Earnings Labs

Amicus Therapeutics, Inc. (FOLD)

Q2 2016 Earnings Call· Tue, Aug 9, 2016

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Transcript

Operator

Operator

Good day, ladies and gentlemen. And welcome to the Amicus Second Quarter 2016 results conference call and webcast. At this time, all participants are in a listen-only mode. Later, we will a conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference call over to Sara Pellegrino, Senior Director, Investor Relations. Please go ahead.

Sara Pellegrino

Analyst

Good morning. Thank you for joining our conference call to discuss Amicus Therapeutics second quarter 2016 corporate highlights program update and financial results. Speaking on today’s call, we have John Crowley, Chairman and Chief Executive Officer; Bradley Campbell, President and Chief Operating Officer; and Chip Baird, Chief Financial Officer. Dr. Jay Barth, Chief Medical Officer; Dr. Hung Do, our Chief Science Officer; and Dipal Doshi, our Chief Business Officer and General Manager of Scioderm are also here and available to participate in the Q&A session. On this call, we may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 relating to our business as wells as our plans and prospects. Our forward-looking statements should not be regarded as representation by us that any of our plans will be achieved. Any or all of the forward-looking statements made on this call may turn out to be wrong and can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. You are cautioned not to place undue reliance on any forward-looking statement, which speak only as the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement and we undertake no obligation to revise or update this presentation to reflect events or circumstances after the date hereof. For a full discussion of such forward-looking statements and the risks and uncertainties that may impact them, we refer you to the forward-looking statement on this slide, as well as to the forward-looking statements and risk factors sections of our annual report on Form 10-K for the year ended December 31, 2015 and our quarterly report on Form 1O-Q to be filed later today with the Securities and Exchange Commission. At this time, it is my pleasure to turn the call over to John Crowley, Chairman and Chief Executive Officer of Amicus Therapeutics.

John Crowley

Analyst

Great, thank you, Sara, and good morning, everybody. I'm pleased to welcome everyone to this call today to review what has been a very strong second quarter of 2016 at Amicus Therapeutics. So, as we began the year at the JP Morgan Conference, we had outlined several important catalysts throughout 2016 that we believe would make this a truly transformative year for Amicus, and through the first half of this year, we've accomplished many of these key milestones as you'll see in the second - I’m sorry, in the left-hand side of the slide. These milestones include the full approval in commercial launch of our precision medicine Migalastat under the trade name Galafold in the European Union; we also saw significant progress with regulatory submissions of Migalastat in other countries on the heels of this EU approval; we saw also dosing of patients in our Pompe clinical study, a very milestone for us, of course, Pompe now our first biologics program into the clinic and a very unique and novel use of our ERP biologics and chaperone technology platforms; we saw two of the expansion of our biologics pipeline with the new program for the disease CDKL5; and the completion in the first half of the year of $130 million in financing through what we believe to be a very smart mix of equity through our state of the market ATM facility, as well as debt. So, as we look forward to the second half of 2016, we’re sharply focused on five key strategic priorities. I’ll highlight these as an overview, and then turn it over to Brad to begin speaking about the initial days of the launch in Europe. So our five key priorities for the second half of this year: First, the international launch of Galafold with continued…

Bradley Campbell

Analyst

Great, thank you, John, and welcome everyone to our first conference call, where we can officially discuss the commercial launch of Galafold. It’s a very exciting time for the company and on today’s call, I’ll introduce some of the key metrics that we’re using to track the success of the launch in these early days. As a reminder on slide four, a little over eight weeks ago, we received a very strong label in the EU for long-term treatment of adults and adolescents 16 years and older with the confirmed diagnosis of Fabry, who have an amendable mutation. The label reference is 269 amendable mutations which we estimate a representative 35%-50% of the Fabry population and this is very consistent with the data that we’ve uncovered through patient mapping with our positions in our major markets. The approval was a significant milestone for the Fabry community, as well as for Amicus. It’s our very first product approval and marks the completion of our transition to a fully integrated commercial biotechnology company. As outlined on slide five, we remind you that the EU is, of course, a very important region for Fabry, representing 34% of the 1.2 billion in full year 2015 and then replacement therapy sales, a significant portion of which comes from the EU three. As you know, Germany was our initial launch country and the third largest Fabry market globally, with approximately 500 patients treated and roughly equal amount to re-diagnose that untreated. In France, we’ve made significant progress with the initial patients coming onto treatment through our cohort ATU and finally, in UK, where we’ve engaged in pricing and reimbursement discussion under the highly specialized technology or HST profit. On slide six, we provided you snapshot of our initial success with Galafold launch. In these early days,…

John Crowley

Analyst

Great. Thank you, Brad. So, why don’t we go ahead and turn to slide nine and we’ll talk about the Pompe program. Let me highlight the study here which we refer to as ATB200-02. This is our first clinical study for our first biologics program, again, here in Pompe disease. It is rapidly advancing with significant moment in enrolment to investigate our proprietary enzyme replacement product, the ERT noted ATB200, which had co-administered in a fixed dose regimen with our chaperone 80, 22, 21. As a reminder, this is an 18-week safety and PK study beginning with three ascending doses of the ERT alone, followed by that ERT plus chaperone. Following the 18-week treatment period, patients are then eligible to continue to receive ERT plus Chaperone. We’ve enrolled the initial group of ambulatory ERT switch patients and we continue to anticipate interim data in these patients by year end. We are also preparing to begin enrolment in cohorts 2 and cohorts 3, which are the ERT naïve, and the non-ambulatory ERT switch cohorts. In these last two cohorts, these patients will immediately begin with ERT plus Chaperone right from the start. As you’ll see on this slide, we’ve outlined what we call the cascade of data that we expect to see between the end of 2016 and throughout 2017. These highlights include in the fourth quarter data in the ERT switch patients who are ambulatory or cohorts 1, in the first half of 2017 extension data in cohorts 1, and the initial data in the ERT naïve patients cohorts 2, and then from mid-2017 through the second half of ‘17, the extension data in cohorts 2, as well as the data - the complete dataset from the non-ambulatory ERT switch patients or cohorts 3. Data from the 18-week primary treatment…

Chip Baird

Analyst

Thanks, John, and good morning, everyone. I’ll start today's financial discussion with a few comments on our current cash position and our overall 2016 financial guidance. I’ll refer you to slide 15. Cash, cash equivalents and marketable securities totaled $214.2 million at the end of the second quarter. I’m pleased to report we strengthened our balance sheet significantly during the second quarter of 2016 with $57.9 million in net proceeds under the ATM or aftermarket financing facility and an additional $30 million in debt under an existing debt facility. Following the second quarter close, we raised an additional $39.3 million in net proceeds through the ATM facility and have now raised the full $100 million registered under that ATM facility, completing that financing transaction. Through continued careful management of expenses, we expect to remain within our the original 2016 net cash spend guidance of between $135 million and $155 million. Our current cash position including proceeds raised from the ATM and the additional debt is projected to fund operations into the second half of 2017 through several important function points that John outlined previously in the call. Turning to second quarter results, I’ll be referring to slide 16 and additional details will be found in our Form 10-Q, which will be filed later today. While we did not record revenue in the second quarter, we invoiced commercial product shipments and I’m pleased to report that we’ve begun to receive cash payments for commercial product. We expect to record product revenue in the third quarter. Total R&D expenses for the second quarter of 2016 increased to $18.3 million, as compared to $17.2 million for the second quarter 2015. The increase is primarily due to investment in our phase 3 EB clinical development which was not a part of Amicus at this time last year. Total general and administrative expenses for the second quarter of 2016 were $19.3 million, as compared to $8.3 million in the second quarter of 2015. The increase here was primarily due to investment in pre-commercial and commercial activities related to the Galafold launch. Net loss was $51.1 million or $0.40 per share in the second quarter of 2016, compared to a net loss $27.1 million or $0.27 per share for the second quarter of 2015. The water loss is attributed to an increase in total operating expenses, and as of June 30, 2016, we have approximately 134.4 million shares outstanding. This summarizes our key financials for the second quarter of 2016, and as I said, more information on financials will be available in the 10-Q, which will be available later today. Happy to address any questions during the Q&A, but for now, I’ll turn it back to John.

John Crowley

Analyst

Great. Thank you, Chip. So, let me go ahead and conclude on slide 17 by noting that this has been a very strong first half year for Amicus. We believe that 2016 overall is poised to be our most significant year in the history of the company. We anticipate important interim phase 1 and 2 data from our Pompe program, which should validate both this important program and more broadly our unique capabilities as a Biologics company. After we have the initial Pompe data much like the EU approval and launch of validated Migalastat as a meaningful therapy for amendable Fabry patients, we also see phase 3 data from the EB program that if positive will validate our purchase of Scioderm last year and our entrance into the EB community. As outlined in the beginning of the year at the JP Morgan conference, any one of these programs could be the basis of a promising rare disease company. Taken together, however, we believe that we've never been in a stronger position at here in Amicus with one of the best portfolios of potential first and/or best-in-class medicines for rare and devastating diseases. So with that, operator, we’ll go ahead and turn it over to any questions.

Operator

Operator

[Operator Instructions] Our first question comes from Ritu Baral of Cowen. Your line is open.

Ritu Baral

Analyst

Hi, guys. Thanks for taking the question. My first couple of questions have to do with the Galafold launch, one, are you expecting any conversion of extension trial patients in Europe - to commercial patients anytime soon?

John Crowley

Analyst

Yeah. So, Ritu, it’s a great question, we thought it was important on a call to highlight the fact that the initial patients were de novo patients, because it reflects the very strong demand in those markets. Remember, in particular, in Germany, where most of the patients have come onto Galafold, that’s actually a market where we didn’t have any clinical trial size. And so, in that market, we’re actually we’re actually seeing really strong update in physicians and patients who have no experience previously with Migalastat. We do, however, as you know, we are, however, proceeding with the country-by-country reimbursement process and we would expect in countries where we have active clinical trial sites in Europe to begin converting those patients to commercialize as soon as we have the ability to do so and would expect that to happen over the course of the second half of this year.

Ritu Baral

Analyst

Got it. And then, the additional geographies where you’re expecting EAPs and pending regulatory applications, can you give us any more detail as to what those geographies are that maybe expanded into by the second half of 2016, and specifically, are Brazil, Canada and Australia geographies with pending applications?

John Crowley

Analyst

So, we’re trying to be a little circumspect around the actual order of country launch just given the competitive nature, but I can give you a little bit more color to get to some of your questions. So, the markets that you’ve identified are clearly ones that are on our priority list for global submissions, and in particular, Australia, Canada, for example, have independent regulatory approval processes which we’ll pursue as quickly as we can. From an expanded access programs, there are sort of standard programs in Italy and Spain, they are more similar to the ATU, and we would expect to continue to pursue those as quickly as possible, but there are also market, as you know, Brazil, Turkey and others, which have their own expanded access or name patient programs that can be pursued and we’ll be pursuing those as quickly as possible as well. So, I would expect that you'll see later this year some patients coming on board in new expanded access types of programs like the one that I’ve mentioned. And I would also expect to continue to pursue regulatory submissions in those keys markets [indiscernible] as well as others that we can.

Ritu Baral

Analyst

Got it. And last question, Pompe or commercial doubt, I go for commercialization, how do you define within Amicus the low-hanging fruit in Europe right now? Sort of what is the profile of those patients and what’s your internal estimate in, say the European top five as to the number of those patients?

John Crowley

Analyst

Well, I would describe it in terms of where is the most severe unmet need for patients and there we see it equal, both for switch patients and for ERT naïve and again, Brad’s comment, we’re very pleased that we’re seeing switch patients from both standards of care and therapies, as well as patients who have never been treated with ERT. So, I don’t think there is one segment if you will of the patient population that’s stepping forward with a greater unmet need. I think there is equal levels of unmet need for patients currently treated, as well as patients never to receive ERT, and we think that’s a very, very good dynamic for the product.

Ritu Baral

Analyst

Got it. So, if you look at just the German numbers, it would be equally distributed between the 500 that are - I mean, would you say that all one 1000 are low-hanging fruit or how would you further sub-divide those patients into sort of…?

John Crowley

Analyst

Well, I think - in German, you’ve got a market of about 1000 identified and diagnosed Fabry patients, about half of them are treated today within one of the two existing ERTs. We would expect in the early days of launch that the majority of the initial patients will be switch patients from the early dynamics we’re seeing in the market and I think that’s because they’re in - being in the position more regularly than the ERT untreated patients and also this - an existing reimbursement mechanism in place for those patients. So, in terms of speed to coming onto Galafold, our guess is, if current trends continue, you’ll see more switch patients than naïve patients, but we think very quickly that that should even out to that equal numbers.

Ritu Baral

Analyst

Okay. And then, as we look at those switch patients, you think that there is a sub-population even more likely to switch quicker those with cardiac involvement or males versus females?

John Crowley

Analyst

No. I think it reflects the breadth of the label.

Ritu Baral

Analyst

Got it. Thanks for taking the questions.

John Crowley

Analyst

Of course.

Operator

Operator

Thank you. Our next question comes from Anupam Rama with JPMorgan. Your line is open.

Anupam Rama

Analyst · JPMorgan. Your line is open.

Hey, guys. Thanks so much for taking the question. Maybe just a quick clarification question on Zorblisa, has the FDA agreed that statistical significance on one of the two co-primary influence would be sufficient for approval here? I know that meeting one out of two co-primary influence has been sufficient in the [indiscernible] disorder space in the past, but I think ecozyme and aldurazyme, but is there a precedent here in the derm space as well that we should be thinking about? Thanks so much.

John Crowley

Analyst · JPMorgan. Your line is open.

Sure. So, based on the discussion we’ve had in the written minutes we’ve received, we do believe that the success of this study could potentially be based on the achievement of one or both of those co-primary endpoints, and what we’re doing now is just finalizing the statistical methodology around that approach.

Anupam Rama

Analyst · JPMorgan. Your line is open.

Okay. And maybe just a quick one for Brad, of the 21 patients that you highlighted, could you describe a little bit about the concentration here in terms of physicians and prescribers? Where these are patients are coming from? Thanks.

Bradley Campbell

Analyst · JPMorgan. Your line is open.

Sorry, Anupam, you just broke up at the end there, can you repeat the last part of your question?

Anupam Rama

Analyst · JPMorgan. Your line is open.

Just in terms of 21 patients, the numbers of physicians and prescribers and the concentration of those, where are those patients are coming from?

Bradley Campbell

Analyst · JPMorgan. Your line is open.

We won’t give specifics there, but I would say that it’s a well distributed group. I think the important thing is that we’ve had good coverage of both KOLs in Germany, for example, but also the top-tier prescribers and the second-tier prescribers, so we feel like the organization that we’d put in place is well able to target the key physicians in Germany and the other markets where we have expanded access programs. So, the distribution so far - the coverage has been strong so far and the distribution has been good so far - it’s been a remarkable openness to the physicians, again, in Germany, since we didn't have any clinical site, we’ve invested in a significant business and commercial infrastructure in Germany. It’s a bit of a more diffuse market than you would see in other countries in Europe - quite a few treating physicians I think we've estimated that there are about the 50 physicians who see about 90% of the Fabry patients. Our sales teams have been to see every one of those 50 doctors, it leaves a handful of time, so we’ve seen great reception from the physician community and openness to reviewing the data and the label for Migalastat.

Anupam Rama

Analyst · JPMorgan. Your line is open.

Great. Thanks so much for taking the question guys.

Bradley Campbell

Analyst · JPMorgan. Your line is open.

You bet.

Operator

Operator

Thank you. Our next question comes from Joseph Schwartz with Leerink Partners. Your line is open.

Joseph Schwartz

Analyst · Leerink Partners. Your line is open.

Good morning. Thanks very much. First, on Galafold’s launch in Europe, I was wondering how representative is the 21 patients on drug to this point of trends that you would expect going forward within that market and more broadly? And then, are you able to obtain any insight into demand from monitoring Internet queries on your amenability table? And is there any way to leverage that resource in creative yet still regulatory compliant ways to drive more prescriptions, for example, ensuring that physicians have all of the information that they need or attention from company reps?

John Crowley

Analyst · Leerink Partners. Your line is open.

Yeah. Again, we’re not going to be giving forward-looking guidance and projections on sales going forward, so I don't know that we could add a lot of color, Joe, except to state that there seems to be significant interest from both physicians and patients and we’re very pleased that in the first couple of weeks of launch that we’ve got 21 people who at the end of May were not treated with Galafold were now being treated. So, we would see those trends continue in terms of the interest and our investment in reaching out, so I think the next six months will give us a really good indication of what the launch metrics should be in Europe over the next couple of years. So again, it's hard to project out on the six to eight weeks of data, but I think good early trends for sure. Brad, do you have any color to add?

Bradley Campbell

Analyst · Leerink Partners. Your line is open.

On the second question, Joe, I think maybe you’ve a role in our - future role in our marketing team, but it’s a great question. I’ll say, this is a new tool for us and our key focus is that this is a regulatory tool to help physicians understand that amenability is an important part of the label and how to treat their patient. And so, we’ll just be very careful to ensure that that maintains that level of integrity and we’ll be using it for marketing purposes.

Joseph Schwartz

Analyst · Leerink Partners. Your line is open.

Okay. And on Zorblisa, you’ve been hovering around 50% or more enrollment in the EB phase 3 for some time now, I was wondering if you could talk a little bit about the main challenges to enrollment and what kinds of things you can do to give that program a boost? And I thought you added some additional centers, have they been contributing as you would've hoped? And what needs to happen for enrollment to complete by the end of the year versus stretch into ‘17?

John Crowley

Analyst · Leerink Partners. Your line is open.

Sure, Joe. So, again, we put enormous resources to this program after the acquisition of Scioderm, both internal resources and we knew upon closing that we’d need to add significant sites to this program. So, we said back in the spring when we get 50% enrollment that we wouldn’t give a further update until the study was completely enrolled, it’s now well over 50% enrolled, but it’s not yet completely enrolled. So, there are some additional sites that will be coming online over the next month or two, couple of months, so those will add additional patients. What we’ve been doing too, if you remember this is a very strict entry criteria, again, focused on the identification of a primary wound as the primary endpoint and now that we’re looking at both overall proportion of wounds to close versus placebo, as well as time to wound closure, that’s just as important if it though we’ve been. To give you some sense, we’ve had over 400 patients present to clinic site, indicating an interest and potential to participate in the study with the rigorous evaluation and inclusion criteria, only about 20% to 25% of those patients have actually qualified to enter into the study. So, I think we’re doing everything we can and should be doing. We’re closing monitor enrollment over the month ahead and we think, by the fall, will be able to provide an update, but again, two things that are driving that data, either by year end or first part of 2017, partly as the finalization of enrollment, and secondly, two, it’s with this modification in the statistical analysis plan, we want to get the final steps locked in, and then be able to determine when we’ll take a look at the full data set.

Joseph Schwartz

Analyst · Leerink Partners. Your line is open.

Thank you.

Operator

Operator

Thank you. Our next questions comes from Tafin Umar [ph] with Bank of America. Your line is open.

Unidentified Analyst

Analyst

Hi, can you hear me? Sorry, I am calling for Umar. [indiscernible]

John Crowley

Analyst

Yes, Tazeen.

Unidentified Analyst

Analyst

Just wanted to ask you a couple of questions from Pompe, BioMarine recently discontinued to its program and I was wondering if you can give us the results on potential takeaways that you took from that molecule or the way that the company had to find their trial and where you think you might be on an advantage over BioMarine in terms of how you’ve designed your trial and how confident you feel about going forward?

John Crowley

Analyst

Sure. Thank you, Tazeen. So, again, BioMarine is a tremendous company and a great leader in the rare diseases, and I commend them for the enormous effort and resources that they input into the Pompe program over those many years. We do think that we have a very differentiated approach, the BioMarine approach was a very different in targeting technology, it also didn't include any chaperone component to deal with the issues around stabilization of the protein and blood or immunogenicity. So again, we think that we - as we’ve always believed, we had a very differentiated approach for the treatment of Pompe. We think that there are three major limitations of lumizyme the current standard of the care, we think it has to be at number one with the targeting that relates primarily to the carbohydrate structures, and specifically, the levels of mannose 6 phosphate on that protein. Second problem is, with the very high dose and the lack of a chaperone to keep it - find it in stable unfolded, that drug loses its activity. Third is problems around tolerability and immunogenicity, as you know, lumizyme product has a black box warning for some of the side effects, so when we began this program here a number of years ago at Amicus, I challenged Hung in our science team to tackle all three of those limitations of the current standard of care, and we think based on preclinical model that we have a potentially very differentiated approach to the treatment of Pompe disease here, again, with our unique ability to glycosylate engineer carbohydrates on this protein and to maintain that high level of carbohydrate optimize structure through the manufacturing process that reflects our biologic capability and a very unique biologic. And again, with this fixed dose combination, with our chaperone 80, 22, 21, that’s administered as a small molecule about an hour or so before the infusion, so that the chaperone is in the patient’s plasma, they are ready to effectively meet the ERT when it hits the blood. So, again, we think ours is a very differentiated approach, the animal data was very, very compelling, and we are very eagerly looking forward to this initial data set in Q4, and then the cascade of data through the first half of the year.

Unidentified Analyst

Analyst

Okay. Thanks for that color. And then, as you look for the first part of the data to read out at the end of year, what would you consider to be compelling data?

John Crowley

Analyst

Sure. There will be more over the weeks and months ahead that we’re going to see to that, but as we refer everybody to the slide and the cascade data which is slide nine. So, when you look at the first data set that will be from cohort 1 in the fourth quarter, we want to make sure, of course, these are ERT switch patients from lumizyme, did they switch safely to be able to tolerate our drugs specifically the fixed dose combination of ERT plus chaperone. Secondly, very importantly pharmacokinetics, the PK, a key element of our fixed dose combination is a different bio-distribution and a different PK curve at different half-life than lumizyme, so we’re going to look at all of those parameters and see doesn't it match with our expectations and with what we saw in the preclinical data. So, it’ll be a very important dataset for us. We will also look at biomarkers, including biomarkers of efficacy and will have more to say about that in the coming months before we unveil the data about some of those specific biomarkers, as well as immunogenicity what were the antibody profile with the nature and type of antibodies on cytokines, other measures of the inflammatory response to ERT and what maybe a difference in our data set. And again, that will be the first of what will be many data set that will release over 6 to 9 months period in this program. So that by mid-2017, we think we’ll have a very large and robust data set that again will prove the principle that this is a very differentiated approach to treating Pompe and also give us the path to the phase 3.

Unidentified Analyst

Analyst

Okay. Thanks for that color, appreciate it.

John Crowley

Analyst

Sure.

Operator

Operator

Thank you. Our next question comes from Roy Buchanan with Janney Montgomery. Your line is open.

Roy Buchanan

Analyst · Janney Montgomery. Your line is open.

Hi, thanks for taking the question. Just a quick on the zorblisa phase 3, is kind of specifical plans still not finalized I believe, I just wonder if there is any thoughts of adding patients to the study? Thanks.

John Crowley

Analyst · Janney Montgomery. Your line is open.

No. We think that we would be able to keep within the target range of approximately 150 patients even with the final revisions to the SAP, again, now that we have agreement with FDA on the elevation of that time to wound closure to a co-primary endpoint.

Roy Buchanan

Analyst · Janney Montgomery. Your line is open.

Okay. Thank you.

John Crowley

Analyst · Janney Montgomery. Your line is open.

Sure.

Operator

Operator

Thank you. Our next question comes from Salveen Richter with Goldman Sachs. Your line is open.

Unidentified Analyst

Analyst · Goldman Sachs. Your line is open.

Hi, this is actually Carrion that called for Salveen. Thanks for taking my question and congrats on the progress. I have a few questions. First, what has the initial feedback been so far from patients and physicians that had started on Galafold? And what is the distribution of patients in terms of previously ERT treated versus ERT naïve patients that have to follow?

John Crowley

Analyst · Goldman Sachs. Your line is open.

Yeah, the last of part of that is, of the 21 patients, the majority of them are ERT switch patients. In terms of color from what we’re hearing, Brad, if you want to comment on that? I don't think anything new from what we've seen in terms of clinical experience with Galafold.

Bradley Campbell

Analyst · Goldman Sachs. Your line is open.

No, I think it’s in line with what we’d expect and with the color we’ve provided on the call which is we’ve had good distribution for the prescription that have been written, we’ve seen good uptick with physicians and good receptivity to having discussions around the data, around the program, so we’re very pleased so far with the feedback and the progress.

Unidentified Analyst

Analyst · Goldman Sachs. Your line is open.

Okay. Thank you. And finally, just wanted to get some color around the rationale for elevating this secondary endpoint of time to wound closure to co-primary endpoint with it, and primarily driven from your side or was it kind of a FDA dermatology to division-driven decision?

John Crowley

Analyst · Goldman Sachs. Your line is open.

Right. No, this was entirely proposed by Amicus. Let me ask Jay Barth, their Chief Medical Officer to comment further on the rationale.

Jay Barth

Analyst · Goldman Sachs. Your line is open.

There are several reasons to that. We thought the elevate the time to closure to co-primary very happy that the FDA agreed to that, based on FDA guidance [indiscernible] been approvable endpoint and we’ll be able to study. We also had very encouraging data from our phase 2B study, showing a difference in time from enclosure for HD-101 compared to placebo, that was quite strong. And that, we feel, among the data that we’re collecting, going to be very sensitive and powerful way to look at that data, and in addition through proportionate wound field at a particular time point, but this accumulative, look at all the wounds given over time. So, for a number of reasons, we feel that it’s a very positive development that we can have it in the co-primary endpoint, and as John mentioned before, that with appropriate physical methodology, based on agreement with FDA that hitting one of the two co-primary endpoints would be a successful study.

Unidentified Analyst

Analyst · Goldman Sachs. Your line is open.

Okay. Thank you.

Operator

Operator

[Operator Instructions] We have a follow-up from Ritu Baral with Cowen. Your line is open.

Ritu Baral

Analyst

Hi, guys. Thanks for taking the follow-up. Actually, just wanted to go a little further on your answer to Tazeen’s question on the biomarkers, given you’re not doing biopsies, John, what are the key biomarkers that you’re going to be following? And what sort of changes in them are you looking for?

John Crowley

Analyst

Of course, we'll look at a number of biomarkers, things like PK as you know there are isoforms of ALC, ASD that come from muscle, we will look at both PK and ALC, ASD are elevated in patients, well we don't know what we will see in ERT experience patients, we don't know what we'll see in a short term but look at those. We will also look at Hex4 which is taken from analyzing the urine of the patients. So, we will look at that as well. And again this is an exploratory sedate and as you remember from the preclinical data, we saw terrific uptick of the enzyme into target tissues and compared to standard of care and preclinical model we saw significantly better clearance of glycogen. So, these will be markers for, you know, is the enzyme getting into muscle, is it having an effect on the muscle architecture itself and it is leading potentially to the further break down of glycogen, we think those are two equally important elements of the mechanism here that will get them early data.

Ritu Baral

Analyst

One for Chip, Chip what's the current shares outstanding now after the exercise of the ATM?

Chip Baird

Analyst

As of June 30, the number of shares outstanding was 134.4 million.

Ritu Baral

Analyst

And last question guys, as you think about the expansion of sites in the [indiscernible] pivot study, how are you dealing with the potential for differences in treatment paradigm, especially given you said that you're going across different geographies, what geographies are you going across and how different is background standard of care across these geographies?

John Crowley

Analyst

We will say that all the study sites are in the United States and in Europe. So, with that we are looking at the potential for, I think we've looked at sites in other parts of the world, a handful of those sites may come in but only after they've passed rigorous quality control inspection by our teams, by our CROs, other compromised and study sites quality or ability to execute in that study. These are all top advanced dermatology vendors, major academic vendors and importantly vendors that are experiencing VD. Quality control is something we're very focused on.

Ritu Baral

Analyst

And you feel pretty comfortable that the standard of care is relatively equal across the ones you're looking at?

John Crowley

Analyst

Yes, very comfortable.

Ritu Baral

Analyst

And then just on your comment on covariance adjustments for wound size and age in this study, is that sort of the same thing as stratification and if not, do you have stratifications in your new SAP?

John Crowley

Analyst

I’ll let Jay comment.

Jay Barth

Analyst

It is the way of addressing the same issues that you’re raising. We’re not stratifying, but await to adjust for that when you analyze is to introduce the covariant and we think those two, the age of the patients and size of wounds would adjust for any potential imbalances between the groups. So that increases the power of our analysis.

Ritu Baral

Analyst

Got it. Thanks for taking the follow-up guys.

John Crowley

Analyst

Yeah. I would just comment further on the EV program, we knew when we closed on the acquisition of Scioderm that there are three key areas that we had to focus on and improve with the Amicus resources and experience. One was the addition of, additional clinical sites, high quality sites, two was significantly more resources, internal resources, people put to the program. We’ve done both of those two, by the time we get completed with the activities in the spring of this year, we then turned our attention to the third area where we thought there could be significant improvements and that was around the statistical analysis, plans and the definitions of success in this study. So we together with experts in the field, worked through our plan. We then presented that to FDA and through a series of discussions and then written comments received from FDA, again, we feel really, really good about these changes and we believe that it has the potential to increase the likelihood of success in this study. It continues to see enormous interest from physicians and patients to participate in the study and again I think that reflects the devastating nature of the disease and the significant number of people living with this just awful disorder.

Operator

Operator

Thank you. And we have a follow-up from Joseph Schwartz with Leerink Partners. Your line is open.

Joseph Schwartz

Analyst

Thanks for taking my follow-up. I was just wondering if you could talk a little bit about your understanding for the drivers of placebo response and EB, beyond spontaneous resolution and the potential for patients to get better skin care management, is there any other reasons for response rate in the placebo arm to be what it is?

Jay Barth

Analyst

No, I think you hit on those points, just based on the management of wounds in general and, the nature of EB. There are the few around, the smaller ones, the ones that haven’t been present for that long. But that is the nature of EB and the standard of care, there are wounds that you heal, especially if it’s smaller hand wounds of younger age.

Joseph Schwartz

Analyst

Okay, thank you very much.

John Crowley

Analyst

So again, Joe, with the inclusion criteria, the design of the study and now with these changes in the definitions of success, we think we’ve only further increased the potential and probability for this study succeeding, but ultimately it will be driven by the data of course.

Operator

Operator

Thank you. That does conclude today’s question-and-answer session. I’d like to turn the call back to John Crowley for closing remarks.

John Crowley

Analyst

Great. No, operator. Thank you. That’s all I have everybody. Thanks for listening. Have a great day.