Amylyx(AMLX) - 2022 Q4 - Annual Report

Regulatory Approvals - AMX0035 (RELYVRIO) received FDA approval in September 2022 and was commercially available in October 2022, marking the company's first regulatory approval in the U.S. and its second worldwide [671]. - The Marketing Authorization Application for AMX0035 in Europe is under review, with an opinion from the EMA expected mid-year and a decision in Q3 2023 [672]. - The company received marketing authorization for ALBRIOZA in Canada and RELYVRIO in the U.S. for the treatment of ALS [699]. Financial Performance - As of December 31, 2022, the company reported a net loss of $198.4 million for the year, with an accumulated deficit of$354.2 million [677]. - Product revenue for the year ended December 31, 2022, was approximately $22.2 million, a significant increase from$0 in 2021 [705]. - The net loss for the year ended December 31, 2022, was $198.4 million, compared to a net loss of$87.9 million in 2021, reflecting a 126% increase [703]. - Interest income for 2022 was $4.3 million, a significant increase from less than$0.1 million in 2021, attributed to higher investment balances [710]. Expenses and Investments - Research and development expenses rose to $93.5 million in 2022, up 112$44.0 million in 2021, primarily due to increased spending on AMX0035 for ALS [708]. - Selling, general and administrative expenses increased to $127.1 million in 2022, a 227$38.9 million in 2021, driven by higher payroll and personnel-related costs [709]. - The company expects substantial increases in expenses related to the commercialization of AMX0035 and other product candidates, including clinical trials and regulatory approvals [715]. - The company anticipates that existing cash and revenue from AMX0035 sales will be sufficient to meet operating and capital expenditure requirements for at least twelve months [719]. Cash and Funding - The company had cash, cash equivalents, and short-term investments totaling $346.9 million as of December 31, 2022, following a public offering that raised approximately$230.6 million [679]. - The company has raised a total of $663.6 million in proceeds since inception, with$196.4 million from the IPO in January 2022 and $230.6 million from a public offering in October 2022 [714]. - Financing activities provided$431.8 million in cash in 2022, including $200.9 million from the IPO and$231.6 million from a follow-on offering [731]. - Future funding requirements may increase significantly due to various factors, including drug development costs and regulatory review outcomes [721]. Research and Development - The Phase 3 clinical trial (PHOENIX) for AMX0035 enrolled 664 participants, with topline results expected in mid-2024 [673]. - AMX0035 is being pursued as a foundational therapy for ALS and has shown both functional and survival benefits in clinical trials [669]. - Research and development expenses are expected to increase substantially due to planned clinical development activities and commercialization efforts [691]. - The ongoing COVID-19 pandemic and global economic conditions may disrupt the development of AMX0035 and future product candidates [680]. Accounting and Compliance - The company is classified as an "emerging growth company" and has elected to use an extended transition period for compliance with new accounting standards [748]. - The company will cease to be an emerging growth company when total annual gross revenues exceed $1.235 billion or other specified conditions are met [749]. - The company is also classified as a "smaller reporting company," allowing for simplified disclosure obligations until certain revenue and market value thresholds are met [750]. - Recently issued accounting pronouncements that may impact financial position and results of operations are disclosed in the consolidated financial statements [752]. Revenue Recognition - The company recognizes revenue from product sales when control is transferred to customers, with revenue recorded net of applicable gross-to-net adjustments [735]. - The company participates in government programs that require pricing on products to be extended below wholesaler list price, impacting product revenue and accounts receivable [736]. - Cash discounts are offered to customers for prompt payment, reducing product revenue and accounts receivable at the time of sale [738]. - The company accrues rebates and discounts for Medicaid and other government programs, which reduce product revenue in the same period as the related revenue is recognized [739]. - Estimated product returns for established products are based on quantitative and qualitative information, with minimal returns expected in future periods [741]. - Accrued research and development expenses are estimated based on contracts and services performed, with adjustments made as necessary [742]. Operational Challenges - The company has incurred operating losses since inception, primarily due to research and development costs and general administrative expenses [678]. - Operating activities used$179.9 million in cash for the year ended December 31, 2022, primarily due to a net loss of $198.4 million [725]. - Net cash used in investing activities was$239.0 million in 2022, significantly higher than $46.4 million in 2021, reflecting increased investments in short-term assets [729]. - The change in fair value of convertible notes was zero for 2022, compared to a loss of$5.2 million in 2021 due to conversion to preferred stock [711]. - The net cash used in operating assets and liabilities included a $26.1 million increase in accrued expenses due to higher spending on external research and development [726]. - The company plans to continue expanding its intellectual property portfolio and transitioning to a public company structure, which will incur additional legal and compliance costs [718].