What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2024-02-22 compared with 2023-03-13 · 10 added, 430 removed, 11 unchanged (98% of the section changed)

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock began trading on The Nasdaq Global Select Market on January 7, 2022, under the symbol “AMLX.”

Prior to that time, there was no public market for our common stock.

Our common stock began trading on The Nasdaq Global Select Market on January 7, 2022, under the symbol “AMLX.” Prior to that time, there was no public market for our common stock.

Holders of Record

As of March 8, 2023, we had approximately 28 holders of record of our common stock.

Certain shares are held in “street”

name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.

As of February 12, 2024, we had approximately 21 holders of record of our common stock.

Certain shares are held in “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.

This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

6 unchanged sentences

We did not purchase any of our registered equity during the period covered by this Annual Report.

Unregistered Sales of Securities and Use of Proceeds

Recent Sales of Unregistered Securities

Unregistered Sales of Securities

During the year ended December 31, 2023, we did not issue or sell any unregistered securities.

Use of Proceeds from Initial Public Offering

On January 6, 2022, our Registration Statements on Form S-1 (File Nos.

333-261703 and 333-262046) relating to our initial public offering, or IPO, were declared effective by the SEC.

As of December 31, 2022, all proceeds from our IPO were fully utilized primarily to advance AMX0035 through clinical trials, manufacture drug supply, prepare for potential commercialization and for working capital and general corporate purposes.

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

The following information should be read in conjunction with the consolidated financial information and the notes thereto appearing elsewhere in this Annual Report.

This discussion and other parts of this Annual Report contain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions.

As a result of many factors, including those factors set forth in the “Risk Factors”

section of this Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis .

Our mission is to one day end the suffering caused by neurodegenerative diseases.

We are committed to supporting and creating more moments for the neurodegenerative disease community through the discovery and development of innovative new treatments.

Our first product, RELYVRIO® (sodium phenylbutyrate and taurursodiol), previously known as AMX0035 in the U.S., is approved in the U.S.

for the treatment of ALS in adults.

AMX0035 is also approved with conditions by Health Canada and marketed as ALBRIOZA for the treatment of ALS in Canada.

Unlike most other cells in the body that regularly die and are replaced as part of healthy function, mature neurons are normally resistant to cell death and generally cannot regenerate.

We believe AMX0035 is the first drug candidate to show both a functional and survival benefit in a large-scale clinical trial of patients with amyotrophic lateral sclerosis, or ALS.

The results of our Phase 2 clinical trial of AMX0035, known as the CENTAUR trial, were published in the New England Journal of Medicine , in two publications in Muscle & Nerve , and in the Journal of Neurology , Neurosurgery , and Psychiatry .

AMX0035 is a dual UPR-Bax apoptosis inhibitor composed of PB and TURSO (also known as TUDCA).

Through the resolution of the UPR and by inhibiting translocation of the Bax to the outer mitochondrial membrane, we have shown in multiple models that AMX0035 can keep neurons alive under a variety of different conditions and stresses, including in in vitro models of neurodegeneration, endoplasmic reticulum, or ER, stress, mitochondrial dysfunction, oxidative stress and disease-specific models of a variety of other conditions, as well as in vivo models of ALS, Alzheimer’s disease, or AD, and multiple sclerosis, or MS.

We believe AMX0035 has the potential to be a foundational therapy, meaning that it could be used alone or in conjunction with other therapies to change the treatment paradigm across a broad range of neurodegenerative diseases.

We are pursuing ALS as our first indication as it is a disease of rapid and profound neurodegeneration, and we are focused on the development and potential commercialization of AMX0035 for ALS globally.

We have received marketing authorization with conditions by Health Canada for ALBRIOZA for the treatment of ALS.

We announced commercial availability of the product in July 2022.

We have submitted to and received from the national reimbursement authorities, known as the Canadian Agency for Drugs and Technologies in Health, or CADTH, and l’Institut national d’excellence en santé

et en services sociaux, or INESSS, recommendations regarding reimbursement for ALBRIOZA by the Canadian provincial governments, and are negotiating with both public and private payers to obtain reimbursement coverage.

We received approval by the FDA for RELYVRIO in September 2022, and commercial product was first available in October 2022.

This decision represented Amylyx’

first regulatory approval of AMX0035 in the U.S.

and its second worldwide.

We are also actively pursuing regulatory approval of AMX0035 for the treatment of ALS in Europe.

Our MAA remains under review by the Committee for Medicinal Products for Human Use, or CHMP, of the EMA.

We submitted a Marketing Authorization Application, or MAA, to the European Medicines Agency, or EMA, in Europe in the first quarter of 2022, which was validated in the same quarter.

We completed the Scientific Advisory Group meeting.

Certain major objections remain, and the CHMP has adopted another round of questions as part of the regulatory process.

We are now in possession of those questions.

In order to respond in accordance with the updated timelines, we now expect an opinion from CHMP mid-year and a decision in the third quarter of 2023 at the earliest.

