Good morning. My name is Keith, and I will be your conference operator today. At this time, I would like to welcome everyone to the Amylyx Pharmaceuticals Third Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions]. Please be advised this call is being recorded at the company's request. I would now like to turn the conference over to Lindsey Allen, Head of Investor Relations and Communications. Please proceed, ma'am.

Good morning, and thank you for joining us today to discuss our third quarter 2023 earnings. With me on the call are Josh Cohen and Justin Klee, our Co-CEOs; Margaret Olinger, our Chief Commercial Officer; and Jim Frates, our Chief Financial Officer. Before we begin, I would like to remind everyone that any statements we make or information presented on this call that are not historical facts are forward-looking statements that are made based on our current beliefs, plans and expectations and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, our expectations with respect to RELYVRIO and ALBRIOZA, statements regarding our current and planned clinical trials and regulatory developments and the expected timing thereof, our business and marketing strategy and outlook and our expected financial performance. Actual events and results could differ materially from those expressed or implied by any forward-looking statements as a result of various risks, uncertainties and other factors, including those set forth in our most recent filings with the SEC and any other future filings that we may make with the SEC. You are cautioned not to place any undue reliance on these forward-looking statements, and Amylyx disclaims any obligation to update such statements unless required by law. Now I will turn the call over to Justin.

Thank you, Lindsey, and good morning. As we sit here three full quarters into our U.S. launch in ALS, we are proud of what we have accomplished. We are also keenly focused on the work we still need to do to help transform and improve the way that ALS is treated. Our progress with RELYVRIO continues. As of September 30, 2023, there were roughly 3,900 people living with ALS, taking RELYVRIO in the U.S. We generated $102.7 million in net product revenues in the third quarter and $272.3 million in the first three full quarters of launch. We are incredibly pleased with how quickly RELYVRIO has been adopted at key ALS centers and with our engagement with clinicians. While we will continue our efforts to grow within these centers, we are now expanding our focus beyond those top centers based on our experience in the field and new research that points to the fact that roughly half of all people living with ALS receive care from clinicians that do not specialize in ALS and are likely unaware of the benefits of RELYVRIO. A key message that you will hear on our call today is that we are continuing to evolve our commercial focus as we look to transform the ALS market. We recognize that it may take time and additional data from PHOENIX to reach the many clinicians who have yet to prescribe RELYVRIO as we work towards our goal that at least 10,000 people will be taking RELYVRIO at any given time. Margaret will provide additional details. As an organization, we are focused on both delivering on our commercial and R&D goals in the near term and investing for the long-term with a pipeline focused on treating neurodegenerative diseases. Importantly, our PHOENIX study is progressing well, and we now…

Thank you. As Justin mentioned, we ended the quarter with roughly 3,900 people on RELYVRIO in the U.S., up from roughly 3,800 at the end of the second quarter. With our goal that at least 10,000 people living with ALS will be taking RELYVRIO at any given time, we are working hard to accelerate this growth, and I will detail some of the specific plans shortly. The interest and engagement among our prescribers remains strong, and we saw a steady cadence of new prescriptions written in the third quarter. In addition, fill times were down to about three weeks for people living with ALS enrolling in the quarter. As we think about how our growth has evolved this year, the slowdown in net adds this quarter was primarily driven by increased discontinuations for a variety of reasons. We have already begun implementing new educational initiatives, which I will touch on in a few minutes. In addition, we are developing an updated clinician engagement and marketing program in preparation for PHOENIX. We believe support of PHOENIX's results will reinforce the robust data currently available and help all aspects of our launch with greater awareness, demand and greater duration of use. Our hope is that these data will further demonstrate that RELYVRIO can significantly impact people living with ALS. Turning to the quarter. Prescribing remain concentrated with roughly 80 prescribers mostly at major ALS centers, representing approximately half of all RELYVRIO prescriptions and approximately 300 prescribers representing the vast majority of prescriptions. We are pleased to have a core group of active riders at the top centers, just three full quarters into our U.S. launch. And roughly 25% of the people treated at these centers were taking RELYVRIO. There is still a clear opportunity for continued growth, as our research shows that…

Thanks, Margaret, and good morning. As you've heard, we have an excellent penetration and engagement among the top ALS centers and we remain optimistic and committed to the potential for RELYVRIO. As we adapt to our focus and await PHOENIX data, we're confident in the long-term prospects of our business. In the meantime, we're profitable and focused on being prepared for success when PHOENIX reads out in the second quarter of next year. Now let me turn to the financial results for the quarter. Net product revenues were $102.7 million for the third quarter compared to net product revenues of $98.2 million for the second quarter of 2023, with the vast majority of that revenue coming from the United States. Our results were impacted by a number of factors. In addition to what Margaret mentioned earlier, there was also a higher number of people living with ALS receiving free goods, slightly over 15% versus roughly 10% in Q2. Gross-to-net adjustments were approximately 8% in the quarter. This is below our long-term expectations and was similar to Q2. We continued to see lower chargebacks and rebates than we had anticipated. Going forward, we expect our gross-to-net will settle in the range of 12% to 15%. Inventory levels at quarter end were as expected, with approximately two weeks of inventory in the channel at specialty pharmacies similar to what we've seen in previous quarters. Cost of sales were $5.2 million for the quarter, roughly 5% of net product revenues. This is within the range of our expectations. Q3 was helped by a low rate of scrap and the completion of our royalty obligations in the second quarter. Going forward, we expect COGS to be in the range of 5% to 10% of sales. Research and development expenses were $30 million for the…

Thanks, Jim. We believe RELYVRIO, also known as AMX0035, may have applicability across other neurodegenerative diseases, and we are actively advancing clinical trials to evaluate AMX0035 in progressive supranuclear palsy or PSP and Wolfram syndrome as well as advancing an antisense oligonucleotide in ALS. AMX0035 is comprised of sodium phenylbutyrate and Taurursodiol and work synergistically to prevent or slow cell death. We are on track to launch the Phase 3 ORION trial of AMX0035 in PSP during this year. We recently presented the ORION study design at the Neuro 2023 Conference and received positive feedback from the community there. Additionally, we continue to progress our Phase 2 trial in Wolfram syndrome and expect to report results in 2024. We are also advancing AMX0114, our antisense oligonucleotide targeting Calpain-2 through IND-enabling studies and expect to enter the clinic in 2024. We recently presented preclinical data at the NEALS conference on this candidate. In addition to advancing these new therapeutic programs, we are also advancing a new composite biomarker to diagnose ALS earlier. Current data suggests that diagnosis takes about a year. The goal of this program is to create a tool that allows for earlier diagnosis of ALS, which may result in earlier treatment and better outcomes. We shared that we are conducting this program at NEALS this year. We intend to provide a full set of results from initial experimentation in 2024. For several years, we have also been working on a new taste-masked formulation of RELYVRIO. This formulation may allow for new intellectual property. We are planning to file an IND and conduct Phase 1 testing for our innovative formulation in 2024. This quarter, we also continued to publish RELYVRIO data. RELYVRIO is the first and only approved treatment for ALS to demonstrate a statistically significant benefit in function…

Yes, thank you. At this time, we will begin the question-and-answer session. [Operator Instructions]. And the first question comes from Corinne Jenkins with Goldman Sachs.

Good morning. So can you just help clarify a little bit on the discontinuations that you're seeing? Or are these primarily due to adverse events, disease progression or kind of patients ultimately dying? Or are you in the -- kind of as a follow-on from that, are you seeing any changes in the type of patients that's coming on to drug now versus during the early launch, particularly with respect to time since diagnosis?

Yes. Thank you very much for the question. This is Margaret. So yes, on the discontinuations, there's a variety of reasons why people discontinue ALS therapies. But it's important to remember that in many ways, it's really connected to the disease state sadly. So as we mentioned, we're deploying tactics designed to help lower the rate of these types of discontinuations, including taking the key learnings from Canada, where we heavily focused on the importance of remaining on therapy because our long-term efficacy is really based on being on therapy for the long-term. So that's highly what we're focused on. And the second question regarding mix of therapies. We continue to see a mix of therapies, a mix of patients coming on therapy with the prevalent patients. But I would say in the third quarter, we've probably seen a slightly higher mix of patients coming on that were more newly diagnosed patients, and we define that as patients that have been diagnosed in the last six months.

Yes. And maybe the only thing I'll add there as well. Just going to the discontinuation specifically, at six months in the U.S., we're seeing roughly 60% of people remaining on therapy. In Canada, however, we're seeing roughly 80%. So what this tells us is that we believe that we can impact this. And so that's what we're going to be trying to do over the coming quarters.

And do we know what kind of the industry standard is for ALS drugs on the whole, like what's sort of the average duration of therapy or discontinuation rates for the broader cost of therapies in that indication?

Yes. It's a little hard to say. Obviously, we're all kind of pulling different data on different therapies and probably don't talk too much about the other therapies on the market. But again, I think our goal is to be best-in-class here. And looking at Canada and some of the data we're seeing there, we believe this is an area we can continue to see opportunity and continue to grow.

Yes, and I would just say -- sorry, and I was just going to add to that. We continue to believe that patients who get on therapy earlier and stay on therapy longer will have better patient outcomes, and that's certainly our objective and mission moving forward.

Okay. And then I guess, how quickly can we expect to see you guys toggle this, in particular, given the acceleration in patient growth in the first half of this year? Or should we expect this to be a big factor into the fourth quarter? And if you could comment on kind of trends you're seeing there would be helpful as well.

Yes, I'd say it's probably early to comment on how the next quarters will land. But what I can say, and I think, as Margaret mentioned, we have a number of initiatives that we're rolling out that we hope will impact things. In the top centers and while we have -- percent of people on therapy with -- or 25% of people on RELYVRIO, roughly 66% of people are in any ALS therapy. So we see a big opportunity there, and we're going to continue optimizing that. And then as we share what we found is roughly half of people are not actually seen by an ALS specialist. And so there's a big opportunity to get RELYVRIO broader beyond just the key ALS centers. And then I think finally, as we touched on, too, on the discontinuation side, we've seen tactics that have worked in regions. And we're going to try to use those in the U.S. as well and hopefully continue to see growth there.

And Corinne, just bringing it back to that big picture, I think in short, we see great near-term growth opportunities and also long-term growth opportunities. I mean, we have 3,900 people on treatment as of the end of the quarter, and there are roughly 30,000 people in the U.S. at any one time who have ALS. And while we have the growth opportunities, as Josh was outlining, we also have the PHOENIX study results, which we think will be a huge milestone for the ALS community, the first time that a treatment would have positive results from two studies. So I think we have great growth opportunities ahead of us right now, and we have the PHOENIX trial results, which we think will further accelerate that.

Thank you.

Thank you. And the next question comes from Geoff Meacham with Bank of America.

Good morning guys. Thanks for the questions. Just had a few. So on PHOENIX, the first one is -- I know it's splitting hairs, but mid '24 versus 2Q, is that based on a faster event rate? Or did you guys just want to get more specific with the guidance? And the second question is compassionate use in France and maybe other geographies, how much incremental revenue could we expect to see from some of these? Just thinking about going into formal full approval as you think about Europe, but does compassionate use kind of be a -- is that a leading indicator, I guess of ultimate demand? Thank you.

Yes. So maybe on PHOENIX first. I think we first said mid '24 maybe at this point over a year ago or otherwise. So I do think it's just a case of getting more specific as we're getting closer and nearer to the readout there. And then I'll pass it over to Jim to talk about the compassionate use impact on revenue.

Yes, thanks Geoff. Good morning. We just started up in France late last month. So it will be interesting, and it remains to be seen the demand that we see there. I do think this will be incremental revenue if we see it through -- as we see it through 2024 and then hopefully, ultimate approval. And that said, it is going to be an important opportunity to have the key centers get experienced with RELYVRIO. And additionally, those centers tend to be more concentrated in Europe than they are in the United States. So it's important for us to get access to patients. But given the size, frankly, of our revenues in the United States, while it will be -- it will certainly be incremental, but the main driver we're looking for is full approval in Europe.

Got you. And just a follow-up to that real quick. When you think about filing in Europe, I know you guys have been through a back-and-forth process as of now. But for PHOENIX, do you think you would have to wait for OS to hit? Or do you think you could file theoretically, if you hit on just the functional data set for next year? Thank you.

Yes. So I'll say, ultimately, we can never expect or speak for the regulators. But certainly, our intention is with positive PHOENIX results, especially coming out of the top-line readout, we will want to push forward towards approval as quickly as we possibly can.

Yes. And just adding, I mean, I think further to your questions, too, I think we remain confident in the design and execution of the study. Again, it's a 664 participant study, our team is executing. And I think that those results will be a major milestone for the ALS community, the opportunity to have two positive studies in a disease where there's been so much historical clinical trial failure, I think it's hard to overstate what a big deal that will be for the community.

Thanks guys.

Thank you. And the next question comes from Umer Raffat with Evercore ISI.

Hi guys, thanks for taking my question. I have two. Let me start with this perhaps. If I just look at the fact pattern on how you implemented the data restriction on IMS and Symphony vendors this summer and how that coincided with this massive slowdown, it just really puzzles me because I feel like not only was the Street ready from communication on your end, but also I feel like you limited the channels to which Street could have been ready for today. How do you -- can you expand on that? Because it looks like you may have had a sense for discontinuations really picking up around July timeframe.

Well, Umer, maybe I'll start. So our intention at launch was always to have the limited distribution model. And so we updated everyone in February that we thought we had identified one of the areas where there is some data coming out, and so we had addressed that. So that was back in February. And I think the most important thing here, though, is that we have huge long-term growth opportunities ahead of us. We're very proud that we're helping 3,900 people as of the end of the quarter. But again, I'll reiterate, there are 30,000 people with ALS at any one time. And the last thing I'll say, too, is that we're really trying to transform the disease space here. As I said in my remarks, ALS historically is focused on symptom management, and we're trying to shift the field to focus on meaningful interventions, that's not going to happen overnight, but we think we've done a great job so far, but we've also identified even further opportunities to start to transform the landscape. So we think we have great growth opportunities ahead of us.

Got it. And let me just follow-up. Just on, A, am I right in calculating about 5,500 patients may have started therapy since your launch? And secondly, if I model out on discontinuations, what I feel is it's not just the discontinuation. It's also the new starts might have dropped about 35%, 40% quarter-over-quarter from 2Q to 3Q. Is that right? Because I feel like you may have had about, I don't know, 750 discontinuations in 3Q. But if that's the case, you might be in for another about 650 to 700 discontinuations in 4Q, which makes it very hard to again put up a very meaningful net add number in 4Q unless your new add picks up very meaningfully versus where it was in 3Q. Am I on the right track there?

Maybe we haven't commented on any of those metrics, but maybe just to circle back. There are roughly 30,000 people living with ALS in the United States. We have 3,900 on therapy. So we certainly see an opportunity to continue to grow. And that's what we're going to be out here trying to do. I think we shared several of the tactics that we think will achieve that.

Yes. And I think that our initiatives are designed at again, transforming ALS. We have initiatives to help in the top centers where we think there's further opportunity in the market, we found that there are far more people in the broader neurology community. And so we think there's great initiatives we can do for further awareness. And as we showed in Canada, we think that we can use our strategies to show that staying on therapy longer matters. And again, that's part of transforming the disease space. So in answer to your question on sort of both growth in terms of new people coming on as well as staying on treatment, we think we have great strategies to address all of those.

Yes. Let me just take number two. I think as you do your calculations, actually, Margaret mentioned in her remarks, we've had actually steady new prescriptions from Q2 into Q3. So while we obviously want to see more growth and accelerated growth in that and we touched a little bit about that in our remarks. There's no real distinctive change in terms of the new adds. Certainly, it slowed down from Q4 and into Q1, and we talked about that on the last call, but we've seen steady new adds. And just another point on the discontinuations, it's not like we've seen a major drop off here. This has been a slightly steady decline as we move through time. We've always cautioned about what the right discontinuation model is, right, because we can't model six months or nine months discontinuations until we get there. So we've been tracking the CENTAUR data through last quarter. It's gotten a little higher than that discontinuation rate over the last couple of months. That's different in Canada. So we actually think that as we lean into this a little bit more and adjust our tactics here on what has been a very solid launch so far in our first nine months. This is an adjustment of tactics, and I think we can hopefully get back to seeing growth again.

Thank you. And the next question comes from Marc Goodman with Leerink Partners.

Yes, maybe you can give us a flavor for how October went to give everybody a sense of trends versus what we just talked about?

Yes. We usually don't report month-to-month. But what I'd say is that we're certainly rolling out many of the things that Margaret described. And certainly, there's nothing revolutionary there in terms of things are continuing. We're continuing to see net adds at a steady pace.

Yes. I think just reiterating what Margaret and Jim were saying, the slowdown in net patient adds we saw was primarily driven by discontinuation. And we think we have great things to address there and as well as new opportunities for growth as well.

So just to be clear on the new patient adds, from second quarter into third quarter, you had a steady increase in new patient adds. And so whatever that steady pace was month-to-month, is that what it was? October, everything is just kind of the same, similar, slowing down, speeding up? Just give us a sense.

Yes. I'd say steady is steady. And so I think that what we want to see is a reacceleration of that growth, right, back to the levels that we saw when we were first launching the drug. And I think a very important point to make here is that we're doing exceptionally well in the key centers. And one of the things that we're doing, right, and it was a logical place for us to focus, we're going to keep that focus on those key centers where we've got penetration up to roughly 25% of all patients, as Margaret talked about. But what we have to do now is continue to grow there, but expand into the next deciles down. Deciles, say, 336 is where we're going to be focused.

But is it fair to say that steady means steady, like October was steady trends, just like the previous quarter because here's an opportunity to kind of comment on it given what happened this past quarter. I know you don't normally do it, but maybe you could make an exception this time.

Yes. Well, I think, Marc, the trouble is, right, this is not another factor that's going on here, right, is we had an additional 5% of the people that were on free drug, right? So if those folks -- if we remain at the 10% range instead of the 15% range, right, sales would have been a lot higher and closer to people's expectations. So I think month-to-month, single months matter still even at these levels. And so we're only one month into the quarter, and it's very hard to predict where we're going to be at the end of the quarter where we sit today.

Thank you. And the next question comes from Graig Suvannavejh from Mizuho Partners.

Hey, it's Graig Suvannavejh. Thanks so much. Thanks for taking my question. I've got two, if I could. First, I know a lot of the growth now is going to be focused on the non-ALS center setting. And I was wondering if you could just maybe provide additional color around the pace with which you think you can penetrate that non-ALS center setting? And then my second question just has to do with kind of with PHOENIX, now a second quarter event. And as you think about current usage of the product, whether it's views by physicians or patients, I'm wondering if you feel and maybe help us understand this, if you feel that there is some element of you not being able to capture more patients because of anticipation around PHOENIX? In other words, how much do you think if you do end up getting positive PHOENIX data that, that will really drive growth over and above what you're experiencing right now? Thanks.

Yes. Great. So just to answer your first question, certainly, we see our growth coming in three different buckets. One is we do believe we have continued focus and opportunity within the top ALS centers. As we've already talked about, we have 300 physicians that are prescribing in that bucket of patients. They're prescribing about 25% of all their patients on RELYVRIO treatment but they are treating two-thirds of their patients with any patient -- any drug available for ALS. So that's a 40% growth opportunity in front of us that we are heavily focused on driving our education, the first and only product to have function plus survival. And we really believe that we can be foundational treatment. And again, just to reiterate, we have full approval in the U.S. We are confident in our CENTAUR data, and we were studied in monotherapy and combination therapy. So we believe that just in that bucket alone, where we've been heavily focused and concentrated on, there's a tremendous amount of opportunity. The second bucket, as you mentioned, is really growing into the non-ALS specialists where we've identified a number of strategies and tactics that we'll be focused on. It's hard to predict exactly how quickly we'll have an impact on that, but we absolutely do think we'll have an impact on that. And we've started to implement some of that, it will probably take a little bit of time. And as Justin mentioned, we're transforming the landscape in ALS treatment. They have had a little bit of appetite because they haven't had a lot of tools in their toolbox in the past, and we're trying to change that. Literally, we believe that every patient living with ALS, they can benefit from our treatment should have access to our treatment and work function and survival. So we believe that's a tremendous amount of opportunity for us moving forward. And the third bucket would be really driving the persistency, taking the learnings we have from Canada, taking the learnings we have in the ALS and really focusing our educational efforts, not only on function but survival. But the long-term efficacy comes with being on therapies for the long-term. So that's our focus there. We believe that will have an impact on us. And then the second question regarding PHOENIX data is we're doing a lot of this in preparation for our PHOENIX readout. We are incredibly bullish on our PHOENIX data. We believe we're going to have successful data. That's certainly what we're planning for. And we believe it will have an inflection point on our business both from an awareness and demand generation and a duration of use perspective.

Thank you. And the next question comes from Ananda Ghosh with H.C. Wainwright & Co.

Yes, hi. Good morning guys. One of the questions -- I have two questions. The first one is based on -- looks like the absence of PHOENIX data is a kind of hindrance in terms of the RELYVRIO's uptake with the specialists. My question is what about the nonspecialists, how much aware they are with respect to the CENTAUR data? And what's the strategy around kind of educating the nonspecialists as you think about the next quarter?

Well, yes, thank you for the question. And maybe to clarify, I mean, I think we're off to a great start with -- particularly with the specialists. I mean a year into launch, we have roughly 25% people with ALS on RELYVRIO in those key centers. Now obviously, there's more to do. But when you think that ALS historically focuses mostly on symptom management, and we're trying to say, no, there are meaningful interventions, I think that, that's quite good for a year into launch. Now there's obviously more work to do. But again, that's -- we've talked about where we see those opportunities for growth in the key centers. In terms of the non-key centers, just I think, reminding everyone, for many of these people, they learned about ALS last time in med school, and ALS is a diagnosis that no one wants to give because there's very little you can do for those patients. And we obviously think that's not true. There are therapeutic and nontherapeutic interventions that are very meaningful. But that's what it means to transform a disease landscape. Now on top of all of those things, we think that the PHOENIX trial results will be a major milestone for the community because, again, having the first treatment with two positive studies in ALS is a really big deal. On top of, of course, the CENTAUR results, which is the first time the treatment showed a benefit on both slowing disease progression as well as increasing lifespan. So that's why we feel like we have great near-term opportunities in both the key centers as well as the broader neurology community. And then we think PHOENIX will just further accelerate all of that.

Great, thanks. My second question is on the discontinuation rate. The difference which you see in Canada and U.S., I mean it's quite prominent. And the question is, like, can you be more specific on what exactly Canada -- like how exactly Canada is different than U.S. that you see the top difference in discontinuation rate?

Yes. So thanks for the question. Canada really focused from day 1 on driving the importance of remaining on therapy. And just to mention -- I mentioned it in the comments, but concentrate -- Canada is a really concentrated market. They have about 17 key centers of excellence. So it's a little hard, a little easier to control sort of that getting that message down to the HCPs and then having them communicated to the patients, which is incredibly important, where it's a little bit more decentralized in the U.S. So while we certainly have in communicating those messages, I think getting those treatment expectations and just doubling down on that messaging is going to be really important. But I think the important point is we know that when done and done well, you can achieve better persistency rates.

Got it, thank you.

Thank you. And this concludes the question session at this time. I'll turn the call back to Mr. Klee.

Thank you, operator, and thank you all for joining us on our call today and for your support. We hope you have a good day.

Thank you. The conference call has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.