30, 2017, we recorded gain of $238.6 million representing a change of $247.8 million from the $9.2 million of expense for the nine months ended September 30, 2016. The change in the fair value from the nine months ended September 30, 2016 to the nine months ended September 30, 2017 resulted primarily from a decrease in the change attributable to the Scioderm contingent consideration of $259.4 million and an increase in the change attributable to the Callidus contingent consideration of $11.6 million. The fair value is impacted by updates to the estimated probability of achievement, assumed timing of milestones and adjustments to the discount periods and rates. The decrease in Scioderm contingent consideration was due to the results announced in September 2017 that the study did not meet the primary endpoints or secondary endpoints in participants, and, as a result, of which the contingent consideration is no longer payable.Loss on Impairment of Assets: For the three months ended September 30, 2017, we recorded $465.4 million as impairment charges to assets, which primarily included $463.7 million in IPR&D. The impairment was assessed after the announcement of the results from the Phase 3 ESSENCE study.Depreciation Expense. Depreciation expense was $2.5 million for the nine months ended September 30, 2017, representing an increase of $0.2 million as compared to $2.3 million for the nine months ended September 30, 2016. Depreciation was higher due to increased asset acquisitions, resulting in a higher depreciation base in 2017.Interest Income. Interest income was $2.7 million for the nine months ended September 30, 2017, representing an increase of $1.6 million from $1.1 million for the nine months ended September 30, 2016. The increase in interest income was due to the overall higher average cash and investment balances as a result of our financing transactions.Interest Expense. Interest expense was approximately $12.8 million for nine months ended September 30, 2017, representing an increase of $9.3 million from $3.5 million for the nine months ended September 30, 2016. Interest expense was higher due to the $250 million convertible debt offering completed in December 2016.Other Income/ Expense. Other income for the nine months ended September 30, 2017 was $5.1 million, as compared to expense of $3.2 million for the nine months ended September 30, 2016. The increase was primarily due to unrealized gain on foreign exchange transactions.Income Tax Benefit. Income tax benefit for the nine months ended September 30, 2017 was $164.6 million, as compared to $0.7 million for the nine months ended September 30, 2016. The increase was primarily due to the reduction of the deferred tax liability of $164.7 million related to Scioderm IPR&D as a result of the announcement of the Phase 3 ESSENCE study.Liquidity and Capital ResourcesSource of LiquidityAs a result of our significant research and development expenditures as well as expenditures to build a commercial organization to support the launch of Galafold™, we have not been profitable and have generated operating losses since we were incorporated in 2002. We have historically funded our operations principally through the issuance and sale of stock, collaborations, debt financings, grants and non-refundable license fees.Cash flowsAs of September 30, 2017, we had cash and cash equivalents and marketable securities of $426.6 million. We invest cash in excess of our immediate requirements with regard to liquidity and capital preservation in a variety of interest-bearing instruments, including obligations of U.S. government agencies and money market accounts. Wherever possible, we seek to minimize the potential effects of concentration and degrees of risk. Although we maintain cash balances with financial institutions in excess of insured limits, we do not anticipate any losses with respect to such cash balances. For more details on the cash, cash equivalents and marketable securities,“—"—Note 5. Cash, Money Market Funds and Marketable Securities,”2. Summary of Significant Accounting Policies" in our Notes to Consolidated Financial Statements.Net Cash Used in Operating ActivitiesNet cash used in operations for the nine months ended September 30, 2017 was $141.7 million due primarily to the net loss for the nine months ended September 30, 2017 of $214.8 million, and a decrease in deferred reimbursements of $12.6 million, resulting from the milestone payments to GSK. The net cash used in operations was offset by an increase in accounts payable and accrued expenses of $13.0 million related to program expenses and support for the commercial launch of Galafold™.Net cash used in operations for the nine months ended September 30, 2016 was $118.5 million, due primarily to the net loss for the nine months ended September 30, 2016 of $141.4 million and the change in operating assets and liabilities of $10.1 million. The change in operating assets and liabilities was primarily due to a decrease in accounts payable and accrued expenses of $2.9 million, partially offset by increases in inventory of $3.5 million, prepaid assets of $2.8 million and other non-current assets of $0.7 million.Net Cash Used in Investing ActivitiesNet cash used in investing activities for the nine months ended September 30, 2017 was $222.8 million. Our investing activities have consisted primarily of purchases and sales and maturities of investments and capital expenditures. Net cash used in investing activities reflects $450.4 million for the purchase of marketable securities, $3.4 million for the acquisition of property and equipment, partially offset by $231.0 million for the sale and redemption of marketable securities.Net cash used in investing activities for the nine months