Amylyx Pharmaceuticals Inc

Previous wording

Cost of sales consists primarily of costs associated with the manufacturing of RELYVRIO, ALBRIOZA and certain period costs, which include:

Current wording

Cost of sales consists primarily of costs associated with the manufacturing of RELYVRIO, ALBRIOZA and certain period costs and losses on purchase commitments with contract manufacturing organizations. Following our announcement of a process to discontinue the marketing authorizations for RELYVRIO®/ALBRIOZA™ and remove the product from the market in the U.S. and Canada, we did not report product cost of sales following the discontinuation of these products.

Previous wording

Research and development expenses consist primarily of costs incurred in connection with the research and development of AMX0035. We expense research and development costs as incurred. These expenses include:

Current wording

Research and development expenses consist primarily of costs incurred in connection with the research and development of avexitide, AMX0035, AMX0114 and other potential future product candidates. We expense research and development costs as incurred. These expenses include:

Previous wording

Certain of our indirect research and development expenses are not tracked on an indication-by-indication basis for AMX0035. We do not allocate employee costs and facilities, including depreciation or other indirect costs, to specific indications because these costs are deployed across multiple indications and, as such, are not separately classified. We use internal resources to oversee the research and discovery as well as to manage our preclinical development, process development, manufacturing and clinical development activities. These employees work across multiple indications and, therefore, we do not track their costs by indication.

Current wording

Certain of our indirect research and development expenses are not tracked on an indication-by-indication basis. We do not allocate employee costs and facilities, including depreciation or other indirect costs, to specific indications because these costs are deployed across multiple indications and, as such, are not separately classified. We use internal resources to oversee the research and discovery as well as to manage our preclinical development, process development, manufacturing and clinical development activities. These employees work across multiple indications and, therefore, we do not track their costs by indication.

Previous wording

Research and development activities are central to our business model. Product candidates such as AMX0035 in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, such as AMX0114, primarily due to the increased size and duration of later-stage clinical trials and related product manufacturing expenses. We expect that our research and development expenses will continue to increase in connection with our planned clinical development activities in the near term and in the future and to fund commercialization activities in the U.S., Canada and any other jurisdictions in which AMX0035 is approved. At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the clinical development of AMX0035 and any future product candidates. Our clinical development costs may vary significantly based on factors such as:

Current wording

Research and development activities are central to our business model. Product candidates such as avexitide and AMX0035 in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, such as AMX0114, primarily due to the increased size and duration of later-stage clinical trials and related product manufacturing expenses. Despite a decline in research and development expenses in 2024 compared to 2023, we expect that our research and development expenses will increase in connection with our planned clinical development activities in the near term and in the future. At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the clinical development of avexitide, AMX0035 and any future product candidates. Our clinical development costs may vary significantly based on factors such as:

Previous wording

The successful development and commercialization of AMX0035 and any other current or future product candidates is highly uncertain, due to the numerous risks and uncertainties associated with product development and commercialization, including the following:

Current wording

The successful development and commercialization of avexitide, AMX0035 and any other current or future product candidates is highly uncertain, due to the numerous risks and uncertainties associated with product development and commercialization, including the following:

Previous wording

the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to Health Canada, the FDA or the EMA, or any other comparable foreign regulatory authority;

Current wording

the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any other comparable foreign regulatory authority;

Previous wording

the availability of drug substance and drug product for use in production of AMX0035;

Current wording

the availability of drug substance and drug product for use in production of avexitide, AMX0035 or other product candidates;

Previous wording

establishing and maintaining agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing;

Current wording

establishing and maintaining agreements with third-party manufacturers for clinical supply for our clinical trials;

Previous wording

obtaining and maintaining third-party insurance coverage and adequate reimbursement;

Current wording

obtaining and maintaining third-party insurance coverage and adequate reimbursement in the future for any approved products;

Previous wording

A change in the outcome of any of these variables with respect to the development of AMX0035 or any future product candidates could have a significant impact on the cost and timing associated with the development of our product candidates. We may never succeed in obtaining or maintaining, as applicable, regulatory approval for AMX0035 or any future product candidates.

Current wording

A change in the outcome of any of these variables with respect to the development of avexitide, AMX0035 or any other current or future product candidates could have a significant impact on the cost and timing associated with the development of our product candidates. We may never succeed in obtaining or maintaining, as applicable, regulatory approval for avexitide, AMX0035 or any other current or future product candidates.

Previous wording

Selling, general and administrative expenses consist primarily of salaries and related costs for personnel in executive, finance, sales, marketing, as well as administrative functions. Selling, general and administrative expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax and administrative consulting services; corporate insurance costs; administrative travel expenses; sales and marketing expenses; information technology; charitable donations to independent charitable foundations; facility-related and other operating costs. We anticipate that our selling, general and administrative expenses will continue to increase in the future as we further increase our headcount to support our continued research activities and development of AMX0035 and as we commercialize AMX0035. We also anticipate that we will continue to incur increased accounting, audit, legal, regulatory, compliance, and director and officer insurance costs as well as investor and public relations expenses associated with being a public company. We have received marketing authorization with conditions for ALBRIOZA for the treatment of ALS in Canada and marketing authorization for RELYVRIO for the treatment of ALS in adults in the U.S.

Current wording

Selling, general and administrative expenses consist primarily of salaries and related costs for personnel in executive, finance, sales, marketing, as well as administrative functions. Selling, general and administrative expenses also include legal fees relating to patent and corporate matters; professional fees for accounting, auditing, tax and administrative consulting services; corporate insurance costs; administrative travel expenses; sales and marketing expenses; information technology; charitable donations to independent charitable foundations; facility-related and other operating costs. In April 2024, we announced the Restructuring Plan designed to focus our resources on key clinical and preclinical programs. The restructuring included a reduction in force which reduced our workforce by approximately 70% and a decrease in external financial commitments outside our priority areas. As a result, our selling, general and administrative expenses decreased in 2024 as compared to 2023. However, we expect that general and administrative expenses will increase in future periods as we advance our clinical pipeline.

Previous wording

Income taxes are determined using the asset and liability approach. Deferred tax assets and liabilities represent future tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities and for tax attribute carryforwards using enacted tax rates expected to be in effect in the years in which the differences reverse. Realization of our deferred tax assets is dependent upon the generation of future taxable income, the amount and timing of which are uncertain. Valuation allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. During 2023, a portion of our valuation allowance has been reversed with respect to amounts we realized through current year U.S. federal and state taxable income. We continue to maintain a full valuation allowance against all of our U.S. deferred tax assets as of December 31, 2023 based on management’s evaluation of all available evidence, including our history of incurring significant losses from operations. Our evaluation of all available evidence also includes consideration of regulatory approvals of and developments related to ALBRIOZA and RELYVRIO, including actual and forecasted revenues generated from the sale of these products. Given the early stage of our product commercialization, we are uncertain about the timing and amount of future sales. We may release all or a portion of the remaining valuation allowance in the near-term; however, the release of the valuation allowance, as well as the exact timing and the amount of such release, continue to be subject to, among other things, our level of profitability, revenue growth, clinical program progression and expectations regarding future profitability.

Current wording

We have historically not incurred significant income taxes. We continue to maintain a full valuation allowance against all of our deferred tax assets based on management’s evaluation of all available evidence, including our history of incurring significant losses from operations. As a result, we don’t expect to incur material income taxes for the foreseeable future.

Previous wording

Selling, general and administrative expenses were $188.4 million for the year ended December 31, 2023 compared to $127.1 million for the year ended December 31, 2022. The increase of $61.2 million was primarily due to increases of $30.2 million in payroll and personnel-related costs, which includes an $11.2 million increase in stock-based compensation, $16.1 million in consulting and professional services and $14.9 million in other expenses. The increase in payroll and personnel-related costs was primarily due to hiring additional personnel in commercial and general and administrative functions to support our growth, as well as commercialization preparation initiatives in the EU. The increases in consulting and professional services and other expenses were primarily due to an increase in spending for commercial activities, operations as a public company, and other expenses.

Current wording

Selling, general and administrative expenses were $114.3 million for the year ended December 31, 2024 compared to $188.4 million for the year ended December 31, 2023. The decrease was primarily due to a decrease of $39.5 million in payroll and personnel-related costs, $25.5 million in consulting and professional services, and $9.1 million in other expenses. The decrease in payroll and personnel-related costs was primarily related to a decrease in the number of employees as a result of the Restructuring Plan. The decrease in consulting and professional services was primarily due to a decrease in commercial sales and marketing activity as a result of the RELYVRIO®/ALBRIOZA™ Discontinuation. The decrease in other expenses is primarily due to a decrease in charitable contributions.

Previous wording

As of December 31, 2023, we had cash, cash equivalents and short-term investments of $371.4 million. We believe that the revenue we generate from commercial sales of AMX0035 in the U.S. and Canada and our existing cash, cash equivalents and short-term investments as of December 31, 2023, will be sufficient to meet our anticipated operating and capital expenditure requirements for at least one year from the date of this Annual Report. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Current wording

As of December 31, 2024, we had cash, cash equivalents and marketable securities of $176.5 million and an accumulated deficit of $606.7 million. We believe our existing cash, cash equivalents and marketable securities as of December 31, 2024, along with the proceeds from the January 2025 Offering, will be sufficient to meet our anticipated operating and capital expenditure requirements through 2026. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

Previous wording

Since inception, we have devoted substantially all of our efforts to research and development, pre-commercialization and commercialization activities, including recruiting management and technical staff, raising capital, producing materials for preclinical studies and clinical trials, and building infrastructure to support such activities. As of December 31, 2023, we have funded our operations primarily through public offerings of our common stock, private sales of preferred stock, convertible notes, and more recently through revenue from sales of RELYVRIO and ALBRIOZA in the U.S. and Canada, respectively.

Current wording

Since inception, we have devoted substantially all of our efforts to research and development, pre-commercialization and commercialization activities, including recruiting management and technical staff, raising capital, producing materials for preclinical studies and clinical trials, and building infrastructure to support such activities. As of December 31, 2024, we have funded our operations primarily through public offerings of our common stock, private sales of preferred stock, convertible notes, and through revenue from sales of RELYVRIO and ALBRIOZA in the U.S. and Canada, respectively between July 2022 and April 2024.

Previous wording

We also expect to continue to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses. As a result, we may need substantial additional funding to support our continuing operations and pursue our growth strategy. Until such time as we can generate sufficient revenue from product sales to sustain profitability, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies, royalty financings, or other strategic transactions. Our inability to raise capital as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies. There can be no assurances that our current operating plan will be achieved or that additional funding, if required, will be available on terms acceptable to us, or at all.

Current wording

We expect to finance our near-term operations through our existing cash, cash equivalents and marketable securities and if needed, the sale of equity, debt financings or other capital sources, including potential collaborations with other companies, royalty financings, or other strategic transactions. Our inability to raise capital or secure other funding as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies. There can be no assurances that our current operating plan will be achieved or that additional funding, if required, will be available on terms acceptable to us, or at all.

Previous wording

We expect our expenses to increase in connection with our ongoing activities, particularly as we advance the preclinical activities, manufacturing and clinical trials of AMX0035 and any other current or future product candidates, execute on our commercialization plans for ALBRIOZA in Canada and RELYVRIO in the U.S., and prepare for the commercial launch of AMX0035 in other jurisdictions, if approved. In addition, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses. Because we no longer qualify as an emerging growth company as defined in the JOBS Act and we are now considered a large accelerated filer, we are no longer entitled to rely on exemptions from certain compliance requirements that are applicable to companies that are emerging growth companies including, among other requirements, the auditor attestation requirements of Section 404(b) and reduced reporting requirements. Our expenses will also increase as we:

Current wording

Despite the decline in research and development and general administrative expenses in 2024 as compared to 2023, we expect our expenses to increase in connection with our ongoing activities, particularly as we advance the preclinical activities, manufacturing and clinical trials of avexitide, AMX0035 and any other current or future product candidates or acquire or in-license additional product candidates or products. We may also incur expenses related to business development activities, such as in-licensing or acquisition of product candidates. In addition, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses. We expect to incur significant expenses as we:

Previous wording

continue our research and development efforts, including our ongoing Phase 3 trial of AMX0035 in PSP and our ongoing Phase 2 trial of AMX0035 for the treatment of WS;

Current wording

continue our research and development efforts of AMX0035, including our ongoing Phase 2b/3 trial of AMX0035 in PSP and our ongoing Phase 2 trial of AMX0035 for the treatment of Wolfram syndrome;

Previous wording

continue to develop AMX0114, antisense oligonucleotide, for the treatment of people living ALS;

Current wording

continue to develop AMX0114, our antisense oligonucleotide, for the treatment of people living ALS;

Previous wording

develop the necessary processes, controls and manufacturing data to obtain additional marketing approval for AMX0035 or approval for any future product candidates and to support manufacturing on a commercial scale;

Current wording

develop the necessary processes, controls and manufacturing data to obtain marketing approval for current or future product candidates and to support manufacturing on a commercial scale;

Previous wording

seek additional regulatory approvals for AMX0035 or approvals for any future product candidates that successfully complete clinical trials, if any;

Current wording

seek regulatory approvals for any current or future product candidates that successfully complete clinical trials, if any;

Previous wording

Prior to 2023, we had incurred operating losses and as of December 31, 2023, we had an accumulated deficit of $304.9 million. These losses resulted primarily from costs incurred in connection with research and development activities and selling, general and administrative costs associated with our operations. We expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution of our approved products. We may incur significant losses and our financial results will be highly dependent upon our successful commercialization of RELYVRIO in the U.S. We will continue to incur significant expenses as we advance AMX0035 and any other current or future product candidates through preclinical and clinical development, set up and initiate additional trials, hire additional clinical, scientific, management and administrative personnel, seek regulatory approval and pursue commercialization of any approved product candidates. To date, we have primarily developed AMX0035 and AMX0114 internally, with assistance from our network of CROs and other advisors. This has resulted in increased research and development spending but has enabled us to manage AMX0035 and AMX0114 efficiently through the development and manufacturing process.

Current wording

incur expenses in preparation for commercialization for any approved product candidates related to product sales, marketing, manufacturing, and distribution;

Previous wording

the scope, progress, results and costs of drug discovery, laboratory testing, preclinical and clinical development for AMX0035 and any future product candidates;

Current wording

the scope, progress, results and costs of drug discovery, laboratory testing, preclinical and clinical development for avexitide, AMX0035 and any future product candidates;

Previous wording

the costs, timing and outcome of commercialization activities, including manufacturing, marketing, sales and distribution for AMX0035 in the U.S. and Canada, and, if approved, in the EU and other territories or for any future product candidates for which we receive regulatory approval;

Current wording

the costs, timing and outcome of any future commercialization activities, including manufacturing, marketing, sales and distribution costs;

Previous wording

the costs, timing and outcome of regulatory review of AMX0035 and any future product candidates;

Current wording

the costs, timing and outcome of regulatory review of avexitide, AMX0035 and any future product candidates;

Previous wording

timing delays with respect to preclinical and clinical development of AMX0035 and any future product candidates, including as result of any future outbreak of any highly infectious or contagious diseases;

Current wording

timing delays with respect to preclinical and clinical development of avexitide, AMX0035 and any future product candidates, including as result of any future outbreak of any highly infectious or contagious diseases;

Previous wording

the costs of expanding our facilities to accommodate our expected growth in personnel, and the costs of such additional personnel;

Current wording

the costs of any future expansion of our facilities to accommodate our potential growth in personnel, and the costs of such additional personnel;

Previous wording

the sales price and availability of adequate third-party coverage and reimbursement for AMX0035 and any future product candidates, if and when approved; and

Current wording

the sales price and availability of adequate third-party coverage and reimbursement for any future product candidates, if and when approved;

Previous wording

During the year ended December 31, 2022, operating activities used $179.9 million of cash, primarily resulting from our net loss of $198.4 million and net amortization of premiums and discounts on investments of $2.1 million, offset by $21.7 million of non-cash stock-based compensation expense, $0.5 million of depreciation expense and a $1.6 million increase in net cash used in our operating assets and liabilities.

Current wording

During the year ended December 31, 2024, operating activities used $167.6 million of cash, primarily resulting from our net loss of $301.7 million, offset by non-cash items totaling $179.9 million including $118.7 million of inventory impairment and loss on firm purchase commitments, $33.0 million of non-cash stock-based compensation expense, $9.9 million in accretion of discounts on investments and $36.2 million of acquired IPR&D assets, which are classified as investing activities.

Previous wording

Net cash used in our operating assets and liabilities primarily consisted of a $21.6 million increase in accrued expenses, a $15.9 million increase in accounts payable and a $1.8 million decrease in operating lease right-of-use assets. This was offset by a $73.1 million increase in inventories, a $24.7 million increase in accounts receivable, a $4.8 million increase in prepaid expenses and other current assets and a $2.0 million decrease in operating lease liabilities.

Current wording

Net cash used in our operating assets and liabilities in 2023 primarily consisted of a $21.6 million increase in accrued expenses, a $15.9 million increase in accounts payable and a $1.8 million decrease in operating lease right-of-use assets. This was offset by a $73.1 million increase in inventories, a $24.7 million increase in accounts receivable, a $4.8 million increase in prepaid expenses and other current assets and a $2.0 million decrease in operating lease liabilities.

Previous wording

During the year ended December 31, 2022, net cash used in investing activities was $239.0 million, resulting from $2.5 million in purchases of property and equipment and $415.9 million in purchases of short-term investments, offset by $179.4 million of investments matured during the period.

Current wording

During the year ended December 31, 2024, net cash provided by investing activities was $75.7 million resulting from $344.0 million of investments that matured during the period offset by $232.0 million in purchases of marketable securities and a $36.2 million cash outflow to acquire IPR&D assets related to the Eiger Acquisition.

Previous wording

During the year ended December 31, 2023, net cash provided by investing activities was $92.1 million resulting from $394.1 million of investments matured during the period offset by $300.8 million in purchases of short-term investments and $1.2 million in purchases of property and equipment.

Current wording

During the year ended December 31, 2023, net cash provided by investing activities was $92.1 million resulting from $394.1 million of investments matured during the period offset by $300.8 million in purchases of marketable securities and $1.2 million in purchases of property and equipment.

Previous wording

We enter into agreements in the normal course of business with contract manufacturing organizations for raw material purchases and manufacturing services. As of December 31, 2023, we had committed approximately $195.0 million under these agreements related to raw material purchases and manufacturing services, which are expected to be paid through 2028.

Current wording

We enter into agreements in the normal course of business with contract manufacturing organizations for raw material purchases and manufacturing services. As of December 31, 2024, the amounts committed under these agreements are not material.

Previous wording

Our accounting policy for revenue recognition has a substantial impact on reported results and relies on certain estimates. Revenue is recognized following a five-step model under ASC Topic 606 -Revenue from Contracts with Customers, or Topic 606. Revenue is also reduced by variable consideration related to certain gross-to-net, or GTN, adjustments discussed below. These GTN adjustments involve significant estimates and judgment after 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. Estimates are assessed each period and adjusted as required to revise information or actual experience. In accordance with Topic 606, we recognize revenue on product sales when the customer obtains control of our product, which occurs at a point in time (upon delivery). Product revenues are recorded net of applicable GTN adjustments, including discounts and allowances. Payment from customers is typically due within 30 calendar days of the invoice date.

Current wording

Prior to the RELYVRIO®/ALBRIOZA™ Discontinuation, our accounting policy for revenue recognition had a substantial impact on reported results and relied on certain estimates. Specifically, revenue was reduced by variable consideration related to certain gross-to-net, or GTN. These GTN adjustments involve significant estimates and judgment, 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. Estimates were assessed each period and adjusted as required to revise information or actual experience. To date, actual GTN activity has not differed materially from our estimates. Because of the time elapsed since the RELYVRIO®/ALBRIOZA™ Discontinuation the remaining estimates and judgments related to revenue recognition are not considered significant as of December 31, 2024.

Previous wording

We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CMOs and CROs that conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

Current wording

We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CMOs and CROs that conduct and manage preclinical studies and clinical trials on our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly. To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.