10-Q 1 amlx-20240331.htm 10-Q 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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 March 31, 2024

OR

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: 001-41199

 

Amylyx Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

46-4600503

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

43 Thorndike St.

Cambridge, Massachusetts

02141

(Address of principal executive offices)

(Zip Code)

(617) 682-0917

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

 

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, $0.0001 par value per share

 

AMLX

 

Nasdaq Global Select Stock 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, 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

As of April 30, 2024, the registrant had 68,005,749 shares of common stock, $0.0001 par value per share, outstanding.

 

 

 

 


 

AMYLYX PHARMACEUTICALS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

 

Table of Contents

 

 

 

Page

 

 

 

PART I.

FINANCIAL INFORMATION

3

 

 

 

Item 1.

Financial Statements (Unaudited)

3

Condensed Consolidated Balance Sheets

3

 

Condensed Consolidated Statements of Operations

4

 

Condensed Consolidated Statements of Comprehensive (Loss) Income

5

 

Condensed Consolidated Statements of Stockholders’ Equity

6

 

Condensed Consolidated Statements of Cash Flows

7

 

Notes to Condensed Consolidated Financial Statements

8

Item 2.

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

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

26

Item 4.

Controls and Procedures

27

 

 

 

PART II.

OTHER INFORMATION

28

 

 

 

Item 1.

Legal Proceedings

28

Item 1A.

Risk Factors

28

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

82

Item 3.

Defaults Upon Senior Securities

82

Item 4.

Mine Safety Disclosures

82

Item 5.

Other Information

82

Item 6.

Exhibits

83

Signatures

84

 

From time to time, we may use our website or our LinkedIn profile at www.linkedin.com/company/amylyx to distribute material information. Our financial and other material information is routinely posted to and accessible on the Investors section of our website, available at www.amylyx.com. Investors are encouraged to review the Investors section of our website because we may post material information on that site that is not otherwise disseminated by us. Information that is contained in and can be accessed through our website or our LinkedIn page is not incorporated into, and does not form a part of, this Quarterly Report on Form 10-Q.

i


 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” or the negative of these terms or other comparable terminology. These statements are not guarantees of future results or performance and involve substantial risks and uncertainties. Forward-looking statements in this Quarterly Report include, but are not limited to, express or implied statements about:

our ability to obtain regulatory approvals of AMX0035 in Wolfram syndrome, or WS, progressive supranuclear palsy, or PSP, or any other indications, our ability to obtain regulatory approval of AMX0114 in ALS, and our ability to obtain regulatory approval for any other current or future product candidates;
our ability to successfully commercialize and market our product candidates, if approved, and the timing of any commercialization and marketing efforts;
our ability to contract with third-party suppliers, manufacturers and other service providers and their ability to perform adequately and to produce sufficient quantities of clinical and, if needed, commercial supplies;
the market size, opportunity, demand and growth potential for AMX0035, AMX0114 and any future product candidates, if approved;
our ability to build and maintain our own sales and marketing capabilities, or seek collaborative partners, to commercialize AMX0035 and any other current or future product candidates, if approved;
our ability to obtain funding for our operations;
the timing to implement our restructuring plan and our ability to refocus our operations on our revised priorities;
the initiation, timing, progress and results of our research and development activities, preclinical studies and clinical trials, including our Phase 3 global clinical trial of AMX0035 for the treatment of PSP known as the ORION trial, and our Phase 2 clinical trial of AMX0035 for the treatment of WS known as the HELIOS trial;
our ability to retain the continued service of our key executives and to identify, hire and retain additional qualified professionals;
our ability to successfully complete our ongoing clinical trials of AMX0035 and to advance any other current or future product candidates into, and successfully complete, preclinical studies and clinical trials;
our ability to successfully recruit and enroll suitable patients in our clinical trials;
the timing or likelihood of the accomplishment of various scientific, clinical, regulatory filings and approvals and other product development objectives;
the rate and degree of market acceptance of AMX0035 and any other current or future product candidates, if approved, by physicians, patients, third-party payors and others in the medical community;
the implementation of our business model and strategic plans for our business, products, product candidates and technology;
our ability to identify, evaluate, in-license and develop additional products or product candidates to complement our existing pipeline;
the scope of protection we are able to establish and maintain for intellectual property rights covering our products, product candidates and technology;
developments relating to our competitors and our industry, including any regulatory developments;
our estimates regarding expenses, revenue, capital requirements, cash runway and future needs for additional financing;
fluctuations of our quarterly and annual operating results and the related effects on our stock price;
the effect of global financial and economic conditions and geopolitical events, including heightened and fluctuating interest rates and inflation, foreign exchange fluctuations, particularly the Pound Sterling to U.S. Dollar, the risk of

1


 

economic slowdown or recession in the United States, instability in the banking system, overall market volatility in the United States or the United Kingdom, including as a result of, among other factors, the ongoing war between Russia and Ukraine, the Israel-Hamas war and escalating conflict in the Middle East, the upcoming presidential election in the United States or similar events, on our business; and
other statements about future events, including those listed under the section titled “Risk Factors”.

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events and with respect to our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those described under the section titled “Risk Factors” and elsewhere in this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

All of our forward-looking statements are as of the date of this Quarterly Report only. In each case, actual results may differ materially from such forward-looking information. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of or any material adverse change in one or more of the risk factors or risks and uncertainties referred to in this Quarterly Report or included in our other public disclosures or our other periodic reports or other documents or filings filed with or furnished to the Securities and Exchange Commission, or the SEC, could materially and adversely affect our business, prospects, financial condition and results of operations. Except as required by law, we do not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections or other circumstances affecting such forward-looking statements occurring after the date of this Quarterly Report, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. Any public statements or disclosures by us following this Quarterly Report that modify or impact any of the forward-looking statements contained in this Quarterly Report will be deemed to modify or supersede such statements in this Quarterly Report.

We may from time to time provide estimates, projections and other information concerning our industry, the general business environment, and the markets for certain diseases, including estimates regarding the potential size of those markets and the estimated incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events, circumstances or numbers, including actual disease prevalence rates and market size, may differ materially from the information reflected in this Quarterly Report. Unless otherwise expressly stated, we obtained this industry, business information, market data, prevalence information and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources, in some cases applying our own assumptions and analysis that may, in the future, prove not to have been accurate.

 

TRADEMARKS

Solely for convenience, our trademarks and trade names in this report are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that we will not assert, to the fullest extent under applicable law, our rights thereto.

 

2


 

 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

AMYLYX PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(Unaudited)

 

 

March 31, 2024

 

 

December 31, 2023

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

170,552

 

 

$

170,201

 

Short-term investments

 

 

202,741

 

 

 

201,161

 

Accounts receivable, net

 

 

20,351

 

 

 

40,050

 

Inventories

 

 

 

 

 

38,323

 

Prepaid expenses and other current assets

 

 

16,890

 

 

 

14,931

 

Total current assets

 

 

410,534

 

 

 

464,666

 

Property and equipment, net

 

 

2,459

 

 

 

2,686

 

Restricted cash equivalents

 

 

719

 

 

 

719

 

Operating lease right-of-use assets

 

 

3,252

 

 

 

3,725

 

Long-term inventories

 

 

 

 

 

44,957

 

Other assets

 

 

493

 

 

 

701

 

Total assets

 

$

417,457

 

 

$

517,454

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

21,453

 

 

$

22,061

 

Accrued expenses

 

 

67,874

 

 

 

57,724

 

Operating lease liabilities, current portion

 

 

2,312

 

 

 

2,257

 

Total current liabilities

 

 

91,639

 

 

 

82,042

 

Operating lease liabilities, net of current portion

 

 

1,382

 

 

 

1,980

 

Total liabilities

 

 

93,021

 

 

 

84,022

 

Commitments and contingencies (Note 11)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value; 10,000,000 shares authorized

 

 

 

 

 

 

Common stock, $0.0001 par value; 300,000,000 shares authorized; 67,975,587 and 67,707,432 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

 

 

7

 

 

 

7

 

Additional paid-in capital

 

 

748,248

 

 

 

738,177

 

Accumulated deficit

 

 

(423,742

)

 

 

(304,949

)

Accumulated other comprehensive (loss) income

 

 

(77

)

 

 

197

 

Total stockholders’ equity

 

 

324,436

 

 

 

433,432

 

Total liabilities and stockholders’ equity

 

$

417,457

 

 

$

517,454

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3


 

AMYLYX PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(Unaudited)

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Product revenue, net

 

$

88,643

 

 

$

71,428

 

Operating expenses:

 

 

 

 

 

 

Cost of sales

 

 

5,945

 

 

 

5,283

 

Cost of sales - inventory impairment and loss on firm purchase commitments

 

 

110,461

 

 

 

 

Research and development

 

 

36,608

 

 

 

24,192

 

Selling, general and administrative

 

 

57,759

 

 

 

44,006

 

Total operating expenses

 

 

210,773

 

 

 

73,481

 

Loss from operations

 

 

(122,130

)

 

 

(2,053

)

Other income, net:

 

 

 

 

 

 

Interest income

 

 

4,326

 

 

 

3,718

 

Other expense, net

 

 

(747

)

 

 

(262

)

Total other income, net

 

 

3,579

 

 

 

3,456

 

(Loss) income before income taxes

 

 

(118,551

)

 

 

1,403

 

Provision (benefit) for income taxes

 

 

242

 

 

 

(170

)

Net (loss) income

 

$

(118,793

)

 

$

1,573

 

 

 

 

 

 

 

 

Net (loss) income per share

 

 

 

 

 

 

Basic

 

$

(1.75

)

 

$

0.02

 

Diluted

 

$

(1.75

)

 

$

0.02

 

Weighted-average shares used in computing net (loss) income per share

 

 

 

 

 

 

Basic

 

 

67,854,356

 

 

 

66,717,271

 

Diluted

 

 

67,854,356

 

 

 

70,863,665

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4


 

AMYLYX PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(in thousands)

(Unaudited)

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Net (loss) income

 

$

(118,793

)

 

$

1,573

 

Other comprehensive loss (income)

 

 

 

 

 

 

Foreign currency translation (loss) gain

 

 

(158

)

 

 

79

 

Net unrealized (loss) gain on available-for-sale securities

 

 

(116

)

 

 

32

 

Other comprehensive (loss) income

 

 

(274

)

 

 

111

 

Comprehensive (loss) income

 

$

(119,067

)

 

$

1,684

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5


 

AMYLYX PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

(Unaudited)

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2023

 

 

67,707,432

 

 

$

7

 

 

$

738,177

 

 

$

197

 

 

$

(304,949

)

 

$

433,432

 

Issuance of common stock upon exercise of stock options

 

 

49,618

 

 

 

 

 

 

147

 

 

 

 

 

 

 

 

 

147

 

Issuance of common stock upon vesting of RSUs

 

 

218,537

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

9,924

 

 

 

 

 

 

 

 

 

9,924

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(274

)

 

 

 

 

 

(274

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(118,793

)

 

 

(118,793

)

Balance as of March 31, 2024

 

 

67,975,587

 

 

$

7

 

 

$

748,248

 

 

$

(77

)

 

$

(423,742

)

 

$

324,436

 

 

 

 

 

Common Stock

 

 

Additional
Paid-In

 

 

Accumulated
Other
Comprehensive

 

 

Accumulated

 

 

Total
Stockholders’

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balance as of December 31, 2022

 

 

66,512,011

 

 

$

7

 

 

$

694,906

 

 

$

(86

)

 

$

(354,220

)

 

$

340,607

 

Issuance of common stock upon exercise of stock options

 

 

451,298

 

 

 

 

 

 

2,777

 

 

 

 

 

 

 

 

 

2,777

 

Issuance of common stock upon vesting of RSUs

 

 

132,294

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

7,580

 

 

 

 

 

 

 

 

 

7,580

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

111

 

 

 

 

 

 

111

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,573

 

 

 

1,573

 

Balance as of March 31, 2023

 

 

67,095,603

 

 

$

7

 

 

$

705,263

 

 

$

25

 

 

$

(352,647

)

 

$

352,648

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6


 

AMYLYX PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Cash flows used in operating activities:

 

 

 

 

 

 

Net (loss) income

 

$

(118,793

)

 

$

1,573

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

Stock-based compensation expense

 

 

9,924

 

 

 

7,501

 

Depreciation expense

 

 

315

 

 

 

204

 

Accretion of investment discounts, net

 

 

(2,582

)

 

 

(2,903

)

Inventory impairment and loss on firm purchase commitments

 

 

110,461

 

 

 

 

Other non-cash items

 

 

22

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

19,698

 

 

 

(2,249

)

Inventories

 

 

(9,253

)

 

 

(13,303

)

Interest receivable

 

 

117

 

 

 

253

 

Prepaid expenses and other current assets

 

 

(2,104

)

 

 

(2,882

)

Operating lease right-of-use assets

 

 

473

 

 

 

436

 

Other assets

 

 

204

 

 

 

Accounts payable

 

 

(652

)

 

 

4,611

 

Accrued expenses

 

 

(7,776

)

 

 

2,178

 

Operating lease liabilities

 

 

(543

)

 

 

(491

)

Net cash used in operating activities

 

 

(489

)

 

 

(5,072

)

Cash flows provided by investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(67

)

 

 

(250

)

Purchases of investments

 

 

(73,114

)

 

 

(9,756

)

Proceeds from maturities of short-term investments

 

 

74,000

 

 

 

66,000

 

Net cash provided by investing activities

 

 

819

 

 

 

55,994

 

Cash flows (used in) provided by financing activities:

 

 

 

 

 

 

Follow-on offering costs paid

 

 

 

 

 

(136

)

Proceeds from exercise of stock options and RSUs vesting

 

 

1,446

 

 

 

3,539

 

Withholding taxes paid on stock-based awards

 

 

(1,315

)

 

 

(2,363

)

Net cash provided by financing activities

 

 

131

 

 

 

1,040

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash equivalents

 

 

(110

)

 

 

75

 

Net increase in cash, cash equivalents and restricted cash equivalents

 

 

351

 

 

 

52,037

 

Cash, cash equivalents and restricted cash equivalents, beginning of period

 

 

170,920

 

 

 

63,245

 

Cash, cash equivalents and restricted cash equivalents, end of period

 

$

171,271

 

 

$

115,282

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Taxes withheld on stock-based awards included in accrued expenses

 

$

9

 

 

$

22

 

Purchases of property and equipment included in accounts payable

 

$

63

 

 

$

 

Income taxes paid

 

$

275

 

 

$

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7


 

AMYLYX PHARMACEUTICALS, INC.

NOTES TO CONDENSED Consolidated FINANCIAL STATEMENTS

(unaudited)

1. Nature of the Business

Amylyx Pharmaceuticals, Inc., together with its wholly owned subsidiaries, known as Amylyx or the Company, is a biotechnology company with a mission to end the suffering caused by neurodegenerative diseases. The Company is investigating AMX0035 in diseases where endoplasmic reticulum, or ER, and mitochondrial stress are implicated, including progressive supranuclear palsy, or PSP, and Wolfram syndrome, or WS. The Company dosed the first participant in the HELIOS trial, a Phase 2 trial of AMX0035 for the treatment of WS, in April 2023. The Company dosed the first participant in the ORION trial, a Phase 3 trial of AMX0035 for the treatment of PSP, in December 2023. The Company is also advancing additional drug candidates developed by Amylyx for neurodegenerative diseases including AMX0114, a potent antisense oligonucleotide targeting inhibition of Calpain-2, a key contributor to the axonal (also known as Wallerian) degeneration pathway. Preclinical studies completed to date have shown that AMX0114 achieves potent, dose-dependent, and durable knockdown of CAPN2 mRNA expression and Calpain-2 protein levels in human motor neurons. In preclinical efficacy studies, treatment with AMX0114 reduced extracellular neurofilament light chain levels following neurotoxic insult in induced pluripotent stem cell (iPSC)-derived human motor neurons, and improved survival of iPSC-derived human motor neurons harboring ALS-linked, pathogenic TDP-43 mutations. Neurofilament is a broadly researched biomarker in ALS. The Company plans to file an investigational new drug (IND) application, then initiate a multiple ascending dose clinical trial of AMX0114 in people living with ALS in the second half of 2024.

On April 4, 2024, the Company announced it started a process with the U.S. Food and Drug Administration, or the FDA, and Health Canada to voluntarily discontinue the marketing authorizations for RELYVRIO®/ALBRIOZA (AMX0035) for amyotrophic lateral sclerosis, or ALS, and remove the product from the market in the U.S. and Canada based on topline results from the global Phase 3 PHOENIX trial, which failed to meet its prespecified primary and secondary endpoints. The Company will continue to collect available data on survival and to share learnings from PHOENIX to help inform future ALS research. Amylyx is planning to wind down the Open Label Extension by the end of 2024. Separately, the PHOENIX survival data collection efforts will continue at the encouragement of ALS specialists.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to companies in the biotechnology industry, including, but not limited to, the outcome of preclinical studies and clinical trials, potential difficulties with or delays in timing with respect to regulatory approval processes, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, ability to secure additional capital to fund operations, and risks associated with the economic challenges caused by economic uncertainty in various global markets caused by geopolitical instability and conflict. The Company and its contractors may experience disruptions in supply of items that are essential for its research and development activities, including, for example, raw materials and bulk drug substances that the Company imports from Europe and Canada used in the manufacturing of AMX0035, and any additional or future product candidates.

2. Summary of Significant Accounting Policies

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in the audited consolidated financial statements for the year ended December 31, 2023 and the notes thereto, which are included in the Company’s most recent Annual Report on Form 10-K. Since the date of those consolidated financial statements, there have been no material changes to its significant accounting policies.

Basis of Presentation and Consolidation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in conformity with accounting principles generally accepted in the U.S., or GAAP, and include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company's management, all normal and recurring adjustments necessary for a fair presentation have been reflected. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the ASC, and Accounting Standards Update, or ASU, of the Financial Accounting Standards Board, or FASB.

8


 

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of expenses during the reporting period. Actual results could differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies in developing the estimates and assumptions that are used in the preparation of the financial statements. Management must apply significant judgment in this process. Management’s estimation process often may yield a range of potentially reasonable estimates and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: gross-to-net, or GTN, adjustments; recoverability of inventories; accrued expense and research and development expenses.

New Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, or ASU 2023-09, to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption and retrospective application is permitted. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, or ASU 2023-09, which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. ASU 2023-07 is effective for the Company beginning the year ended May 31, 2025. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

3. PRODUCT REVENUE, NET

To date, the Company’s only source of product revenue has been from the sales of RELYVRIO, known as ALBRIOZA in Canada. Significant judgment is required in estimating GTN adjustments considering historical experience, payer channel mix (e.g., Medicare or Medicaid), current contract prices under applicable programs, unbilled claims and processing time lags and inventory levels in the distribution channel. The following table reconciles gross product revenue to net product revenue (in thousands):

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Product revenue, gross

 

$

113,660

 

 

$

84,553

 

GTN adjustments

 

 

(25,017

)

 

 

(13,125

)

Product revenue, net

 

$

88,643

 

 

$

71,428

 

 

The activity and ending reserve balance for GTN adjustments were as follows for the three months ended March 31, 2024 and 2023 (in thousands):

 

 

Chargebacks and Cash Discounts

 

 

Medicaid and Medicare Rebates

 

 

Other Rebates, Returns, Discounts and Adjustments

 

 

Total

 

Ending balance at December 31, 2023

 

$

3,143

 

 

$

4,946

 

 

$

11,073

 

 

$

19,162

 

Provision related to sales in the current year

 

 

4,983

 

 

 

3,504

 

 

 

19,288

 

 

 

27,775

 

Adjustments related to prior period sales

 

 

(1,696

)

 

 

 

 

 

(1,062

)

 

 

(2,758

)

Credits and payments made

 

 

(5,784

)

 

 

(2,201

)

 

 

(5,246

)

 

 

(13,231

)

Ending balance at March 31, 2024

 

$

646

 

 

$

6,249

 

 

$

24,053

 

 

$

30,948

 

 

 

Chargebacks and Cash Discounts

 

 

Medicaid and Medicare Rebates

 

 

Other Rebates, Returns, Discounts and Adjustments

 

 

Total

 

Ending balance at December 31, 2022

 

$

648

 

 

$

1,992

 

 

$

1,664

 

 

$

4,304

 

Provision related to sales in the current year

 

 

6,273

 

 

 

3,640

 

 

 

3,448

 

 

 

13,361

 

Adjustments related to prior period sales

 

 

 

 

 

(236

)

 

 

 

 

 

(236

)

Credits and payments made

 

 

(2,907

)

 

 

(718

)

 

 

(2,422

)

 

 

(6,047

)

Ending balance at March 31, 2023

 

$

4,014

 

 

$

4,678

 

 

$

2,690

 

 

$

11,382

 

 

9


 

 

Included in the ending reserve balance for GTN adjustments are chargebacks resulting from contractual commitments to sell products to qualified healthcare providers at prices lower than the list prices charged to customers who directly purchase the product from the Company, discounts to customers for prompt payment and estimates for product returns. Chargebacks, discounts and returns are recorded as reductions of accounts receivable, net on the condensed consolidated balance sheets. In addition, included in the ending reserve balance for GTN adjustments are Medicaid and Medicare rebates, other rebates for obligations under voluntary patient assistance programs, and accrued fees payable to customers. Medicaid and Medicare rebates, other rebates and fees are recorded as a component of accrued expenses on the condensed consolidated balance sheets.

In April 2024, the Company announced it started a process with the FDA and Health Canada to voluntarily discontinue the marketing authorizations for RELYVRIO®/ALBRIOZAand remove the product from the market in the U.S. and Canada based on topline results from the Phase 3 PHOENIX trial.

4. SHORT-TERM INVESTMENTS

The Company has classified all of its marketable securities at March 31, 2024 as “available-for-sale”. The Company records available-for-sale securities at fair value, with the unrealized gains and losses included as a separate component of other accumulated comprehensive income (loss). There were no realized gains or losses recognized during the three months ended March 31, 2024 and 2023.

The Company adjusts the cost of available-for-sale debt securities for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion are included in interest income. The cost of securities sold is based on the specific identification method. The Company includes interest and dividends on securities classified as available-for-sale in interest income. Accrued interest receivable relating to the Company's available-for-sale securities is presented within prepaid expenses and other current assets in the accompanying condensed consolidated balance sheets, and amounted to $0.3 million and $0.5 million at March 31, 2024 and December 31, 2023, respectively.

The following is a summary of available-for-sale securities with unrealized losses for less than 12 months as of March 31, 2024 and December 31, 2023 (in thousands):

 

 

 

March 31, 2024

 

 

December 31, 2023

 

 

 

Fair Value

 

 

Unrealized Losses

 

 

Fair Value

 

 

Unrealized Losses

 

Treasury bills

 

$

182,832

 

 

$

(52

)

 

$

 

 

$

 

U.S. agency bonds

 

 

 

 

 

 

 

 

4,996

 

 

 

(3

)

Total available-for-sale securities in an unrealized loss position

 

$

182,832

 

 

$

(52

)

 

$

4,996

 

 

$

(3

)

 

At March 31, 2024, the Company's security portfolio consisted of 9 securities related to investments in debt securities available-for-sale, of which 8 securities were in an unrealized loss position. There were no securities in an unrealized loss position for greater than 12 months as of March 31, 2024. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases. The Company did not record an allowance for credit losses as of March 31, 2024.

Short-term investments, which are classified as available-for-sale, consisted of the following (in thousands):

 

Balance at March 31, 2024:

 

Amortized
Cost Basis

 

 

Unrealized
Gain

 

 

Unrealized
Loss

 

 

Fair
Value

 

Treasury bills

 

$

202,793

 

 

$

 

 

$

(52

)

 

$

202,741

 

Total short-term investments

 

$

202,793

 

 

$

 

 

$

(52

)

 

$

202,741

 

 

Balance at December 31, 2023:

 

Amortized
Cost Basis

 

 

Unrealized
Gain

 

 

Unrealized
Loss

 

 

Fair
Value

 

Treasury bills

 

$

196,098

 

 

$

67

 

 

$

 

 

$

196,165

 

U.S. agency bonds

 

 

4,999

 

 

 

 

 

 

(3

)

 

 

4,996

 

Total short-term investments

 

$

201,097

 

 

$

67

 

 

$

(3

)

 

$

201,161

 

 

5. INVENTORIES

10


 

Inventories consisted of the following (in thousands):

 

 

March 31, 2024

 

 

December 31, 2023

 

Raw materials

 

$

 

 

$

53,144

 

Work in process

 

 

 

 

 

18,945

 

Finished goods

 

 

 

 

 

11,191

 

Total inventories

 

$

 

 

$

83,280

 

 

On April 4, 2024, the Company announced it started a process with the FDA and Health Canada to voluntarily discontinue the marketing authorizations for RELYVRIO®/ALBRIOZA™ and remove the product from the market in the U.S. and Canada based on topline results from the global Phase 3 PHOENIX trial. As a result, the Company recorded approximately $92.5 million of charges associated with the write-down of inventory for the three months ended March 31, 2024. Inventory write-downs for the three months ended March 31, 2023 were immaterial.

6. Accrued Expenses

Accrued expenses consisted of the following (in thousands):

 

 

March 31, 2024

 

 

December 31, 2023

 

Accrued external research and development

 

$

11,029

 

 

$

12,625

 

Accrued benefits and incentive compensation

 

 

6,204

 

 

 

16,790

 

Accrued manufacturing

 

 

4,489

 

 

 

1,652

 

Accrued consulting and other professional fees

 

 

8,693

 

 

 

6,506

 

Accrued rebates and co-pay assistance

 

 

18,636

 

 

 

16,063

 

Accrued royalties

 

 

 

 

 

3,111

 

Accrued loss on future purchase commitments

 

 

17,928

 

 

 

 

Other accrued expenses

 

 

895

 

 

 

977

 

Total accrued expenses

 

$

67,874

 

 

$

57,724

 

 

7. FAIR VALUE MEASUREMENTS

The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicates the level of the fair value hierarchy utilized to determine such fair values (in thousands):

 

 

March 31, 2024

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

78,731

 

 

$

 

 

$

 

 

$

78,731

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

Treasury bills

 

 

202,741

 

 

 

 

 

 

 

 

 

202,741

 

Total short-term investments

 

 

202,741

 

 

 

 

 

 

 

 

 

202,741

 

Restricted cash equivalents

 

 

719

 

 

 

 

 

 

 

 

 

719

 

Total financial assets

 

$

282,191

 

 

$

 

 

$

 

 

$

282,191

 

 

 

December 31, 2023

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash equivalents

 

$

76,710

 

 

$

 

 

$

 

 

$

76,710

 

Short-term investments:

 

 

 

 

 

 

 

 

 

 

 

 

Treasury bills

 

 

196,165

 

 

 

 

 

 

 

 

 

196,165

 

U.S. agency bonds

 

 

 

 

 

4,996

 

 

 

 

 

 

4,996

 

Total short-term investments

 

 

196,165

 

 

 

4,996

 

 

 

 

 

 

201,161

 

Restricted cash equivalents

 

 

719

 

 

 

 

 

 

 

 

 

719

 

Total financial assets

 

$

273,594

 

 

$

4,996

 

 

$

 

 

$

278,590

 

 

The Company classifies its money market funds, treasury notes and treasury bills as Level 1 assets under the fair value hierarchy, as these assets have been valued using quoted market prices for identical assets in active markets without any valuation adjustment. The Company classifies its commercial paper, corporate debt securities, and agency bonds as Level 2 assets under the fair value hierarchy, as these assets have been valued using information obtained through a third-party pricing service at each balance

11


 

sheet date, using observable market inputs that may include trade information, broker or dealer quotes, bids, offers, or a combination of these data sources.

8. Stock Option and Grant Plan

Stock Incentive Plan

General Option Information

A summary of option activity for the three months ended March 31, 2024, is as follows:

 

 

Number of
Options

 

 

Weighted-
Average
Exercise
Price

 

 

Weighted-
Average
Remaining
Contractual
Term
(in years)

 

 

Aggregate
Intrinsic
Value
(in thousands)

 

Outstanding at December 31, 2023

 

 

9,823,248

 

 

$

18.39

 

 

 

7.9

 

 

$

27,639

 

Granted

 

 

1,357,981

 

 

$

16.76

 

 

 

 

 

 

 

Exercised

 

 

(49,618

)

 

$

2.96

 

 

 

 

 

$

653

 

Cancelled or forfeited

 

 

(356,109

)

 

$

21.88

 

 

 

 

 

 

 

Outstanding at March 31, 2024

 

 

10,775,502

 

 

$

18.14

 

 

 

7.9

 

 

$

689

 

Options exercisable as of March 31, 2024

 

 

4,739,300

 

 

$

14.87

 

 

 

7.0

 

 

$

689

 

Options unvested as of March 31, 2024

 

 

6,036,202

 

 

$

20.70

 

 

 

8.6

 

 

$

 

Weighted average grant-date fair value of options granted during the period

 

$

11.00

 

 

 

 

 

 

 

 

 

 

 

The aggregate intrinsic value of options exercised during the three months ended March 31, 2024 and 2023 was $0.7 million and $11.7 million, respectively.

The total fair value of stock options vested during the three months ended March 31, 2024 and 2023 was $14.9 million and $14.7 million, respectively.

Restricted Stock Unit Activity

A summary of restricted stock unit activity for the three months ended March 31, 2024, is as follows:

 

 

 

Number of Shares

 

 

Weighted Average Grant Date Fair Value

 

Nonvested as of December 31, 2023

 

 

1,112,542

 

 

$

24.80

 

Granted

 

 

1,242,207

 

 

$

17.42

 

Vested

 

 

(231,437

)

 

$

25.39

 

Forfeited

 

 

(67,972

)

 

$

24.90

 

Nonvested as of March 31, 2024

 

 

2,055,340

 

 

$

20.27

 

 

Summary of Stock-Based Compensation Expense

Stock-based compensation expense for the three months ended March 31, 2024 and 2023, is as follows (in thousands):

 

 

Three Months Ended March 31,

 

 

 

2024

 

 

2023

 

Research and development

 

$

2,712

 

 

$

1,891

 

Selling, general and administrative

 

 

7,212

 

 

 

5,610

 

Total stock-based compensation expense

 

$

9,924

 

 

$

7,501

 

 

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The following table summarizes unrecognized stock-based compensation expense as of March 31, 2024, by type of awards (in thousands), and the weighted-average period over which that expense is expected to be recognized (in years). The total unrecognized stock-based compensation expense will be adjusted for actual forfeitures as they occur.

 

 

 

March 31, 2024

 

 

 

Unrecognized Expense

 

 

Weighted-average Recognition Period

 

Stock options

 

$

80,901

 

 

 

2.63

 

Restricted stock units

 

$

39,510

 

 

 

3.30

 

 

9. NET (LOSS) INCOME PER SHARE

Net (Loss) Income per Share

Basic earnings per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated based on the combined weighted average number of common shares and potentially dilutive shares, which include the assumed exercise of employee stock options and unvested restricted stock units. In computing diluted earnings per share, the Company utilizes the treasury stock method.

A summary of the numerator and denominators used in the computation of earnings per share follows (in thousands, except share and per share data):

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Numerator:

 

 

 

 

 

 

Net (loss) income

 

$

(118,793

)

 

$

1,573

 

Denominator:

 

 

 

 

 

 

Weighted-average shares used to compute basic net (loss) income per share

 

 

67,854,356

 

 

 

66,717,271

 

Dilutive effect of employee stock options and restricted stock units

 

 

 

 

 

4,146,394

 

Weighted-average shares used to compute diluted net (loss) income per share

 

 

67,854,356

 

 

 

70,863,665

 

Net (loss) income per share

 

 

 

 

 

 

Basic

 

$

(1.75

)

 

$

0.02

 

Diluted

 

$

(1.75

)

 

$

0.02

 

 

Because the Company reported a net loss attributable to common stockholders for the three months ended March 31, 2024, basic and diluted net loss per share attributable to common stockholders were the same. All stock options and restricted stock units were excluded from the computation of diluted weighted-average shares outstanding because such securities would have an antidilutive impact for the three months ended March 31, 2024. The following stock options and restricted stock units outstanding at each period end have been excluded from the calculation of diluted net income (loss) per share because their inclusion would have been antidilutive:

 

 

Three Months Ended March 31,

 

 

2024

 

 

2023

 

Options to purchase common stock

 

 

10,775,502

 

 

 

368,503

 

Restricted stock units

 

 

2,055,340

 

 

 

4,509

 

Total excluded common stock equivalents

 

 

12,830,842

 

 

 

373,012

 

 

10. Related party transactions

Supplier Agreements

In the ordinary course of business, the Company may purchase materials or supplies or services from entities that are associated with a party that meets the criteria of a related party of the Company. These transactions are reviewed quarterly and to date have not been material to the Company’s condensed consolidated financial statements.

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11. Commitments and Contingencies

Lease Commitments

The Company has two operating lease agreements for its office space.

 

Letter of Credit

Restricted cash equivalents consist of $0.2 million of cash serving as collateral for a letter of credit issued for the Company’s office space, and $0.5 million as collateral for a corporate credit card program. As of March 31, 2024 and December 31, 2023, the Company’s restricted cash equivalents balance was $0.7 million on its condensed consolidated balance sheets.

Legal Proceedings

On February 9, 2024, a putative class action lawsuit was filed in the U.S. District Court for the Southern District of New York against the Company and certain of its current and former officers (Shih v. Amylyx Pharmaceuticals, Inc., et al., Case Number 1:24-CV-00988, or the Shih Complaint. The Shih Complaint asserts a claim against all defendants for alleged violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder and a claim under Section 20(a) against certain current and former officers as alleged controlling persons. The Shih Complaint alleges that defendants made materially false and misleading statements related to the commercial results and prospects for RELYVRIO. The Shih Complaint seeks unspecified damages, interest, costs and attorneys’ fees, and other unspecified relief that the court deems appropriate. The Company intends to defend against the Shih Complaint vigorously. At this time, an estimate of the impact, if any, of these claims cannot be made.

Royalty Payments

Between August 2016 and February 2019, the Company entered into grant agreements with the ALS Association, ALS Finding a Cure Foundation, Alzheimer’s Drug Discovery Foundation, Alzheimer’s Association and Cure Alzheimer’s Fund, or Grantors. Under the terms of the agreements, the Company was granted, in aggregate, $4.3 million. These grants were provided to the Company for the purpose of furthering the research and development of AMX0035 as a therapeutic benefit for ALS and Alzheimer’s disease. Under the terms of the arrangements, the Company would receive a tranche of funds as it completed certain milestones. Pursuant to the terms of the grant agreements, the Company has certain payment obligations that are contingent upon future events such as the achievement of commercialization or the receipt of proceeds from a revenue generating transaction resulting from the projects for which the grants are used for.

Pursuant to the terms of the respective grant agreements among the Company, ALS Association and ALS Finding a Cure, the Company will be required to make royalty payments to each Grantor in the total amount equal to 150% of the grant received. The royalty payments will be achieved through a combination of the following payment methods: (i) an annual installment payment of 3% of net sales of any products developed under the project for which the grant was used for and (ii) 3% of cash proceeds resulting from revenue generating transaction under the project for which the grants are used for. During the three months ended March 31, 2024, the Company did not record any royalty expense. During the three months ended March 31, 2023, the Company recorded $2.5 million in royalty expense, which is included in cost of sales in the condensed consolidated financial statements. As of March 31, 2024, no further royalties remain to be accrued under the grant agreements with the ALS Association and ALS Finding a Cure Foundation.

Under the terms of the respective grant agreements among the Company, Alzheimer’s Drug Discovery Foundation, the Alzheimer’s Association, and Cure Alzheimer’s Fund, the Company will make royalty payments up to the maximum amount of $15.0 million to each Grantor (or $45.0 million in aggregate). The royalty payment will be made through a combination of the following payment methods: (i) 4% of annual net sales of any product commercialized from the project for which the grant was used for and directly related to the treatment of the Alzheimer’s disease and (ii) 15% of all royalties and cash proceeds resulting from revenue generating transactions associated with the projects for which the grants were used for under the grant agreements. As the conditions that would trigger royalty payments under the agreements have not occurred, no amounts have been recorded in the condensed consolidated financial statements for the three months ended March 31, 2024 and 2023.

Purchase Commitments

The Company enters into agreements in the normal course of business with contract manufacturing organizations for raw material purchases and manufacturing services. As disclosed in Note 18 Commitments and Contingencies in the Company's Annual Report on Form 10-K, as of December 31, 2023, the Company had committed approximately $195.0 million under these agreements related to raw material purchases and manufacturing services, which were expected to be paid through 2028. While these commitments are estimates and are subject to changes based on the outcomes of ongoing negotiations with the contract manufacturing

14


 

organizations, as of March 31, 2024, the Company had estimated approximately $35.1 million of commitments under these agreements related to raw material purchases and manufacturing services, which are expected to be paid through 2025. The actual obligations may differ from these estimates, and such differences will be reflected in the Company's financial statements in future periods as they become known.

The Company recognized a loss on purchase commitments of $17.9 million for the three months ended March 31, 2024, which was recorded to cost of sales on the condensed consolidated statement of operations and as part of accrued expenses on the condensed consolidated balance sheet. The purchase commitment loss is based on an estimate of future commitments related to supply agreements with third party vendors for which the Company does not expect to have related sales.

12. Subsequent Events

In April 2024, the Company announced that it has started a process with the FDA and Health Canada to voluntarily discontinue the marketing authorizations for RELYVRIO®/ALBRIOZA (sodium phenylbutyrate and taurursodiol [also known as ursodoxicoltaurine]; also known as AMX0035) for the treatment of ALS and remove the product from the market in the U.S. and Canada. As of April 4, 2024, RELYVRIO/ALBRIOZA was no longer available for new patients. The Company also announced a restructuring plan designed to focus the Company’s resources on key clinical and preclinical programs, or the Restructuring Plan. The Restructuring Plan includes a reduction in force which is expected to reduce the Company’s workforce by approximately 70% and a decrease in external financial commitments outside of its priority areas. The Company expects to substantially complete the Restructuring Plan by the end of the third quarter of 2024. As part of this Restructuring Plan, the Company expects to incur severance and severance-related charges of approximately $19.1 million. The Company may also incur other charges or cash expenditures not currently contemplated or that cannot be currently estimated due to events that may occur as a result of, or associated with, the Restructuring Plan.

As the Company will no longer sell RELYVRIO or ALBRIOZA, the Company recorded approximately $92.5 million of charges associated with the write-down of inventory for the three months ended March 31, 2024. In addition, the Company recognized a loss on purchase commitments of $17.9 million for the three months ended March 31, 2024, which is based on an estimate of future commitments related to supply agreements with third party vendors for which the Company does not expect to have related sales.

15


 

Item 2. Management’s Discussion and Analysis of Financial C