In November 2021, we initiated a Phase 3 clinical trial of AMX0035 for the treatment of ALS, known as PHOENIX trial, at clinical trial sites in the U.S.

On February 2, 2023, we announced completion of enrollment in PHOENIX, which enrolled 664 participants.

We anticipate topline results from the PHOENIX trial in mid-2024.

This trial is designed to provide further data evaluating the safety and efficacy of AMX0035 over 48 weeks for the treatment of ALS to further support our global regulatory efforts.

European participants completing the 48-week trial have the option to enroll in

an open label extension (OLE) phase.

During this phase, all participants receive AMX0035, and continued safety and efficacy measures will be assessed.

We were incorporated under the laws of the State of Delaware on January 10, 2014.

Between 2020 and 2022 we created wholly owned subsidiaries, Amylyx Pharmaceuticals Canada, Inc., or Amylyx Canada, in Calgary, Canada, Amylyx Pharmaceuticals EMEA B.V., or Amylyx EMEA, in Amsterdam, Netherlands, Amylyx Pharmaceuticals Distribution Ltd., or Amylyx Ireland, in Dublin, Ireland, Amylyx Pharmaceuticals Germany GmbH, or Amylyx Germany, in Munich, Germany and Amylyx Pharmaceuticals France SAS, or Amylyx France, in Paris, France.

Since inception, we have devoted substantially all of its efforts to research and development and pre-commercialization activities, including recruiting management and technical staff, raising capital, producing materials for preclinical studies and clinical trials, and building infrastructure to support such activities.

Other than RELYVRIO in the U.S.

and ALBRIOZA in Canada, we do not have any products approved for sale and as of December 31, 2022.

As of December 31, 2022, we have funded our operations primarily through the public offering of our common stock, private sales of preferred stock, and convertible notes.

We have also generated grant revenues through five grants from ALS Association, ALS Finding a Cure Foundation, Cure Alzheimer’s Fund, Alzheimer’s Drug Discovery Foundation and Alzheimer’s Association, or Grantors.

We have incurred operating losses since inception, including a net loss of $198.4 million and $87.9 million for the years ended December 31, 2022 and 2021, respectively.

As of December 31, 2022, we had an accumulated deficit of $354.2 million.

These losses have resulted primarily from costs incurred in connection with research and development activities and general and administrative costs associated with our operations.

We expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution of our approved products.

We may continue to incur significant losses and our financial results will be highly dependent upon our successful commercialization of RELYVRIO in the U.S.

We will continue to incur significant expenses as we advance AMX0035 and any future product candidates through preclinical and clinical development, hire additional clinical, scientific, management and administrative personnel, seek regulatory approval and pursue commercialization of any approved product candidates.

To date, we have primarily developed AMX0035 internally, with assistance from our network of contract research organizations, or CROs, and other advisors.

This has resulted in increased research and development spending but has enabled us to manage AMX0035 efficiently through the development and manufacturing process.

We also expect to continue to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company.

As a result, we may need substantial additional funding to support our continuing operations and pursue our growth strategy.

Until such time as we can generate sufficient revenue from product sales, if ever, we expect to finance our operations through the sale of equity, debt financings or other capital sources, including potential collaborations with other companies, royalty financings, or other strategic transactions.

Our inability to raise capital as and when needed could have a negative impact on our financial condition and ability to pursue our business strategies.

There can be no assurances, however, that our current operating plan will be achieved or that additional funding, if required, will be available on terms acceptable to us, or at all.

As of December 31, 2022, we had cash, cash equivalents and short-term investments of $346.9 million.

On October 11, 2022, we completed the sale of 7,697,812 shares of our common stock in an underwritten public offering, or our 2022 follow-on offering, pursuant to which we received net proceeds of approximately $230.6 million, including exercise in full of the underwriters' option to purchase additional shares, and after deducting underwriting discounts and commissions and other offering costs.

We believe that the revenue we have begun to generate with commercial sales of AMX0035 in the U.S.

and Canada and our existing cash, cash equivalents, and short-term investments, will be sufficient to meet our anticipated operating and capital expenditure requirements for at least twelve months after the date of the filing of this Annual Report.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

See “—Liquidity and Capital Resources—Funding Requirements”

Impact of COVID-19 and Other Macroeconomic Factors

The development of AMX0035 and any future product candidates could be disrupted and materially adversely affected in the future by the continuing COVID-19 pandemic or any future pandemic or calamity.

The spread of COVID-19 and identification of new variants and subvariants of the virus has impacted the global economy and our operations, including requiring us to make certain alterations to our preclinical and clinical trial activities, such as scheduling certain work off-site and performing off-site assessments.

The COVID-19 pandemic could also continue to affect our employees or the employees of research sites and service providers on whom we rely as well as those of companies with which we do business, including our suppliers, thereby disrupting our business operations.

