UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2023~~March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-33497

Amicus Therapeutics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

71-0869350

(State or Other Jurisdiction of

(I.R.S. Employer

Incorporation or Organization)

Identification Number)

~~3675 Market~~47 Hulfish Street, Princeton, NJ

~~Philadelphia,~~

~~19104~~08542

(Address of Principal Executive Offices)

(Zip Code)

~~(215)~~(609)

~~921-7600~~662-2000

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of 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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant's common stock, $0.01 par value per share, as of ~~July 26, 2023~~April 25, 2024 was ~~287,120,937~~296,198,963 shares.

AMICUS THERAPEUTICS, INC.

Form 10-Q for the Quarterly Period Ended ~~June 30, 2023~~March 31, 2024

Page

PART I. FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements and Notes (unaudited)

Consolidated Balance Sheets as of Ju ~~ne 30, 2023~~March 31, 2024 and December 31, ~~2022~~2023

Consolidated Statements of Operations for the Three ~~and~~ ~~Six~~ Months Ended ~~June 30~~,March 31, 2024 and 2023 ~~and 2022~~

Consolidated Statements of Comprehensive Loss for the Three ~~and Six~~ Months Ended ~~June 30~~,March 31, 2024 and 2023 ~~and 2022~~

Consolidated Statements of Changes in Stockholders' Equity for the Three ~~and Six~~ Months Ended ~~June 30~~,March 31, 2024 and 2023 ~~and 2022~~

Consolidated Statements of Cash Flows for the ~~Six~~ Three Months Ended ~~June 30~~,March 31, 2024 and 2023 ~~and 2022~~

Notes to Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

2017

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

2923

Item 4.

Controls and Procedures

2923

PART II. OTHER INFORMATION

Item 1.

Item 1A.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

2923

Item 3.

Defaults Upon Senior Securities

3024

Item 4.

Mine Safety Disclosures

Item 5.

Item 6.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks, uncertainties, and assumptions. Forward-looking statements are all statements, other than statements of historical facts, that discuss our current expectation and projections relating to our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, and objectives of management. These statements may be preceded by, followed by or include the words "aim," "anticipate," "believe," "can," "could," "estimate," "expect," "forecast," "intend," "likely," "may," "might," "outlook," "plan," "potential," "predict," "project," "seek," "should," "will," "would," the negatives or plurals thereof, and other words and terms of similar meaning, although not all forward-looking statements contain these identifying words.

We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct. You should understand that the following important factors could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:

•the scope, progress, results and costs of clinical trials for our drug candidates;

•the cost of manufacturing drug supply for our commercial, clinical and preclinical studies, including the cost of manufacturing ~~Pompe Enzyme Replacement Therapy ("ERT" or~~Pombiliti® (also referred to as "ATB200" or "cipaglucosidase alfa");

•the future results of preclinical research and subsequent clinical trials for pipeline candidates we may identify from time to time, including our ability to obtain regulatory approvals and commercialize ~~these therapies and obtain market acceptance for~~ such therapies;

•the costs, timing, and outcome of regulatory review of our product ~~candidates, including AT-GAA;~~candidates;

•any changes in regulatory standards relating to the review of our product ~~candidates, including AT-GAA;~~candidates;

•~~the number and development requirements of other~~any changes in laws, rules or regulations affecting our ability to manufacture, transport, test, develop, or commercialize our products, including Galafold®, Pombiliti® + Opfolda®, or our product ~~candidates that we pursue;~~candidates;

•the costs of commercialization activities, including product marketing, sales, and distribution;

•the emergence of competing technologies and other adverse market developments;

•the estimates regarding the potential market opportunity for our ~~product~~products and product ~~candidates, including AT-GAA;~~candidates;

•our ability to successfully commercialize Galafold® (also referred to as "migalastat HCl");

•our ability to successfully commercialize Pombiliti™® ~~and~~+ Opfolda™® ~~(also~~(together, also referred to as ~~AT-GAA)~~"AT-GAA") in the E.U., U.K., and U.S., and elsewhere, if ~~our~~ regulatory applications ~~for AT-GAA~~ are approved;

•our ability to manufacture or supply sufficient clinical or commercial products, including Galafold®,and Pombiliti™® ~~and~~+ Opfolda™®;

•our ability to obtain reimbursement for Galafold®;

•~~our ability to obtain reimbursement for~~ and Pombiliti™® ~~and~~+ Opfolda™ ~~in the E.U., and elsewhere, if our regulatory applications for AT-GAA are approved;~~

•~~our ability to satisfy post-marketing commitments or requirements for continued regulatory approval of Galafold~~®;

•our ability to satisfy post-marketing commitments or requirements for continued regulatory approval of Galafold® and Pombiliti™® ~~and~~+ Opfolda™ ®~~in the E.U., and elsewhere, if our regulatory applications for AT-GAA are approved;~~;

•our ability to obtain market acceptance of Galafold®and Pombiliti® ~~and, if our~~+ Opfolda®, or any other product developed or acquired that has received regulatory ~~applications are approved, AT-GAA;~~

•~~our ability to obtain market acceptance of Pombiliti~~™ ~~and Opfolda~~™ ~~in the E.U., and elsewhere, if our regulatory applications for AT-GAA are approved;~~approval;

•the costs of preparing, filing, and prosecuting patent applications and maintaining, enforcing, and defending intellectual property-related claims, including Hatch-Waxman litigation;

•the impact of litigation that has been or may be brought against us or of litigation that we are pursuing or may pursue against others, including Hatch-Waxman litigation;

•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, or successfully divest or license existing products and technologies from 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;

•our ability to establish licensing agreements, collaborations, partnerships or other similar arrangements and to obtain milestone, royalty, or other ~~payments~~economic benefits from any such collaborators;

•
the extent to which our business could be adversely impacted by the effects of the novel coronavirus ("COVID-19") outbreak, including actions by us, governments, our customers, our suppliers, or other third parties to control the spread of COVID-19, or by other health epidemics or pandemics;

•the costs associated with, and our ability to comply with, emerging environmental, social and governance ~~standards;~~standards, including climate reporting requirements at the local, state and national levels;

•our ability to successfully protect our information technology systems and maintain our global operations and supply chain without interruption;

•our ability to accurately forecast revenue, operating expenditures, or other metrics impacting profitability;

•fluctuations in foreign currency exchange rates; and

•changes in accounting standards.

In light of these risks and uncertainties, we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in Part I Item 1A — Risk Factors of the Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022,~~2023, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Those factors and the other risk factors described herein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Our forward-looking statements do not reflect the potential impact of any future collaborations, alliances, business combinations, partnerships, strategic out-licensing of certain assets, the acquisition of preclinical-stage, clinical-stage, marketed products or platform technologies or other investments we may make. 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.

You should read this Quarterly Report on Form 10-Q in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022~~2023 (including the documents incorporated by reference therein) completely and with the understanding that our actual future results may be materially different from what we expect. These forward-looking statements speak only as of the date of this report. We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking 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.

PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS AND NOTES (UNAUDITED)

Amicus Therapeutics, Inc.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share amounts)


		June 30, 2023		December 31, 2022
	March 31, 2024						March 31, 2024	December 31, 2023
Assets	Assets
Current assets:	Current assets:
Current assets:
Current assets:
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	211,307	$	148,813
Investments in marketable securities	Investments in marketable securities	54,319		144,782
Accounts receivable	Accounts receivable	63,716		66,196
Inventories	Inventories	51,381		23,816
Prepaid expenses and other current assets	Prepaid expenses and other current assets	52,099		40,209
Total current assets	Total current assets	432,822		423,816
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	28,042		29,534
Property and equipment, less accumulated depreciation of $24,060 and $22,281 at June 30, 2023 and December 31, 2022, respectively		30,238		30,778
Intangible assets, less accumulated amortization of $855 and $0 at June 30, 2023 and December 31, 2022, respectively		22,145		23,000
Property and equipment, less accumulated depreciation of $26,563 and $25,429 at March 31, 2024 and December 31, 2023, respectively
Intangible assets, less accumulated amortization of $3,328 and $2,510 at March 31, 2024 and December 31, 2023, respectively
Goodwill	Goodwill	197,797		197,797
Other non-current assets	Other non-current assets	19,049		19,242
Total Assets	Total Assets	$	730,093	$	724,167
Liabilities and Stockholders’ Equity	Liabilities and Stockholders’ Equity
Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Accounts payable
Accounts payable
Accounts payable	Accounts payable	$	13,522	$	15,413
Accrued expenses and other current liabilities	Accrued expenses and other current liabilities	124,868		93,636
Contingent consideration payable		13,005		21,417
Operating lease liabilities	Operating lease liabilities	7,840		8,552
Total current liabilities	Total current liabilities	159,235		139,018
Long-term debt	Long-term debt	393,350		391,990
Operating lease liabilities	Operating lease liabilities	50,976		51,578
Deferred reimbursements		5,906		4,656
Deferred income taxes		—		4,939
Other non-current liabilities	Other non-current liabilities	9,045		8,939
Total liabilities	Total liabilities	618,512		601,120
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
Stockholders’ equity:	Stockholders’ equity:
Common stock, $0.01 par value, 500,000,000 shares authorized, 286,992,923 and 281,108,273 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		2,856		2,815
Common stock, $0.01 par value, 500,000,000 shares authorized, 296,159,417 and 293,594,209 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively
Common stock, $0.01 par value, 500,000,000 shares authorized, 296,159,417 and 293,594,209 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively
Common stock, $0.01 par value, 500,000,000 shares authorized, 296,159,417 and 293,594,209 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively
Additional paid-in capital	Additional paid-in capital	2,733,148		2,664,744
Accumulated other comprehensive gain (loss):
Accumulated other comprehensive loss:
Foreign currency translation adjustment
Foreign currency translation adjustment
Foreign currency translation adjustment	Foreign currency translation adjustment	4,337		(11,989)
Unrealized loss on available-for-sale securities	Unrealized loss on available-for-sale securities	(177)		(116)
Warrants	Warrants	71		83
Accumulated deficit	Accumulated deficit	(2,628,654)		(2,532,490)
Total stockholders’ equity	Total stockholders’ equity	111,581		123,047
Total Liabilities and Stockholders’ Equity	Total Liabilities and Stockholders’ Equity	$	730,093	$	724,167

See accompanying Notes to Consolidated Financial Statements

Amicus Therapeutics, Inc.