ended September 30, 2016 was $39.9 million and reflects $199.8 million for the purchase of marketable securities, $5.5 million for the acquisition of property and equipment, partially offset by $165.5 million for the sale and redemption of marketable securities.Net Cash Provided by Financing ActivitiesNet cash provided by financing activities for the nine months ended September 30, 2017 was $240.6 million. Net cash provided by financing activities reflects $243.0 million from issuance of Common Stock from the July 2017 equity financing, $8.8 million from exercise of stock options, partially offset by $10.0 million paid to Scioderm as contingent consideration and $1.1 million from vesting of RSUs.Net cash provided by financing activities for the nine months ended September 30, 2016 was $122.4 million. Net cash provided by financing activities reflects $97.1 million from issuance of Common Stock under the ATM program, $30.0 million as proceeds from the notes sold to Redmile Capital Fund, LP and certain of its affiliates and Grosvenor Special Opportunities Master Fund, Ltd., and $1.5 million from exercise of stock options, partially offset by $5.0 million paid to Scioderm as contingent consideration and $1.0 million from vesting of RSUs.Funding RequirementsWe expect to incur losses from operations for the foreseeable future primarily due to research and development expenses, including expenses related to conducting clinical trials. Our future capital requirements will depend on a number of factors, including:· the progress and results of our clinical trials of our drug candidates;· the cost of manufacturing drug supply for our clinical and preclinical studies, including the significant cost of new Fabry ERT cell line development and manufacturing as well as the cost of manufacturing Pompe ERT;· the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our product candidates including those testing the use of pharmacological chaperones co-formulated and co-administered with ERT and for the treatment of LSDs;· the future results of on-going preclinical research and subsequent clinical trials for CDKL5, including our ability to obtain regulatory approvals and commercialize CDKL5 and obtain market acceptance for CDKL5;· the costs, timing and outcome of regulatory review of our product candidates;· the number and development requirements of other product candidates that we pursue;· the costs of commercialization activities, including product marketing, sales and distribution;· the emergence of competing technologies and other adverse market developments;· our ability to obtain reimbursement for migalastat HCl;· our ability to obtain market acceptance of migalastat HCl in the EU;· the costs of preparing, filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims;· the extent to which we acquire or invest in businesses, products and technologies;· our ability to successfully integrate our acquired products and technologies into our business, including the possibility that the expected benefits of the transactions will not be fully realized by us or may take longer to realize than expected; and· our ability to establish collaborations and obtain milestone, royalty or other payments from any such collaborators.While we generated revenue from product sales since the second half of 2016, in the absence of additional funding, we expect our continuing operating losses to result in increases in our cash used in operations over the next several quarters and years. We may seek additional funding through public or private financings of debt or equity. We believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund the current operating plan into the second half of 2019.Financial Uncertainties Related to Potential Future PaymentsMilestone Payments / RoyaltiesWe acquired exclusive worldwide patent rights to develop and commercialize migalastat and other pharmacological chaperones for the prevention or treatment of human diseases or clinical conditions by increasing the activity of wild-type and mutant enzymes pursuant to a license agreement with MSSM. This agreement expires upon expiration of the last of the licensed patent rights, which will be in 2018 in the U.S. and 2019 in Europe and Japan for monotherapy. If we develop a product for combination therapy of specific pharmacological chaperone such as migalastat plus an ERT for certain LSDs such as Fabry disease and a patent issues from the pending MSSM applications covering such a combination therapy(ies), expiration for the combination product(s) will be 2024.Under our license agreements, if we owe royalties on net sales for one of our products to more than one of the above licensors, then we have the right to reduce the royalties owed to one licensor for royalties paid to another. The amount of royalties to be offset is generally limited in each license and can vary under each agreement. For migalastat, we incurred $0.7 million of royalty expense under the agreement with MSSM for the nine months ended September 30, 2017.In November 2013, we entered into the Revised Agreement with GlaxoSmithKline (“GSK”), pursuant to which we have obtained global rights to develop and commercialize migalastat as a monotherapy and in combination with ERT for Fabry disease. The Revised Agreement amends and replaces in its entirety the prior agreement entered into between us and GSK in July 2012. Under the terms of the Revised Agreement, there was no upfront payment from us to GSK. For migalastat monotherapy, GSK is eligible to receive post-approval and sales-based milestones up to $40 million, as well as tiered royalties in the mid-teens in eight major markets outside the U.S. In addition, because we reacquired worldwide rights to migalastat, we are no longer eligible to receive any milestones or royalties we would have been eligible to receive under the Original Collaboration Agreement. In the nine months ended September 30, 2017, we incurred approximately $2.2 million of royalty expense under the agreement with GSK.As part of the acquisition of Callidus, we will be obligated to make additional payments to the former stockholders of Callidus upon the achievement by the Company of certain clinical milestones of up to $35 million and regulatory approval milestones of up to $105 million as set forth in the merger agreement, provided that the aggregate consideration shall not exceed $130 million. We may, at our election, satisfy certain milestone payments identified in the merger agreement aggregating $40 million in shares of our Common Stock (calculated based on a price per share equal to the average of the last closing bid price per share for the Common Stock on The NASDAQ Global Select Market for the ten trading days immediately preceding the date of payment). The milestone payments not permitted to be satisfied in Common Stock (as well as any payments that we are permitted to, but choose not to, satisfy in Common Stock), as a result of the terms of the merger agreement, the rules of The NASDAQ Global Select Market, or otherwise, will be paid in cash. During the second quarter of 2016, we reached the first clinical milestone for Callidus, which was the dosing of the first patient in a Phase 1 or 2 study. The milestone payment for this event was $6.0 million which was paid in the Company’s stock during the second quarter of 2016.As part of the acquisition of MiaMed, we will be obligated to make additional payments to the former stockholders of MiaMed upon the achievement by the Company of certain clinical milestones of up to $8 million, regulatory approval milestones of up to $10 million, and commercial milestones up to $65 million. Any milestone payment may be satisfied in cash, shares of Common Stock, or a combination of both. The milestone payments not permitted to be satisfied in Common Stock (as well as any payments that we are permitted to, but choose not to, satisfy in Common Stock), as a result of the terms of the merger agreement, the rules of The NASDAQ Global Select Market, or otherwise, will be paid in cash. No milestone payments in connection with the acquisition of MiaMed have been paid.Recent Accounting PronouncementsPlease refer to “—Note 2. Summary of Significant Accounting Policies,” in our Notes to Consolidated Financial Statements.QuantitativeQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKaboutAbout Market RiskMarket risk is the risk of change in fair value of a financial instrument due to changes in interest rates, equity prices, creditworthiness, financing, exchange rates or other factors. Our primary market risk exposure relates to changes in interest rates in our cash, cash equivalents and marketable securities. We place our investments in high-quality financial instruments, primarily money market funds, corporate debt securities, asset backed securities and U.S. government agency notes with maturities of less than one year, which we believe are subject to limited interest rate and credit risk. The securities in our investment portfolio are not leveraged, are classified as available-for-sale and, due to the short-term nature, are subject to minimal interest rate risk. We believe that a 1% (100 basis points) change in average interest rates would either increase or decrease the market valueRisk" of our investment portfolio by $1.8 million. At September 30, 2017, we held $426.6 million in cash, cash equivalents and availableAnnual Report on Form 10-K for sale securities and they are all due on demandthe fiscal year ended December 31, 2022. As of March 31, 2023, there have been no material changes to our market risks or within one year. We currently do not hedge interest rate exposure and consistent withto our investment policy, we do not use derivative financial instruments in our investment portfolio. Our outstanding debt has a fixed interest rate and therefore, we have no exposure to interest rate fluctuations.We have operated primarily in the U.S. with international operations increasingmanagement of such risks since the last quarter of 2015. We do conduct some clinical activities with vendors outside the U.S. While most expenses are paid in U.S. dollars, we now have increased transactions of expenses and cash flows in foreign currencies that are exposed to changes in foreign currency rates.“Exchange Act”"Exchange Act") was carried out under the supervision of our Principal Executive Officer and Principal Financial Officer, with the participation of our management. Based on that evaluation, the Principal Executive Officer and the Principal Financial Officer concluded that, as of the end of such period, our disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act and are effective in ensuring that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.Duringfiscalfirst quarter covered by this report,of 2023, we implemented a new enterprise resource planning ("ERP") system for financial reporting. In connection with the implementation, there has been no change inwere material changes to our internal control over financial reporting (asas defined in RulesRule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect,Act. We believe our internal control over financial reporting.have been commencedagainst Teva, Lupin, and Aurobindo in the United StatesU.S. District Court for New Jersey, naming as defendants the Company,District of Delaware for infringement of its ChairmanOrange Book-listed patents and Chief Executive Officer, and in one of the actions,will vigorously enforce its Chief Medical Officer. The lawsuits allege violations of the Securities Exchange Act of 1934 in connection with allegedly false and misleading statements made by the Company related to the regulatory approval path for migalastat. The plaintiffs seek, among other things, damages for purchasers of the Company’s Common Stock during different periods, all of which fall between March 19, 2015 and October 1, 2015. It is possible that additional suits will be filed, or allegations received from stockholders, with respect to similar matters and also naming the Company and/or its officers and directors as defendants. On May 26, 2016, the Court consolidated these lawsuits into a single action and appointed a lead plaintiff. The lead plaintiff filed a Consolidated Amended Class Action Complaint on July 11, 2016. On August 25, 2016, the defendants filed a motion to dismiss in response to the Consolidated Amended Class Action Complaint. This motion to dismiss was fully briefed on October 28, 2016 but has not been decided. Lead plaintiff and defendants have reached an agreement in principal to fully and finally settle all claims asserted in the Consolidated Amended Class Action Complaint. On June 29, 2017, the Court granted preliminary approval to the settlement. In connection with the Court’s preliminary approval, the settlement amount was paid into the plaintiff’s fund. The settlement is immaterial to the Company’s consolidated financial statements and is subject to final court approval. A fairness hearing to determine whether the settlement will be approved is now scheduled to occur on November 9, 2017. The settlement amount was covered under insurance.On or about March 3, 2016, a derivative lawsuit was filed by an Amicus shareholder purportedly on Amicus’ behalf in the Superior Court of New Jersey, Middlesex County, Chancery Division, against various officers and directors of the Company. Amicus itself is named as a nominal defendant. The derivative lawsuit alleges similar facts and circumstances as the three purported securities class action lawsuits described above and further alleges claims for breach of state law fiduciary duties, wasteof corporate assets, unjust enrichment, abuse of control, and gross mismanagement based on allegedly false and misleading statements made by Amicus related to the regulatory approval path for migalastat HCl. The plaintiff seeks, among other things, to require the Amicus Board to take certain actions to reform its corporate governance procedures, including greater shareholder input and a provision to permit shareholders to nominate candidates for election to the Board, along with restitution, costs of suit and attorney’s fees. On February 7, 2017, the complaint was dismissed by the Court without prejudice.These lawsuits and any other related lawsuits are subject to inherent uncertainties and the actual cost will depend upon many unknown factors. The outcome of the litigation is necessarily uncertain and we could be forced to expend significant resources in the defense of these suits, and we may not prevail.2016, as amended.2022.We did not repurchase any sharesCommon Stockcommon stock during the three months ended September 30, 2017. We have not announced any plans or programs for the repurchaseMarch 31, 2023:
______________________________Period Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs January 1, 2023 through January 31, 2023 938,481 $ 12.07 — — February 1, 2023 through February 28, 2023 15,148 $ 13.21 — — March 1, 2023 through March 31, 2023 170,987 $ 11.45 — — Total 1,124,616 $ 11.99 — — our Common Stock. However, employees surrendered 3,368 sharescommon stock withheld to the Company, during the three months ended September 30, 2017 at a weighted average price of $13.53 per share for the payment of the minimum tax liability withholding obligations uponsatisfy taxes associated with the vesting of RSUs. We do not consider this a share buyback program.restricted stock unitsExhibitNumberDescriptionExhibit
NumberDescription 3.1(1)31.1 3.2(2)Certificate of Amendment to the Company’s Restated Certificate of Incorporation, as amended3.3(3)31.1101The following financial information from this Quarterly Report on Form 10-Q forInline XBRL Instance Document - the nine months ended September 30, 2017, formattedinstance document does not appear in the Interactive Data File because its XBRL (Extensible Business Reporting Language)tags are embedded within the Inline XBRL document101.SCH Inline XBRL Taxonomy Extension Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 104 Cover Page Interactive Data File (formatted in Inline XBRL and filed electronically herewith: (i) the Consolidated Balance Sheets; (ii) the Consolidated Statements of Operations; (iii) the Consolidated Statements of Comprehensive Loss; (iv) the Consolidated Statements of Cash Flows; (v) and the Notes to the Consolidated Financial Statementsincluded in Exhibit 101)(1) Incorporated by reference to Exhibit 3.1 to our Quarterly Report on Form 10-Q filed on August 5, 2015.(2) Incorporated by reference to Exhibit 3.2 to our Quarterly Report on Form 10-Q filed on August 5, 2015.(3) Incorporated by reference to Exhibit 3.4 to our Registration Statement on Form S-1.AMICUS THERAPEUTICS, INC.Date: November 8, 2017By:/s/ John F. CrowleyJohn F. CrowleyChairman and Chief Executive Officer(Principal Executive Officer)Date: November 8, 2017By:/s/ William D. Baird IIIWilliam D. Baird IIIChief Financial Officer(Principal Financial Officer)AMICUS THERAPEUTICS, INC. Date: May 10, 2023 By: /s/ Bradley L. Campbell Bradley L. Campbell President and Chief Executive Officer (Principal Executive Officer) Date: May 10, 2023 By: /s/ Daphne Quimi Daphne Quimi Chief Financial Officer (Principal Financial Officer) (Principal Accounting Officer)