Moreover, the full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations, liquidity and financial condition will depend on future

developments, which are highly uncertain and cannot be accurately predicted, including new information that may develop concerning COVID-19, the emergence of new variants and subvariants and the actions taken to contain it or treat its impact and the economic impact on local, regional, national and international markets.

We continue to monitor COVID-19 levels local to our research operations and adapt our employee working practices to ensure essential staffing levels in our operations remain in place, including maintaining key personnel in our laboratories.

In addition, economic uncertainty in various global markets, including the U.S.

and Europe, caused by political instability and conflict, such as the ongoing conflict in Ukraine, and economic challenges caused by the COVID-19 pandemic, have led to market disruptions, including significant volatility in commodity prices, credit and capital market instability and supply chain interruptions, which have caused record inflation globally.

Our business, financial condition and results of operations could be materially and adversely affected by further negative impact on the global economy and capital markets resulting from these global economic conditions, particularly if such conditions are prolonged or worsen.

Although, to date, our business has not been materially impacted by these global economic and geopolitical conditions, it is impossible to predict the extent to which our operations will be impacted in the short and long term, or the ways in which such instability could impact our business and results of operations.

The extent and duration of these market disruptions, whether as a result of the military conflict between Russia and Ukraine and effects of the Russian sanctions, geopolitical tensions, record inflation or otherwise, are impossible to predict, but could be substantial.

Any such disruptions may also magnify the impact of other risks described in this report.

For additional information on the various risks posed by the COVID-19 pandemic and global economic uncertainty, please read the section entitled “Risk Factors”

in this Annual Report.

Components of Our Results of Operations

Product revenue, net

In June 2022, AMX0035 received marketing authorization with conditions as ALBRIOZA by Health Canada for the treatment of ALS, and we began commercially selling ALBRIOZA within Canada in July 2022.

In September 2022, AMX0035 received regulatory approval as RELYVRIO by the FDA for the treatment of ALS, and we launched RELYVRIO in the U.S.

in October 2022.

All product revenue net, recognized during the period relates to units of ALBRIOZA and RELYVRIO sold in Canada and the U.S., respectively.

Operating Expenses

Cost of Sales

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

Direct materials costs;

Packaging services;

Transportation costs;

Manufacturing overhead costs;

Royalties related to grants provided to us for the purpose of furthering the research and development of AMX0035 as a therapeutic benefit for ALS and AD.

For additional information refer to Note 18 to our consolidated financial statements appearing at the end of this Annual Report.

As a result of global macroeconomic conditions, we may experience some disruption and volatility in our global supply chain network, and we may in the future experience disruptions in availability and delays in shipments of raw materials and packaging, as well as related cost inflation.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred in connection with the research and development of AMX0035.

We expense research and development costs as incurred.

These expenses include:

expenses incurred under agreements with CROs, contract manufacturing organizations, or CMOs, as well as investigative sites and consultants that conduct our clinical trials, preclinical studies and other scientific development services;

manufacturing scale-up expenses and the cost of acquiring and manufacturing drug product for our preclinical studies and clinical trials, including manufacturing registration and validation batches, as well as pre-commercial manufacturing activities;

expenses to acquire technologies to be used in research and development;

employee-related expenses, including salaries, payroll taxes, related benefits and stock-based compensation expense for employees engaged in research and development functions;

costs related to compliance with quality and regulatory requirements.

Advance payments that we make for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses.

Such amounts are recognized as an expense as the goods are delivered or the related services are performed, or until it is no longer expected that the goods will be delivered, or the services rendered.

Certain of our indirect research and development expenses are not tracked on an indication-by-indication basis for AMX0035.

We do not allocate employee costs and facilities, including depreciation or other indirect costs, to specific indications because these costs are deployed across multiple indications and, as such, are not separately classified.

We use internal resources to oversee the research and discovery as well as to manage our preclinical development, process development, manufacturing and clinical development activities.

These employees work across multiple indications and, therefore, we do not track their costs by indication.

Research and development activities are central to our business model.

Product candidates such as AMX0035 in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials and related product manufacturing expenses.

We expect that our research and development expenses will continue to increase substantially in connection with our planned clinical development activities in the near term and in the future and to fund commercialization activities in the U.S., Canada and any other jurisdictions in which AMX0035 is approved.

At this time, we cannot accurately estimate or

know the nature, timing and costs of the efforts that will be necessary to complete the clinical development of AMX0035 and any future product candidates.

Our clinical development costs may vary significantly based on factors such as:

per patient trial costs;

the number of trials required for approval;

the number of sites included in the trials;

the countries in which the trials are conducted;

the length of time required to enroll eligible patients;

the number of patients that participate in the trials;

the number of doses that patients receive;

the drop-out or discontinuation rates of patients;

potential additional safety monitoring requested by regulatory agencies;

the duration of patient participation in the trials and follow-up periods;

the cost and timing of manufacturing our current or future product candidates;

the phase of development of our current or future product candidates;

the efficacy and safety profile from clinical trials and preclinical studies of our current or future product candidates;

the number of product candidates we are developing.