Consolidated Statements of Operations

(Unaudited)

(in thousands, except share and per share amounts)


		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
	Three Months Ended March 31,													Three Months Ended March 31,
	2024											2024			2023
Net product sales	Net product sales	$	94,503	$	80,731	$	180,773	$	159,446
Cost of goods sold	Cost of goods sold	9,114		8,197		16,056		15,779
Gross profit	Gross profit	85,389		72,534		164,717		143,667
Operating expenses:	Operating expenses:
Research and development	Research and development	35,149		78,319		76,648		159,836
Research and development
Research and development
Selling, general, and administrative	Selling, general, and administrative	65,423		53,379		139,380		111,495
Changes in fair value of contingent consideration payable	Changes in fair value of contingent consideration payable	337		115		588		(1,073)
Loss on impairment of assets		1,134		—		1,134		6,616
Restructuring charges
Depreciation and amortization	Depreciation and amortization	2,206		1,334		3,463		2,745
Total operating expenses	Total operating expenses	104,249		133,147		221,213		279,619
Loss from operations	Loss from operations	(18,860)		(60,613)		(56,496)		(135,952)
Other (expense) income:
Other expense:
Interest income
Interest income
Interest income	Interest income	1,737		356		3,936		489
Interest expense	Interest expense	(12,492)		(8,257)		(24,336)		(16,404)
Other (expense) income		(10,902)		7,268		(16,840)		9,170
Other expense
Loss before income tax	Loss before income tax	(40,517)		(61,246)		(93,736)		(142,697)
Income tax expense		(2,715)		(911)		(2,428)		(4,720)
Income tax (expense) benefit
Net loss attributable to common stockholders	Net loss attributable to common stockholders	$	(43,232)	$	(62,157)	$	(96,164)	$	(147,417)
Net loss attributable to common stockholders per common share — basic and diluted	Net loss attributable to common stockholders per common share — basic and diluted	$	(0.15)	$	(0.21)	$	(0.33)	$	(0.51)
Weighted-average common shares outstanding — basic and diluted	Weighted-average common shares outstanding — basic and diluted	292,797,002		291,970,562		292,071,201		288,646,587		Weighted-average common shares outstanding — basic and diluted	302,903,009		291,336,750

See accompanying Notes to Consolidated Financial Statements

Amicus Therapeutics, Inc.

Consolidated Statements of Comprehensive Loss

(Unaudited)

(in thousands)

Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
Net loss $ (43,232) $ (62,157) $ (96,164) $ (147,417)
Other comprehensive gain (loss):
Foreign currency translation adjustment gain (loss) 10,880 (16,183) 16,326 (21,854)
Unrealized gain (loss) on available-for-sale securities 24 (29) (61) (367)
Other comprehensive gain (loss) 10,904 (16,212) 16,265 (22,221)
Comprehensive loss $ (32,328) $ (78,369) $ (79,899) $ (169,638)


	Three Months Ended March 31,
	2024		2023
Net loss	$	(48,419)	$	(52,932)
Other comprehensive gain, net of tax:
Foreign currency translation adjustment gain	1,418		5,446
Unrealized loss on available-for-sale securities	(15)		(85)
Other comprehensive gain	1,403		5,361
Comprehensive loss	$	(47,016)	$	(47,571)

See accompanying Notes to Consolidated Financial Statements

Amicus Therapeutics, Inc.

Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)

(in thousands, except share amounts)

Three Months Ended June 30, 2023
Common Stock Additional
Paid-In
Capital Warrants Other
Comprehensive
Gain (Loss) Accumulated
Deficit Total
Stockholders'
Equity
Shares Amount
Balance at March 31, 2023 283,300,585 $ 2,820 $ 2,691,836 $ 83 $ (6,744) $ (2,585,422) $ 102,573
Stock options exercised, net 269,109 4 1,746 — — — 1,750
Vesting of restricted stock units, net of taxes 155,776 — (1,202) — — — (1,202)
Stock-based compensation — — 16,577 — — — 16,577
Issuance of shares in connection with at-the-market offering, net of issuance costs 2,047,353 20 24,179 — — — 24,199
Warrants exercised 1,220,100 12 12 (12) — — 12
Unrealized gain on available-for-sale securities — — — — 24 — 24
Foreign currency translation adjustment — — — — 10,880 — 10,880
Net loss — — — — — (43,232) (43,232)
Balance at June 30, 2023 286,992,923 $ 2,856 $ 2,733,148 $ 71 $ 4,160 $ (2,628,654) $ 111,581


Three Months Ended March 31, 2024

	Common Stock			Additional Paid-In Capital		Warrants		Other Comprehensive Loss		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at December 31,2023	293,594,209	$	2,918	$	2,836,018	$	71	$	5,241	$	(2,684,074)	$	160,174
Stock options exercised, net	444,497	4		3,450		—		—		—		3,454
Vesting of restricted stock units, net of taxes	2,120,711	—		(16,721)		—		—		—		(16,721)
Stock-based compensation	—	—		30,803		—		—		—		30,803
Unrealized loss on available-for-sale securities	—	—		—		—		(15)		—		(15)
Foreign currency translation adjustment	—	—		—		—		1,418		—		1,418
Net loss	—	—		—		—		—		(48,419)		(48,419)
Balance at March 31, 2024	296,159,417	$	2,922	$	2,853,550	$	71	$	6,644	$	(2,732,493)	$	130,694

Six Months Ended June 30, 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 653,217 7 4,398 — — — 4,405
Vesting of restricted stock units, net of taxes 1,768,751 (14,008) — — — (14,008)
Stock-based compensation — — 51,471 — — — 51,471
Warrants exercised 1,220,100 12 12 (12) — — 12
Issuance of shares in connection with at-the-market offering, net of issuance costs 2,242,582 22 26,531 — — — 26,553
Unrealized loss on available-for-sale securities — — — — (61) — (61)
Foreign currency translation adjustment — — — — 16,326 — 16,326
Net loss — — — — — (96,164) (96,164)
Balance at June 30, 2023 286,992,923 $ 2,856 $ 2,733,148 $ 71 $ 4,160 $ (2,628,654) $ 111,581

Three Months Ended June 30, 2022
Common Stock Additional
Paid-In
Capital Warrants Other
Comprehensive
Gain (Loss) Accumulated
Deficit Total
Stockholders'
Equity
Shares Amount
Balance at March 31, 2022 280,133,856 $ 2,809 $ 2,617,935 $ 83 $ (1,028) $ (2,381,182) $ 238,617
Stock options exercised, net 189,256 2 997 — — — 999
Vesting of restricted stock units, net of taxes 133,555 — (285) — — — (285)
Stock-based compensation — — 12,463 — — — 12,463
Unrealized loss on available-for-sale securities — — — — (29) — (29)
Foreign currency translation adjustment — — — — (16,183) — (16,183)
Net loss — — — — — (62,157) (62,157)
Balance at June 30, 2022 280,456,667 $ 2,811 $ 2,631,110 $ 83 $ (17,240) $ (2,443,339) $ 173,425

															Six Months Ended June 30, 2022
Three Months Ended March 31, 2023															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, 2021		278,912,800	$	2,808	$	2,595,419	$	83	$	4,981	$	(2,295,922)	$	307,369
		Common Stock
		Common Stock
		Common Stock														Additional Paid-In Capital	Warrants	Other Comprehensive Gain (Loss)	Accumulated Deficit	Total Stockholders' Equity
	Shares
Balance at December 31,2022
Balance at December 31,2022
Balance at December 31,2022
Stock options exercised, net	Stock options exercised, net	334,705	3		1,855		—		—		—		1,858
Vesting of restricted stock units, net of taxes	Vesting of restricted stock units, net of taxes	1,209,162	—		(9,278)		—		—		—		(9,278)
Stock-based compensation	Stock-based compensation	—	—		43,114		—		—		—		43,114
Issuance of shares in connection with at-the-market offering, net of issuance costs
Unrealized loss on available-for-sale securities	Unrealized loss on available-for-sale securities	—	—		—		—		(367)		—		(367)
Foreign currency translation adjustment	Foreign currency translation adjustment	—	—		—		—		(21,854)		—		(21,854)
Net loss	Net loss	—	—		—		—		—		(147,417)		(147,417)
Balance at June 30, 2022		280,456,667	$	2,811	$	2,631,110	$	83	$	(17,240)	$	(2,443,339)	$	173,425
Balance at March 31, 2023

See accompanying Notes to Consolidated Financial Statements

Amicus Therapeutics, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


		Six Months Ended June 30,
		2023		2022
	Three Months Ended March 31,						Three Months Ended March 31,
	2024					2024		2023
Operating activities	Operating activities
Net loss	Net loss	$	(96,164)	$	(147,417)
Net loss
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:	Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount and deferred financing
Amortization of debt discount and deferred financing
Amortization of debt discount and deferred financing	Amortization of debt discount and deferred financing	1,359		1,295
Depreciation and amortization	Depreciation and amortization	3,463		2,745
Stock-based compensation	Stock-based compensation	51,471		43,114
Non-cash changes in the fair value of contingent consideration payable	Non-cash changes in the fair value of contingent consideration payable	588		(1,073)
Foreign currency remeasurement loss	Foreign currency remeasurement loss	23,904		353
Deferred taxes	Deferred taxes	(4,939)		—
Asset impairment charges and other asset write-offs		2,060		12,265
Other
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:
Accounts receivable
Accounts receivable
Accounts receivable	Accounts receivable	2,705		(4,424)
Inventories	Inventories	(27,483)		3,537
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(12,263)		(4,481)
Accounts payable, accrued expenses, and other current liabilities	Accounts payable, accrued expenses, and other current liabilities	31,620		22,671
Other non-current assets and liabilities	Other non-current assets and liabilities	(2,586)		(2,762)
Payment of contingent consideration		(7,937)		—
Net cash used in operating activities	Net cash used in operating activities	$	(34,202)	$	(74,177)
Investing activities	Investing activities
Sale and redemption of marketable securities
Sale and redemption of marketable securities
Sale and redemption of marketable securities	Sale and redemption of marketable securities	126,848		184,061
Purchases of marketable securities	Purchases of marketable securities	(36,448)		(98,330)
Capital expenditures	Capital expenditures	(4,144)		(1,226)
Net cash provided by investing activities	Net cash provided by investing activities	$	86,256	$	84,505
Financing activities	Financing activities
Payment of finance leases	Payment of finance leases	(51)		(41)
Payment of finance leases
Payment of finance leases
Withholding taxes paid on vested restricted stock units	Withholding taxes paid on vested restricted stock units	(14,008)		(9,278)
Proceeds from stock options exercised, net	Proceeds from stock options exercised, net	4,405		1,858
Proceeds from warrants exercised, net		12		—
Proceeds from the issuance of shares in connection with at-the-market offering, net of issuance costs	Proceeds from the issuance of shares in connection with at-the-market offering, net of issuance costs	26,553		—
Payment of contingent consideration		(1,063)		—
Net cash provided by (used in) financing activities		$	15,848	$	(7,461)
Net cash used in financing activities
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	$	(6,684)	$	(12,462)
Net increase (decrease) in cash, cash equivalents, and restricted cash at the end of the period		61,218		(9,595)
Net (decrease) increase in cash, cash equivalents, and restricted cash at the end of the period
Cash, cash equivalents, and restricted cash at the beginning of period	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	Cash, cash equivalents, and restricted cash at the end of period	$	214,333	$	239,861
Supplemental disclosures of cash flow information	Supplemental disclosures of cash flow information
Cash paid during the period for interest	Cash paid during the period for interest	$	23,155	$	15,108
Cash paid during the period for interest
Cash paid during the period for interest
Capital expenditures unpaid at the end of period
Cash paid for taxes	Cash paid for taxes	$	5,978	$	710
Capital expenditures unpaid at the end of period		$	297	$	53
Tenant improvements paid through lease incentives

See accompanying Notes to Consolidated Financial Statements

Amicus Therapeutics, Inc.

Notes to the Consolidated Financial Statements

(Unaudited)

1. Description of Business

Amicus Therapeutics, Inc. (the "Company") is a global, patient-dedicated biotechnology company focused on discovering, developing, and delivering novel medicines for rare diseases. The Company ~~has developed~~seeks to deliver the highest quality therapies that have the potential to obsolete current treatments, provide significant benefits to patients, and ~~commercialized~~be first- or best-in-class. The Company's two marketed therapies are Galafold®, the first oral monotherapy for Fabry disease that has achieved widespread global approval and the first two-component therapy for Pompe disease that has been approved in the European Union (“E.U.”) and the United Kingdom (“U.K.”), and is under regulatory review in the United States (“U.S.”). The Company is committed to discovering and developing next generation therapies in Fabry and Pompe diseases.

~~The cornerstone of the Company's portfolio is Galafold~~® ~~(also referred to as "migalastat"), the first and only approved oral precision medicine~~ for people living with Fabry disease who have amenable genetic ~~variants. Migalastat is currently approved under the trade name~~ variants, and Pombiliti® + Opfolda®, a novel treatment designed to improve uptake of active enzyme into key disease relevant tissues for adults living with late-onset Pompe disease.

Galafold® (also referred to as "migalastat"), is approved in over 40 countries around the world, including the United States ("U.S."), European Union ("E.U."), United Kingdom ("U.K."), and Japan. Additionally, Galafold® has been granted orphan drug designation in the U.S., E.U., U.K., Japan and ~~Japan, with multiple additional approvals granted and applications pending in~~ several ~~geographies around the world.~~other countries.

Pombiliti™® ~~and~~+ Opfolda™® (also referred to as ~~AT-GAA, ATB200/AT2221, or cipaglucosidase alfa/miglustat)~~"cipaglucosidase alfa-atga/miglustat"), ~~is a novel, two-component treatment for Pompe disease that~~ was approved byin 2023 in the ~~European Commission ("EC") in June 2023~~three largest Pompe markets: the U.S., the E.U., and the U.K. ~~Medicines~~Multiple regulatory submissions and ~~Healthcare products Regulatory Agency ("MHRA") in August 2023. The Company began launch activities for Pombiliti~~™ ~~and Opfolda~~™ ~~in Germany and will commence the~~ reimbursement processes with ~~healthcare~~global health authorities in other European countries. 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 2023, the FDA completed the required pre-approval inspection of the manufacturing site and the review is ongoing.

The Company continues to monitor the novel coronavirus (“COVID-19”) pandemic. The Company's commercial operations have not been significantly impacted by the COVID-19 pandemic and the Company continues to see a gradual improvement in patient identification and Galafoldare currently underway. Additionally, Pombiliti® ~~initiation. The Company has been able to continue to meet required commercial demand for Galafold~~+ Opfolda® ~~as well as supply Pombiliti~~™has been granted orphan drug designation in the U.S., E.U., U.K., Japan and ~~Opfolda~~™ commercial launch inventory and its ongoing clinical studies and access programs without interruption. In regard to the Company's regulatory operations, the FDA deferred action on the pending BLA for cipaglucosidase alfa, as a site inspection could not be completed by the PDUFA action date due to COVID-19 related travel restrictions in China. In the second quarter of 2023, the FDA completed the required pre-approval inspection of the manufacturing site. Per FDA guidance relating to pre-approval inspections during the COVID-19 pandemic, receipt of a deferral action indicates no deficiencies have been identified and the application otherwise satisfies the requirements for approval.several other countries.

The Company had an accumulated deficit of ~~$2.6~~$2.7 billion as of ~~June 30, 2023~~March 31, 2024 and anticipates incurring losses through the fiscal year ending December 31, ~~2023.~~2024. The Company has historically funded its operations through stock offerings, ~~Galafold~~®product revenues, debt issuances, collaborations, and other financing arrangements.

Based on its current operating model, the Company believes ~~that~~ the current cash position, which includes expected revenues, is sufficient to fund the Company's operations and ongoing research programs for at least the next 12 months. Potential ~~impacts of the COVID-19 pandemic,~~ business development ~~collaborations,~~opportunities, pipeline expansion, and investment in manufacturing capabilities could impact the Company's ~~future~~long-term capital requirements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The ~~Company has prepared the~~ accompanying unaudited Consolidated Financial Statements have been prepared in accordance with the U.S. generally accepted accounting principles ("(“U.S. ~~GAAP"~~GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, ~~they do not include all of the~~certain financial information ~~and disclosures required by~~that is normally included in annual financial statements prepared in accordance with U.S. GAAP, but that is not required for ~~complete financial statements.~~interim reporting purposes, has been omitted. In the opinion of management, the accompanying unaudited Consolidated Financial Statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's interim financial information. Management has determined that the Company operates in one segment focused on the discovery, development, and commercialization of advanced therapies to treat a range of devastating rare and orphan diseases.

The accompanying unaudited Consolidated Financial Statements and related notes should be read in conjunction with the Company's financial statements and related notes as contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023. For a complete description of the Company's accounting policies, please refer to the Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023.

Consolidation

The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions are eliminated in consolidation.

Foreign Currency Transactions

The functional currency for most of the Company's foreign subsidiaries is their local currency. For non-U.S. subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange at the balance sheet date. Income and expense items are translated at the weighted average foreign exchange rates for the

period. Adjustments resulting from the translation of the financial statements of the Company's foreign operations into U.S. dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive income, a separate component of stockholders' equity. Transactions which are not in the functional currency of the entity are remeasured into the functional currency with gains or losses resulting from the remeasurement recorded in other expense.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Additionally, the Company assessed the impact the COVID-19 pandemic had on its operations and financial results as of June 30, 2023 and through the issuance of these financial statements. The Company’s analysis was informed by the facts and circumstances as they were known to the Company. This assessment considered the impact COVID-19 may have on financial estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses.

Cash, Cash Equivalents, Marketable Securities, and Restricted Cash

The Company considers all highly liquid investments purchased with a maturity of three months or less at the date of acquisition to be cash equivalents. Marketable securities consist of fixed income investments with a maturity of greater than three months and other highly liquid investments that can be readily purchased or sold using established markets. These investments are classified as available-for-sale and are reported at fair value on the Company's Consolidated Balance Sheets. Unrealized holding gains and losses are reported within other comprehensive ~~loss~~gain in the Company's Consolidated Statements of Comprehensive Loss. Fair value is based on available market information including quoted market prices, broker or dealer quotations, or other observable inputs.

Restricted cash consists primarily of funds held to satisfy the requirements of certain agreements that are restricted in their use and is included inas a component of other non-current assets on the Company's Consolidated Balance Sheets.

Concentration of Credit Risk

The Company's financial instruments that are exposed to concentration of credit risk consist primarily of cash, cash equivalents, marketable securities, and ~~marketable securities.~~ accounts receivable.

The Company maintains its cash and cash equivalents in bank accounts, which, at times, exceed federally insured limits. The Company invests its marketable securities in high-quality commercial financial instruments. The Company has not recognized any losses from credit risks on such accounts during any of the periods presented. The Company believes it is not exposed to significant credit risk on its cash, cash equivalents, or marketable securities.

The ~~Company is subject to credit risk from its accounts receivable primarily related to its product sales of Galafold~~®~~. The~~ Company's accounts receivable at ~~June 30, 2023~~March 31, 2024 have primarily arisen from ~~product~~Galafold® sales ~~primarily~~ in Europe, the U.S., and Japan. The Company ~~will~~ periodically ~~assess~~assesses the financial strength of its customers to establish allowances for anticipated losses, if any. For accounts receivable that have arisen from named patient sales, the payment terms are predetermined, and the Company evaluates the creditworthiness of each customer on a regular basis. As of ~~June 30, 2023,~~March 31, 2024, the Company's allowance for doubtful accounts was $0.1 million.

Revenue Recognition

~~The Company's net product sales consist primarily of sales of Galafold~~® ~~for the treatment of Fabry disease. Galafold~~® sales for the three and six months ended June 30, 2023 were $94.3 million and $180.4 million, respectively, and $80.7 million and $159.4 million for the three and six months ended June 30, 2022, respectively. The Company has recorded revenue on sales where ~~Galafold~~® isits products are available either on a commercial basis or through a reimbursed early access program. ~~Orders for Galafold~~®Product orders are generally received from distributors and pharmacies, with the ultimate payor often a government authority.

The Company recognizes revenue when its performance ~~obligations~~obligation to its customers have been satisfied, which occurs at a point in time when the pharmacies or distributors obtain control of ~~Galafold~~®.the products. The transaction price is determined based on fixed consideration in the Company's customer contracts and is recorded net of estimates for variable consideration, which ~~are third party~~primarily consist of third-party discounts and rebates. The identified variable consideration is recorded as a reduction of revenue at the time revenue from the sale ~~of Galafold~~® is recognized. The Company recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. These estimates may differ from actual consideration received. The Company evaluates these estimates each reporting period to reflect known changes.

The following table summarizes the Company's net product sales disaggregated by product:


	Three Months Ended March 31,
(in thousands)	2024		2023
Galafold®	$	99,359	$	86,112
Pombiliti® + Opfolda®	11,044		158
Total net product sales	$	110,403	$	86,270

The following table summarizes the Company's net product sales disaggregated by geographic area:


			Three Months Ended June 30,				Six Months Ended June 30,
		Three Months Ended March 31,												Three Months Ended March 31,
(in thousands)	(in thousands)		2023		2022		2023		2022		(in thousands)	2024	2023
U.S.	U.S.		$	37,128	$	27,540	$	65,959	$	51,718
Ex-U.S.	Ex-U.S.		57,375		53,191		114,814		107,728
Total net product sales	Total net product sales		$	94,503	$	80,731	$	180,773	$	159,446

Inventories and Cost of Goods Sold

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 goods sold in the Company's Consolidated Statements of Operations.

Cost of goods sold includes the cost of inventory sold, manufacturing and supply chain costs, product shipping and handling costs, provisions for excess and obsolete inventory, as well as royalties payable. A portion of Pombiliti® + Opfolda® inventory 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 costs of goods sold and gross margin.

Recent Accounting Developments - Guidance Adopted in 2024

In November 2023, the Financial Accounting Standards Board ("FASB") issued the Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments expand reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments require, among other things, disclosure of the title and position of the chief operating decision maker and require that public entities with a single reportable segment provide all disclosures required by this update and existing segment disclosures in Topic 280. Annual disclosures are required for fiscal years beginning after December 15, 2023 and interim disclosures are required for periods within fiscal years beginning after December 15, 2024. Retrospective application is required unless it is impracticable, and early adoption is permitted. The Company adopted this guidance on January 1, 2024. This ASU applies to disclosure requirements only, and the Company will provide required annual disclosures as part of the 2024 Annual Report on Form 10-K and required interim disclosures as part of 2025 Quarterly Reports on Form 10-Q.

Recent Accounting Developments - Guidance Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, must be applied prospectively with an option to apply retrospectively, and early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on the Company's consolidated financial statements.

1110

~~Intangible Assets and Goodwill~~

The Company records goodwill in a business combination when the total consideration exceeds the fair value of the net tangible and identifiable intangible assets acquired. 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.

Finite-lived intangible assets are recorded at cost, net of accumulated amortization, and, if applicable, impairment charges. Amortization of finite-lived intangible assets is recorded over the assets’ estimated useful lives on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment is determined, the Company writes down the asset to its estimated fair value and records an impairment loss equal to the excess of the carrying value of the asset over its estimated fair value in the period at which such a determination is made.

~~No indicators of impairment were noted during the six months ended June 30, 2023.~~

~~Recent Accounting Developments~~

~~The Company has evaluated recent accounting pronouncements and believes that none of them will have a material effect on the Company's Consolidated Financial Statements or related disclosures.~~

3. ~~Intangible Assets~~

As of June 30, 2023, the Company's intangible assets consisted of lead enzyme replacement therapy assets acquired with the Callidus Biopharma, Inc. acquisition in 2013, previously accounted for as in-process research and development. In March 2023, as a result of the EC's approval of Pombiliti™, the Company began amortizing the assets over the initial regulatory exclusivity period of 7 years. The Company completed an impairment assessment before changing the classification to definite-lived intangible asset noting no impairment. Amortization expense for the three and six months ended June 30, 2023 was $0.8 million and $0.9 million, respectively. Total estimated amortization for the finite-lived intangible assets is estimated to be $2.5 million for the year ended December 31, 2023 and $3.3 million for the next four years thereafter.

4. Cash, Cash Equivalents, Marketable Securities, and Restricted Cash

As of ~~June 30, 2023,~~March 31, 2024, the Company held ~~$211.3~~$209.8 million in cash and cash equivalents and ~~$54.3~~$29.8 million of marketable securities which are reported at fair value on the Company's Consolidated Balance Sheets. Unrealized holding gains and losses are generally reported within other comprehensive gain ~~(loss)~~ in the ~~Company's~~ Consolidated Statements of Comprehensive Loss. If a decline in the fair value of a marketable security below the Company's cost basis is determined to be other-than-temporary or if an available-for-sale debt security’s fair value is determined to be less than the amortized cost and the Company intends or is more than likely to sell the security before recovery and it is not considered a credit loss such security is written down to its estimated fair value as a new cost basis and the amount of the write-down is included in ~~earnings~~the Consolidated Statements of Operations as an impairment charge. 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.~~the Consolidated Statements of Operations.

The Company regularly invests excess operating cash in deposits with major financial institutions, ~~and~~ money market funds, notes issued by the U.S. government, as well as fixed income investments and U.S. bond funds, both of which can be readily purchased and sold using established markets. The Company believes that the market risk arising from its holdings of these financial instruments is mitigated as, in accordance with Company policy, securities are of high credit rating. Investments that have original maturities greater than three months but less than one year are classified as current.

Cash, cash equivalents and marketable securities are classified as current unless mentioned otherwise below and consisted of the following:


			As of June 30, 2023									As of March 31, 2024
(in thousands)	(in thousands)		Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value		(in thousands)	Cost	Gross Unrealized Gain	Gross Unrealized Loss	Fair Value
Cash and cash equivalents	Cash and cash equivalents		$	211,307	$	—	$	—	$	211,307
Commercial paper	Commercial paper		44,022		10		(1)		44,031
U.S. government agency bonds	U.S. government agency bonds		9,875		12		—		9,887
Money market	Money market		350		—		—		350
Certificates of deposit	Certificates of deposit		51		—		—		51
			$	265,605	$	22	$	(1)	$	265,626
		$
Included in cash and cash equivalents	Included in cash and cash equivalents		$	211,307	$	—	$	—	$	211,307
Included in marketable securities	Included in marketable securities		54,298		22		(1)		54,319
Total cash, cash equivalents, and marketable securities	Total cash, cash equivalents, and marketable securities		$	265,605	$	22	$	(1)	$	265,626


			As of December 31, 2022									As of December 31, 2023
(in thousands)	(in thousands)		Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value		(in thousands)	Cost		Gross Unrealized Gain			Gross Unrealized Loss			Fair Value
Cash and cash equivalents	Cash and cash equivalents		$	148,813	$	—	$	—	$	148,813
Commercial paper	Commercial paper		144,299		82		—		144,381
Treasury bill
U.S. government agency bonds
Money market	Money market		350		—		—		350
Certificate of deposit	Certificate of deposit		51		—		—		51
			$	293,513	$	82	$	—	$	293,595
		$
Included in cash and cash equivalents	Included in cash and cash equivalents		$	148,813	$	—	$	—	$	148,813
Included in marketable securities	Included in marketable securities		144,700		82		—		144,782		Included in marketable securities	39,196	14		14	(4)		(4)	39,206		39,206
Total cash, cash equivalents, and marketable securities	Total cash, cash equivalents, and marketable securities		$	293,513	$	82	$	—	$	293,595

For both the ~~six~~three months ended ~~June 30,~~March 31, 2024 and March 31, 2023, ~~and the fiscal year ended December 31, 2022,~~ there were no realized gains or losses. The cost of securities sold is based on the specific identification method.

Unrealized loss positions in the marketable securities as of ~~June 30, 2023~~March 31, 2024 reflect temporary impairments and are not a result of credit loss. Additionally, as these positions have been in a loss position for less than twelve months and the Company does not intend to sell these securities before recovery, the losses are recognized inas a component of other comprehensive ~~gain (loss).~~gain. The fair value of these marketable securities in unrealized loss positions ~~was $3.0~~are $29.7 million and $11.4 million as of ~~June 30, 2023. The Company had no securities in an unrealized loss position as of~~March 31, 2024 and December 31, ~~2022.~~2023, respectively.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the ~~Company's~~ Consolidated Balance Sheets that sum to the total of the same such amounts shown in the ~~Company's~~ Consolidated Statements of Cash Flows.

As of June 30,
(in thousands) 2023 2022
Cash and cash equivalents $ 211,307 $ 235,639
Restricted cash 3,026 4,222
Cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows $ 214,333 $ 239,861


	As of March 31,
(in thousands)	2024		2023
Cash and cash equivalents	$	209,761	$	160,602
Restricted cash	3,033		4,381
Cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows	$	212,794	$	164,983

5.4. Inventories

~~Inventories as of June 30, 2023 and December 31, 2022 consisted~~The following table summarizes the components of the ~~following:~~Company’s inventories for each of the periods indicated:


(in thousands)	(in thousands)	June 30, 2023		December 31, 2022		(in thousands)	March 31, 2024	December 31, 2023
Raw materials	Raw materials	$	36,379	$	10,054
Work-in-process	Work-in-process	7,327		9,615
Finished goods	Finished goods	7,675		4,147
Total inventories	Total inventories	$	51,381	$	23,816

The Company's reserve for inventory was ~~$1.0~~$2.9 million and ~~$0.4~~$0.5 million as of ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively.

6.5. Debt

The following table summarizes the Company's debt ~~consists~~for each of the ~~following:~~periods indicated:

(in thousands)

June 30, 2023

December 31, 2022

(in thousands)

March 31, 2024

December 31, 2023

Senior Secured Term Loan due 2026:

Senior Secured Term Loan due 2029:

Principal

400,000

Less: debt discount (1)

(3,795)

(4,571)

Less: deferred financing (1)

(2,855)

(3,439)

Net carrying value of Long-term debt

393,350

391,990

(1) Included in the Company's Consolidated Balance Sheets within long-term debt and amortized to interest expense over the remaining life of the Senior Secured Term Loan due 2029 using the effective interest rate method.

Interest Expense

The following table sets forth interest expense recognized related to the Company's debt for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ respectively:


		Three Months Ended June 30,				Six Months Ended June 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
(in thousands)
(in thousands)
(in thousands)	(in thousands)	2023		2022		2023		2022
Contractual interest expense	Contractual interest expense	$	11,789	$	7,589	$	23,019	$	15,089
Contractual interest expense
Contractual interest expense
Amortization of debt discount
Amortization of debt discount
Amortization of debt discount	Amortization of debt discount	$	395	$	375	$	776	$	739
Amortization of deferred financing	Amortization of deferred financing	$	297	$	283	$	583	$	556
Amortization of deferred financing
Amortization of deferred financing

6. Restructuring

In the first quarter of 2024, restructuring charges are primarily related to an initiative to reduce operating costs by abandoning one of the Company's leases that it no longer believes is necessary to conduct its operations.

The associated liabilities are recorded in accruedexpenses and other current liabilities in the Company’s Consolidated Balance Sheets.Total charges incurred are summarized as follows:


(in thousands)	Other Facility and Non-Lease Costs		Accelerated Depreciation		Total
Balance as of December 31, 2023	$	—	$	—	$	—
Restructuring charges	3,201		2,844		6,045
Non-cash items	—		(2,844)		(2,844)
Cash settled	(310)		—		(310)
Balance as of March 31, 2024	$	2,891	$	—	$	2,891

7. ~~Stockholder's Equity~~

During the three and six months ended June 30, 2023, the Company issued and sold an aggregate of 2,047,353 and 2,242,582 shares, respectively, through its at-the-market equity program ("ATM program") at weighted-average public offering prices of $12.21 and $12.25 per share, resulting in net proceeds of $24.2 million and $26.6 million, respectively. As of June 30, 2023, an aggregate of $222.5 million worth of shares remain available to be issued and sold under the ATM program.

8. Stock-Based Compensation

The ~~Company's~~ Amended and Restated 2007 Equity Incentive 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~~ Board of 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's~~ business. 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.

Stock Option Grants

The fair value of the stock options granted iswere estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:






		Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
Expected stock price volatility	Expected stock price volatility	59.2		%	61.3		%	59.3		%	62.2		%
Expected stock price volatility
Expected stock price volatility
Risk free interest rate
Risk free interest rate
Risk free interest rate	Risk free interest rate	3.8		%	3.0		%	3.9		%	1.6		%
Expected life of options (years)	Expected life of options (years)	5.5			5.3			5.5			5.3
Expected life of options (years)
Expected life of options (years)
Expected annual dividend per share	Expected annual dividend per share	$	—		$	—		$	—		$	—
Expected annual dividend per share
Expected annual dividend per share

A summary of the Company's stock options for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 were as follows:

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 5,194 $ 11.97
Exercised (655) $ 6.73 ��
Forfeited (160) $ 11.36
Expired (35) $ 13.99
Options outstanding, June 30, 2023 23,408 $ 11.58 6.9 $ 41.1
Vested and unvested expected to vest, June 30, 2023 21,510 $ 11.52 6.7 $ 39.3
Exercisable at June 30, 2023 13,061 $ 11.02 5.3 $ 32.5


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Years	Aggregate Intrinsic Value
	(in thousands)				(in millions)
Options outstanding, December 31, 2023	23,002	$	11.69
Granted	4,033	$	14.23
Exercised	(439)	$	7.86
Forfeited	(271)	$	12.56
Expired	(20)	$	17.28
Options outstanding, March 31, 2024	26,305	$	12.13	6.4	$	23.9
Vested and unvested expected to vest, March 31, 2024	24,409	$	12.08	6.2	$	23.5
Exercisable at March 31, 2024	15,979	$	11.60	4.9	$	22.3

As of ~~June 30, 2023,~~March 31, 2024, the total unrecognized compensation cost related to non-vested stock options granted was ~~$43.4~~$52.5 million and is expected to be recognized over a weighted average period of three years.

Restricted Stock Units and Performance-Based Restricted Stock Units (collectively "RSUs")

RSUs awarded under the Plan are generally subject to graded vesting and are contingent on an employee's continued service. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. The Company expenses the cost of the RSUs, which is determined to be the fair market value of the shares of common stock underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse. A summary of non-vested RSU activity under the Plan for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 is as follows:


			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
		Number of Shares										Number of Shares			Weighted Average Grant Date Fair Value	Weighted Average Remaining Years	Aggregate Intrinsic Value
		(in thousands)										(in thousands)						(in millions)
Non-vested units as of December 31, 2023									Non-vested units as of December 31, 2023	10,033			$	13.37
Granted	Granted		3,967	$	13.06				Granted	3,251	$		$	15.35
Vested	Vested		(2,752)	$	12.12				Vested	(3,332)	$		$	13.49
Forfeited	Forfeited		(567)	$	9.86				Forfeited	(393)	$		$	14.66
Non-vested units as of June 30, 2023			10,365	$	13.53	2.3	$	130.2
Non-vested units as of March 31, 2024

As of ~~June 30, 2023,~~March 31, 2024, there was ~~$68.5~~$77.7 million of total unrecognized compensation cost related to unvested RSUs with service-based vesting conditions. These costs are expected to be recognized over a weighted average period of ~~two~~three years.

Compensation Expense Related to Equity Awards

The following table summarizes information related to compensation expense recognized in the Company's Consolidated Statements of Operations related to the equity awards:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
(in thousands)	(in thousands)	2023		2022		2023		2022		(in thousands)	2024	2023
Research and development expense	Research and development expense	$	4,117	$	4,379	$	12,607	$	13,744
Selling, general, and administrative expense	Selling, general, and administrative expense	12,460		8,084		38,864		29,370
Total equity compensation expense	Total equity compensation expense	$	16,577	$	12,463	$	51,471	$	43,114

9.8. Assets and Liabilities Measured at Fair Value

The Company's financial assets and liabilities are measured at fair value and classified within the fair value hierarchy, which is defined as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.

Level 2 — Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly.

Level 3 — Inputs that are unobservable for the asset or liability.

A summary of the fair value of the Company's recurring assets and liabilities aggregated by the level in the fair value hierarchy within which those measurements fall as of ~~June 30, 2023~~March 31, 2024 are identified in the following tables:


(in thousands)	(in thousands)	Level 2		Total		(in thousands)	Level 1	Level 2	Total
Assets:	Assets:					Assets:
Commercial paper	Commercial paper	$	44,031	$	44,031
U.S. government agency bonds	U.S. government agency bonds	9,887		9,887
Money market	Money market	7,133		7,133
		$	61,051	$	61,051


(in thousands)	(in thousands)	Level 2		Level 3		Total		(in thousands)	Level 1	Level 2	Total
Liabilities:	Liabilities:							Liabilities:
Contingent consideration payable		$	—	$	13,005	$	13,005
Deferred compensation plan liability	Deferred compensation plan liability	6,783		—		6,783
		$	6,783	$	13,005	$	19,788

A summary of the fair value of the Company's recurring assets and liabilities aggregated by the level in the fair value hierarchy within which those measurements fall as of December 31, ~~2022~~2023 are identified in the following tables:

(in thousands)

Level 2

Total

(in thousands)

Level 1

Level 2

Total

Assets:

Commercial paper

144,381

Commercial paper

Treasury bill

U.S. government agency bonds

Money market

5,808

150,189


(in thousands)	(in thousands)	Level 2		Level 3		Total		(in thousands)	Level 1	Level 2	Total
Liabilities:	Liabilities:							Liabilities:
Contingent consideration payable		$	—	$	21,417	$	21,417
Deferred compensation plan liability	Deferred compensation plan liability	5,458		—		5,458
		$	5,458	$	21,417	$	26,875

~~The~~

Deferred compensation plan liability is recorded as a component of other non-current liabilities on the Company's Senior Secured Term Loan due 2026 falls into the Level 2 category within the fair value level hierarchy and the fair value was determined using quoted prices for similar liabilities in active markets, as well as inputs that are observable for 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.~~

Consolidated Balance Sheets. The Company did not have any Level 3 assets or liabilities as of ~~June 30, 2023~~March 31, 2024 or December 31, ~~2022.~~2023.

Cash, Money Market Funds, and Marketable Securities

The Company classifies its cash within the fair value hierarchy as Level 1 as these assets are valued using quoted prices in an active market for identical assets at the measurement date. The Company considers its investments in marketable securities as available-for-sale and classifies these assets and the money market funds within the fair value hierarchy as Level 2 primarily utilizing broker quotes in a non-active market for valuation of these securities.

~~Contingent Consideration Payable~~

The contingent consideration payable resulted from the acquisition of Callidus Biopharma, Inc. ("Callidus") in November 2013. The most recent valuation was determined using a probability weighted discounted cash flow valuation approach. Gains and losses are included in the Company's Consolidated Statements of Operations.

The contingent consideration payable for Callidus has been classified as a Level 3 recurring liability as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market. If different assumptions

~~were used for the various inputs to the valuation approach, the estimated fair value could be significantly higher or lower than the fair value the Company determined.~~

~~The following significant unobservable inputs were used in the valuation of the contingent consideration payable of Callidus for the ATB200 Pompe disease program:~~

Contingent Consideration
Liability
Fair Value as of June 30, 2023 Valuation Technique Unobservable Input Range
(in thousands)

Discount rate 11.7%

Clinical and regulatory milestones $ 13,005 Probability weighted discounted cash flow Probability of achievement of milestones 88%

Projected year of payments 2023

Contingent consideration liabilities are remeasured to fair value each reporting period using discount rates, probabilities of payment, and projected payment dates. Projected contingent payment amounts related to clinical and regulatory based milestones are discounted back to the current period using a discounted cash flow model. Increases in discount rates and the time to payment may result in lower fair value measurements. Increases or decreases in any of those inputs together, or in isolation, may result in a significantly lower or higher fair value measurement. There is no assurance that any of the conditions for the milestone payments will be met.

~~The Company reached a regulatory milestone in March 2023 associated with the EC granting approval for Pombiliti~~™~~, related to the contingent consideration of Callidus for the ATB200 Pompe disease program. The satisfaction of this milestone resulted in a milestone payment of $9.0 million.~~

~~The following table shows the change in the balance of contingent consideration payable for the three and six months ended June 30, 2023 and 2022, respectively:~~

Three Months Ended June 30, Six Months Ended June 30,
(in thousands) 2023 2022 2023 2022
Balance, beginning of the period $ 12,668 $ 19,151 $ 21,417 $ 20,339
Changes in fair value during the period, included in the Consolidated Statements of Operations 337 115 588 (1,073)
Milestone payment in cash — — (9,000) —
Balance, end of the period (1)
$ 13,005 $ 19,266 $ 13,005 $ 19,266

~~(1)~~ ~~As certain milestones are expected to be reached within the next twelve months, the June 30, 2023 balance was recorded as a current liability in the Company's Consolidated Balance Sheets.~~

~~10.~~9. Basic and Diluted Net Loss per Common Share

The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss attributable to common stockholders per common share:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended March 31,
(in thousands, except per share amounts)	(in thousands, except per share amounts)	2023		2022		2023		2022		(in thousands, except per share amounts)	2024	2023
Numerator:	Numerator:									Numerator:
Net loss attributable to common stockholders	Net loss attributable to common stockholders	$	(43,232)	$	(62,157)	$	(96,164)	$	(147,417)
Denominator:	Denominator:
Weighted average common shares outstanding — basic and diluted	Weighted average common shares outstanding — basic and diluted	292,797,002		291,970,562		292,071,201		288,646,587
Weighted average common shares outstanding — basic and diluted
Weighted average common shares outstanding — basic and diluted

Dilutive common stock equivalents would include the dilutive effect of outstanding common stock options and unvested RSUs. Potentially dilutive common stock equivalents were excluded from the diluted earnings per share denominator for all periods because of their anti-dilutive effect. Weighted average common shares outstanding includes outstanding pre-funded warrants with an exercise price of $0.01.

The table below presents potential shares of common stock that were excluded from the computation as they were anti-dilutive using the treasury stock method:


		As of June 30,			As of March 31,
(in thousands)	(in thousands)	2023	2022	(in thousands)	2024	2023
Options to purchase common stock	Options to purchase common stock	23,408	19,283
Unvested restricted stock units	Unvested restricted stock units	10,365	10,166
Total number of potentially issuable shares	Total number of potentially issuable shares	33,773	29,449

1916

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the unaudited Consolidated Financial Statements and the notes thereto included in this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022.~~2023. Some of the statements we make in this section are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this Quarterly Report on Form 10-Q entitled “Special Note Regarding Forward-Looking Statements”. Certain risk factors may cause actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see the section in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022~~2023 entitled “Risk Factors”.

Overview

We are a global, patient-dedicated biotechnology company focused on discovering, developing, and delivering novel medicines for rare diseases. We seek to deliver the highest quality therapies that have ~~developed~~the potential to obsolete current treatments, provide significant benefits to patients, and ~~commercialized~~be first- or best-in-class. Our two marketed therapies are Galafold®, the first oral monotherapy for Fabry disease that has achieved widespread global approval and the first two-component therapy for Pompe disease that has been approved in the European Union (“E.U.”) and the United Kingdom (“U.K.”), and is under regulatory review in the United States (“U.S.”). We are committed to discovering and developing next generation therapies in Fabry and Pompe diseases.

~~The cornerstone of our portfolio is Galafold~~® ~~(also referred to as "migalastat"), the first and only approved oral precision medicine~~ for people living with Fabry disease who have amenable genetic ~~variants. Migalastat is currently approved under the trade name~~ variants, and Pombiliti® + Opfolda®, a novel treatment designed to improve uptake of active enzyme into key disease relevant tissues for adults living with late-onset Pompe disease.

Galafold® (also referred to as "migalastat") is approved in over 40 countries around the world, including the United States ("U.S."), European Union ("E.U."), United Kingdom ("U.K."), and Japan. Additionally, Galafold® has been granted orphan drug designation in the U.S., E.U., U.K., Japan and ~~Japan, with multiple additional approvals granted and applications pending in~~ several ~~geographies around the world.~~other countries.

Pombiliti™® ~~and~~+ Opfolda™® (also referred to as ~~AT-GAA, ATB200/AT2221, or cipaglucosidase alfa/miglustat), is a novel, two-component treatment for Pompe disease that~~"cipaglucosidase alfa-atga/miglustat") was approved byin 2023 in the ~~European Commission ("EC") in June 2023~~three largest Pompe markets: the U.S., the E.U., and the U.K. ~~Medicines~~Multiple regulatory submissions and ~~Healthcare products Regulatory Agency ("MHRA") in August 2023. We began launch activities for Pombiliti~~™ ~~and Opfolda~~™ ~~in Germany and will commence the~~ reimbursement processes with ~~healthcare~~global health authorities are currently underway. Additionally, Pombiliti® + Opfolda®has been granted orphan drug designation in ~~other European countries. In October 2022,~~ the U.S. ~~Food~~, E.U., U.K., Japan 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 2023, the FDA completed the required pre-approval inspection of the manufacturing site and the review is ongoing.several other countries.

Our Strategy

Our strategy is to create, manufacture, test, and deliver the highest quality medicines for people living with rare diseases through internally developed, jointly developed, acquired, or in-licensed products and product ~~candidates that have the potential to obsolete current treatments, provide significant benefits to patients, and be first- or best-in-class.~~candidates. We are leveraging our global capabilities to develop and broaden our ~~lead~~ franchises in Fabry and Pompe disease, with focused discovery work on next generation therapies and novel ~~platform~~ technologies.

We continue to monitor the novel coronavirus ("COVID-19") pandemic. Our commercial operations have not been significantly impacted by the COVID-19 pandemic and we continue to see a gradual improvement in patient identification and Galafold® ~~initiation. We have been able to continue to meet required commercial demand for Galafold~~® ~~as well as supply Pombiliti~~™ ~~and Opfolda~~™ commercial launch inventory and our ongoing clinical studies and access programs without interruption. In regard to our regulatory operations, the FDA deferred action on the pending BLA for cipaglucosidase alfa, as a site inspection could not be completed by the PDUFA action date due to COVID-19 related travel restrictions in China. In the second quarter of 2023, the FDA completed the required pre-approval inspection of the manufacturing site. Per FDA guidance relating to pre-approval inspections during the COVID-19 pandemic, receipt of a deferral action indicates no deficiencies have been identified and the application otherwise satisfies the requirements for approval.

Highlights of our progress include:

•Commercial and regulatory success in Fabry disease. For the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, Galafold® revenue was ~~$180.4~~$99.4 million of consolidated revenue, which represented an increase of ~~$21.0~~$13.2 million compared to the same period in the prior year. We continue to see strong commercial momentum and expansion into additional geographies. ~~In countries where we have been operating the longest, we see an increasing proportion of previously untreated patients come onto Galafold~~® ~~as compared to treatment experienced patients. In the U.S., we continue to see a significant~~

~~increase in patients from a growing and very wide prescriber base. Across all markets, we see a high rate of compliance and adherence to this oral treatment option.~~

•Pompe disease program milestones. For the three months ended March 31, 2024, Pombiliti™® ~~and~~+ Opfolda™® revenue was $11.0 million of consolidated revenue. Pombiliti® + Opfolda® were approved by the ECEuropean Commission ("EC") in June 2023, the Medicines and ~~MHRA~~Healthcare products Regulatory Agency ("MHRA)" of the United Kingdom in August ~~2023. The regulatory reviews in~~2023, and the U.S. ~~remain ongoing. Additionally, multiple expanded access mechanisms are~~Food and Drug Administration ("FDA") in ~~place around the globe, including in the U.S., U.K., Japan, and others.~~September 2023.

•Pipeline advancement and growth. We are leveraging our global capabilities to develop and broaden our ~~lead~~ franchises in Fabry and Pompe disease, with focused discovery work on next generation therapies and novel ~~platform~~ technologies.

•Financial strength. Total cash, cash equivalents, and marketable securities as of ~~June 30, 2023~~March 31, 2024 was ~~$265.6~~$239.6 million. Based on the current operating model, we believe that the current cash position, which includes expected revenues, is sufficient to fund our operations and ongoing research programs for at least the next 12 months. Potential impacts of the COVID-19 pandemic, business development collaborations, pipeline expansion, and investment in manufacturing capabilities could impact our future capital requirements.

Our Commercial ~~Product~~Products and Product Candidates

Galafold® (migalastat HCl) for Fabry Disease

Our oral precision medicine Galafold® was granted accelerated approval by the FDA in August 2018 ~~under the brand name 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 351 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 (variant). The approved E.U. and U.K. labels include 1,384 mutations amenable to Galafold~~® ~~treatment, which represent up to half of all patients with Fabry disease.~~variant. Marketing authorization approvals as well as approvals for adolescents aged 12 years and older weighing 45 kg or more have been granted in over 40 countries around the world. We plan to continue to launch Galafold® in additional countries, including for adolescents aged 12 years and older.

As an orally administered monotherapy, Galafold® is designed to bind to and stabilize an endogenous alpha-galactosidase A ("alpha-Gal A") enzyme in those patients with genetic variants identified as amenable in a Good Laboratory Practice ("GLP") cell-based amenability assay. ~~Galafold~~® ~~is an oral precision medicine intended to treat Fabry disease in patients who have amenable genetic variants, and at this time, it is not intended for concomitant use with ERT.~~

~~The Galafold~~® ~~U.S. patent portfolio encompasses 53 Orange Book listed patents, including 9 composition-of-matter patents, of which 37 provide protection through at least 2038.~~

Next Generation for Fabry Disease

We are committed to continued innovation for all people living with Fabry disease. As part of our long-term commitment, we ~~have an academic research collaboration agreement to explore next generation pharmacological chaperones~~are also continuing discovery for next-generation genetic medicines for Fabry disease.

Pombiliti

~~Novel ERT~~® (cipaglucosidase alfa-atga) + Opfolda® (miglustat) for Pompe Disease

We ~~are leveraging~~have leveraged our biologics capabilities to develop ~~AT-GAA,~~Pombiliti® + Opfolda®, a novel treatment paradigm for late-onset Pompe disease. ~~AT-GAA~~Pombiliti® + Opfolda® were approved by the EC in June 2023, the MHRA in August 2023, and the FDA in September 2023. Additional regulatory submissions and reimbursement processes with global health authorities are currently underway.

Pombiliti® + Opfolda® consists of a uniquely engineered rhGAA enzyme, ~~ATB200, or~~ cipaglucosidase ~~alfa,~~alfa-atga, with an optimized carbohydrate structure to enhance lysosomal uptake, administered in combination with ~~AT2221, or~~ miglustat that functions as an enzyme stabilizer. Miglustat binds to and stabilizes ~~ATB200 preventing~~cipaglucosidase alfa-atga reducing inactivation of rhGAA in circulation to improve the uptake of active enzyme ininto key ~~disease-relevant tissues, resulting in increased clearance of accumulated substrate, ("glycogen").~~disease relevant tissues. Miglustat is not an active ingredient that contributes directly to glycogen reduction.

In February 2021, we reported topline results from the Phase 3 PROPEL study. Of the Pompe disease patients enrolled, 77% were being treated with alglucosidase alfa (n=95) immediately prior to enrollment (“Switch”) and 23% 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 extension clinical study. The clinical data from the PROPEL study, the extension study as well as the Phase 1/2 study were included in the AT-GAA submissions to the FDA and the EMA.

In October 2022 and February 2023, we reported positive long-term data from our ongoing phase 1/2 clinical study and Phase 3 open-label extension study, respectively. Phase 1/2 and 3 study participants treated with AT-GAA for up to 48 months and up to 2 years, respectively, demonstrated persistent and durable effects on six-minute walk test distance and measures of motor function and muscle strength, stability, or increase in forced vital capacity, and reductions in biomarkers of muscle damage and disease substrate.

~~Pombiliti~~™ ~~and Opfolda~~™ ~~were approved by the EC in June 2023 and MHRA in August 2023. We began launch activities for Pombiliti~~™ ~~and Opfolda~~™ ~~in Germany and will commence reimbursement processes with healthcare authorities in other European countries.~~

In addition, weclinical studies are ~~conducting~~ ongoing ~~clinical studies~~ in pediatric patients for both ~~LOPD~~the late-onset Pompe disease ("LOPD") and infantile-onset Pompe disease ("IOPD") populations.

Next Generation for Pompe Disease

We are committed to continued innovation for all people living with Pompe disease. As part of our long-term commitment, we are also continuing discovery for next-generation genetic medicines for Pompe disease.

~~Additional Development and Next Generation Programs~~

We are researching potential therapies 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 development, including potential gene therapies in multiple forms of Batten disease.

Strategic Alliances and Arrangements

We will continue to evaluate business development opportunities as appropriate to build stockholder value and provide us with access to the financial, technical, clinical, and commercial resources and intellectual property necessary to develop and market technologies or products with a focus on rare and orphan diseases. We are exploring potential collaborations, alliances, and various 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 or ~~platform~~novel technologies consistent with our strategic plan to develop and provide therapies to patients living with rare and orphan diseases.

Consolidated Results of Operations

Three Months Ended ~~June 30, 2023~~March 31, 2024 compared to ~~June 30, 2022~~March 31, 2023

The following table provides selected financial information for the Company:


			Three Months Ended June 30,
		Three Months Ended March 31,																Three Months Ended March 31,
(in thousands)	(in thousands)		2023			2022			Change			(in thousands)	2024		2023		Change
Net product sales	Net product sales		$	94,503		$	80,731		$	13,772
Cost of goods sold	Cost of goods sold		9,114			8,197			917
Cost of goods sold as a percentage of net product sales	Cost of goods sold as a percentage of net product sales		9.6		%	10.2		%	(0.6)		%	Cost of goods sold as a percentage of net product sales	12.3	%	8.0	%	4.3		%
Operating expenses:	Operating expenses:
Research and development	Research and development		35,149			78,319			(43,170)
Research and development
Research and development
Selling, general, and administrative	Selling, general, and administrative		65,423			53,379			12,044
Changes in fair value of contingent consideration payable	Changes in fair value of contingent consideration payable		337			115			222
Loss on impairment of assets			1,134			—			1,134
Restructuring charges
Depreciation and amortization	Depreciation and amortization		2,206			1,334			872
Other (expense) income:
Other expense:
Interest income
Interest income
Interest income	Interest income		1,737			356			1,381
Interest expense	Interest expense		(12,492)			(8,257)			(4,235)
Other (expense) income			(10,902)			7,268			(18,170)
Income tax expense			(2,715)			(911)			(1,804)
Other expense
Income tax (expense) benefit
Net loss attributable to common stockholders	Net loss attributable to common stockholders		$	(43,232)		$	(62,157)		$	18,925

Net Product Sales. Net product sales increased ~~$13.8~~$24.1 million during the three months ended ~~June 30, 2023~~March 31, 2024 compared to the same period in the prior year. The increase was primarily due to ~~continued growth in~~both the ~~U.S., Europe and Japan markets.~~

~~Research and Development Expense.~~ ~~The following table summarizes our principal development programs and the out-of-pocket, third-party expenses incurred:~~

(in thousands) Three Months Ended June 30,
Projects 2023 2022
Third party direct project expenses
Galafold® (Fabry Disease)
$ 3,822 $ 3,419
AT-GAA (Pompe Disease) 13,117 21,585
Gene therapy programs 520 27,225
Pre-clinical and other programs 345 —
Total third-party direct project expenses 17,804 52,229
Other project costs
Personnel costs 13,662 18,152
Other costs 3,683 7,938
Total other project costs 17,345 26,090
Total research and development costs $ 35,149 $ 78,319

The $43.2 million decrease in research and development costs was primarily driven by the strategic prioritization of our gene therapy portfolio, which resulted in the recognition of contract exit costs in the prior year. Additionally, Pompe disease program spend decreased due to reduced clinical manufacturing costs. Personnel costs decreased in connection with the reallocation of resources to support our anticipated AT-GAA commercial launch and continued growth of Galafold®.

~~Selling, General, and Administrative Expense.~~ Selling, general, and administrative expense increased $12.0 million, primarily driven by personnel costs in connection with the reallocation of resources to support AT-GAA commercial launch activities and third-party professional fees, partially offset by the write-off of cloud computing costs and software licensing fees in the ~~prior period in connection with~~U.S. and Europe as well as the ~~strategic prioritization~~launch of ~~our gene therapy portfolio.~~

~~Interest Expense.~~ Pombiliti~~The $4.2 million variance was due to a higher variable interest rate on debt period over period.~~

~~Other (Expense) Income.~~ ~~The $18.2 million variance was primarily related to foreign exchange losses caused by remeasurement of foreign-denominated balances.~~

~~Consolidated Results of Operations~~

~~Six Months Ended June 30, 2023 compared to June 30, 2022~~

~~The following table provides selected financial information for the Company:~~

Six Months Ended June 30,
(in thousands) 2023 2022 Change
Net product sales $ 180,773 $ 159,446 $ 21,327
Cost of goods sold 16,056 15,779 277
Cost of goods sold as a percentage of net product sales 8.9 % 9.9 % (1.0) %
Operating expenses:
Research and development 76,648 159,836 (83,188)
Selling, general, and administrative 139,380 111,495 27,885
Changes in fair value of contingent consideration payable 588 (1,073) 1,661
Loss on impairment of assets 1,134 6,616 (5,482)
Depreciation and amortization 3,463 2,745 718
Other (expense) income:
Interest income 3,936 489 3,447
Interest expense (24,336) (16,404) (7,932)
Other (expense) income (16,840) 9,170 (26,010)
Income tax expense (2,428) (4,720) 2,292
Net loss attributable to common stockholders $ (96,164) $ (147,417) $ 51,253

~~Net Product Sales.~~® ~~Net product sales increased $21.3 million during the six months ended June 30, 2023 compared to the same period~~+ Opfolda® in ~~the prior year. The increase was primarily due to continued growth in the U.S.,~~ Europe and ~~Japan markets, partially offset by~~ the ~~$4.1 million unfavorable impact of foreign currency exchange.~~U.S.

Cost of goods sold. Cost of goods sold includes manufacturing costs as well as royalties associated with net product sales. Cost of goods sold as a percentage of net product sales ~~decreased 1.0%~~increased 4.3% primarily due to inventory write-offs associated with validation efforts in the ~~increased proportion of sales in countries not subject to royalties.~~current period.

Research and Development Expense. The following table summarizes our principal development programs and the out-of-pocket, third-party expenses incurred:


(in thousands)	(in thousands)	Six Months Ended June 30,				(in thousands)	Three Months Ended March 31,
Projects	Projects	2023		2022		Projects	2024	2023
Third party direct project expenses	Third party direct project expenses					Third party direct project expenses
Galafold® (Fabry Disease)	Galafold® (Fabry Disease)	$	6,466	$	7,039
AT-GAA (Pompe Disease)		28,893		48,563
Gene therapy programs		755		44,917
Pombiliti® + Opfolda® (Pompe Disease)
Pre-clinical and other programs	Pre-clinical and other programs	710		93
Total third-party direct project expenses	Total third-party direct project expenses	36,824		100,612
Other project costs	Other project costs					Other project costs
Personnel costs	Personnel costs	31,914		43,827
Other costs	Other costs	7,910		15,397
Total other project costs	Total other project costs	39,824		59,224
Total research and development costs	Total research and development costs	$	76,648	$	159,836

The ~~$83.2~~$13.2 million decrease in research and development costs was primarily driven by ~~the strategic prioritization of~~ our gene therapy portfolio, which resulted in the recognition of contract exit costs in the prior year. Additionally, Pompe disease program spend decreased due to reduced clinical manufacturing costs. Personnel costs decreased in connection with the reallocation of resources to support our anticipated AT-GAAPombiliti® + Opfolda® commercial launch, decreasing both clinical spend and ~~continued growth~~the number of ~~Galafold~~employees supporting research and development efforts.

®
.

Selling, General, and Administrative Expense. Selling, general, and administrative expense increased ~~$27.9~~$14.1 million, primarily driven by personnel costs resulting from an increase in ~~connection with~~ the ~~reallocation~~number of ~~resources~~employees to support our ~~anticipated AT-GAA~~ commercial launch activities, post-approval costs not otherwise included in research and development expenses, and third-party professional ~~fees, partially offset by the write-off of cloud computing costs and software licensing fees in the prior year in connection with the strategic prioritization of our gene therapy portfolio.~~fees.

~~Loss on Impairment~~Restructuring Charges. In the first quarter of ~~Assets.~~ Loss on impairment of assets decreased $5.5 million primarily in connection with the strategic prioritization of our gene therapy portfolio in the prior year, which resulted in us recognizing a loss on impairment of assets.

~~Interest Expense.~~ ~~The $7.9 million variance was due to a higher variable interest rate on debt period over period.~~

~~Other (Expense) Income.~~ ~~The $26.0 million variance was~~2024, restructuring charges were primarily related to ~~foreign exchange losses caused~~an initiative to reduce operating costs by ~~remeasurement~~abandoning a lease that we no longer believe is useful in our operations.

Income Tax Expense. We are subject to income taxes in various jurisdictions. Our tax liabilities are largely dependent on the distributions of ~~foreign-denominated balances.~~pre-tax earnings among the many jurisdictions in which we operate.

Liquidity and Capital Resources

As a result of our significant research and development expenditures, as well as expenditures to build a commercial organization to support the launch of Galafold® and Pombiliti® + Opfolda®, we have not been profitable and have generated operating losses since we were incorporated in 2002. We have historically funded our operations through stock offerings, ~~Galafold~~®product revenues, debt issuance, collaborations, and other financing arrangements.

Sources of Liquidity

In November 2022, we entered into a Sales Agreement with The Goldman Sachs & Co. LLC to create an at-the-market equity program ("ATM program"), pursuant to which we may offer to sell shares of our common stock having an aggregate offering gross proceeds of up to $250.0 million. ~~During the three and six months ended June 30, 2023, we issued and sold~~As of March 31, 2024, an aggregate of 2,047,353 and 2,242,582 shares through our ATM program at a weighted-average public offering price of $12.21 and $12.25 per share, resulting in net proceeds of $24.2 million and $26.6 million, respectively. As of June 30, 2023, an aggregate of $222.5$184.4 million worth of shares remain available to be issued and sold under the ATM program.

Cash Flow Discussion

As of ~~June 30, 2023,~~March 31, 2024, we had cash, cash equivalents, and marketable securities of ~~$265.6~~$239.6 million. We invest cash in excess of our immediate requirements in 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, refer to "— Note 4.3. Cash, Cash Equivalents, Marketable Securities, and Restricted Cash," in our Notes to Consolidated Financial Statements.

Net Cash Used in Operating Activities

Net cash used in operations for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 was ~~$34.2~~$29.7 million. The components of net cash used in operations included the net loss for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 of ~~$96.2~~$48.4 million and a net decrease in changes in operating assets and liabilities of $22.3 million offset by ~~$51.5~~$30.8 million of stock compensation ~~$26.4~~and $10.2 million of other non-cash adjustments, . The changes in operating assets and liabilities was primarily due to a decrease in accounts payable and accrued expenses of $24.5 million associated with payments for Pombiliti® + Opfolda® launch activities and personnel costs.

Net cash used in operations for the three months ended March 31, 2023 was $18.1 million. The components of net cash used in operations included the net loss for the three months ended March 31, 2023 of $52.9 million offset by $34.9 million of stock compensation, $3.1 million of other non-cash adjustments, and a net increase in changes in operating assets and liabilities of ~~$15.9 million.~~ ~~The changes in operating assets and liabilities were~~$3.2 million primarily due to an increase in inventory of $27.5 million and an increase in prepaid expenses and other current assets of $12.3 million, partially offset by an increase in accounts payable and accrued expenses of $31.6 million associated with Pombiliti™ ~~and Opfolda~~™ ~~launch activities and increases in sales rebates associated with increased commercial sales of Galafold~~®.

Net cash used in operations for the six months ended June 30, 2022 was $74.2 million. The components of net cash used in operations included the net loss for the six months ended June 30, 2022 of $147.4 million offset by $43.1 million of stock compensation, $15.6 million of other non-cash adjustments, and a net increase in changes in operating assets and liabilities of $14.5 million. ~~The changes in operating assets and liabilities were primarily due to an increase in accounts payable and accrued expenses of $22.7 million associated with the~~ ~~strategic prioritization of our gene therapy portfolio resulting in the non-recurring expense of contractual obligations from which we will no longer receive further economic benefit~~ and tax accruals, offset by payments of contract manufacturing, third party research and development services, and annual performance bonuses. The net cash used in operations was also impacted by an increase in accounts receivable of $4.4 million due to increased commercial sales of Galafold®.

Net Cash Provided by Investing Activities

Net cash provided by investing activities for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 was ~~$86.3~~$7.5 million. Our investing activities have consisted primarily of purchases, sales, and maturities of investments and capital expenditures. Net cash provided by investing activities reflects ~~$126.8~~$38.9 million ~~for~~from the sale and redemption of marketable securities, partially offset by $~~36.4~~29.6 million for the purchase of marketable securities and $~~4.1~~1.8 million for capital expenditures.

Net cash provided by investing activities for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 was ~~$84.5~~$36.3 million. Our investing activities have consisted primarily of purchases, sales and maturities of investments and capital expenditures. Net cash provided

by investing activities reflects ~~$184.1~~$54.9 million ~~for~~from the sale and redemption of marketable securities, partially offset by ~~$98.3~~$16.7 million for the purchase of marketable securities and ~~$1.2~~$1.9 million for capital expenditures.

Net Cash ~~Provided by (Used in)~~Used in Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2023 was $15.8 million. Net cash provided by financing activities primarily reflects $26.6 million of proceeds from the issuance of shares in connection with the ATM program offering, net of issuance costs, and $4.4 million of proceeds from the exercise of stock options, partially offset by the withholding taxes paid on vested restricted stock units of $14.0 million.

Net cash used in financing activities for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2024 was ~~$7.5~~$13.3 million. Net cash used in financing activities primarily reflects the withholding taxes paid on vested restricted stock units of ~~$9.3~~$16.7 million, partially offset by ~~$1.9~~proceeds from the exercise of stock options of $3.5 million.

Net cash used in financing activities for the three months ended March 31, 2023 was $7.8 million. Net cash used in financing activities primarily reflects the purchase of vested restricted stock units of $12.8 million, partially offset by $2.7 million of proceeds from the exercise of stock ~~options.~~

options and $2.4 million of proceeds from the issuance of shares in connection with the ATM program offering, net of issuance costs.

Funding Requirements

We expect to continue to incur significant costs in 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: