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What changed in AMICUS THERAPEUTICS, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of AMICUS THERAPEUTICS, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+461 added−509 removedSource: 10-K (2024-02-28) vs 10-K (2023-03-01)

Top changes in AMICUS THERAPEUTICS, INC.'s 2023 10-K

461 paragraphs added · 509 removed · 364 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

90 edited+24 added−50 removed173 unchanged
Biggest changeThus approval of a 505(b)(2) NDA can be stalled until all the listed patents claiming the referenced product have expired, until any non-patent exclusivity, such as exclusivity for obtaining approval of an NCE, listed in the Orange Book for the referenced product has expired, and, in the case of a Paragraph 4 certification and subsequent patent infringement suit, until the earlier of 30 months, settlement of the lawsuit or a decision in the infringement case that is favorable to the Section 505(b)(2) applicant.
Biggest changeThus approval of a 505(b)(2) NDA can be stalled until all the listed patents claiming the referenced product have expired, until any non-patent exclusivity, such as exclusivity for obtaining approval of an NCE, listed in the Orange Book for the referenced product has expired, and, in the case of a Paragraph 4 certification and subsequent patent infringement suit, until the earlier of 30 months, settlement of the lawsuit or a decision in the infringement case that is favorable to the Section 505(b)(2) applicant. -17- Table of Contents Biologics Price Competition and Innovation Act The Biologics Price Competition and Innovation Act of 2009 ("BPCIA"), which was enacted as part of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 ("PPACA") created an abbreviated approval pathway for biological products that are demonstrated to be "biosimilar" or "interchangeable" with an FDA-licensed reference biological product via an approved BLA.
When alpha-Gal A is absent or deficient the substrates, GL-3 and lyso-Gb3 accumulate, leading to damage of cells within affected parts of the individual's body and causing the various pathologies seen in Fabry disease. Fabry disease leads to progressive, irreversible organ damage, typically involving the nervous, cardiac, and renal systems, as well as multiple other tissues.
When alpha-Gal A is absent or deficient in the substrates, GL-3 and lyso-Gb3 accumulate, leading to damage of cells within affected parts of the individual's body and causing the various pathologies seen in Fabry disease. Fabry disease leads to progressive, irreversible organ damage, typically involving the nervous, cardiac, and renal systems, as well as multiple other tissues.
We support engagement through communicating frequently and transparently with our employees through a variety of communication methods, including video and written communications, town hall meetings, round tables, employee pulse surveys, company intranet, and we acknowledge individual contributions through a number of reward and recognition programs.
We support engagement through communicating frequently and transparently with our employees through a variety of communication methods, including video and written communications, town hall meetings, round tables, employee pulse surveys, and Company intranet, and we acknowledge individual contributions through a number of reward and recognition programs.
Among the provisions of the Affordable Care Act that have been implemented since enactment and are of importance to the commercialization of our product and product candidates, if approved, are the following: • an annual, nondeductible fee on any entity that manufactures, or imports specified branded prescription drugs or biologic agents; • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; • expansion of healthcare fraud and abuse laws, including the U.S. civil False Claims Act and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance; • a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D; • extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected; • expansion of eligibility criteria for Medicaid programs; • expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; • requirements to report certain financial arrangements with physicians and teaching hospitals; • a requirement to annually report certain information regarding drug samples that manufacturers and distributors provide to physicians; and • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
Among the provisions of the Affordable Care Act that have been implemented since enactment and are of importance to the commercialization of our products and product candidates, if approved, are the following: • an annual, nondeductible fee on any entity that manufactures, or imports specified branded prescription drugs or biologic agents; • an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; • expansion of healthcare fraud and abuse laws, including the U.S. civil False Claims Act and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance; • a Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D; • extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations; • a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted, or injected; • expansion of eligibility criteria for Medicaid programs; • expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; • requirements to report certain financial arrangements with physicians and teaching hospitals; • a requirement to annually report certain information regarding drug samples that manufacturers and distributors provide to physicians; and • a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the U.S. civil False Claims Act (which can be enforced through “qui tam,” or whistleblower actions, by private citizens on behalf of the federal government), prohibits any person from, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment of government funds or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the U.S. federal government; -20- Table of Contents • U.S. federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal liability and amends provisions on the reporting, investigation, enforcement, and penalizing of civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of, or payment for healthcare benefits, items or services by a healthcare benefit program, which includes both government and privately funded benefits programs; similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • state laws and regulations, including state anti-kickback and false claims laws, that may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payer, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and • the Physician Payments Sunshine Act, implemented as the Open Payments program, and its implementing regulations, requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS information related to certain payments made in the preceding calendar year and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; beginning in 2022, applicable manufacturers are required to report such information regarding payments and transfers of value provided, as well as ownership and investment interests held, during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives.
A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • the U.S. civil False Claims Act (which can be enforced through “qui tam,” or whistleblower actions, by private citizens on behalf of the federal government), prohibits any person from, among other things, knowingly presenting, or causing to be presented false or fraudulent claims for payment of government funds or knowingly making, using or causing to be made or used, a false record or statement material to an obligation to pay money to the government or knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the U.S. federal government; • U.S. federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal liability and amends provisions on the reporting, investigation, enforcement, and penalizing of civil liability for, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, or knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement, in connection with the delivery of or payment for healthcare benefits, items or services by a healthcare benefit program, which includes both government and privately funded benefits programs; similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; -18- Table of Contents • state laws and regulations, including state anti-kickback and false claims laws, that may apply to our business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by any third-party payer, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S. federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; and state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities; and • the Physician Payments Sunshine Act, implemented as the Open Payments program, and its implementing regulations, requires certain manufacturers of drugs, devices, biologics and medical supplies that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program to report annually to CMS information related to certain payments made in the preceding calendar year and other transfers of value to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; beginning in 2022, applicable manufacturers are required to report such information regarding payments and transfers of value provided, as well as ownership and investment interests held, during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse-midwives.
United States Healthcare Reform The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system, including implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. -24- Table of Contents In the United States, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the Affordable Care Act, was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
United States Healthcare Reform The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system, including implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded prescription drugs. -22- Table of Contents In the United States, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act, or collectively the Affordable Care Act, was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add transparency requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and impose additional health policy reforms.
We also expect that the Affordable Care Act, as well as other healthcare reform measures that have and may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for our product and product candidates, if approved.
We also expect that the Affordable Care Act, as well as other healthcare reform measures that have and may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for our products and product candidates, if approved.
The Agency sends to the commission its opinion and assessment report, together with annexes containing: the SmPC ("Annex 1"); the particulars of the MAH responsible for batch release, the particulars of the manufacturer of the active substance and the conditions of the marketing authorization ("Annex 2"); and the labelling and the package leaflet ("Annex 3").
The Agency sends to the commission its opinion and assessment report, together with annexes containing: the SmPC ("Annex 1"); the particulars of the Marketing Authorization Holder ("MAH") responsible for batch release, the particulars of the manufacturer of the active substance and the conditions of the marketing authorization ("Annex 2"); and the labelling and the package leaflet ("Annex 3").
On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other things, reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. -25- Table of Contents The Affordable Care Act has also been subject to challenges in the courts.
On January 2, 2013, the American Taxpayer Relief Act was signed into law, which, among other things, reduced Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. -23- Table of Contents The Affordable Care Act has also been subject to challenges in the courts.
Orphan drug designation is only available if there is no other satisfactory method approved in the E.U. of diagnosing, preventing, or treating the condition, or if such a method exists, the proposed orphan drug will be of significant benefit to patients. -22- Table of Contents Orphan drug designation provides opportunities for fee reductions, protocol assistance and access to the centralized procedure before and during the first year after marketing approval.
Orphan drug designation is only available if there is no other satisfactory method approved in the E.U. of diagnosing, preventing, or treating the condition, or if such a method exists, the proposed orphan drug will be of significant benefit to patients. -20- Table of Contents Orphan drug designation provides opportunities for fee reductions, protocol assistance and access to the centralized procedure before and during the first year after marketing approval.
Strategic Alliances and Arrangements We will continue to evaluate business development opportunities as appropriate to build stockholder value and provide us with access to the financial, technical, clinical, and commercial resources necessary to develop and market technologies or products with a focus on rare and orphan diseases.
Strategic Alliances and Arrangements We will continue to evaluate business development opportunities as appropriate to build stockholder value and provide us with access to the financial, technical, clinical, and commercial resources and intellectual property necessary to develop and market technologies or products with a focus on rare and orphan diseases.
However, more recent newborn screening studies in Italy, Taiwan, Austria, Spain and the U.S., which collectively screened more than 500,000 male and female newborns, found the incidence of GLA mutations to be between 1:2,445 to 1:8,454, more than ten times higher than previous estimates for classic patients (American Journal of Human Genetics 2006, Human Mutation 2009, the Lancet 2011, Journal of Pediatrics 2017, and JAMA Pediatrics 2018).
However, more recent newborn screening studies in Italy, Taiwan, Austria, Spain and the U.S., which collectively screened more than 500,000 male and female newborns, found the incidence of GLA mutations to be between 1:2,445 to 1:8,454, more than ten times higher than previous estimates for classic patients (American Journal of Human Genetics 2006, Human Mutation 2009, the Lancet 2011, Journal of Pediatrics 2017, and Journal of the American Medical Association Pediatrics 2018).
The MHRA has introduced changes to national licensing procedures, including procedures to prioritize access to new medicines that will benefit patients, an accelerated assessment procedure and new routes of evaluation for novel products and biotechnological products. All existing E.U. marketing authorizations ("MAs") for centrally authorized products were automatically converted ("grand fathered") into U.K. MAs free-of-charge on January 1, 2021.
The MHRA has introduced changes to national licensing procedures, including procedures to prioritize access to new medicines that will benefit patients, an accelerated assessment procedure and new routes of evaluation for novel products and biotechnological products. All existing E.U. marketing authorizations ("MAs") for centrally authorized products were automatically converted ("grandfathered") into U.K. MAs free-of-charge on January 1, 2021.
We are exploring potential collaborations, alliances, and other business development opportunities on a regular basis.
We are exploring potential collaborations, alliances, and various other business development opportunities on a regular basis.
Amicus has completed the necessary baseline submission for conversion and was granted Marketing Authorization on August 4, 2021 with an effective date of January 1, 2021. -23- Table of Contents There is no pre-marketing authorization orphan designation. Instead, the MHRA reviews applications for orphan designation in parallel to the corresponding MA application.
Amicus has completed the necessary baseline submission for conversion and was granted Marketing Authorization on August 4, 2021 for Galafold ® with an effective date of January 1, 2021. -21- Table of Contents There is no pre-marketing authorization orphan designation. Instead, the MHRA reviews applications for orphan designation in parallel to the corresponding MA application.
We cannot be certain, however, that issued patents will be enforceable or provide adequate protection or that pending patent applications will result in issued patents. • Individual patents extend for varying periods depending on the effective date of filing of the patent application or the date of patent issuance, and the legal term of the patents in the countries in which they are obtained.
We cannot be certain, however, that issued patents will be enforceable or provide adequate protection or that pending patent applications will result in issued patents. -8- Table of Contents • Individual patents extend for varying periods depending on the effective date of filing of the patent application or the date of patent issuance, and the legal term of the patents in the countries in which they are obtained.
Under federal law, the submission of most NDAs and BLAs is additionally subject to a substantial application user fee; although for orphan drugs these fees are waived, and the holder of an approved NDA or BLA may also be subject to annual product and establishment user fees. These fees are typically increased annually.
Under federal law, the submission of most NDAs and BLAs is additionally subject to a substantial application user fee; although for orphan drugs these fees are waived, and the holder of an approved NDA or BLA may also be subject to annual product and establishment user fees.
New efficacy claims require submission and approval of an NDA supplement and BLA supplement for each new indication. -17- Table of Contents The efficacy claims typically require new clinical data similar to those included in the original application. The FDA uses the same procedures and actions in reviewing NDA and BLA supplements as it does in reviewing NDAs and BLAs.
New efficacy claims require submission and approval of an NDA supplement and BLA supplement for each new indication. The efficacy claims typically require new clinical data similar to those included in the original application. The FDA uses the same procedures and actions in reviewing NDA and BLA supplements as it does in reviewing NDAs and BLAs.
As part of our commitment to our employees, these trainings cover our zero-tolerance policy towards the use of child labor, forced labor, or other forms of modern slavery, educating our workforce on discrimination and harassment, and periodically refreshing the organization’s understanding of our global anti-bribery and corruption policy.
As part of our commitment to our employees, these trainings cover our zero-tolerance policy -24- Table of Contents towards the use of child labor, forced labor, or other forms of modern slavery, educating our workforce on discrimination and harassment, and periodically refreshing the organization’s understanding of our global anti-bribery and corruption policy.
We own or hold license rights to several issued patents and numerous pending and issued applications, filed in the U.S., Europe, Japan, and other jurisdictions that are related to Galafold ® and our ongoing clinical programs: • We own issued U.S. patents that cover the use of migalastat, the active pharmaceutical ingredients in Galafold ® , in the treatment of Fabry disease, which expire between 2027 and 2039 and are listed in the FDA Orange Book.
We own or hold license rights to several issued patents and numerous pending and issued applications, filed in the U.S., Europe, Japan, and other jurisdictions that are related to Galafold ® and our ongoing clinical programs: • We own issued U.S. patents that cover the use of migalastat, the active pharmaceutical ingredient in Galafold ® , in the treatment of Fabry disease, which expire between 2027 and 2042 and are listed in the FDA Orange Book.
We believe these engagement efforts keep employees informed about our strategy, culture and purpose and motivated to do their best work. -26- Table of Contents We believe in a strong compliance culture and provide robust trainings to employees on our code of conduct and the various policies contained therein.
We believe these engagement efforts keep employees informed about our strategy, culture and purpose and motivated to do their best work. We believe in a strong compliance culture and provide robust trainings to employees on our code of conduct and the various policies contained therein.
Enforcement actions may be brought by the Department of Justice or the Securities and Exchanges Commission (“SEC”), and recent enacted legislation has expanded the SEC’s power to seek disgorgement in all FCPA cases filed in federal court and extended the statute of limitations in SEC enforcement actions in intent-based claims such as those under the FCPA from five years to ten years.
Enforcement actions may be brought by the Department of Justice or the SEC, and recent enacted legislation has expanded the SEC’s power to seek disgorgement in all FCPA cases filed in federal court and extended the statute of limitations in SEC enforcement actions in intent-based claims such as those under the FCPA from five years to ten years.
Our Commercial Product and Product Candidates Galafold ® (migalastat HCl) for Fabry Disease Our oral precision medicine Galafold ® was granted accelerated approval by the FDA in August 2018 under the brand name Galafold ® for the treatment of adults with a confirmed diagnosis of Fabry disease and an amenable galactosidase alpha gene ("GLA") variant based on in vitro assay data.
Our Commercial Products and Product Candidates Galafold ® (migalastat HCl) for Fabry Disease Our oral precision medicine Galafold ® was granted accelerated approval by the FDA in August 2018 for the treatment of adults with a confirmed diagnosis of Fabry disease and an amenable galactosidase alpha gene ("GLA") variant based on in vitro assay data.
The MHRA is taking decisions on PIP and waiver opinions, modifications and compliance statements to support pediatric market authorization decisions, while acknowledging that Northern Ireland continues to be part of the E.U.’s system for pediatric medicines development including agreement of E.U. PIPs or waivers. The MHRA has maintained the EAMS.
The MHRA is taking decisions on PIP and waiver opinions, modifications and compliance statements to support pediatric market authorization decisions, while acknowledging that Northern Ireland continues to be part of the E.U.’s system for pediatric medicines development including agreement of E.U. PIPs or waivers. The MHRA has maintained the early access to medicine scheme ("EAMS").
Any waivers or material amendments to the Code will be posted promptly on our website. -27- Table of Contents
Any waivers or material amendments to the Code will be posted promptly on our website. -25- Table of Contents
For example, we own or hold license rights to U.S. and foreign patents or patent applications covering the following: • Gene therapy protein engineering technology; • Gene therapy (e.g., Pompe, Fabry) and ERT (e.g., CDKL5) programs and the use to treat specified diseases.
For example, we own or hold license rights to U.S. and foreign patents or patent applications covering the following: • Next-generation Fabry chaperones; • Gene therapy protein engineering technology; • Gene therapy (e.g., Pompe, Fabry) and ERT (e.g., CDKL5) programs and their use to treat specified diseases.
The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. -21- Table of Contents To obtain regulatory approval of an orphan drug under the E.U. regulatory system, we are mandated to submit a MAA to be assessed in the centralized procedure.
The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. -19- Table of Contents To obtain regulatory approval of an orphan drug under the E.U. regulatory system, we are mandated to submit a marketing authorization application ("MAA") to be assessed in the centralized procedure.
We plan to continue to launch Galafold ® in additional countries during 2023, including for adolescents aged 12 years and older. As an orally administered monotherapy, Galafold ® is designed to bind to and stabilize an endogenous alpha-galactosidase A ("alpha-Gal A") enzyme in those patients with genetic variants identified as amenable in a Good Laboratory Practice ("GLP") cell-based amenability assay.
We plan to continue to launch Galafold ® in additional countries, including for adolescents aged 12 years and older. -5- Table of Contents As an orally administered monotherapy, Galafold ® is designed to bind to and stabilize an endogenous alpha-galactosidase A ("alpha-Gal A") enzyme in those patients with genetic variants identified as amenable in a Good Laboratory Practice ("GLP") cell-based amenability assay.
The FDA has approved Galafold ® for 350 amenable GLA variants. Galafold ® was approved in the E.U. and U.K. in May 2016 as a first-line therapy for long-term treatment of adults and adolescents, aged 16 years and older, with a confirmed diagnosis of Fabry disease and who have an amenable mutation (variant).
Galafold ® was approved in the E.U. and U.K. in May 2016 as a first-line therapy for long-term treatment of adults and adolescents, aged 16 years and older, with a confirmed diagnosis of Fabry disease and who have an amenable mutation (variant).
Importantly, a dedicated contact and rapporteur from the CHMP is appointed early in the PRIME scheme facilitating increased understanding of the product at EMA’s committee level. An initial meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies. In September 2020, AT-GTX-501 was granted PRIME designation.
Importantly, a dedicated contact and rapporteur from the CHMP is appointed early in the PRIME scheme facilitating increased understanding of the product at EMA’s committee level. An initial meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies.
(2) Reflects running 12 month revenue as of December 31, 2022, as Takeda's fiscal year ends on March 31, 2023. Government Regulation FDA Approval Process In the U.S., biopharmaceutical products, including gene therapies, are subject to extensive regulation by the FDA.
(2) Reflects running 12 month revenue as of December 31, 2023, as Takeda's fiscal year ends on March 31, 2024. (3) Reflects sales through September 30, 2023. Government Regulation FDA Approval Process In the U.S., biopharmaceutical products, including gene therapies, are subject to extensive regulation by the FDA.
Long-term preclinical safety evaluations, such as animal tests of reproductive toxicity and carcinogenicity, continue during the IND phase of development. Reproductive toxicity studies are required to allow inclusion of women of childbearing potential in clinical trials, whereas carcinogenicity studies are required for registration. The results of these long-term studies would eventually be described in product labeling.
Long-term preclinical safety evaluations, such as animal tests of reproductive toxicity and carcinogenicity, continue during the IND phase of development. Reproductive toxicity studies are required to allow inclusion of women of childbearing potential in clinical trials, whereas carcinogenicity studies are required for registration.
When a company wishes to place on the market a medicinal product that is eligible for the centralized procedure, it sends an application directly to the EMA, to be assessed by the CHMP. The procedure results in a commission decision, which is valid in all E.U. member states. Centrally-authorized products may be marketed in all member states.
When a company wishes to place on the market a medicinal product that is eligible for the centralized procedure, it sends an application directly to the European Medicines Agency ("EMA"), to be assessed by the Committee for Medicinal Products for Human Use ("CHMP"). The procedure results in a commission decision, which is valid in all E.U. member states.
After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.
Orphan drug designation must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the generic identity of the drug and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.
Next Generation for Pompe Disease We are committed to continued innovation for all people living with Pompe disease. As part of our long-term commitment, we are also continuing discovery for next-generation genetic medicines for Pompe disease. Pompe Disease Background Pompe disease is a lysosomal disorder ("LD") that results from a deficiency in an enzyme, GAA.
As part of our long-term commitment, we are also continuing discovery for next-generation genetic medicines for Pompe disease. Pompe Disease Background Pompe disease is a lysosomal storage disorder that results from a deficiency in an enzyme, GAA.
In addition, our ability to compete may be affected because in some cases insurers or other third-party payors seek to encourage the use of generic products.
In addition, our ability to compete may be affected because in some cases insurers or other third-party payors seek to encourage the use of generic products. This may have the effect of making branded products less attractive to buyers.
Substantial penalties can be assessed for noncompliance with the drug pricing provisions in the IRA. The IRA could have the effect of reducing the prices we can charge and reimbursement we receive for our products, if approved, thereby reducing our profitability, and could have a material adverse effect on our financial condition, results of operations, and growth prospects.
The IRA could have the effect of reducing the prices we can charge and reimbursement we receive for our products, if approved, thereby reducing our profitability, and could have a material adverse effect on our financial condition, results of operations, and growth prospects.
Foreign counterparts of the U.S. patents are pending or issued in Europe, Japan, and certain other jurisdictions. Further, we have pending U.S. patent applications covering various aspects of Galafold ® , including composition-of-matter methods of treating a patient diagnosed with Fabry disease with migalastat and their foreign counterparts. Any patents issuing from these applications will expire between 2036 and 2043.
Foreign counterparts of the U.S. patents are pending or issued in Europe, Japan, and certain other jurisdictions. Further, we have pending U.S. patent applications, as well as their foreign counterparts covering various aspects of Galafold ® , including composition-of-matter methods of treating a patient diagnosed with Fabry disease, and methods of manufacturing.
Under the centralized procedure, full copies of the MAA are sent to a rapporteur and a co-rapporteur designated by the competent EMA scientific committee. They coordinate the EMA's scientific assessment of the medicinal product and prepare draft reports.
Centrally-authorized products may be marketed in all member states. Under the centralized procedure, full copies of the MAA are sent to a rapporteur and a co-rapporteur designated by the competent EMA scientific committee. They coordinate the EMA's scientific assessment of the medicinal product and prepare draft reports.
Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals are government entities; therefore, our dealings with these prescribers and purchasers are subject to regulation under the FCPA. Recently, the SEC and Department of Justice have increased their FCPA enforcement activities with respect to pharmaceutical companies.
Additionally, in many other countries, the health care providers who prescribe pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals are government entities; therefore, our dealings with these prescribers and purchasers are subject to regulation under the FCPA.
Other competitors are pharmaceutical and biotechnology companies that have approved therapies or therapies in development for rare diseases for which pharmacological chaperone technology, or next-generation ERT may be applicable.
Major Competitors Our major competitors include pharmaceutical and biotechnology companies in the U.S. and abroad that have approved therapies or therapies in development for lysosomal storage disorders. Other competitors are pharmaceutical and biotechnology companies that have approved therapies or therapies in development for rare diseases for which pharmacological chaperone technology, or next-generation ERT may be applicable.
The FDA has 60 days from its receipt of an NDA or BLA to determine whether the application will be accepted for filing based on the agency's threshold determination that it is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review.
These fees are typically increased annually. -13- Table of Contents The FDA has 60 days from its receipt of an NDA or BLA to determine whether the application will be accepted for filing based on the agency's threshold determination that it is sufficiently complete to permit substantive review.
In this case, clinical trials are conducted in which a surrogate endpoint is used as the primary outcome for approval.
This approval mechanism is provided for under 21CRF314 Subpart H and Subpart E. In this case, clinical trials are conducted in which a surrogate endpoint is used as the primary outcome for approval.
The following table lists our principal competitors and publicly available information on the status of their clinical-stage product offerings: Competitor (1) Indication Product Class of Product Status 2022 Sales (in millions) Sanofi Aventis Fabry Disease Fabrazyme ® ERT Marketed €938 Pompe Disease Myozyme ® / Lumizyme ® ERT Marketed €958 Pompe Disease Nexviazyme ® / Nexviadyme ® ERT Marketed €196 Fabry Disease Venglustat Oral glucosylceramide synthase ("GCS") Inhibitor Phase 3 N/A Takeda (2) Fabry Disease Replagal ® ERT Marketed ¥62,700 Idorsia Fabry Disease Lucerastat Oral GCS Inhibitor Phase 3 N/A Protalix Biotherapeutics / Chiesi Farmaceutici S.p.A Fabry Disease PRX-102 ERT Regulatory N/A Freeline Fabry Disease FLT-190 Gene Therapy Phase 1/2 N/A Sangamo Fabry Disease Isaralgagene civaparvovec Gene Therapy Phase 1/2 N/A 4DMT Fabry Disease 4D-310 Gene Therapy Phase 1/2 N/A Bayer Pompe Disease ACTUS-101 Gene Therapy Phase 1/2 N/A Astellas Pompe Disease AT-845 Gene Therapy Phase 1/2 N/A Roche Pompe Disease SPK-3006 Gene Therapy Phase 1/2 N/A Maze Therapeutics Pompe Disease GYS1 Oral glycogen synthase ("GYS1") Inhibitor Phase 1/2 N/A _____________________________ (1) Reflects commercial products and product candidates for which IND has been filed or are in clinical development.
The following table lists our principal competitors and publicly available information on the status of their clinical-stage product offerings: -11- Table of Contents Competitor (1) Indication Product Class of Product Status 2023 Sales (in millions) Sanofi Fabry Disease Fabrazyme ® ERT Marketed €991 Pompe Disease Myozyme ® / Lumizyme ® ERT Marketed €783 Pompe Disease Nexviazyme ® / Nexviadyme ® ERT Marketed €425 Fabry Disease Venglustat Oral glucosylceramide synthase ("GCS") Inhibitor Phase 3 N/A Takeda (2) Fabry Disease Replagal ® ERT Marketed ¥71,300 Chiesi (3) Fabry Disease ELFABRIO ® ERT Marketed $14.7 Idorsia Fabry Disease Lucerastat Oral GCS Inhibitor Phase 3 N/A AceLink Fabry Disease AL1211 Oral GCS Inhibitor Phase 1/2 N/A Sangamo Fabry Disease Isaralgagene civaparvovec Gene Therapy Phase 1/2 N/A 4DMT Fabry Disease 4D-310 Gene Therapy Phase 1/2 N/A Bayer Pompe Disease ACTUS-101 Gene Therapy Phase 1/2 N/A Astellas Pompe Disease AT845 Gene Therapy Phase 1/2 N/A Roche Pompe Disease SPK-3006 Gene Therapy Phase 1/2 N/A Maze Pompe Disease MZE001 Oral glycogen synthase ("GYS1") Inhibitor Phase 1/2 N/A _____________________________ (1) Reflects commercial products and product candidates for which IND has been filed or are in clinical development.
However, the maximum extension is five years and the extension cannot extend the patent beyond 14 years from the NDA approval. Similar extensions are available in European countries, known as Supplemental Protection Certificate ("SPC") extensions, Japan, and other countries. However, in the U.S. we will not know what, if any, extensions are available until a drug is approved.
However, the maximum extension is five years and the extension cannot extend the patent beyond 14 years from the New Drug Application ("NDA") approval. Similar extensions are available in European countries, known as Supplemental Protection Certificate ("SPC") extensions, Japan, and other countries.
Additionally, the Fast Track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process. -18- Table of Contents Breakthrough Therapy Designation Breakthrough Therapy designation is intended to expedite the development and review of a candidate that is planned for use to treat a serious or life-threatening disease or condition when preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.
Breakthrough Therapy Designation Breakthrough Therapy designation is intended to expedite the development and review of a candidate that is planned for use to treat a serious or life-threatening disease or condition when preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints.
For the year ended December 31, 2022, Galafold ® revenue was $329.0 million of consolidated revenue, which represented an increase of $23.5 million compared to the prior year. We continue to see strong commercial momentum and expansion into additional geographies.
For the year ended December 31, 2023, Galafold ® revenue was $387.8 million of consolidated revenue, which represented an increase of $58.7 million compared to the prior year. We continue to see strong commercial momentum and expansion into additional geographies. • Pompe disease program milestones .
Supporting our globally diverse employees is an essential part of the core values and culture at Amicus. Tied to these values and culture, we believe our success and our ability to help patients depends on our capability to attract, develop and retain key personnel. We are committed to the advancement of Diversity, Equity and Inclusion (“DEI”) in the workplace.
Supporting our global employees and valuing their differences is an essential part of the core values and culture at Amicus. Tied to these values and culture, we believe our success and our ability to help patients depends on our capability to attract, develop and retain key personnel.
Subsequent litigation extended the 2% reduction, on average, to 2030 unless additional Congressional action is taken. The Coronavirus Aid, Relief and Economic Security Act, or the CARES Act, which was designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2% Medicare sequester from May 1, 2020 to March 31, 2022.
The Coronavirus Aid, Relief and Economic Security Act, or the CARES Act, which was designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2% Medicare sequester from May 1, 2020 to March 31, 2022 and adjusted the sequester to 1% for the period between April 1, 2022 and June 30, 2022.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.
These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, as well as in acquiring technologies complementary to, or necessary for, our programs.
The FDA attempts to review a drug candidate that is eligible for priority review within six months, as discussed below. The review process may be extended by the FDA for three additional months to evaluate major amendments submitted during the pre-specified PDUFA V review clock.
The review process may be extended by the FDA for three additional months to evaluate major amendments submitted during the pre-specified PDUFA V review clock.
Our Corporate Information We were incorporated under the laws of the State of Delaware on February 4, 2002. The address of our global headquarters is 3675 Market Street, Philadelphia, PA 19104 and our telephone number is 215-921-7600. Our website address is www.amicusrx.com .
Our Corporate Information We were incorporated under the laws of the State of Delaware on February 4, 2002. The address of our global headquarters is 47 Hulfish Street, Princeton, NJ 08542 and our telephone number is 609-662-2000. Our website address is www.amicusrx.com .
The FDA has established the Office of Tissue and Advanced Therapies within the Center for Biologics Evaluation and Research, or CBER, to consolidate the review of gene therapy and related products, and has established the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER in its review. -15- Table of Contents In addition to the regulations discussed above, there are a number of additional standards that apply to clinical trials involving gene therapies.
The FDA has established the Office of Tissue and Advanced Therapies within the Center for Biologics Evaluation and Research, or CBER, to consolidate the review of gene therapy and related products, and has established the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER in its review.
A certification that the new product will not infringe the already approved product's listed patents or that such patents are invalid is called a Paragraph 4 certification. If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired.
A certification that the new product will not infringe the already approved product's listed patents or that such patents are invalid is called a Paragraph 4 certification.
Currently, two products, both ERTs, are approved for the treatment of Pompe disease: alglucosidase alfa and avalglucosidase alfa-ngpt by Sanofi Aventis. Additional Development and Next Generation Programs We are researching potential therapies for CDKL5 deficiency disorder ("CDD").
Currently, two products, both ERTs, are approved for the treatment of Pompe disease: alglucosidase alfa and avalglucosidase alfa-ngpt by Sanofi Aventis.
We are leveraging our global capabilities to develop and broaden our lead franchises in Fabry and Pompe disease, with focused discovery work on next generation therapies and novel platform technologies. We continue to monitor the novel coronavirus ("COVID-19") pandemic.
We are leveraging our global capabilities to develop and broaden our franchises in Fabry and Pompe disease, with focused discovery work on next-generation therapies and novel technologies. Highlights of our progress include: • Commercial and regulatory success in Fabry disease .
Our commercial opportunities could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer side effects, are more convenient, and/or are less expensive than products that we may develop.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. -10- Table of Contents Our commercial opportunities could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer side effects, are more convenient, and/or are less expensive than products that we may develop.
The FDA has agreed to certain performance goals in the review of NDAs and BLAs. Marketing applications are assigned review status during the filing period. Review status could be either standard or priority. Most such applications for standard review are reviewed within 12 months under PDUFA V (two months for filing plus ten months for review).
Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review of NDAs and BLAs. Marketing applications are assigned review status during the filing period. Review status could be either standard or priority.
Currently, two other products, both ERTs, are approved for the treatment of Fabry disease: agalsidase beta by Sanofi Aventis and agalsidase alfa by Takeda, the latter of which is not approved in the U.S. -7- Table of Contents Novel ERT for Pompe Disease We are leveraging our biologics capabilities to develop AT-GAA, a novel treatment paradigm for Pompe disease.
Currently, three other products, all ERTs, are approved for the treatment of Fabry disease: agalsidase beta by Sanofi Aventis, pegunigalsidase alfa-iwxj by Chiesi Farmaceutici and agalsidase alfa by Takeda, the last of which is not approved in the U.S. -6- Table of Contents Pombiliti ™ (cipaglucosidase alfa-atga) + Opfolda ™ (miglustat) for Pompe Disease We have leveraged our biologics capabilities to develop Pombiliti ™ + Opfolda ™ , a novel treatment paradigm for late-onset Pompe disease.
The FDA may then approve the new product candidate for all or some of the label indications for which the referenced product has been approved, as well as for any new indication sought by the Section 505(b) (2) applicant. -19- Table of Contents To the extent that the Section 505(b) (2) applicant is relying on studies conducted for an already-approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent as an ANDA applicant.
To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already-approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent as an ANDA applicant.
If the ANDA applicant submits a Paragraph 4 certification to the FDA, the applicant must also send notice of the Paragraph 4 certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA.
If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired. -14- Table of Contents If the ANDA applicant submits a Paragraph 4 certification to the FDA, the applicant must also send notice of the Paragraph 4 certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA.
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to file a marketing application, to issue complete response letters or to not approve pending NDAs or BLAs, or to issue warning letters, untitled letters, Form 483s, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, litigation, government investigation, and criminal prosecution. -14- Table of Contents Biopharmaceutical product development in the U.S. typically involves nonclinical laboratory and animal tests, the submission to the FDA of an Investigational New Drug application ("IND"), which must become effective before clinical testing may commence, and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication for which FDA approval is sought.
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA refusal to file a marketing application, to issue complete response letters or to not approve pending NDAs or BLAs, or to issue warning letters, untitled letters, Form 483s, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, litigation, government investigation, and criminal prosecution.
Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained, problems are identified following initial marketing, or post-marketing commitments are not met. -16- Table of Contents The Hatch-Waxman Act In seeking approval for a drug through an NDA, applicants are required to list with the FDA certain patent(s) with claims that cover the applicant's product or approved method of use.
The Hatch-Waxman Act In seeking approval for a drug through an NDA, applicants are required to list with the FDA certain patent(s) with claims that cover the applicant's product or approved method of use.
Should an orphan designation be granted, the period or market exclusivity will be set from the date of first approval of the product in GB or E.U./European Economic Area, wherever is earliest. The PIP application process for applicants is simplified by offering an expedited assessment where possible, and by mirroring the submission format, content and terminology of the E.U.-PIP system.
Should an orphan designation be granted, the period or market exclusivity will be set from the date of first approval of the product in GB or E.U./European Economic Area, wherever is earliest. Galafold ® and Pombiliti ™ + Opfolda ™ have been granted orphan designation by the MHRA.
These opportunities may include business combinations, partnerships, the strategic out-licensing of certain assets, or the acquisition of preclinical-stage, clinical-stage, or marketed products or platform technologies consistent with our strategic plan to develop and provide therapies to patients living with rare and orphan diseases. -9- Table of Contents Acquisitions Celenex, Inc. In connection with our acquisition of Celenex, Inc.
These opportunities may include business combinations, partnerships, the strategic out-licensing of certain assets, or the acquisition of preclinical-stage, clinical-stage, or marketed products or platform technologies consistent with our strategic plan to develop and provide therapies to patients living with rare and orphan diseases. -7- Table of Contents Intellectual Property Patents and Trade Secrets Our success depends in part on our ability to maintain proprietary protection surrounding our product candidates, technology, and know-how, to operate without infringing the proprietary rights of others, and to prevent others from infringing our proprietary rights.
Accelerated Approval Under the FDA's accelerated approval regulations, the FDA may approve a drug for a serious or life-threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit. This approval mechanism is provided for under 21CRF314 Subpart H and Subpart E.
The FDA makes its determination of priority or standard review during the 60-day filing period after an initial NDA or BLA submission. -16- Table of Contents Accelerated Approval Under the FDA's accelerated approval regulations, the FDA may approve a drug for a serious or life-threatening illness that provides meaningful therapeutic benefit to patients over existing treatments based upon a surrogate endpoint that is reasonably likely to predict clinical benefit.
In addition to our clinical programs, we actively monitor and file patent applications in the U.S. and in foreign countries on relevant technologies and pre-clinical programs.
Patent term extensions and adjustments, supplementary protection certificates, and pediatric exclusivity periods are not reflected in the expiration dates listed above and may extend protection. In addition to our clinical programs, we actively monitor and file patent applications in the U.S. and in foreign countries on relevant technologies and pre-clinical programs.
AT-GAA consists of a uniquely engineered rhGAA enzyme, ATB200, or cipaglucosidase alfa, with an optimized carbohydrate structure to enhance lysosomal uptake, administered in combination with AT2221, or miglustat, that functions as an enzyme stabilizer.
Pombiliti ™ + Opfolda ™ consists of a uniquely engineered rhGAA enzyme, cipaglucosidase alfa-atga, with an optimized carbohydrate structure to enhance lysosomal uptake, administered in combination with miglustat that functions as an enzyme stabilizer. Miglustat binds to and stabilizes cipaglucosidase alfa-atga reducing inactivation of rhGAA in circulation to improve the uptake of active enzyme into key disease relevant tissues.
As part of our long-term commitment, we have an academic research collaboration agreement to explore next generation pharmacological chaperones for Fabry disease. -6- Table of Contents Fabry Disease Background Patients with Fabry disease have an inherited deficiency of the alpha-Gal A enzyme that would normally degrade the lipid substrate globotriaosylceramide in the lysosome.
Fabry Disease Background Patients with Fabry disease have an inherited deficiency of the alpha-Gal A enzyme that would normally degrade the lipid substrate globotriaosylceramide in the lysosome.
A 30-day review period after the submission and receipt of an IND is required prior to the commencement of clinical testing in humans. The IND becomes effective 30 days after its receipt by the FDA, and trials may begin at that point unless the FDA notifies the sponsor that the investigations are subject to a clinical hold.
The IND becomes effective 30 days after its receipt by the FDA, and trials may begin at that point unless the FDA notifies the sponsor that the investigations are subject to a clinical hold. Clinical trials usually involve the administration of the investigational new drug to healthy volunteers or patients under the supervision of a qualified investigator.
In addition, our trade secrets may otherwise become known or be discovered independently by others. To the extent that our consultants, contractors, or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
To the extent that our consultants, contractors, or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions. -9- Table of Contents Collaboration and License Agreements We have acquired rights to develop and commercialize our product candidates through licenses granted by various parties.
Our Strategy Our strategy is to create, manufacture, test, and deliver the highest quality medicines for people living with rare diseases through internally developed, jointly developed, acquired, or in-licensed products and product candidates that have the potential to obsolete current treatments, provide significant benefits to patients, and be first- or best-in-class.
Additionally, Pombiliti ™ + Opfolda ™ has been granted orphan drug designation in the U.S., E.U., U.K., Japan and several other countries. Our Strategy Our strategy is to create, manufacture, test, and deliver the highest quality medicines for people living with rare diseases through internally developed, jointly developed, acquired, or in-licensed products and product candidates.
Orphan Drugs Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the U.S. Orphan drug designation must be requested before submitting an NDA or BLA.
Regulatory authorities may withdraw product approvals or request product recalls if a company fails to comply with regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized problems are subsequently discovered. -15- Table of Contents Orphan Drugs Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the U.S.
This ensures that every employee feels they are treated fairly regardless of identities and differences, which is evidenced through our most recent engagement survey where we came within 2% of the global benchmark for DEI. As of December 31, 2022, we had 484 full-time employees.
We are committed to fostering an inclusive workplace where every voice is heard and valued, resulting in a dimensional way of thinking that is used when meeting Company goals. This ensures that every employee feels they are treated fairly which is evidenced through our most recent engagement survey where we came within 2% of the global benchmark for Justice/Fairness.
In connection with the Termination Agreement, we agreed to pay Penn an aggregate of $23.7 million in connection with an unpaid portion of the discovery support payments, research program wind-down activities, and outstanding patent costs. -12- Table of Contents Concurrently, we entered into a license agreement with Penn pursuant to which we obtained a license with respect to the pre-clinical research and development of next generation parvovirus gene therapy products for the treatment of Pompe disease and Fabry disease.
The following summarizes our material rights and obligations under those licenses: University of Pennsylvania In December 2022, we entered into a license agreement with Penn pursuant to which we obtained a license with respect to the pre-clinical research and development of next-generation parvovirus gene therapy products for the treatment of Pompe disease and Fabry disease.
A Fast Track designated drug candidate would ordinarily meet the FDA's criteria for priority review. The FDA makes its determination of priority or standard review during the 60-day filing period after an initial NDA or BLA submission.
A Fast Track designated drug candidate would ordinarily meet the FDA's criteria for priority review.
Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality control to maintain compliance with cGMP. Regulatory authorities may withdraw product approvals or request product recalls if a company fails to comply with regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized problems are subsequently discovered.
Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality control to maintain compliance with cGMP.
Additionally, multiple expanded access mechanisms are in place around the globe, including in the U.S., U.K., Germany, France, Japan, and others. • Pipeline advancement and growth. We are leveraging our global capabilities to develop and broaden our lead franchises in Fabry and Pompe disease, with focused discovery work on next generation therapies and novel platform technologies. • Financial strength.
Food and Drug Administration ("FDA") in September 2023. • Pipeline advancement and growth. We are leveraging our global capabilities to develop and broaden our franchises in Fabry and Pompe disease, with focused discovery work on next-generation therapies and novel technologies. • Financial strength. Total cash, cash equivalents, and marketable securities as of December 31, 2023 was $286.2 million.
Migalastat is currently approved under the trade name Galafold ® in the United States ("U.S."), European Union ("E.U."), U.K., and Japan, with multiple additional approvals granted and applications pending in several geographies around the world.
Galafold ® (also referred to as "migalastat") is approved in over 40 countries around the world, including the United States ("U.S."), European Union ("E.U."), United Kingdom ("U.K."), and Japan. Additionally, Galafold ® has been granted orphan drug designation in the U.S., E.U., U.K., Japan, and several other countries.
We anticipate listing these patents in the FDA Orange Book if issued. -10- Table of Contents • We own several issued U.S. patents that cover various aspects of our investigational new treatment for Pompe disease, AT-GAA (ATB200/AT2221, an ERT/pharmacological chaperone combination) as well as foreign counterparts to the issued patents, some of which are still pending.
Any patents issuing from these applications will expire between 2036 and 2043. We anticipate listing these patents in the FDA Orange Book if issued. • We own several issued U.S. patents that cover various aspects of Opfolda ™ and Pombiliti ™ , a pharmacological chaperon/ERT combination in the treatment of Pompe disease, which expire between 2033 and 2037.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe expect to continue to incur significant costs in the foreseeable future as we: • continue our development and commercialization of, and seek regulatory approvals for, product candidates, including Galafold ® and AT-GAA in the U.S., the E.U., U.K., Japan and other foreign countries, as applicable; • conduct additional clinical trials to support the full approval of Galafold ® in the U.S. and post-approval commitments or trials; • continue communicating with the EMA, as necessary, regarding post-marketing requirements and clinical trials for Galafold ® ; • continue to or initiate the regulatory submission process for marketing approval of Galafold ® outside of the U.S. and E.U. and other foreign jurisdictions where approved, as applicable; • build and maintain our commercial infrastructure so that it is capable of supporting product sales, marketing and distribution of Galafold ® and our other product candidates in Europe, Japan and the U.S. or other territories in which we have received or may receive regulatory approval; • prepare for launch of AT-GAA in the U.S., E.U., U.K. and other jurisdictions if approved by regulators; • continue our gene transfer discovery and next generation product research; • continue our preclinical studies of and potentially conduct clinical studies of ERT and gene therapy for CDD; and • continue our rigorous prosecution and defense of our patent portfolio. -52- Table of Contents We may encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business.
Biggest changeWe expect to continue to incur significant costs in the foreseeable future as we: • continue our development and commercialization of our products and seek regulatory approvals for our product candidates in the U.S., the E.U., U.K., Japan and other foreign countries, as applicable; • conduct additional clinical trials to support the full approval of Galafold ® in the U.S. and post-approval commitments or trials; • continue communicating with the EMA, as necessary, regarding post-marketing requirements and clinical trials for Galafold ® ; • continue to or initiate the regulatory submission process for marketing approval of Galafold ® and Pombiliti ™ + Opfolda ™ outside of the U.S. and E.U. and other foreign jurisdictions where approved, as applicable; • build and maintain our commercial infrastructure so that it is capable of supporting product sales, marketing and distribution of Galafold ® and Pombiliti ™ + Opfolda ™ , as well as our other product candidates in Europe, Japan and the U.S. or other territories in which we have received or may receive regulatory approval; • continue our next-generation product research; and • continue our rigorous prosecution and defense of our patent portfolio.
Dependence on distribution arrangements and marketing alliances to commercialize our products and product candidates will subject us to a number of risks, including: • we may not be able to control the amount and timing of resources that our distributors may devote to the commercialization of our product or product candidates, if approved; • our distributors may experience financial difficulties; • our distributors may experience compliance related issues and associated government investigations; • our distributors may require transfer of the marketing authorization for our product and product candidates, if approved, and may refuse to relinquish them at the end of the distribution relationship; • our distributors may be out of compliance with applicable anti-bribery and corruption laws with an adverse effect on operations and expose us to liability; • business combinations or significant changes in a distributor's business strategy may also adversely affect a distributor's willingness or ability to complete its obligations under any arrangement; and • these arrangements are often terminated or allowed to expire, which could interrupt the marketing and sales of a product and decrease our revenue.
Dependence on distribution arrangements and marketing alliances to commercialize our products and product candidates will subject us to a number of risks, including: • we may not be able to control the amount and timing of resources that our distributors may devote to the commercialization of our products or product candidates, if approved; • our distributors may experience financial difficulties; • our distributors may experience compliance related issues and associated government investigations; • our distributors may require transfer of the marketing authorization for our products and product candidates, if approved, and may refuse to relinquish them at the end of the distribution relationship; • our distributors may be out of compliance with applicable anti-bribery and corruption laws with an adverse effect on operations and expose us to liability; • business combinations or significant changes in a distributor's business strategy may also adversely affect a distributor's willingness or ability to complete its obligations under any arrangement; and • these arrangements are often terminated or allowed to expire, which could interrupt the marketing and sales of a product and decrease our revenue.
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and potential advantages compared to competitive or alternative treatments, including generics and gene therapies; • the prevalence and severity of any side effects; • the ability to offer our product and product candidates, if approved, for sale at competitive prices; • convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of marketing and distribution support and timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; • competition from other products for the same or similar indications; and • sufficient third-party coverage or reimbursement.
The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: • the efficacy and potential advantages compared to competitive or alternative treatments, including generics and gene therapies; • the prevalence and severity of any side effects; • the ability to offer our products and product candidates, if approved, for sale at competitive prices; • convenience and ease of administration compared to alternative treatments; • the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; • the strength of marketing and distribution support and timing of market introduction of competitive products; • publicity concerning our products or competing products and treatments; • competition from other products for the same or similar indications; and • sufficient third-party coverage or reimbursement.
As a result of pursuing the development and commercialization of our product and product candidates using our proprietary and licensed technologies, we may fail to develop products or product candidates, or address indications based on other scientific approaches that may offer greater commercial potential or for which there is a greater likelihood of success.
As a result of pursuing the development and commercialization of our product and product candidates using our proprietary and licensed technologies, we may fail to develop other products or product candidates, or address indications based on other scientific approaches that may offer greater commercial potential or for which there is a greater likelihood of success.
Restrictions under applicable federal, state and foreign healthcare laws and regulations may affect our ability to operate and expose us to areas of risk, including: • the U.S. federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid.
Restrictions under applicable federal, state and foreign healthcare laws and regulations may affect our ability to operate and expose us to areas of risk, including: • U.S. federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid.
The review processes and the processes of regulatory authorities, including the FDA, EMA and PMDA, are extensive, lengthy, expensive, and uncertain, and such regulatory authorities may delay, limit, or deny the approval of any of our product candidates for many reasons, including, but not limited to: • our failure to demonstrate to the satisfaction of the applicable regulatory authorities that any of our product candidates, including AT-GAA are safe and effective for a particular indication; • the results of clinical trials may not meet the level of statistical significance or other efficacy or safety parameters required by the applicable regulatory authorities for approval; • the applicable regulatory authority may disagree with the number, design, size, conduct, or implementation of our clinical trials or conclude that the data fail to meet statistical or clinical significance; • the applicable regulatory authority may not find the data from preclinical studies and clinical trials sufficient to demonstrate that the product candidate's clinical and other benefits outweigh its safety risks; • the applicable regulatory authority may disagree with our interpretation of data from preclinical studies or clinical trials, and may reject conclusions from preclinical studies or clinical trials, or determine that primary or secondary endpoints from clinical trials were not met, or reject safety conclusions from such studies or trials; • the applicable regulatory authority may not accept data generated at one or more of our clinical trial sites; • the applicable regulatory authority may determine that we did not properly oversee our clinical trials or follow the regulatory authority's advice or recommendations in designing and conducting our clinical trials; -29- Table of Contents • an advisory committee, if convened by the applicable regulatory authority, may recommend against approval of our application or may recommend that the applicable regulatory authority require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions, or even if an advisory committee, if convened, makes a favorable recommendation, the respective regulatory authority may still not approve the product candidate; • the applicable regulatory authority may only approve a limited label for less than the full indicated population, as a second line or rescue therapy, or impose other label restrictions; and • the applicable regulatory authority may identify deficiencies in the chemistry, manufacturing, and control sections of our application, our manufacturing processes, facilities, or analytical methods or those of our third-party contract manufacturers or be unable to complete any necessary manufacturing inspections of our third party manufacturers which may lead to significant delays in the approval of our product candidates or to the rejection of our applications altogether.
The review processes and the processes of regulatory authorities, including the FDA, EMA and PMDA, are extensive, lengthy, expensive, and uncertain, and such regulatory authorities may delay, limit, or deny the approval of any of our product candidates for many reasons, including, but not limited to: • our failure to demonstrate to the satisfaction of the applicable regulatory authorities that any of our product candidates, are safe and effective for a particular indication; • the results of clinical trials may not meet the level of statistical significance or other efficacy or safety parameters required by the applicable regulatory authorities for approval; • the applicable regulatory authority may disagree with the number, design, size, conduct, or implementation of our clinical trials or conclude that the data fail to meet statistical or clinical significance; • the applicable regulatory authority may not find the data from preclinical studies and clinical trials sufficient to demonstrate that the product candidate's clinical and other benefits outweigh its safety risks; • the applicable regulatory authority may disagree with our interpretation of data from preclinical studies or clinical trials, and may reject conclusions from preclinical studies or clinical trials, or determine that primary or secondary endpoints from clinical trials were not met, or reject safety conclusions from such studies or trials; • the applicable regulatory authority may not accept data generated at one or more of our clinical trial sites; • the applicable regulatory authority may determine that we did not properly oversee our clinical trials or follow the regulatory authority's advice or recommendations in designing and conducting our clinical trials; -27- Table of Contents • an advisory committee, if convened by the applicable regulatory authority, may recommend against approval of our application or may recommend that the applicable regulatory authority require, as a condition of approval, additional preclinical studies or clinical trials, limitations on approved labeling or distribution and use restrictions, or even if an advisory committee, if convened, makes a favorable recommendation, the respective regulatory authority may still not approve the product candidate; • the applicable regulatory authority may only approve a limited label for less than the full indicated population, as a second line or rescue therapy, or impose other label restrictions; and • the applicable regulatory authority may identify deficiencies in the chemistry, manufacturing, and control sections of our application, our manufacturing processes, facilities, or analytical methods or those of our third-party contract manufacturers or be unable to complete any necessary manufacturing inspections of our third-party manufacturers which may lead to significant delays in the approval of our product candidates or to the rejection of our applications altogether.
If our sales of Galafold ® were to decrease, or such sales were substantially or completely displaced in the market, or if we are unable to achieve sufficient market acceptance of Galafold ® by physicians, patients, third-party payors and others in the medical community, or if we fail to receive commercial approval in any additional jurisdictions, it could have a material adverse effect on our business, financial condition and results of operations.
If our sales of Galafold ® were to decrease, or such sales were substantially or completely displaced in the market, or if we are unable to achieve and maintain sufficient market acceptance of Galafold ® by physicians, patients, third-party payors and others in the medical community, or if we fail to receive commercial approval in any additional jurisdictions, it could have a material adverse effect on our business, financial condition and results of operations.
Our current and future arrangements with payors, healthcare providers, patient organizations, charitable foundations and patients may expose us to broadly applicable fraud and abuse, anti-bribery and corruption, and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our product and any product candidates for which we may obtain marketing approval.
Our current and future arrangements with payors, healthcare providers, patient organizations, charitable foundations and patients may expose us to broadly applicable fraud and abuse, anti-bribery and corruption, and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products and any product candidates for which we may obtain marketing approval.
Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation with governments, customers, employees, other third parties and the communities and industries in which we operate and on our business, share price, financial condition, access to capital or results of operations, including the sustainability of our business over time.
Any failure or perceived failure by us in this regard could have a material adverse effect on our reputation with investors, governments, customers, employees, other third parties and the communities and industries in which we operate and on our business, share price, financial condition, access to capital or results of operations, including the sustainability of our business over time.
Although the IRA exempts orphan drugs that treat only one rare disease from the drug pricing negotiation provisions, we do not know if additional drug pricing reforms could eliminate this exemption and therefore affect the prices we can charge and reimbursement we receive for our product and product candidates, if approved, thereby reducing our profitability.
Although the IRA exempts orphan drugs that treat only one rare disease from the drug pricing negotiation provisions, we do not know if additional drug pricing reforms could eliminate this exemption and therefore affect the prices we can charge and reimbursement we receive for our products and product candidates, if approved, thereby reducing our profitability.
Suppliers may not sell these materials to our manufacturers at the time we need them or on commercially reasonable terms and all such prices are susceptible to fluctuations in price and availability due to transportation costs, government regulations, price controls, geopolitical risk and changes in economic climate or other foreseen circumstances.
Suppliers may not sell these materials to our manufacturers at the time we need them or on commercially reasonable terms and all such materials are susceptible to fluctuations in price and availability due to transportation costs, government regulations, price controls, geopolitical risk and changes in economic climate or other foreseen circumstances.
In addition to the factors discussed in this Annual Report on Form 10-K, these factors include: • the success of competitive products or technologies; • regulatory actions with respect to our product or product candidates or our competitors' products or product candidates; • actual or anticipated changes in our growth rate relative to our competitors; • the outcome of any patent infringement or other litigation that may be brought against us; • announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures, collaborations or capital commitments; • results of clinical trials of our product candidates or those of our competitors; • regulatory or legal developments in the E.U., U.K., U.S. and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to our product or any of our product candidates or clinical development programs; • actual or anticipated variations in our quarterly operating results; • the number and characteristics of our efforts to in-license or acquire additional product candidates or products; • introduction of new products or services by us or our competitors; • failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders or our other stockholders; • changes in accounting practices; • lawsuits and other claims asserted against us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions; -68- Table of Contents • publication of research reports about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities or industry analysts; • other events or factors, many of which are beyond our control; and • the other factors described in this "Risk Factors" section.
In addition to the factors discussed in this Annual Report on Form 10-K, these factors include: • the success of competitive products or technologies; • regulatory actions with respect to our products or product candidates or our competitors' products or product candidates; • actual or anticipated changes in our growth rate relative to our competitors; • the outcome of any patent infringement or other litigation that may be brought against us or we may bring against others; • announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures, collaborations or capital commitments; -64- Table of Contents • results of clinical trials of our product candidates or those of our competitors; • regulatory or legal developments in the E.U., U.K., U.S. and other countries; • developments or disputes concerning patent applications, issued patents or other proprietary rights; • the recruitment or departure of key personnel; • the level of expenses related to our product or any of our product candidates or clinical development programs; • actual or anticipated variations in our quarterly operating results; • the number and characteristics of our efforts to in-license or acquire additional product candidates or products; • introduction of new products or services by us or our competitors; • failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public; • actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • announcement or expectation of additional financing efforts; • sales of our common stock by us, our insiders or our other stockholders; • changes in accounting practices; • lawsuits and other claims asserted against us; • changes in the structure of healthcare payment systems; • market conditions in the pharmaceutical and biotechnology sectors; • general economic, industry and market conditions; • publication of research reports about us, our competitors or our industry, or positive or negative recommendations or withdrawal of research coverage by securities or industry analysts; • other events or factors, many of which are beyond our control; and • the other factors described in this "Risk Factors" section.
There are risks involved with establishing and maintaining our own sales and marketing capabilities and entering into arrangements with third parties to perform these services for our product or any of our product candidates, if approved. For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch.
There are risks involved with establishing and maintaining our own sales and marketing capabilities and entering into arrangements with third parties to perform these services for our products or any of our product candidates, if approved. For example, recruiting and training a sales force is expensive and time consuming and could delay any product launch.
If our manufacturers or we are unable to purchase these materials for commercial distribution of our product or, after regulatory approval has been obtained, our product candidates, the commercial launch of our product and product candidates would be delayed or there would be a shortage in supply, which would materially affect our ability to generate revenues from the sale of our product or product candidates.
If our manufacturers or we are unable to purchase these materials for commercial distribution of our products or, after regulatory approval has been obtained, our product candidates, the commercial launch of our products and product candidates would be delayed or there would be a shortage in supply, which would materially affect our ability to generate revenues from the sale of our products or product candidates.
This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel. Similarly, if we enter into agreements with third parties, including the out licensing of our product or product candidates, we may choose to reduce or eliminate our sales and marketing operations and thereby lose our commercialization investment.
This may be costly, and our investment would be lost if we cannot retain or reposition our sales and marketing personnel. Similarly, if we enter into agreements with third parties, including the out licensing of our products or product candidates, we may choose to reduce or eliminate our sales and marketing operations and thereby lose our commercialization investment.
We currently rely on the manufacturers of our product and product candidates to purchase from third-party suppliers the materials necessary to produce the compounds for our preclinical studies, clinical trials, and commercial supply and we rely, or will rely, on these other manufacturers for commercial distribution of our product and, if and when we obtain marketing approval, for any of our product candidates.
We currently rely on the manufacturers of our products and product candidates to purchase from third-party suppliers the materials necessary to produce the compounds for our preclinical studies, clinical trials, and commercial supply and we rely, or will rely, on these other manufacturers for commercial distribution of our products and, if and when we obtain marketing approval, for any of our product candidates.
We also expect that the Affordable Care Act, as well as other healthcare reform measures that have and may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for our product and product candidates, if approved.
We also expect that the Affordable Care Act, as well as other healthcare reform measures that have and may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for our products and product candidates, if approved.
Any reduction in reimbursement from Medicare, Medicaid, or other government programs may result in a similar reduction in payments from private payers. The Inflation Reduction Act of 2022 (the "IRA") contains substantial drug pricing reforms, including the establishment of a drug price negotiation program within the U.S.
Any reduction in reimbursement from Medicare, Medicaid, or other government programs may result in a similar reduction in payments from private payers. Recently, the Inflation Reduction Act of 2022 (the "IRA") contains substantial drug pricing reforms, including the establishment of a drug price negotiation program within the U.S.
Healthcare providers, physicians and payors play a primary role in the recommendation and prescription of our product and any product candidates for which we may obtain marketing approval. Increasingly, patients, patient organizations and charitable foundations also can influence selection of and payment for therapies.
Healthcare providers, physicians and payors play a primary role in the recommendation and prescription of our products and any product candidates for which we may obtain marketing approval. Increasingly, patients, patient organizations and charitable foundations also can influence selection of and payment for therapies.
Moreover, the FDA requires us to comply with standards, commonly referred to as Good Clinical Practices, or GCP, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
The FDA requires us to comply with standards, commonly referred to as Good Clinical Practices, or GCP, for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.
In September 2021, we entered into a securities purchase agreement an investor for the private placement of, among other things, pre-funded warrants to purchase an aggregate of 8,349,705 shares of common stock, at a purchase price of $10.17 per pre-funded warrant.
In September 2021, we entered into a securities purchase agreement with an investor for the private placement of, among other things, pre-funded warrants to purchase an aggregate of 8,349,705 shares of common stock, at a purchase price of $10.17 per pre-funded warrant.
Extensions, delays, suspensions or terminations of our preclinical development activities or our clinical trials as a result of the performance of our independent clinical investigators and CROs will delay, and make more costly, regulatory approval for any product candidates that we may develop.
Extensions, delays, suspensions or terminations of our preclinical development activities or our clinical trials as a result of the performance of our independent clinical investigators and CROs will delay, and make more costly, regulatory approval for any product candidates that we may develop or acquire.
We or our partners may encounter product, packaging, equipment and process-related issues that may require refinement or resolution in order to successfully commercialize our product and proceed with our planned clinical trials and obtain regulatory approval for commercial marketing of our product candidates.
We or our partners may encounter product, packaging, equipment and process-related issues that may require refinement or resolution in order to successfully commercialize our products, proceed with planned clinical trials, or obtain regulatory approval for commercial marketing of our product candidates.
Our failure or the failure of our third-party manufacturers, to comply with applicable regulations could significantly and adversely affect regulatory approval and supplies of our product candidates. Our product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturing facilities.
Our failure or the failure of our third-party manufacturers, to comply with applicable regulations could significantly and adversely affect regulatory approval and supplies of our products and product candidates. Our products and product candidates that we may develop may compete with other product candidates and products for access to manufacturing facilities.
Further changes to and under the Affordable Care Act remain possible but it is unknown what form any such changes or any law proposed to replace or revise the Affordable Care Act would take, and how or whether it may affect our business in the future.
Changes to and under the Affordable Care Act remain possible but it is unknown what form any such changes or any law proposed to replace or revise the Affordable Care Act would take, and how or whether it may affect our business in the future.
Our employees, independent contractors, principal investigators, CROs, consultants and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.
Our employees, independent contractors, principal investigators, CROs, consultants, agents and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could cause significant liability for us and harm our reputation.
Regardless of merit or eventual outcome, liability claims may result in: • reduced resources of our management to pursue our business strategy; • decreased demand for any product candidates or products that we may develop; • injury to our reputation and significant negative media attention; • regulatory investigations, prosecutions or enforcement actions that could require costly recalls or product modifications; • withdrawal of clinical trial participants; • regulatory authorities placing ongoing clinical trials on clinical hold; • significant costs to defend the related litigation; • increased insurance costs, or an inability to maintain appropriate insurance coverage; • substantial monetary awards to trial participants or patients, including awards that substantially exceed our product liability insurance, which we would then be required to pay from other sources, if available, and would damage our ability to obtain liability insurance at reasonable costs, or at all, in the future; • loss of revenue; and • the inability to commercialize any products that we may develop.
Regardless of merit or eventual outcome, liability claims may result in: • reduced resources of our management to pursue our business strategy; • decreased demand for any product candidates or products that we may develop; -33- Table of Contents • injury to our reputation and significant negative media attention; • regulatory investigations, prosecutions or enforcement actions that could require costly recalls or product modifications; • withdrawal of clinical trial participants; • regulatory authorities placing ongoing clinical trials on clinical hold; • significant costs to defend the related litigation; • increased insurance costs, or an inability to maintain appropriate insurance coverage; • substantial monetary awards to trial participants or patients, including awards that substantially exceed our product liability insurance, which we would then be required to pay from other sources, if available, and would damage our ability to obtain liability insurance at reasonable costs, or at all, in the future; • loss of revenue; and • the inability to commercialize any products that we may develop.
Our failure to use our cash and cash equivalents effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our common stock to decline and delay the development of our product and product candidates.
Our failure to use our cash and cash equivalents effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our common stock to decline and delay the development of our products and product candidates.
In addition, if we obtain regulatory approvals for our product candidates, manufacturing efficiency and marketing capabilities are likely to be significant competitive factors. We currently rely on third-party manufacturers for our product and all of our product candidates.
In addition, if we obtain regulatory approvals for our product candidates, manufacturing efficiency and marketing capabilities are likely to be significant competitive factors. We currently rely on third-party manufacturers for our products and all of our product candidates.
Further, if a patent infringement suit were brought against us, we or they could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit.
Further, if a patent infringement suit were brought against us, we or they could be forced to stop or delay research, development, manufacturing or sales of the products or product candidate that is the subject of the suit.
The incurrence of additional indebtedness beyond our existing indebtedness with the Senior Secured Term Loan due 2026 could also result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur further debt, limitations on our ability to acquire or license intellectual property rights, and other operating restrictions that could have a material adverse effect on our ability to conduct our business and may result in liens being placed on our assets and intellectual property.
The incurrence of additional indebtedness beyond our existing indebtedness with the Senior Secured Term Loan due 2029 could also result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur further debt, limitations on our ability to acquire or license intellectual property rights, and other operating restrictions that could have a material adverse effect on our ability to conduct our business and may result in liens being placed on our assets and intellectual property.
Galafold ® , and any of our other product candidates, including AT-GAA, that may be approved in the future for commercialization in the E.U., U.K. or in other foreign countries are or will be subject to additional risks related to international operations or entering into international business relationships, including: • different regulatory requirements for maintaining approval of drugs in foreign countries; • reduced protection for contractual and intellectual property rights in some countries; • unexpected changes in taxes, tariffs, trade barriers and regulatory requirements; • economic weakness, including rising interest rates, inflation and political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • our ability, and our commercialization partners ability, to comply with local laws, rules and regulations, including those relating to modern slavery; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • workforce uncertainty in countries where labor unrest is more common than in the U.S.; • noncompliance with the U.S.
Galafold ® , Pombiliti ™ + Opfolda ™ , and any of our product candidates that may be approved in the future for commercialization in the E.U., U.K. or in other foreign countries are or will be subject to additional risks related to international operations or entering into international business relationships, including: • different regulatory requirements for maintaining approval of drugs in foreign countries; • reduced protection for contractual and intellectual property rights in some countries; • unexpected changes in taxes, tariffs, trade barriers and regulatory requirements; • economic weakness, including rising interest rates, inflation and political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • our ability, and our commercialization partners ability, to comply with local laws, rules and regulations, including those relating to modern slavery; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • workforce uncertainty in countries where labor unrest is more common than in the U.S.; • noncompliance with the U.S.
We seek to protect our proprietary position by filing patent applications in the U.S. and in certain foreign jurisdictions related to our novel technologies, product and product candidates that are important to our business.
We seek to protect our proprietary position by filing patent applications in the U.S. and in certain foreign jurisdictions related to our novel technologies, products and product candidates that are important to our business.
Any adverse market event with respect to Galafold ® , including failure to obtain sufficient market acceptance, could have a material adverse effect on our business, financial condition and results of operations.
Any adverse market event with respect to Galafold ® , including failure to obtain and maintain sufficient market acceptance, could have a material adverse effect on our business, financial condition and results of operations.
If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize our product or product candidates and our ability to generate revenue will be materially impaired.
If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we will not be able to commercialize our products or product candidates and our ability to generate revenue will be materially impaired.
Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product and product candidates, are based on estimates.
Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our products and product candidates are based on estimates.
Manufacturing issues may arise that could increase product and regulatory approval costs or delay commercialization. Manufacturing of our product and product candidates requires us or our manufacturing partners to conduct required stability and comparability testing.
Manufacturing issues may arise that could increase product and regulatory approval costs or delay commercialization. Manufacturing of our products and product candidates requires us or our manufacturing partners to conduct required stability and comparability testing.
We are exposed to the risk that our employees, independent contractors, principal investigators, CROs, consultants and vendors may engage in fraudulent conduct, harassment or other illegal activity.
We are exposed to the risk that our employees, independent contractors, principal investigators, CROs, consultants, agents and vendors may engage in fraudulent conduct, harassment or other illegal activity.
Failure to obtain regulatory approval for our product and product candidates will prevent us from commercializing our product in jurisdictions beyond those in which we have obtained regulatory approval for our product or in any jurisdictions for our product candidates.
Failure to obtain regulatory approval for our products and product candidates will prevent us from commercializing our products in jurisdictions beyond those in which we have obtained regulatory approval for our product or in any jurisdictions for our product candidates.
Our failure to enter into these arrangements on favorable terms could delay or impair our ability to commercialize our product and product candidates, if approved, and could increase our costs of commercialization.
Our failure to enter into these arrangements on favorable terms could delay or impair our ability to commercialize our products and product candidates, if approved, and could increase our costs of commercialization.
Even if we enter into these agreements, the manufacturers of each product candidate will be single source suppliers to us for a significant period of time.
Even if we enter into these agreements, the manufacturers of each product or product candidate will be single source suppliers to us for a significant period of time.
Our ability to generate material revenue and become profitable depends upon our ability to successfully commercialize our existing product and product candidates, or product candidates that we may in-license or acquire in the future.
Our ability to generate material revenue and become profitable depends upon our ability to successfully commercialize our existing products and product candidates, or product candidates that we may in-license or acquire in the future.
The sale of generic version of Galafold ® earlier than the patent expiration would have a significant negative effect on our revenues, projections of profitability and results of operations. -60- Table of Contents Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
The sale of generic version of Galafold ® earlier than the patent expiration would have a significant negative effect on our revenues, projections of profitability and results of operations. -56- Table of Contents Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.
If we are required to conduct additional clinical trials or other testing of our product candidates, including AT-GAA, or any gene therapies, that we develop beyond those tests and trials that we contemplate; if we are unable to successfully complete our clinical trials or other testing; if the results of these trials or tests are not positive or are only modestly positive; or if there are safety concerns, we may: • choose not to seek regulatory approval in the U.S., E.U., U.K. or other key jurisdictions; • be delayed in obtaining marketing approval for our product candidates; • not obtain marketing approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings; • be subject to additional post-marketing testing requirements, safety strategies or restrictions, such as a requirement of a risk evaluation and mitigation strategy, or REMS; or • have the product removed from the market after obtaining regulatory approval.
If we are required to conduct additional clinical trials or other testing of our product candidates or any gene therapies that we develop beyond those tests and trials that we contemplate; if we are unable to successfully complete our clinical trials or other testing; if the results of these trials or tests are not positive or are only modestly positive; or if there are safety concerns, we may: -39- Table of Contents • choose not to seek regulatory approval in the U.S., E.U., U.K. or other key jurisdictions; • be delayed in obtaining marketing approval for our product candidates; • not obtain marketing approval at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings, including boxed warnings; • be subject to additional post-marketing testing requirements, safety strategies or restrictions, such as a requirement of a risk evaluation and mitigation strategy, or REMS; or • have the product removed from the market after obtaining regulatory approval.
Litigation may be necessary to defend against these claims. -61- Table of Contents In addition, while we typically require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.
Litigation may be necessary to defend against these claims. -57- Table of Contents In addition, while we typically require our employees and contractors who may be involved in the development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in executing such an agreement with each party who in fact develops intellectual property that we regard as our own.
We may need to obtain licenses for intellectual property rights from others and may not be able to obtain these licenses on commercially reasonable terms, if at all. -59- Table of Contents We are currently and may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.
We may need to obtain licenses for intellectual property rights from others and may not be able to obtain these licenses on commercially reasonable terms, if at all. -55- Table of Contents We are currently and may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming and unsuccessful.
Applicable regulations of both the EMA and E.U. member states also impose liability for failing to comply with fraud and abuse laws or improperly using information obtained in in the course of clinical trials with the EMA or other regulatory authorities; • The U.S. federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA") which imposes criminal liability and amends provisions on the reporting, investigation, enforcement, and penalizing of civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.
Applicable regulations of both the EMA and E.U. member states also impose liability for failing to comply with fraud and abuse laws or improperly using information obtained in in the course of clinical trials with the EMA or other regulatory authorities; -37- Table of Contents • U.S. federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA") which imposes criminal liability and amends provisions on the reporting, investigation, enforcement, and penalizing of civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.
Additionally, in the healthcare, pharmaceutical and life sciences industries, the public’s ability to access our medicines is of particular importance. -65- Table of Contents Investment in funds that specialize in companies that perform well in ESG assessments are increasingly popular, and major institutional investors and advisors have publicly emphasized the importance of ESG measures to their investment decisions and recommendations.
Additionally, in the healthcare, pharmaceutical and life sciences industries, the public’s ability to access our medicines is of particular importance. -60- Table of Contents Investment in funds that specialize in companies that perform well in ESG assessments are increasingly popular, and major institutional investors and advisors have publicly emphasized the importance of ESG measures to their investment decisions and recommendations.
If our common stock is delisted by NASDAQ, we could face significant material adverse consequences, including: • a limited availability of market quotations for our securities; • reduced liquidity with respect to our securities; -69- Table of Contents • a determination that our shares are a "penny stock," which will require brokers trading in our shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares; • a limited amount of news and analyst coverage for our company; and • a decreased ability to issue additional securities or obtain additional financing in the future.
If our common stock is delisted by NASDAQ, we could face significant material adverse consequences, including: • a limited availability of market quotations for our securities; • reduced liquidity with respect to our securities; • a determination that our shares are a "penny stock," which will require brokers trading in our shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares; • a limited amount of news and analyst coverage for our company; and • a decreased ability to issue additional securities or obtain additional financing in the future.
We also have registered on a Form S-8 registration statement all shares of common stock that we may issue under our equity compensation plans. As a result, these shares can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates.
We also have registered on Form S-8 registration statements all shares of common stock that we may issue under our equity compensation plans. As a result, these shares can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates.
We may experience numerous unforeseen events during, or as a result of, clinical trials including ongoing clinical trials of AT-GAA in additional study populations that could delay or prevent our ability to receive regulatory approval or commercialize our product candidates, including: • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or patients may drop out of these clinical trials at a higher rate than we anticipate; • we may be unable to enroll a sufficient number of patients in our trials to ensure adequate statistical power to detect any statistically significant treatment effects; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • regulators, institutional review boards, or independent ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; -42- Table of Contents • we may have delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • we may have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks; • regulators, institutional review boards, or independent ethics committees may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • the cost of clinical trials of our product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; or • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators, institutional review boards or independent ethics committees to suspend or terminate the trials.
We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive regulatory approval or commercialize our product candidates, including: • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; • the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, or patients may drop out of these clinical trials at a higher rate than we anticipate; • we may be unable to enroll a sufficient number of patients in our trials to ensure adequate statistical power to detect any statistically significant treatment effects; • our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • regulators, institutional review boards, or independent ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; • we may have delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; • we may have to suspend or terminate clinical trials of our product candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks; • regulators, institutional review boards, or independent ethics committees may require that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; • the cost of clinical trials of our product candidates may be greater than we anticipate; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; or • our product candidates may have undesirable side effects or other unexpected characteristics, causing us or our investigators, regulators, institutional review boards or independent ethics committees to suspend or terminate the trials.
If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize Galafold ® , which would materially harm our business and ability to meet our financial goals.
If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize Galafold ® , which would materially harm our business and ability to meet our financial goals and debt covenants.
The Board of Directors has ultimate responsibility for risk oversight of the Company and carries out this duty through its Committees.
The Board of Directors has ultimate responsibility for risk oversight of the company and carries out this duty through its various committees.
We may experience ownership changes in the future as a result of shifts in our stock ownership some of which are outside our control. We completed a detailed study of our NOLs for the tax year 2022 and determined that there was not an ownership change in excess of 50%.
We may experience ownership changes in the future as a result of shifts in our stock ownership some of which are outside our control. We completed a detailed study of the NOLs for the tax year 2023 and determined that there was not an ownership change in excess of 50%.
Even if we are able to successfully achieve regulatory approval for our product candidates, including AT-GAA, we do not know when any of these product candidates will generate revenue for us, if at all and we may not meet our current revenue, operating expense and profitability guidance.
Even if we are able to successfully achieve regulatory approval for our product candidates, we do not know when any of these product candidates will generate revenue for us, if at all and we may not meet our current revenue, operating expense and profitability guidance.
The loss of the services of any of these individuals might impede the achievement of our research, development and commercialization objectives and materially adversely affect our business and we may not be able to replace them with candidates with similar background and experience in the event of the loss of their services.
The loss of the services of either of these individuals might impede the achievement of our research, development and commercialization objectives and materially adversely affect our business and we may not be able to replace them with candidates with similar background and experience in the event of the loss of their services.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment; -40- Table of Contents • U.S. federal government price reporting laws, which require us to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on our marketed drugs.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment; • U.S. federal government price reporting laws, which require us to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on our marketed drugs.
We may not be able to find suitable acquisition or licensing candidates, and if we make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing business and we may incur additional debt or assume unknown or contingent liabilities in connection therewith.
We may not be able to find suitable acquisition or licensing candidates, and if we make any acquisitions, we may not be able to integrate these acquisitions successfully into our existing business and we may incur additional debt, issue equity, or assume unknown or contingent liabilities in connection therewith.
For example, tensions between the United States and China have led to a series of tariffs being imposed by the United States on imports from China mainland, as well as other business restrictions. Tariffs increase the costs of the components and raw materials we source.
Tensions between the United States and China have led to a series of tariffs being imposed by the United States on imports from China mainland, as well as other business restrictions. Tariffs increase the costs of the components and raw materials we source.
In addition, there are complex regulatory, tax, labor and other legal requirements imposed by the E.U., U.K., and many of the individual countries in Europe, Asia and Latin America with which we will need to comply.
Moreover, there are complex regulatory, tax, labor and other legal requirements imposed by the E.U., U.K., and many of the individual countries in Europe, Asia and Latin America with which we will need to comply.
There is no guarantee that our potential gene therapies will ever receive regulatory approval, that we will have the resources to develop these therapies, that we will recoup our investments made in gene therapies or that we will meet any projected timelines for development.
There is no guarantee that our potential gene therapies will ever receive regulatory approval, that we will have the resources to develop these therapies, that we will recoup our investments made in gene therapies, that we will meet any projected timelines for development or that we will continue to pursue these therapies.
The risks that we may be subject to in possible future collaborations include the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not pursue development and commercialization of our product or product candidates or may elect not to continue or renew development or commercialization programs, based on clinical trial results, changes in the collaborators' strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between the collaborator and us as to the ownership of intellectual property arising during the collaboration; • we may grant rights to our collaborators to be the holder of any marketing authorizations in a jurisdiction; • we may grant exclusive rights to our collaborators, which would prevent us from collaborating with others; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our products or product candidates or that result in costly litigation or arbitration that diverts management attention and resources; and • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.
The risks that we may be subject to in possible future collaborations include the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not pursue development and commercialization of our products or product candidates or may elect not to continue or renew development or commercialization programs, based on clinical trial results, changes in the collaborators' strategic focus or available funding, or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; • collaborators may not properly maintain or defend our intellectual property rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; • collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; • disputes may arise between the collaborator and us as to the ownership of intellectual property arising during the collaboration; • we may grant rights to our collaborators to be the holder of any marketing authorizations in a jurisdiction; • we may grant exclusive rights to our collaborators, which would prevent us from collaborating with others; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development or commercialization of our products or product candidates or that result in costly litigation or arbitration that diverts management attention and resources; and • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates. -46- Table of Contents Collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all.
We have adopted a Code of Business Conduct and Ethics, a robust Enterprise Risk Management Program, and conduct comprehensive training, but it is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
We have adopted a Code of Business Conduct and Ethics, a robust Enterprise Risk Management Program, have extensive Board of Directors oversight, and conduct comprehensive training, but it is not always possible to identify and deter misconduct by employees and other third parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations.
If we fail to comply with these obligations, the licensor may have the right to terminate the license, in which event we might not be able to market any product that is covered by the licensed patents.
If we fail to comply with these obligations, the licensor may have the right to terminate the license, in which event we might not be able to market any product or product candidate that is covered by the licensed patents.
If we are unable to raise additional capital in sufficient amounts, when required or on acceptable terms, we could also be required to: • significantly delay, scale back, or discontinue the development or the commercialization of our product or product candidates or one or more of our other research and development initiatives; • seek collaborators for Galafold ® , AT-GAA or one or more of our current or future product candidates at an earlier stage than otherwise would be desirable, or on terms that are less favorable than might otherwise be available; • relinquish or license on unfavorable terms our rights to our technologies, product or product candidates that we otherwise would seek to develop or commercialize ourselves; • significantly curtail operations; or • enter into strategic partnerships on unfavorable terms, including sale of our assets for less than full value.
If we are unable to raise additional capital in sufficient amounts, when required or on acceptable terms, we could also be required to: • significantly delay, scale back, or discontinue the development or the commercialization of our products or product candidates or one or more of our other research and development initiatives; • seek collaborators for Galafold ® , Pombiliti ™ + Opfolda ™ , or one or more of our current or future product candidates at an earlier stage than otherwise would be desirable, or on terms that are less favorable than might otherwise be available; • relinquish or license on unfavorable terms our rights to our technologies, products or product candidates that we otherwise would seek to develop or commercialize ourselves; • significantly curtail operations; or • enter into strategic partnerships on unfavorable terms, including a sale of our assets for less than full value.
Each pre-funded warrant has an initial exercise price of $0.01 per share and is exercisable at any time after its original issuance at the option of each holder, in such holder’s discretion, by (i) payment in full in immediately available funds of the initial exercise price for the number of shares of common stock purchased upon such exercise or (ii) a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the pre-funded warrant.
Each pre-funded warrant, some of which have been exercised, has an initial exercise price of $0.01 per share and is exercisable at any time after its original issuance at the option of each holder, in such holder’s discretion, by (i) payment in full in immediately available funds of the initial exercise price for the number of shares of common stock purchased upon such exercise or (ii) a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the pre-funded warrant.
Several other countries, including the U.K., have enacted similar anti-kickback, fraud and abuse, and healthcare laws and regulations; -39- Table of Contents • the U.S. federal False Claims Act, which imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
Several other countries, including the U.K., have enacted similar anti-kickback, fraud and abuse, and healthcare laws and regulations; • U.S. federal False Claims Act, which imposes criminal and civil penalties, including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government.
Any change to the exemption could have a material adverse effect on our financial condition, results of operations, and growth prospects. The effects of the IRA on the pharmaceutical industry in general are not yet known. -35- Table of Contents The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
Any change to the exemption could have a material adverse effect on our financial condition, results of operations, and growth prospects. The effects of the IRA on the pharmaceutical industry in general are not yet known. The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
These manufacturers might only be required to conduct a relatively inexpensive study to show that their product has the same active ingredients, dosage form, strength, route of administration, and conditions of use, or product labeling, as our product or product candidate and that the generic product is absorbed in the body at the same rate and to the same extent as, or is bioequivalent to, our product or product candidate.
These manufacturers might only be required to conduct a relatively inexpensive study to show that their product has the same active ingredients, dosage form, strength, route of administration, and conditions of use, or product labeling, as one of our products or product candidates and that the generic product is absorbed in the body at the same rate and to the same extent as, or is bioequivalent to, our product or product candidate.
Different geopolitical situations, responses to COVID-19, or other unforeseeable events could impact the FDA, or other regulatory authorities, ability to timely inspect such contract manufacturers and such delays could materially harm our business and accuracy of our financial guidance projections. Our contract manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside the U.S.
Different geopolitical situations or other unforeseeable events could impact the FDA, or other regulatory authorities, ability to timely inspect such contract manufacturers and such delays could materially harm our business and accuracy of our financial guidance projections. Our contract manufacturers may not be able to comply with cGMP regulations or similar regulatory requirements outside the U.S.
Any change in a CRO during an ongoing preclinical development activity or clinical trial could seriously delay that trial and potentially compromise the results of the activity or trial. We may not be successful in maintaining or establishing collaborations, which could adversely affect our ability to develop and, particularly in international markets, commercialize products.
Any change in a CRO during an ongoing preclinical development activity or clinical trial could seriously delay that trial and potentially compromise the results of the activity or trial. -45- Table of Contents We may not be successful in maintaining or establishing collaborations, which could adversely affect our ability to develop and, particularly in international markets, commercialize products.
If our estimates of the prevalence of Fabry disease, Pompe disease, or other rare diseases or of the number of patients who may benefit from treatment with our product or product candidates prove to be incorrect, the market opportunities for our product and product candidates, if approved, may be smaller than we believe they are, our prospects for generating revenue at our guidance levels may be adversely affected and our business may suffer. -31- Table of Contents Galafold ® or any of our product candidates that receive regulatory approval may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
If our estimates of the prevalence of Fabry disease, Pompe disease, or other rare diseases or of the number of patients who may benefit from treatment with our products or product candidates prove to be incorrect, the market opportunities for our products and product candidates, if approved, may be smaller than we believe they are, our prospects for generating revenue at our guidance levels may be adversely affected and our business may suffer. -29- Table of Contents Galafold ® and Pombiliti ™ + Opfolda ™ , or any of our product candidates that receive regulatory approval, may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
We believe that any disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations reflect the reality that judgments can be faulty, and that breakdowns can occur because of simple error or mistake.
We believe that any disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. -52- Table of Contents These inherent limitations reflect the reality that judgments can be faulty, and that breakdowns can occur because of simple error or mistake.
Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. -58- Table of Contents Moreover, we may be subject to a third-party pre-issuance submission of prior art to the U.S.
Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. Moreover, we may be subject to a third-party pre-issuance submission of prior art to the U.S.
In addition, certain of these lawsuits, if decided against us or settled by us, may result in liability -70- Table of Contents material to our Consolidated Financial Statements as a whole or may negatively affect our operating results if changes to our business operation are required. The cost to prosecute or defend litigation may be significant.
In addition, certain of these lawsuits, if decided against us or settled by us, may result in liability material to our Consolidated Financial Statements as a whole or may negatively affect our operating results if changes to our business operation are required. The cost to prosecute or defend litigation may be significant.
For example, trade policies and geopolitical disputes (including as a result of China-Taiwan relations) and other international conflicts can result in tariffs, sanctions and other measures that restrict international trade, and can materially adversely affect our business, particularly if these measures occur in regions where we source our components or raw materials.
Additionally, trade policies and geopolitical disputes (including as a result of China-Taiwan relations) and other international conflicts can result in tariffs, sanctions and other measures that restrict international trade, and can materially adversely affect our business, particularly if these measures occur in regions where we source our components or raw materials.
Risks Related to our Preclinical Product Candidates Our gene therapy product candidates are based on novel technologies, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval. Only a few gene therapy products have been approved in the U.S., E.U., and U.K.
Our gene therapy product candidates are based on novel technologies, which makes it difficult to predict the time and cost of product candidate development and subsequently obtaining regulatory approval. Only a few gene therapy products have been approved in the U.S., E.U., and U.K.
The occurrence of any of these problems could significantly delay our clinical trials or the commercial availability of our product or product candidates. -47- Table of Contents We may be unable to enter into agreements for commercial supply with third-party manufacturers or may be unable to do so on acceptable terms.
The occurrence of any of these problems could significantly delay our clinical trials or the commercial availability of our products or product candidates. -43- Table of Contents We may be unable to enter into agreements for commercial supply with third-party manufacturers or may be unable to do so on acceptable terms.
Further, the success of Galafold ® will depend on a number of factors, including the following: • obtaining a sufficiently broad label in each territory that would not unduly restrict patient access; • obtaining additional foreign approvals for Galafold ® ; • continuing to build and maintain an infrastructure capable of supporting product sales, marketing, and distribution of Galafold ® in the U.S., Europe, Japan and other territories where we pursue commercialization directly; • maintaining commercial manufacturing arrangements with third-party manufacturers; • maintaining commercial distribution agreements with third-party distributors; • launching commercial sales of Galafold ® , where approved, whether alone or in collaboration with others; • acceptance of Galafold ® , where approved, by patients, the medical community and third-party payors; • effectively competing with other therapies, including potential generics and gene therapies; • successfully identifying new patients who could benefit from Galafold ® ; -28- Table of Contents • a continued acceptable safety profile of Galafold ® ; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity; • protecting and enforcing our rights in our intellectual property portfolio; • obtaining and maintaining a commercially viable price for our product and product candidates, if approved; and • continuing to successfully mitigate the impact of the COVID-19 pandemic.
Further, the success of Galafold ® will depend on a number of factors, including the following: • obtaining a sufficiently broad label in each territory that would not unduly restrict patient access; • obtaining additional foreign approvals for Galafold ® ; • continuing to build and maintain an infrastructure capable of supporting product sales, marketing, and distribution of Galafold ® in the U.S., Europe, Japan and other territories where we pursue commercialization directly; • maintaining commercial manufacturing arrangements with third-party manufacturers; • maintaining commercial distribution agreements with third-party distributors; • launching commercial sales of Galafold ® , where approved, whether alone or in collaboration with others; • acceptance of Galafold ® , where approved, by patients, the medical community and third-party payors; • effectively competing with other therapies, including potential generics and gene therapies; -26- Table of Contents • successfully identifying new patients who could benefit from Galafold ® ; • a continued acceptable safety profile of Galafold ® ; • obtaining and maintaining patent and trade secret protection and regulatory exclusivity; • protecting and enforcing our rights in our intellectual property portfolio; and • obtaining and maintaining a commercially viable price.
Our research, development and commercialization activities, as well as any product candidates or products resulting from these activities, including Galafold ® or AT-GAA, may infringe or be accused of infringing one or more claims of an issued patent or may fall within the scope of one or more claims in a published patent application that may subsequently issue and to which we do not hold a license or other rights.
Our research, development and commercialization activities, as well as any product candidates or products resulting from these activities, including Galafold ® or Pombiliti ™ + Opfolda ™ , may infringe or be accused of infringing one or more claims of an issued patent or may fall within the scope of one or more claims in a published patent application that may subsequently issue and to which we do not hold a license or other rights.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeLocation Approximate Square Feet Use Lease expiry date (1) Philadelphia, Pennsylvania, U.S. 50,816 Office and laboratory September 2044 Marlow, United Kingdom 36,796 Office August 2028 Princeton, New Jersey, U.S. 29,972 Office January 2034 ______________________________ (1) Includes renewal options on leases which we are reasonably certain to exercise.
Biggest changeLocation Approximate Square Feet Use Lease expiry date (1) Philadelphia, Pennsylvania, U.S. 50,816 Office and laboratory September 2034 Marlow, United Kingdom 36,796 Office August 2028 Princeton, New Jersey, U.S. 29,972 Office January 2034 ______________________________ (1) Includes renewal options on leases which we are reasonably certain to exercise.
Item 2. PROPERTIES The following table contains information about our current significant leased properties as of December 31, 2022.
Item 2. PROPERTIES The following table contains information about our current significant leased properties as of December 31, 2023.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS The information called for by this item is incorporated herein by reference to the information set forth in Note 15 “Legal Proceedings” of the Notes to Consolidated Financial Statements included in Item 8 of this Report. Item 4. MINE SAFETY DISCLOSURES None. -71- Table of Contents PART II
Biggest changeItem 3. LEGAL PROCEEDINGS -69- Table of Contents The information called for by this item is incorporated herein by reference to the information set forth in Note 15 “Legal Proceedings” of the Notes to Consolidated Financial Statements included in Item 8 of this Report. Item 4. MINE SAFETY DISCLOSURES None. -70- Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 Amicus Therapeutics, Inc. $100 $67 $68 $160 $80 $83 NASDAQ Composite $100 $96 $130 $187 $227 $150 NASDAQ Biotechnology $100 $91 $113 $142 $141 $124 The stock price performance included in this graph is not necessarily indicative of future stock price performance. -72- Table of Contents Issuer Purchases of Equity Securities The following table provides certain information with respect to purchase of our common stock during the three months ended December 31, 2022: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2022 through October 31, 2022 21,092 $ 10.56 — — November 1, 2022 through November 30, 2022 11,920 $ 11.45 — — December 1, 2022 through December 31, 2022 3,090 $ 12.13 — — Total 36,102 $ 10.99 — — ______________________________ (1) Represents shares of common stock withheld to satisfy taxes associated with the vesting of restricted stock awards.
Biggest changeThe stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorse any predictions as to future stockholder returns. 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Amicus Therapeutics, Inc. $100 $102 $241 $121 $125 $149 NASDAQ Composite $100 $135 $194 $236 $157 $223 NASDAQ Biotechnology $100 $124 $156 $155 $137 $146 The stock price performance included in this graph is not necessarily indicative of future stock price performance. -71- Table of Contents Issuer Purchases of Equity Securities The following table provides certain information with respect to purchase of our common stock during the three months ended December 31, 2023: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2023 through October 31, 2023 47,887 $ 10.46 — — November 1, 2023 through November 30, 2023 12,420 $ 10.66 — — December 1, 2023 through December 31, 2023 38,804 $ 13.61 — — Total 99,111 $ 11.72 — — ______________________________ (1) Represents shares of common stock withheld to satisfy taxes associated with the vesting of restricted stock awards.
The closing price for our common stock as reported by the NASDAQ Global Market on February 13, 2023 was $12.64 per share. As of February 13, 2023, there were 19 holders of record of our common stock. Dividends We have never declared or paid any dividends on our capital stock.
The closing price for our common stock as reported by the NASDAQ Global Market on February 13, 2024 was $12.80 per share. As of February 13, 2024, there were 17 holders of record of our common stock. Dividends We have never declared or paid any dividends on our capital stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur future capital requirements will depend on a number of factors, including: • the scope, progress, results and costs of clinical trials for our drug candidates; • the cost of manufacturing drug supply for our commercial, clinical and preclinical studies, including the cost of manufacturing Pompe Enzyme Replacement Therapy ("ERT" or "ATB200" or "cipaglucosidase alfa"); • the future results of preclinical research and subsequent clinical trials for pipeline candidates we may identify from time to time, including our ability to obtain regulatory approvals and commercialize these therapies and obtain market acceptance for such therapies; • the costs, timing, and outcome of regulatory review of our product candidates, including AT-GAA; • any changes in regulatory standards relating to the review of our product candidates, including AT-GAA; • the number and development requirements of other product candidates that we pursue; • the costs of commercialization activities, including product marketing, sales, and distribution; • the emergence of competing technologies and other adverse market developments; • the estimates regarding the potential market opportunity for our product and product candidates, including AT-GAA; • our ability to successfully commercialize Galafold ® (also referred to as "migalastat HCl") and, if our regulatory applications are approved, AT-GAA; • our ability to manufacture or supply sufficient clinical or commercial products, including Galafold ® and AT-GAA; • our ability to obtain reimbursement for Galafold ® and, if our regulatory applications are approved, AT-GAA; • our ability to satisfy post-marketing commitments or requirements for continued regulatory approval of Galafold ® , and, if approved and applicable, AT-GAA; • our ability to obtain market acceptance of Galafold ® and, if our regulatory applications are approved, AT-GAA; -80- Table of Contents • the costs of preparing, filing, and prosecuting patent applications and maintaining, enforcing, and defending intellectual property-related claims, including Hatch-Waxman litigation; • the impact of litigation that has been or may be brought against us or of litigation that we are pursuing or may pursue against others, including Hatch-Waxman litigation; • the extent to which we acquire or invest in businesses, products, and technologies; • our ability to successfully integrate our acquired products and technologies into our business, or successfully divest or license existing products and technologies from our business, including the possibility that the expected benefits of the transactions will not be fully realized by us or may take longer to realize than expected; • our ability to establish licensing agreements, collaborations, partnerships or other similar arrangements and to obtain milestone, royalty, or other payments from any such collaborators; • the extent to which our business could be adversely impacted by the effects of the novel coronavirus ("COVID-19") outbreak, including actions by us, governments, our customers, our suppliers, or other third parties to control the spread of COVID-19, or by other health epidemics or pandemics; • the costs associated with, and our ability to comply with, emerging environmental, social and governance standards; • our ability to accurately forecast revenue, operating expenditures, or other metrics impacting profitability; • fluctuations in foreign currency exchange rates; and • changes in accounting standards.
Biggest changeOur future capital requirements will depend on a number of factors, including: • the scope, progress, results and costs of clinical trials for our drug candidates; • the cost of manufacturing drug supply for our commercial, clinical and preclinical studies, including the cost of manufacturing Pombiliti ™ (also referred to as "ATB200" or "cipaglucosidase alfa"); • the future results of preclinical research and subsequent clinical trials for pipeline candidates we may identify from time to time, including our ability to obtain regulatory approvals and commercialize such therapies; • the costs, timing, and outcome of regulatory review of our product candidates; • any changes in regulatory standards relating to the review of our product candidates; • any changes in laws, rules or regulations affecting our ability to manufacture, transport, test, develop, or commercialize our products, including Galafold ® , Pombiliti ™ + Opfolda ™ , or our product candidates; • the costs of commercialization activities, including product marketing, sales, and distribution; • the emergence of competing technologies and other adverse market developments; • the estimates regarding the potential market opportunity for our products and product candidates; • our ability to successfully commercialize Galafold ® (also referred to as "migalastat HCl"); • our ability to successfully commercialize Pombiliti ™ + Opfolda ™ (together, also referred to as "AT-GAA") in the E.U., U.K., and U.S., and elsewhere, if regulatory applications are approved; • our ability to manufacture or supply sufficient clinical or commercial products, including Galafold ® and Pombiliti ™ + Opfolda ™ ; • our ability to obtain reimbursement for Galafold ® and Pombiliti ™ + Opfolda ™ ; -77- Table of Contents • our ability to satisfy post-marketing commitments or requirements for continued regulatory approval of Galafold ® and Pombiliti ™ + Opfolda ™ ; • our ability to obtain market acceptance of Galafold ® and Pombiliti ™ + Opfolda ™ or any other product developed or acquired that has received regulatory approval; • the costs of preparing, filing, and prosecuting patent applications and maintaining, enforcing, and defending intellectual property-related claims, including Hatch-Waxman litigation; • the impact of litigation that has been or may be brought against us or of litigation that we are pursuing or may pursue against others, including Hatch-Waxman litigation; • the extent to which we acquire or invest in businesses, products, and technologies; • our ability to successfully integrate acquired products and technologies into our business, or successfully divest or license existing products and technologies from our business, including the possibility that the expected benefits of the transactions will not be fully realized by us or may take longer to realize than expected; • our ability to establish licensing agreements, collaborations, partnerships or other similar arrangements and to obtain milestone, royalty, or other economic benefits from any such collaborators; • the costs associated with, and our ability to comply with, emerging environmental, social and governance standards, including climate reporting requirements at the local, state and national levels; • our ability to successfully protect our information technology systems and maintain our global operations and supply chain without interruption; • our ability to accurately forecast revenue, operating expenditures, or other metrics impacting profitability; • fluctuations in foreign currency exchange rates; and • changes in accounting standards.
GlaxoSmithKline - In connection with our collaboration agreement with GlaxoSmithKline ("GSK"), pursuant to which we obtained global rights to develop and commercialize Galafold ® as a monotherapy and in combination with ERT for Fabry disease, GSK is eligible to receive post-approval and sales-based milestones up to $40 million, as well as tiered royalties in the mid-teens in eight major markets outside the U.S.
In connection with our collaboration agreement with GlaxoSmithKline ("GSK"), pursuant to which we obtained global rights to develop and commercialize Galafold ® as a monotherapy and in combination with ERT for Fabry disease, GSK is eligible to receive post-approval and sales-based milestones up to $40 million, as well as tiered royalties in the mid-teens in eight major markets outside the U.S.
Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Form 10-K can be found in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, which comparisons are hereby incorporated by reference.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which comparisons are hereby incorporated by reference.
We have historically funded our operations through stock offerings, Galafold ® revenues, debt issuance, collaborations, and other financing arrangements. Sources of Liquidity In November 2022, we entered into a Sales Agreement with The Goldman Sachs & Co.
We have historically funded our operations through stock offerings, product revenues, debt issuance, collaborations, and other financing arrangements. Sources of Liquidity In November 2022, we entered into a Sales Agreement with The Goldman Sachs & Co.
The following section generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
The following section generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
We are lessees to various operating leases for facilities and equipment. As of December 31, 2022, our undiscounted cash liabilities for operating leases were $168.8 million, with maturities ranging up through fiscal 2044. Refer to “— Note 12. Leases,” to the Consolidated Financial Statements for more information.
Debt," to the Consolidated Financial Statements for more information. We are lessees to various operating leases for facilities and equipment. As of December 31, 2023, our undiscounted cash liabilities for operating leases were $89.8 million, with maturities ranging up through fiscal 2034. Refer to “— Note 12. Leases,” to the Consolidated Financial Statements for more information.
Net cash provided by investing activities for the year ended December 31, 2021 was $78.8 million. Our investing activities have consisted primarily of purchases, sales, and maturities of investments and capital expenditures.
Net cash provided by investing activities for the year ended December 31, 2022 was $92.3 million. Our investing activities have consisted primarily of purchases, sales, and maturities of investments and capital expenditures.
The net proceeds from these private placements were approximately $199.8 million. Cash Flow Discussion As of December 31, 2022, we had cash, cash equivalents, and marketable securities of $293.6 million.
The net proceeds from these private placements were approximately $199.8 million. Cash Flow Discussion As of December 31, 2023, we had cash, cash equivalents, and marketable securities of $286.2 million.
LLC to create an at-the-market ("ATM") equity program, pursuant to which we may offer to sell shares of our common stock having an aggregate offering gross proceeds of up to $250.0 million. At December 31, 2022, no shares have been issued under the ATM equity program.
LLC to create an at-the-market equity program ("ATM program"), pursuant to which we may offer to sell shares of our common stock having aggregate offering gross proceeds of up to $250.0 million.
Net cash used in financing activities primarily reflects $11.5 million from payments of employee withholding taxes related to restricted stock unit vesting, partially offset by $4.3 million from the exercise of stock options. Net cash provided by financing activities for the year ended December 31, 2021 was $212.1 million.
Net cash used in financing activities primarily reflects $11.5 million from payments of employee withholding taxes related to restricted stock unit vesting, partially offset by $4.3 million from the exercise of stock options.
The net cash used in operations was also impacted by a decrease in accounts payable and accrued expenses of $6.4 million, associated with payments of contract manufacturing and third party development services partially offset by increases in sales rebates and royalties associated with increased commercial sales of Galafold ® .
The net cash used in operations was also impacted by a decrease in accounts payable and accrued expenses of $6.4 million, associated with payments of contract manufacturing and third-party development services partially offset by increases in sales rebates and royalties associated with increased commercial sales of Galafold ® . -76- Table of Contents Net Cash Provided by Investing Activities Net cash provided by investing activities for the year ended December 31, 2023 was $98.1 million.
In September 2021, we entered into securities purchase agreements with certain investors for the private placement of an aggregate of 11,296,660 shares of our common stock, at a purchase price of $10.18 per share, and pre-funded warrants to purchase an aggregate of 8,349,705 shares of common stock, at a purchase price of $10.17 per pre-funded warrant.
We used proceeds from the Senior Secured Term Loan due 2029 and the private placement to prepay the Senior Secured Term Loan due 2026, inclusive of the outstanding principal amount, accrued interest and prepayment premium. -75- Table of Contents In September 2021, we entered into securities purchase agreements with certain investors for the private placement of an aggregate of 11,296,660 shares of our common stock, at a purchase price of $10.18 per share, and pre-funded warrants to purchase an aggregate of 8,349,705 shares of common stock, at a purchase price of $10.17 per pre-funded warrant.
Net Cash Used in Operating Activities Net cash used in operations for the year ended December 31, 2022 was $166.6 million. The components of net cash used in operations included the net loss for the year ended December 31, 2022 of $236.6 million and the net change in operating assets and liabilities of $39.9 million.
The components of net cash used in operations included the net loss for the year ended December 31, 2022 of $236.6 million and the net change in operating assets and liabilities of $39.9 million offset by $76.5 million of stock compensation and $33.4 million of other non-cash adjustments.
Potential impacts of the COVID-19 pandemic, business development collaborations, pipeline expansion, and investment in manufacturing capabilities could impact our future capital requirements. Contractual Obligations and Commitments As of December 31, 2022, remaining maturities, including interest, on our Senior Secured Term Loan due 2026 was $517.7 million. Refer to "— Note 11. Debt," to the Consolidated Financial Statements for more information.
Potential impacts of business development collaborations, pipeline expansion, and investment in manufacturing capabilities could impact our long-term capital requirements. Contractual Obligations and Commitments As of December 31, 2023, remaining maturities, including expected interest payments through maturity, on our Senior Secured Term Loan due 2029 were $623.4 million. Refer to "— Note 11.
The change in operating assets was primarily due to increases in accounts receivable of $8.2 million due to increased commercial sales of Galafold ® , an increase in inventory of $7.8 million, and increase in prepaid and other current assets of $5.9 million to support commercial activities for Galafold ® .
The change in operating assets was primarily due to an increase in inventory of $44.6 million, an increase in accounts receivable of $20.1 million associated with increased commercial sales, and an increase in prepaid and other current assets of $8.1 million primarily associated with tax prepayments.
We have a number of binding minimum purchase and manufacturing commitments due to our third-party manufacturers. As of December 31, 2022, these purchase and manufacturing obligations totaled $62.4 million. Contracts for which our commitment is variable, based on volumes, with no fixed minimum quantities, and contracts that can be canceled without payment penalties have been excluded.
As of December 31, 2023, these purchase and manufacturing obligations totaled $126.2 million, of which $83.9 million and $42.3 million are expected in 2024 and 2025, respectively. Contracts for which our commitment is variable, based on volumes, with no fixed minimum quantities, and contracts that can be canceled without payment penalties have been excluded.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a global, patient-dedicated biotechnology company focused on discovering, developing, and delivering novel medicines for rare diseases.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a global, patient-dedicated biotechnology company focused on discovering, developing, and delivering novel medicines for rare diseases. We seek to deliver the highest quality therapies that have the potential to obsolete current treatments, provide significant benefits to patients, and be first- or best-in-class.
Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 The following table provides selected financial information for the Company: Years Ended December 31, (in thousands) 2022 2021 Change Net product sales $ 329,233 $ 305,514 $ 23,719 Cost of goods sold 38,599 34,466 4,133 Cost of goods sold as a percentage of net product sales 11.7 % 11.3 % 0.4 % Operating expenses: Research and development 276,677 272,049 4,628 Selling, general, and administrative 213,041 192,710 20,331 Changes in fair value of contingent consideration payable 1,078 6,514 (5,436) Loss on impairment of assets 6,616 — 6,616 Depreciation and amortization 5,342 6,209 (867) Other income (expense): Interest income 3,024 509 2,515 Interest expense (37,119) (32,471) (4,648) Loss on extinguishment of debt — (257) 257 Other income (expense) 4,176 (2,901) 7,077 Income tax benefit (expense) 5,471 (8,906) 14,377 Net loss attributable to common stockholders $ (236,568) $ (250,460) $ 13,892 Net Product Sales.
Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table provides selected financial information of our operations: Years Ended December 31, (in thousands) 2023 2022 Change Net product sales $ 399,356 $ 329,233 $ 70,123 Cost of goods sold 37,326 38,599 (1,273) Cost of goods sold as a percentage of net product sales 9.3 % 11.7 % (2.4) % Operating expenses: Research and development 152,381 276,677 (124,296) Selling, general, and administrative 275,270 213,041 62,229 Changes in fair value of contingent consideration payable 2,583 1,078 1,505 Loss on impairment of assets 1,134 6,616 (5,482) Depreciation and amortization 7,873 5,342 2,531 Other (expense) income: Interest income 7,078 3,024 4,054 Interest expense (50,149) (37,119) (13,030) Loss on extinguishment of debt (13,933) — (13,933) Other (expense) income (15,886) 4,176 (20,062) Income tax (expense) benefit (1,483) 5,471 (6,954) Net loss attributable to common stockholders $ (151,584) $ (236,568) $ 84,984 Net Product Sales.
The following table summarizes our principal product development programs for each product candidate in development, and the out-of-pocket, third-party expenses incurred with respect to each product candidate: (in thousands) Years Ended December 31, Projects 2022 2021 Third-party direct project expenses Galafold ® (Fabry Disease) $ 15,012 $ 10,694 AT-GAA (Pompe Disease) 99,584 108,969 Gene therapy programs 48,948 47,817 Pre-clinical and other programs 124 872 Total third-party direct project expenses 163,668 168,352 Other project costs 1 Personnel costs 82,386 73,082 Other costs 30,623 30,615 Total other project costs 113,009 103,697 Total research and development costs $ 276,677 $ 272,049 The $4.6 million increase in research and development expense was primarily due to an increase in personnel share-based compensation and Fabry disease clinical research.
The following table summarizes our principal product development programs for each product candidate in development, and the out-of-pocket, third-party expenses incurred with respect to each product candidate: (in thousands) Years Ended December 31, Projects 2023 2022 Third-party direct project expenses Galafold ® (Fabry Disease) $ 12,928 $ 15,012 Pombiliti ™ + Opfolda ™ (Pompe Disease) 58,826 99,584 Gene therapy programs 872 48,948 Pre-clinical and other programs 1,681 124 Total third-party direct project expenses 74,307 163,668 Other project costs 1 Personnel costs 62,492 82,386 Other costs 15,582 30,623 Total other project costs 78,074 113,009 Total research and development costs $ 152,381 $ 276,677 The $124.3 million decrease in research and development costs was primarily driven by the strategic deprioritization of our gene therapy portfolio, which resulted in the recognition of contract exit costs in the prior year.
We believe that the following discussion represents our critical accounting policies. Revenue Recognition Our net product sales primarily consist of sales of Galafold ® for the treatment of Fabry disease. We have recorded revenue on sales where Galafold ® is available either on a commercial basis or through a reimbursed early access program.
We believe that the following discussion represents our critical accounting policies. Revenue Recognition Our net product sales consist of sales of Galafold ® for the treatment of Fabry disease and Pombiliti ™ + Opfolda ™ for the treatment of Pompe disease.
Accordingly, future business and economic conditions, as well as changes in any of the assumptions described in the accounting for business combinations above can materially impact the amount of contingent consideration expense that we record and, therefore, our results of operations in any given period. -78- Table of Contents Liquidity and Capital Resources As a result of our significant research and development expenditures, as well as expenditures to build a commercial organization to support the launch of Galafold ® , we have not been profitable and have generated operating losses since we were incorporated in 2002.
Liquidity and Capital Resources As a result of our significant research and development expenditures, as well as expenditures to build a commercial organization to support the launch of Galafold ® and Pombiliti ™ + Opfolda ™ , we have not been profitable and have generated operating losses since we were incorporated in 2002.
We are subject to income taxes in various jurisdictions but due to the offset of taxable income with net operating losses and full valuation allowance, there is nominal tax expense in 2022 for taxes in U.S. federal and state jurisdictions. -76- Table of Contents Critical Accounting Policies and Significant Judgments and Estimates The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles ("U.S.
Our tax liabilities are largely dependent on the distributions of pre-tax earnings among the many jurisdictions in which we operate. -74- Table of Contents Critical Accounting Policies and Significant Judgments and Estimates The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with U.S. generally accepted accounting principles ("U.S.
Net product sales increased $23.7 million during the year ended December 31, 2022 compared to the prior year. The increase was primarily due to continued growth in the U.S., Europe, and Japan markets, partially offset by the $26.1 million unfavorable impact of foreign currency exchange. -75- Table of Contents Research and Development Expense.
Net product sales increased $70.1 million during the year ended December 31, 2023 compared to the prior year. The increase was primarily due to continued growth of Galafold ® in the U.S., Europe, and Japan markets as well as our commercial launch of Pombiliti ™ + Opfolda ™ in Europe and the U.S. Cost of goods sold .
Orders for Galafold ® are generally received from distributors and pharmacies with the ultimate payor often a government authority. We recognize revenue when our performance obligation with our customers have been satisfied, which occurs at a point in time when the pharmacies or distributors obtain control of Galafold ® .
We recognize revenue when our performance obligations with our customers have been satisfied, which occurs at a point in time when the pharmacies or distributors obtain control of our products. The transaction price is determined based on fixed consideration in our customer contracts net of estimates for variable consideration.
These purchase obligations are in addition to amounts recorded on our December 31, 2022 Consolidated Balance Sheets. We have no off-balance sheet arrangements as of December 31, 2022 and 2021. Milestone Payments / Royalties Callidus - In connection with our acquisition of Callidus Biopharma, Inc.
These purchase obligations are in addition to amounts recorded on our December 31, 2023 Consolidated Balance Sheets. We have no off-balance sheet arrangements as of December 31, 2023 and 2022. -78- Table of Contents Recent Accounting Pronouncements Please refer to "— Note 2. Summary of Significant Accounting Policies," in our Notes to the Consolidated Financial Statements.
Net cash used in operations for the year ended December 31, 2021 was $202.5 million. The components of net cash used in operations included the net loss for the year ended December 31, 2021 of $250.5 million, and the net change in operating assets and liabilities of $28.9 million.
The components of net cash used in operations included the net loss for the year ended December 31, 2023 of $151.6 million and the net change in operating assets and liabilities of $48.0 million offset by $86.1 million of stock compensation and $44.4 million of other non-cash adjustments.
Net cash provided by investing activities reflects $424.0 million for the sale and redemption of marketable securities, partially offset by $341.4 million for the purchase of marketable securities and $3.9 million for capital expenditures. Net Cash (Used in) Provided by Financing Activities Net cash used in financing activities for the year ended December 31, 2022 was $7.5 million.
Our investing activities have consisted primarily of purchases, sales, and maturities of investments and capital expenditures. Net cash provided by investing activities reflects $197.2 million for the sale and redemption of marketable securities, partially offset by $91.7 million for the purchase of marketable securities and $7.4 million for capital expenditures.
Other Income (Expense) . The $7.1 million variance was primarily related to foreign exchange gains caused by local currency remeasurement of U.S. dollar balances. Income Tax Benefit. The income tax benefit for the year ended December 31, 2022 was $5.5 million.
Interest expense increased $13.0 million during the year ended December 31, 2023. The increase was due to a higher variable interest rate on debt year over year. Other (Expense) Income . The $20.1 million variance was primarily related to movement in foreign exchange rates caused by remeasurement of foreign-denominated balances. Income Tax Expense.
Migalastat is currently approved under the trade name Galafold ® in the United States ("U.S."), European Union ("E.U."), U.K., and Japan, with multiple additional approvals granted and applications pending in several geographies around the world.
Galafold ® (also referred to as "migalastat") is approved in over 40 countries around the world, including the United States ("U.S."), European Union ("E.U."), United Kingdom ("U.K."), and Japan. Additionally, Galafold ® has been granted orphan drug designation in the U.S., E.U., U.K., Japan and several other countries.
Net cash provided by financing activities primarily reflects $199.8 million in net proceeds from the September 2021 private placement of securities, $19.2 million from the exercise of warrants and $10.2 million from the exercise of stock options, partially offset by $15.0 million from payments of employee withholding taxes related to restricted stock unit vesting.
Net cash provided by financing activities was partially offset by the $408.0 million repayment of our Senior Secured Loan due in 2026, and $17.9 million for payments of employee withholding taxes related to restricted stock unit vesting. Net cash used in financing activities for the year ended December 31, 2022 was $7.5 million.
Per FDA guidance relating to pre-approval inspections during the COVID-19 pandemic, receipt of a deferral action indicates no deficiencies have been identified and the application otherwise satisfies the requirements for approval. -74- Table of Contents Consolidated Results of Operations The following discussion should be read in conjunction with the Consolidated Financial Statements and related notes included elsewhere in this report.
Additionally, Pombiliti ™ + Opfolda ™ has been granted orphan drug designation in the U.S., E.U., U.K., Japan and several other countries. -72- Table of Contents Consolidated Results of Operations The following discussion should be read in conjunction with the Consolidated Financial Statements and related notes included elsewhere in this report.
We are committed to discovering and developing next generation therapies in Fabry and Pompe diseases. The cornerstone of our portfolio is Galafold ® (also referred to as "migalastat"), the first and only approved oral precision medicine for people living with Fabry disease who have amenable genetic variants.
Our two marketed therapies are Galafold ® , the first oral monotherapy for people living with Fabry disease who have amenable genetic variants, and Pombiliti ™ + Opfolda ™ , a novel treatment designed to improve uptake of active enzyme into key disease relevant tissues for adults living with late-onset Pompe disease.
The net cash used in operations was also impacted by an increase in accounts payable and accrued expenses of $7.4 million, mainly related to program expenses and support for the commercial activities of Galafold ® , and a decrease due to payment of contingent consideration of $10.4 million associated with meeting certain regulatory milestones during the year. -79- Table of Contents Net Cash Provided by Investing Activities Net cash provided by investing activities for the year ended December 31, 2022 was $92.3 million.
The net cash used in operations was also impacted by an increase in accounts payable and accrued expenses of $49.2 million, associated with accrued interest due to timing, inventory purchases to support our continued commercial growth, personnel costs, and an increases in sales rebates associated with increased commercial sales.
Removed
We have a portfolio including the first, oral monotherapy for Fabry disease that has achieved widespread global approval and a differentiated biologic for Pompe disease that is under review with the U.S. Food and Drug Administration ("FDA"), the European Medicines Agency ("EMA"), and the United Kingdom ("U.K.") Medicines and Healthcare products Regulatory Agency ("MHRA").
Added
Pombiliti ™ + Opfolda ™ (also referred to as "cipaglucosidase alfa-atga/miglustat") was approved in 2023 in the three largest Pompe markets: the U.S., the E.U., and the U.K. Multiple regulatory submissions and reimbursement processes with global health authorities are currently underway.
Removed
The lead biologics program of our pipeline is Amicus Therapeutics GAA ("AT-GAA", also known as ATB200/AT2221, or cipaglucosidase alfa/miglustat), a novel, two-component, potential best-in-class treatment for Pompe disease. In February 2019, the FDA granted Breakthrough Therapy designation ("BTD") to AT-GAA for the treatment of late onset Pompe disease.
Added
Cost of goods sold includes manufacturing costs for our commercial products as well as royalties associated with net product sales of Galafold ® . Cost of goods sold as a percentage of net product sales decreased 2.4% primarily due to inventory write-offs in the prior year.
Removed
In September 2021, the FDA set the Prescription Drug User Fee Act ("PDUFA") target action date of May 29, 2022 for the New Drug Application ("NDA") for miglustat and July 29, 2022 for the Biologics License Application ("BLA") for cipaglucosidase alfa. The EMA validated the Marketing Authorization Application (“MAA”) in the fourth quarter of 2021.
Added
A portion of inventory available for sale was expensed as research and development costs prior to regulatory approval and as such, the cost of goods sold and related gross margins are not necessarily indicative of future costs of goods sold and gross margin. -73- Table of Contents Research and Development Expense.
Removed
In May 2022, the FDA extended the review period for the NDA for miglustat and the BLA for cipaglucosidase alfa resulting in revised PDUFA action dates of August 29, 2022 and October 29, 2022, respectively.
Added
Additionally, Pompe disease program spend decreased due to reduced clinical manufacturing costs. Personnel and other costs decreased in connection with the reallocation of resources to support our Pombiliti ™ + Opfolda ™ commercial launch and continued growth of Galafold ® . Selling, General, and Administrative Expense.
Removed
In October 2022, the FDA deferred action on the BLA for cipaglucosidase alfa, citing the inability to complete the manufacturing facility inspection prior to the PDUFA action date. We are actively engaged with the FDA and an inspection has been scheduled.
Added
Selling, general, and administrative expense increased $62.2 million, primarily driven by personnel costs in connection with the reallocation of resources to support our Pombiliti ™ + Opfolda ™ commercial launch and third-party professional fees. Loss on Impairment of Assets.
Removed
In December 2022, the Committee for Medicinal Products for Human Use ("CHMP") of the EMA adopted a positive opinion recommending market authorization of cipaglucosidase alfa, or Pombiliti ™ . The regulatory submission process for AT-GAA in the U.K. was initiated in December 2022. -73- Table of Contents We continue to monitor the novel coronavirus ("COVID-19") pandemic.
Added
The $5.5 million decrease was primarily in connection with the strategic deprioritization of our gene therapy portfolio in the prior year, which resulted in us recognizing a loss on impairment of assets. Loss on Extinguishment of Debt .
Removed
Our commercial operations have not been significantly impacted by the COVID-19 pandemic and we gradually continue to see an improvement in patient identification and Galafold ® initiation. We have maintained operations in all geographies, secured our global supply chain for our commercial and clinical products, as well as maintained the operational integrity of our clinical trials, with minimum disruptions.
Added
In October 2023, the Company voluntarily prepaid the outstanding principal amount, accrued interest and prepayment premiums of the Senior Secured Term Loan due 2026. As a result of this early extinguishment, a loss on extinguishment of debt of $13.9 million was recognized in the Consolidated Statements of Operations. Interest Expense.
Removed
We have been able to continue to meet required commercial demand for Galafold ® as well as supply our ongoing Pompe disease clinical studies and access programs including the Early Access to Medicines Scheme ("EAMS") without interruption.
Added
The income tax expense for the year ended December 31, 2023 was $1.5 million. We are subject to income taxes in various jurisdictions.
Removed
In regard to our regulatory operations, the FDA deferred action on the pending BLA for cipaglucosidase alfa, as a facility inspection was necessary, however, could not be completed by the PDUFA action date due to COVID-19 related travel restrictions. The facility inspection has subsequently been scheduled.
Added
We have recorded revenue on sales where our products are available either on a commercial basis or through a reimbursed early access program. Orders for our products are generally received from distributors and pharmacies with the ultimate payor often a government authority.
Removed
These costs were partially offset by a decrease in Pompe disease clinical research due to active studies nearing completion and the timing of manufacturing costs. Selling, General, and Administrative Expense.
Added
Variable consideration, which primarily consists of discounts and rebates due to foreign and U.S. government programs, is estimated based on contractual arrangements or statutory obligations, which may vary by product and payer and is recorded in the same period the related sales occur.
Removed
Selling, general, and administrative expense increased $20.3 million, primarily driven by the strategic prioritization of our gene therapy portfolio that resulted in the write-off of cloud computing costs and software licensing fees, as well as increases in share-based compensation, marketing, and travel to support our organizational growth. These costs were partially offset by a reduction in third-party professional fees.
Added
Estimation requires evaluation of our actual historical experience, customer mix, current contractual and statutory obligations, and inventory channel levels.
Removed
Changes in Fair Value of Contingent Consideration Payable . Changes in fair value of contingent consideration payable decreased $5.4 million, primarily due to achievement of two regulatory milestones during the year ended December 31, 2021, as well as changes to certain valuation inputs resulting from the strategic prioritization of our gene therapy portfolio during the year ended December 31, 2022.
Added
We evaluate our customer mix to estimate which sales will be subject to which revenue dilutive items and consider changes to government program guidelines or contractual obligations that would impact the actual rebate or discount and/or our estimates of which sales qualify for such rebate or discount.
Removed
Loss on Impairment of Assets. In connection with the strategic prioritization of our gene therapy portfolio, the Company performed an assessment of its assets and recognized a $6.6 million loss on impairment of assets. Interest Expense. Interest expense increased $4.6 million during the year ended December 31, 2022. The increase was due to a higher LIBOR year over year.
Added
During the year ended December 31, 2023, we issued and sold an aggregate of 5,244,936 shares through our ATM program at a weighted-average public offering price of $12.50 per share, resulting in net proceeds of $63.1 million.
Removed
The transaction price is determined based on fixed consideration in our customer contracts and is recorded net of estimates for variable consideration, which are primarily third-party discounts and rebates. The identified variable consideration is recorded as a reduction of revenue at the time revenue from the sale of Galafold ® is recognized.
Added
As of December 31, 2023, an aggregate of $184.4 million worth of shares remain available to be issued and sold under the ATM program. In October 2023, we entered into the Senior Secured Term Loan due 2029. This transaction resulted in net proceeds of $387.4 million, after deducting fees and expenses.
Removed
Research and Development Expenses As part of the process of preparing our Consolidated Financial Statements, we are required to estimate and accrue our research and development expenses, including those related to clinical studies and drug manufacturing.
Added
There were no warrants or equity conversion features associated with the Senior Secured Term Loan due 2029. Simultaneously, we also entered into a securities purchase agreement with funds managed by Blackstone, for the private placement of an aggregate of 2,467,104 shares of our common stock, at a purchase price of $12.16 per share.
Removed
This process involves reviewing contracts and purchase orders, identifying services that have been performed on our behalf, and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of the actual costs.
Added
Proceeds from the private placement, net of offering costs, were $29.8 million.
Removed
Costs for preclinical studies, clinical studies and manufacturing activities are recognized based on an evaluation of our vendors’ progress towards completion of specific tasks, using data such as clinical site activations, clinical site maintenance, clinical site close out, patient out of pocket cost reimbursements, or information provided to us by our vendors regarding their actual costs incurred.
Added
Net Cash Used in Operating Activities Net cash used in operations for the year ended December 31, 2023 was $69.1 million.
Removed
Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services were performed. We determine accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion of studies, or the services completed.
Added
Net cash used in operations for the year ended December 31, 2022 was $166.6 million.
Removed
Our estimates of accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time.
Added
Net Cash Provided by (Used in) Financing Activities Net cash provided by financing activities for the year ended December 31, 2023 was $61.7 million.
Removed
Costs that are paid in advance of performance are deferred as a prepaid expense and amortized over the service period as the services are provided. -77- Table of Contents Share-based Compensation Stock Option Grants In accordance with the applicable accounting guidance, we estimate the fair value of each equity award on the day of grant.
Added
Net cash provided by financing activities primarily reflects $387.4 million of net proceeds from the Senior Secured Loan due in 2029, $63.1 million of net proceeds from the issuance of shares in connection with our ATM program, $29.8 million of net proceeds from our private placement with Blackstone, and $10.3 million in proceeds from the exercise of stock options.
Removed
We chose the "straight-line" attribution method for allocating compensation costs and recognized the fair value of each stock option on a straight-line basis over the vesting period of the related awards. We use the Black-Scholes option pricing model when estimating the grant date fair value for share-based awards.
Added
As of December 31, 2023, remaining milestones under this agreement were $9.8 million. Refer to "— Note 14. Collaborative Agreements," to the Consolidated Financial Statements for more information. We have a number of binding minimum purchase and manufacturing commitments due to our third-party manufacturers.
Removed
Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility is based on our historical volatility since our initial public offering in May 2007. We determine the average expected life using our actual historical data. The risk-free interest rate is based on U.S.
Removed
Treasury, zero-coupon issues with a remaining term equal to the expected life assumed at the date of grant. Forfeitures are estimated based on historical analysis of actual option forfeitures.
Removed
Restricted Stock Units and Performance-Based Restricted Stock Units (collectively "RSUs") RSUs awarded under the plan are generally subject to graded vesting and are contingent on an employee's continued service on such date. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions.
Removed
We expense the cost of the RSUs, which is determined to be the fair market value of the shares of common stock underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse. In addition, certain of our share-based awards are market- and performance-based and dependent upon achieving certain goals.
Removed
The related share-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized on a straight-line basis over the vesting term. With respect to performance-based awards, we estimate the probability that the performance conditions will be achieved.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+1 added−3 removed3 unchanged
Biggest changeAt December 31, 2022, we had a $400 million Senior Secured Term Loan due 2026 that bears interest at a rate equal to the 3-month LIBOR, subject to a 1% floor, plus 6.5% per year. We do not currently hedge our variable interest rate debt.
Biggest changeAt December 31, 2023, we had a $400 million Senior Secured Term Loan due 2029 that bears interest at a rate equal to the 3-month Term Secured Overnight Financing Rate ("SOFR"), subject to a 2.5% floor, plus a Term SOFR adjustment of 0.26161% and a margin of 6.25% per year.
We place our investments in high-quality financial instruments, primarily money market funds, corporate debt securities, asset backed securities, and U.S. government agency notes with maturities of less than one year, which we believe are subject to limited interest rate and credit risk.
We place our investments in high-quality financial instruments, primarily money market funds, asset backed securities, and U.S. government agency notes with maturities of less than one year, which we believe are subject to limited interest rate and credit risk.
The securities in our investment portfolio are not leveraged, are classified as available-for-sale and, due to the short-term nature, are subject to minimal interest rate risk. We believe that a 1% (100 basis points) change in average interest rates would either increase or decrease the market value of our investment portfolio by $0.5 million as of December 31, 2022.
The securities in our investment portfolio are not leveraged, are classified as available-for-sale and, due to the short-term nature, are subject to minimal interest rate risk. We believe that a 1% (100 basis points) change in average interest rates would either increase or decrease the market value of our investment portfolio by $0.1 million as of December 31, 2023.
A hypothetical 10% change in foreign exchange rates during any of the periods presented would not have had a material impact on our Consolidated Financial Statements. -82- Table of Contents
A hypothetical 10% change in foreign exchange rates during any of the periods presented would not have had a material impact on our Consolidated Financial Statements. -79- Table of Contents
The annual average variable interest rate for our variable rate debt as of December 31, 2022 was 8.5%. A hypothetical 100 basis point increase or decrease in the average interest rate on our variable rate debt would result in $4.1 million change in the interest expense as of December 31, 2022.
The annual average variable interest rate for our variable rate debts during the year ended December 31, 2023 was 11.7%. A hypothetical 100 basis point increase or decrease in the average interest rate on our variable rate debts would result in $4.1 million change in the interest expense as of December 31, 2023.
We are not currently engaged in any foreign currency hedging activities. The current exposures arise primarily from cash, accounts receivable, intercompany receivables and payables, and net product sales denominated in foreign currencies.
We face foreign exchange risk as a result of entering into transactions denominated in currencies other than U.S. dollars. We are not currently engaged in any foreign currency hedging activities. The current exposures arise primarily from cash, accounts receivable, intercompany receivables and payables, and net product sales denominated in foreign currencies.
Removed
The Financial Conduct Authority has announced the intent to phase out the use of LIBOR by mid-2023. If LIBOR is discontinued, we may need to renegotiate the terms of the Senior Secured Term Loan due 2026 in order to replace LIBOR with an alternative standard.
Added
We entered into this loan in October of 2023, and simultaneously used proceeds from the Senior Secured Term Loan due 2029 and the private placement to prepay the Senior Secured Term Loan due 2026. We do not currently hedge our variable interest rate debt.
Removed
As a result, we may incur incremental costs in transitioning to a new standard, and interest rates on our current or future indebtedness may be adversely affected by the new standard.
Removed
The potential effect of any such event on our cost of capital cannot yet be determined, but we do not expect it to have a material impact on our consolidated financial condition, results of operations, or cash flows. We face foreign exchange risk as a result of entering into transactions denominated in currencies other than U.S. dollars.

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