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

the timing and progress of preclinical and clinical development activities;

the number and scope of preclinical and clinical trials for separate indications we decide to pursue;

raising necessary additional funds;

the progress of the development efforts of parties with whom we may enter into collaboration arrangements;

our ability to maintain our current development activities and to establish new ones;

our ability to establish new licensing or collaboration arrangements;

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

the receipt and related terms of regulatory approvals from applicable regulatory authorities, including our marketing authorization with conditions from Health Canada for ALBRIOZA and the post-marketing requirements from the FDA for RELYVRIO;

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

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

our ability to obtain and maintain patents, trade secret protection and regulatory exclusivity, both in the U.S.

and internationally;

our ability to protect our rights in our intellectual property portfolio;

the commercialization in Canada and the U.S.

of AMX0035 (known as ALBRIOZA in Canada and RELYVRIO in the U.S.) and in other potential jurisdictions, if and when approved;

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

the acceptance of AMX0035, if approved, by patients, the medical community and third-party payors;

competition with other product;

a continued acceptable safety profile of our therapies in pre-approval market access programs or in commercial access following approval.

A change in the outcome of any of these variables with respect to the development of AMX0035 or any future product candidates could have a significant impact on the cost and timing associated with the development of our product candidates.

We may never succeed in obtaining or maintaining regulatory approval for AMX0035 or any future product candidates.

Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of salaries and related costs for personnel in executive, finance, sales, marketing, as well as administrative functions.

Selling, general and administrative expenses also include legal fees relating to patent and corporate matters;

professional fees for accounting, auditing, tax and administrative consulting services;

insurance costs;

administrative travel expenses;

sales and marketing expenses;

information technology;

facility-related and other operating costs.

We anticipate that our selling, general and administrative expenses will continue to increase in the future as we further increase our headcount to support our continued research activities and development of AMX0035 and as we continue to increase headcount and incur other significant costs related to our pre-commercialization activities as we prepare for potential near term regulatory approvals.

We also anticipate that we will continue to incur increased accounting, audit, legal, regulatory, compliance, and director and officer insurance costs as well as investor and public relations expenses associated with being a public company.

We have received marketing authorization with conditions for ALBRIOZA for the treatment of ALS in Canada and marketing authorization for RELYVRIO for the treatment of ALS in adults in the U.S.

and are pursuing regulatory approval of AMX0035 for the treatment of ALS in Europe.

As we implement our commercialization plans in Canada and the U.S.

and prepare for a potential approval in Europe, we have been incurring a substantial increase, and anticipate further increases in, payroll and expense as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of AMX0035.

Other Income (Expense), Net

Interest Income

Interest income consists primarily of the amortization of premiums and accretion of discounts on our short-term investments, and interest income earned on our cash, cash equivalents and short-term investments.

Other Expense, Net

Other expense, net consists primarily of realized and unrealized losses on foreign exchange transactions.

Change in Fair Value of Convertible Notes

Change in fair value of convertible notes is comprised of adjustments to the fair value of our 2021 Notes.

As permitted under ASC Topic 825, Financial Instruments (ASC 825), we elected the fair value option to account for our 2021 Notes, and as a result, we measured our 2021 Notes at fair value at each financial reporting period and immediately before conversion in July 2021.

All changes to the fair value of our 2021 Notes for the year ended December 31, 2021 resulted in a loss.

Our 2021 Notes converted into shares of Series C-2 redeemable convertible preferred stock concurrently with the issuance of our Series C-1 redeemable convertible preferred stock.

Immediately prior to the conversion, we determined the fair value of our 2021 Notes based on the fair value of the Series C-1 redeemable convertible preferred stock and the conversion price at which these notes converted, which was at 85% of the fair value of the Series C-1 redeemable convertible preferred stock.

The provision for income taxes primarily consists of provisions for foreign taxes payable.

As of December 31, 2022 and 2021, we had federal net operating loss carryforwards of approximately $203.2 million and $115.7 million, respectively, and state net operating loss carryforwards of approximately $164.1 million and $102.9 million, respectively, which are available to reduce future taxable income.

Of the $203.2 million federal net operating loss carryforwards, $1.3 million begin to expire in 2034 and the remaining $201.9 million net operating losses carryforward indefinitely.

Of the $164.1 million state net operating loss carryforwards, $113.0 million of Massachusetts net operating loss carryforwards begin to expire in 2034.

As of December 31, 2022 and 2021, we also had federal tax credits of $4.6 million and $2.7 million, respectively, and state tax credits of $1.2 million.

The tax credit carryforwards will expire at various dates beginning in 2034.

Results of Operations

Comparison of the Years Ended December 31, 2022 and 2021

The following table summarizes our results of operations for the years ended December 31, 2022 and 2021:

Year Ended December 31,

(in thousands)

Product revenue, net

Grant revenue

Total revenues

Operating expenses:

Cost of sales

Research and development

Selling, general and administrative

Total operating expenses

Loss from operations

Other income (expense), net:

Interest income

Change in fair value of convertible notes

Other expense, net

Total other income (expense), net

Loss before income taxes

Provision for income taxes

* NM - not meaningful

Product revenue, net

We began commercially selling ALBRIOZA within Canada in July 2022 and RELYVRIO within the U.S.

in October 2022.

For the year ended December 31, 2022, we recorded approximately $22.2 million of product revenue, net.

For further discussion regarding our revenue recognition policy, see Note 2, Summary of Significant Accounting Policies, in the Notes to the consolidated financial statements included this Annual Report.

Cost of sales

Cost of sales of $3.0 million for the year ended December 31, 2022, consisted of costs to procure, manufacture and distribute our marketed product, RELYVRIO and ALBRIOZA.

In addition, included in cost of sales are costs to manufacture our marketed product which has been provided to patients at no cost to them while insurance reimbursement is established.

We expect these costs to continue into 2024, and to a lesser degree, indefinitely.

Drug product given to patients at no cost to them is not included in product revenue, net.

Based on our policy to expense costs associated with the manufacture of our products prior to regulatory approval, certain of the costs of units recognized as revenue during the year ended December 31, 2022, or approximately $3.4 million, were expensed prior to obtaining regulatory approvals and, therefore, are not included in cost of sales during this period.

We expect cost of sales to increase and gross margin to decrease as we deplete these inventories.

We expect to use the remaining pre-commercialization inventory for product sales in 2024.

Research and Development Expenses

The following table summarizes our research and development expenses for the years ended December 31, 2022 and 2021:

Year Ended December 31,

(in thousands)

AMX0035 - ALS

Payroll and personnel-related

Research and development expenses were $93.5 million for the year ended December 31, 2022, compared to $44.0 million for the year ended December 31, 2021.

During these periods, most of our research and development expenses were related to the development of and clinical trials of AMX0035.

The increase of $49.4 million was primarily due to a $35.0 million increase in spending on AMX0035 for the ALS indication, a $19.5 million increase in payroll and personnel-related costs, and a $5.1 million decrease in all other costs.

The increases in spending on AMX0035 were primarily related to costs associated with our global Phase 3 PHOENIX trial of AMX0035 in ALS that was initiated in November 2021, including its open label extension phase, and consulting and manufacturing development expenses in anticipation of potential commercialization, which includes inventory raw material purchases made in anticipation of the lead time necessary to have it available to meet our clinical trial and potential commercialization needs.

The increase in payroll and personnel-related costs was primarily due to an increase in the number of employees supporting research and development efforts.

The decreases in other costs were primarily due to a decrease in costs associated with research and development spend for AMX0035 in other indications, as we focused our efforts on ALS leading up to our approvals.

We expect to increase research and development for AMX0035 in other indications in future periods.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $127.1 million for the year ended December 31, 2022 compared to $38.9 million for the year ended December 31, 2021.

The increase of $88.2 million was primarily due to increases of $55.4 million in payroll and personnel-related costs, including stock-based compensation, $15.9 million in consulting and professional services and $17.1 million in insurance and other expenses.

The increase in payroll and personnel-related costs was primarily due to hiring additional personnel in commercial and general and administrative functions to support our growth, as well as commercialization and launch preparation initiatives.

The increases in consulting and professional services and insurance and other expenses were primarily due to an increase in spending for commercial readiness activities and operations as a public company.

Other Income (Expense), Net

Interest Income

Interest income for the year ended December 31, 2022 was $4.3 million compared to less than $0.1 million for the year ended December 31, 2021.

The increase was primarily attributable to higher investment balances driven by our proceeds received from our IPO and our 2022 follow-on offering, resulting in higher interest earned.

Change in Fair Value of Convertible Notes

The change in fair value of convertible notes was zero for the year ended December 31, 2022, due to conversion to preferred stock in July 2021, compared to $5.2 million for the year ended December 31, 2021.

The $5.2 million recorded for the year ended December 31, 2021 represented a loss in fair value related to our 2021 Notes.

Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have incurred significant operating losses and generated revenues through five grants from the Grantors.

In the second half of 2022 we commenced generating revenue from the sale of our approved drug product RELYVRIO, known as ALBRIOZA in Canada.

To date, we have financed our operations primarily through revenue from the sale of our approved products, the sale and issuance of common stock, convertible preferred stock, convertible notes and grant agreements with the Grantors.

As of December 31, 2022, we had cash, cash equivalents and short-term investments of $346.9 million.

From inception through December 31, 2022, we have raised $663.6 million in aggregate proceeds, net of issuance costs, primarily from the issuance of convertible preferred stock, convertible notes and grant agreements.

In July 2021, we issued and sold shares of Series C-1 preferred stock for an aggregate purchase price of approximately $135.0 million.

The 2021 Notes automatically converted into shares of Series C-2 preferred stock pursuant to their original terms in July 2021 in connection with our sale of Series C-1 preferred stock.

In January 11, 2022, we completed the IPO of our common stock pursuant to which we received aggregate net proceeds of $196.4 million after deducting underwriting discounts and commissions and other offering costs.

On October 11, 2022, we completed the sale of 7,697,812 shares of our common stock in an underwritten public offering, pursuant to which we received net proceeds of approximately $230.6 million, including exercise in full of the underwriters' option to purchase additional shares, and after deducting underwriting discounts and commissions and other offering costs.

Based on our current operational plans and assumptions, We believe that the revenue we have begun to generate with commercial sales of AMX0035 in the U.S.

Capital Resources

We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities, manufacturing and clinical trials of AMX0035 and any future product candidates, implement our commercialization plans for ALBRIOZA in Canada and RELYVRIO in the U.S., and prepare for the commercial launch of AMX0035 in other jurisdictions, if approved.

In addition, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company.

Our expenses will also increase as we:

continue our research and development efforts, including our ongoing global Phase 3 PHOENIX trial of AMX0035 for the treatment of ALS;

continue to commercialize AMX0035 (also known as ALBRIOZA in Canada and RELYVRIO in the U.S.) for the treatment of ALS in Canada and the U.S., and pursue launch of AMX0035 in Europe, if approved;

pursue INDs of AMX0035 for additional indications;

conduct preclinical studies and clinical trials for AMX0035 for additional indications and for potential future product candidates;

seek to identify and develop, acquire or in-license additional product candidates;

experience any delays or encounter any issues with any of the above, including but not limited to failed studies, complex results, safety issues, or other regulatory challenges;

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

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

hire and retain additional personnel, such as preclinical, clinical, quality assurance, regulatory affairs, manufacturing, distribution, legal, compliance, finance, general and administrative, commercial and scientific personnel;

develop, maintain, expand and protect our intellectual property portfolio;

continue to transition our organization to being a public company.

We are now a publicly traded company and will incur significant legal, accounting and other expenses that we did not incur as a private company.

In addition, the Sarbanes-Oxley Act of 2002, as well as rules adopted by the SEC and the Nasdaq Global Select Market, require public companies to implement specified corporate governance practices that are currently not applicable to private companies.

Pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, we are required to furnish a report by our management on our internal control over financial reporting for the current year ending December 31, 2022.

However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

To achieve compliance with Section 404 within the prescribed period, we have engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and demands significant effort.

In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.

We expect these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly.

Based on our current operational plans and assumptions, we believe that the revenue we have begun to generate with commercial sales of AMX0035 in the U.S.

We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

As we progress with our development activities and the regulatory review process, we expect to incur significant commercialization expenses related to product manufacturing, pre-commercial activities and commercialization.

Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates and programs, we are unable to estimate the exact amount of our working capital requirements.

Our future funding requirements will depend on and could increase significantly as a result of many factors, including:

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

the costs, timing and outcome of commercialization activities, including manufacturing, marketing, sales and distribution for ALBRIOZA in Canada, RELYVRIO in the U.S.

and for AMX0035, if approved, in other territories or for any future product candidates for which we receive regulatory approval;

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

our ability to establish and maintain collaborations, marketing, distribution and license agreements on favorable terms, if at all;

our ability to enroll clinical trials in a timely manner and to quickly resolve any delays or clinical holds that may be imposed on our development activities;

timing delays with respect to preclinical and clinical development of AMX0035 and any future product candidates, including as result of the ongoing COVID-19 pandemic or other pandemics or disruptions;

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

the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

the extent to which we acquire technologies or other assets;

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

the costs of operating as a public company.

Until such time, if ever, that we can generate product revenue sufficient to achieve profitability, we expect to finance our cash needs through equity offerings, debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements.

To the extent that we raise additional capital through the sale of common stock, convertible securities or other equity securities, current ownership interests will be diluted.

If we raise additional funds through collaborations or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on terms that may not be favorable to us.

In addition, debt financing, if available, may result in fixed payment obligations and may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures, creating liens, redeeming stock or declaring dividends, that could adversely impact our ability to conduct our business.

If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Comparison of the Years Ended December 31, 2022 and 2021

The following table summarizes our sources and uses of cash for the years ended December 31, 2022 and 2021:

Year Ended December 31,

(in thousands)

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash, cash equivalents and

restricted cash equivalents

Net increase in cash, cash equivalents and restricted cash

Operating Activities

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

Net cash used in our operating assets and liabilities primarily consisted of a $26.1 million increase in accrued expenses and deferred rent due to increased spending for external research and development to support our growth, a $1.9 million increase in accounts payable and a $0.5 million decrease in interest receivable from short-term investments.

This was offset by a $15.3 million increase in accounts receivable, a $9.8 million increase in inventories, a $0.5 million increase in other assets and a $5.2 million increase in prepaid expenses and other current assets.

During the year ended December 31, 2021, operating activities used $74.8 million of cash, primarily resulting from our net loss of $87.9 million, offset by a $5.2 million change in fair value of convertible notes, $3.1 million of non-cash stock-based compensation expense, $0.1 million of depreciation expense, $0.1 million net amortization of premiums and discounts on investments, and a $4.6 million increase in net cash used in our operating assets and liabilities.

Net cash used in our operating assets and liabilities primarily consisted of a $8.4 million increase in accrued expenses and deferred rent due to increased spending for external research and development to support our growth, a $0.7 million increase in accounts payable and a $0.1 million decrease in other assets, offset by a $0.1 million increase in interest receivable from short-term investment and $4.5 million increase in prepaid expenses and other current assets due to increase in sign-on bonuses as a result of an increase in headcount and increase in other receivables related to milestones achieved under the grant agreements for which we were owed by the grantors.

Investing Activities

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

During the year ended December 31, 2021, net cash used in investing activities was $46.4 million, resulting from $0.4 million in purchases of property and equipment and $49.1 million in purchases of short-term investments, offset by $3.0 million of investments matured during the period.

Financing Activities

During the year ended December 31, 2022, net cash provided by financing activities was $431.8 million.

This amount consisted of $200.9 million of proceeds from our IPO, net of underwriter’s discounts and commissions, $231.6

million of proceeds from our 2022 follow-on offering, net of underwriter’s discounts and commissions, and $2.2 million of proceeds from exercises of stock options, offset by $2.8 million in payments of deferred offering costs.

During the year ended December 31, 2021, net cash provided by financing was $158.5 million.

This amount consisted of $134.8 million of net proceeds from the sale of our Series C-1 redeemable convertible preferred stock, $14.3 million of net proceeds from the issuance of convertible notes to related parties, $11.9 million of net proceeds from the issuance of the convertible notes and $0.3 million of proceeds from exercises of stock options, offset by a $2.5 million payment of deferred offering costs, $0.3 million repayment of PPP loan, and less than $0.1 million of issuance costs related to the conversion of the convertible notes, which was related to the 2021 Notes.

Critical Accounting Policies and Significant Judgments and Estimates

Our consolidated financial statements are prepared in accordance with U.S.

The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements.

We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We evaluate our estimates and assumptions on an ongoing basis.

Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing at the end of this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

Our accounting policy for revenue recognition has a substantial impact on reported results and relies on certain estimates.

Revenue is recognized following a five-step model under ASC Topic 606 - Revenue from Contracts with Customers , or Topic 606:

(i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) we satisfy a performance obligation.

Revenue is also reduced by variable consideration related to certain gross-to-net, or GTN, adjustments discussed below.

These GTN adjustments involve significant estimates and judgment after considering historical experience, payer channel mix (e.g., Medicare or Medicaid), current contract prices under applicable programs, unbilled claims and processing time lags and inventory levels in the distribution channel.

Estimates are assessed each period and adjusted as required to revise information or actual experience.

We enter into arrangements with wholesalers, specialty pharmacies and specialty distributors, or Customers, to distribute ALBRIOZA, RELYVRIO and future approved products.

In accordance with Topic 606, we recognize revenue on product sales when the Customer obtains control of our product, which occurs at a point in time (upon delivery).

Product revenues are recorded net of applicable GTN adjustments, including discounts and allowances.

Payment from Customers is typically due within 30 calendar days of the invoice date.

The following categories of GTN adjustments involve significant estimates, judgments and information obtained from external sources.

Provider Chargebacks and Discounts

We participate in programs with government entities such as the U.S.

Department of Veterans Affairs, and other parties, including covered entities under the 340B Drug Pricing Program, whereby pricing on products is extended below wholesaler list price to participating entities.

These entities purchase products through wholesalers at the lower program price and the wholesalers then charge us the difference between their acquisition cost and the lower program price.

Product revenue and accounts receivable is reduced for the estimated amount of unprocessed charge-back claims attributable to a sale.

Customers are offered cash discounts as an incentive for prompt payment.

Product revenue and accounts receivable is reduced for the estimated amount of cash discount at the time of sale and the discount is typically taken by the customer within one month.

Payor rebates

We participate in state government Medicaid programs and other qualifying Federal and state government programs requiring discounts and rebates to participating state and local government entities.

All discounts and rebates provided through these programs are included in our Medicaid rebate accrual.

Our rebate accruals are recorded in the same period in which the related revenue is recognized, resulting in a reduction of product revenue.

The estimated amount of unpaid or unbilled rebates is presented as a liability.

Rebates and discounts are offered to managed healthcare organizations in the U.S.

managing prescription drug programs and Medicare Advantage prescription drug plans covering the Medicare Part D drug benefit.

The estimated amount of unpaid or unbilled rebates and discounts is presented as a liability.

Other incentives, returns, discounts and adjustments

Other GTN adjustments include incentives which we offer and includes voluntary patient assistance programs, such as our co-pay assistance program, which are intended to provide financial assistance to qualified commercially-insured patients with prescription drug co-payments required by payors.

The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that we expect to receive associated with the product that has been recognized as revenue for each reporting period.

The adjustments are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included as a component of accrued expenses and other current liabilities on the consolidated balance sheets.

Estimated product returns for established products are determined using quantitative and qualitative information including, but not limited to, expected experience with returns, projected demand, levels of inventory in the distribution channel, product dating and expiration period, and whether products have been discontinued, among others.

The Company has received an immaterial amount of returns to date and believe that returns of product in future periods will be minimal.

Accrued Research and Development Expenses

As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued research and development expenses.

This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify 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 actual costs.

The majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met;

however, some require advance payments.

We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time.

We periodically confirm the accuracy of these estimates with the service providers and make adjustments if necessary.

The estimate of accrued research and development expense is dependent, in part, upon the receipt of timely and accurate reporting from CROs, CMOs and other third-party service providers.

Examples of estimated accrued research and development expenses include fees paid to:

vendors in connection with preclinical development activities;

CROs and investigative sites in connection with preclinical studies and clinical trials;

CMOs in connection with drug substance and drug product formulation of preclinical study and clinical trial materials.

We base our expenses related to preclinical studies and clinical trials on our estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CMOs and CROs that conduct and manage preclinical studies and clinical trials on our behalf.

The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows.

There may be instances in which payments made to our vendors will

exceed the level of services provided and result in a prepayment of the expense.

In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period.

If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.

To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

We account for income taxes using the asset and liability approach.

Deferred tax assets and liabilities represent future tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities and for tax attribute carryforwards using enacted tax rates expected to be in effect in the years in which the differences reverse.

Realization of our deferred tax assets is dependent upon the generation of future taxable income, the amount and timing of which are uncertain.

Valuation allowances are provided, if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

As of December 31, 2022, we continued to maintain a full valuation allowance against all of our deferred tax assets based on management’s evaluation of all available evidence, including our history of incurring significant losses from operations.

Our evaluation of all available evidence also includes consideration of regulatory approvals of ALBRIOZA and RELYVRIO, including revenue generated from the sale these products in 2022.

Given the early stage of our product launch, we are uncertain about the timing and amount of future sales.

We may release all or a portion of the valuation allowance in the near-term;

however, the release of the valuation allowance, as well as the exact timing and the amount of such release, continue to be subject to, among other things, our level of profitability, revenue growth, clinical program progression and expectations regarding future profitability.

We may become subject to income tax audits and adjustments by local tax authorities.

The nature of uncertain tax positions is subject to significant judgment by management and subject to change, which may be substantial.

We develop our assessment of uncertain tax positions, and the associated cumulative probabilities, using internal expertise and assistance from third-party experts.

As additional information becomes available, estimates are revised and refined.

Differences between estimates and final settlement may occur resulting in additional tax expense.

Emerging Growth Company and Smaller Reporting Company Status

The Jumpstart Our Business Startups Act of 2012, or JOBS Act, permits an “emerging growth company”

such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies.

We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

As a result, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies, and our consolidated financial statements may not be comparable to other public companies that comply with new or revised accounting pronouncements as of public company effective dates.

We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

We will cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, (ii) the last day of our fiscal year following the fifth anniversary of the date of the closing of our initial public offering, (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years or (iv) the date on which we are deemed to be a large, accelerated filer under the rules of the Securities and Exchange Commission.

We are also a “smaller reporting company”, and we will continue to be a smaller reporting company until the first quarter of the fiscal year following the determination that the market value of our stock held by non-affiliates is more than $250 million measured on the last business day of our second fiscal quarter, or our annual revenue are more than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is more than $700 million measured on the last business day of our second fiscal quarter.

Similar to emerging growth companies, smaller reporting companies are able to provide simplified executive compensation disclosure and have certain other reduced disclosure obligations, including, among other things, being required to provide only the two most recent fiscal years of audited financial statements.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our consolidated financial statements.

Quantitative and Qualitative Disclosures about Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Financial Statements and Supplementary Data.

Our consolidated financial statements, together with the reports of our independent registered public accounting firms, appear beginning on page F-1 of this Annual Report.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Stock Performance Graph

The following graph compares the performance of our Common Stock for the periods indicated with the performance of the Nasdaq Composite Index and the Nasdaq Biotechnology Index.

This graph assumes an investment of $100 after the market closed on January 7, 2022 in our common stock and the Nasdaq Composite Index and the Nasdaq Biotechnology Index, and assumes reinvestment of dividends, if any.

The stock price performance shown on the graph below is not necessarily indicative of future stock price performance.

This graph is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference into any of our filings under the Securities Act, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity