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Item 7. Management’s Discussion and Analysis

2025-03-04 compared with 2024-02-22 · 140 added, 237 removed, 152 unchanged (71% of the section changed)

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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 .

Amylyx Pharmaceuticals, Inc.

is a commercial-stage biotechnology company with a mission to end the suffering caused by neurodegenerative diseases.

We have been working in ALS and neurodegenerative diseases for over a decade and have been making significant progress in transforming the treatment of these diseases.

Since our founding in 2013, we have transformed from a research-stage company focused on addressing the needs of patients suffering from neurodegenerative diseases to a commercial enterprise with development programs across several indications.

Our first commercial product, AMX0035 (sodium phenylbutyrate [PB] and taurursodiol [TURSO], also known as RELYVRIO in the U.S.

and ALBRIOZA in Canada) is the first and only ALS therapy of which we are aware that has been shown to slow disease progression, help maintain functional independence, and extend overall survival in the same clinical trial, with a generally well-tolerated side effect profile and oral administration.

AMX0035 was commercially launched as RELYVRIO in the U.S.

in October 2022 and commercially launched as ALBRIOZA in Canada in July 2022.

Since the launch of RELYVRIO and ALBRIOZA through December 31, 2023, we have generated net product revenue of $403.0 million.

We believe AMX0035 has the potential to become a widely-used ALS medication and provides an opportunity to transform ALS from a disease for which symptom management is the standard of care to a disease with meaningful interventions.

In addition, we believe AMX0035 has the potential to be a foundational therapy for neurodegenerative diseases, 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 committed to bringing the benefits of AMX0035 to the more than 200,000 people living with ALS worldwide.

We are building a global infrastructure to commercialize AMX0035 in additional jurisdictions where it may be approved and engaging with key stakeholders around the world to explore opportunities for access including the EU and Japan.

We continue to focus on the global PHOENIX Phase 3 clinical trial of AMX0035 for the treatment of ALS, a 48-week, randomized, double-blind, placebo-controlled trial at clinical sites in the U.S.

and Europe, and expect to report topline results during or before the second quarter of 2024.

If the data from PHOENIX are supportive, it will be the first time that two clinical trials have demonstrated a benefit in ALS.

We believe that supportive PHOENIX data will further accelerate the commercial launch of AMX0035 and the transformation of the treatment of ALS.

In addition to ALS, we believe there is strong scientific rationale to use AMX0035 to treat other neurodegenerative diseases.

AMX0035 was designed to slow or mitigate neurodegeneration by targeting ER stress and mitochondrial dysfunction, two connected central pathways that lead to neurodegeneration.

We believe that our proprietary combination of PB and TURSO and their respective mechanisms of action will allow us to synergistically target abnormal cell death to better prevent neurodegeneration than treatment targeted at either mechanism of action alone.

We are actively advancing clinical trials to evaluate AMX0035 in PSP and WS.

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

As of December 31, 2023, we have funded our operations primarily through public offerings of our common stock, private sales of preferred stock, convertible notes, and more recently through revenue from sales of RELYVRIO and ALBRIOZA in the U.S.

and Canada, respectively.

Prior to 2023, we had incurred operating losses and as of December 31, 2023, we had an accumulated deficit of $304.9 million.

These losses resulted primarily from costs incurred in connection with research and development activities

and selling, general and administrative costs associated with our operations.

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

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

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

To date, we have primarily developed AMX0035 and AMX0114 internally, with assistance from our network of CROs and other advisors.

This has resulted in increased research and development spending but has enabled us to manage AMX0035 and AMX0114 efficiently through the development and manufacturing process.

We also expect to continue to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses.

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

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

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

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

As of December 31, 2023, we had cash, cash equivalents and short-term investments of $371.4 million.

We believe that the revenue we generate from commercial sales of AMX0035 in the U.S.

and Canada and our existing cash, cash equivalents and short-term investments as of December 31, 2023, will be sufficient to meet our anticipated operating and capital expenditure requirements for at least one year from the date of this Annual Report.

We are a clinical-stage pharmaceutical company with a mission to develop novel therapies for communities with high unmet medical needs.

We have preclinical and clinical development programs underway in neurodegenerative diseases and endocrine conditions.

We are advancing a pipeline in which we have matched investigational therapies with diseases where they can make the greatest impact, based on well-defined mechanistic rationale, clear clinical outcomes and biomarkers, and rigorous preclinical data, agnostic of modality.

We are currently developing three investigational therapies for potential impact across several diseases:

avexitide in PBH and congenital HI, AMX0035 in Wolfram syndrome and PSP, and AMX0114 in ALS.

As of December 31, 2024, we had cash, cash equivalents and marketable securities of $176.5 million.

In January 2025, we received net proceeds of $65.5 million from the January 2025 Offering.

We believe our existing cash, cash equivalents and marketable securities as of December 31, 2024, along with the proceeds from the January 2025 Offering, will be sufficient to meet our anticipated operating and capital expenditure requirements through 2026.

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

Impact of Macroeconomic Factors

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

In addition, economic uncertainty in various global markets, including in the U.S., Europe and the Middle East, caused by political instability and conflict, such as the ongoing conflicts in Ukraine and Israel, and economic challenges caused by global pandemics or other public health events, 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, the conflict in Israel, 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 global economic uncertainty, please read the section entitled “Risk Factors” in this Annual Report.

See “Liquidity and Capital Resources” below.

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.

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

Product revenue, net recognized during the years ended December 31, 2024 and 2023 relates to units of ALBRIOZA and RELYVRIO sold in Canada and the U.S., respectively.

In April 2024, we announced we had started a process with the FDA and Health Canada to voluntarily discontinue the marketing authorizations for RELYVRIO®/ALBRIOZA (sodium phenylbutyrate and taurursodiol [also known as ursodoxicoltaurine];

also known as AMX0035) for the treatment of ALS and remove the product from the market in the U.S.

and Canada, or the “RELYVRIO®/ALBRIOZA Discontinuation.

This decision was informed by topline results from the global Phase 3 PHOENIX trial, which failed to meet its prespecified primary and secondary endpoints, engagement with regulatory authorities, and discussions with the ALS community.

As a result, we do not expect to generate revenue from the sale of RELYVRIO®/ALBRIOZA in future periods.

As of April 4, 2024, RELYVRIO/ALBRIOZA was no longer available for new patients.

Patients who were currently on therapy in the U.S.

and Canada who, in consultation with their physician, wished to stay on treatment had the option to be transitioned to a free drug program.

Patients and their physicians were informed that final shipments of free drug were made to allow treatment through early 2025.

The NDA is now on the Discontinued Drug Product List of the Orange Book and we have filed a formal request to withdraw the NDA.

We have completed the collection of data on survival and we will continue to share any learnings from PHOENIX to help inform future ALS research.

We wound down the Open Label Extension as planned.

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;

• Drug product manufacturing 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.

Cost of sales consists primarily of costs associated with the manufacturing of RELYVRIO, ALBRIOZA and certain period costs and losses on purchase commitments with contract manufacturing organizations.

Following our announcement of a process to discontinue the marketing authorizations for RELYVRIO®/ALBRIOZA and remove the product from the market in the U.S.

and Canada, we did not report product cost of sales following the discontinuation of these products.

Acquired In-process Research and Development Expenses

Acquired in-process research and development, or IPR&D, expenses relate to upfront or other payments pursuant to our business development transactions, including the Eiger Acquisition (as defined below).

Research and Development Expenses

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

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

We expense research and development costs as incurred.

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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.

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

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

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Research and development activities are central to our business model.

Product candidates such as AMX0035 in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, such as AMX0114, primarily due to the increased size and duration of later-stage clinical trials and related product manufacturing expenses.

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

At this time, we cannot accurately

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

Product candidates such as avexitide and AMX0035 in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, such as AMX0114, primarily due to the increased size and duration of later-stage clinical trials and related product manufacturing expenses.

Despite a decline in research and development expenses in 2024 compared to 2023, we expect that our research and development expenses will increase in connection with our planned clinical development activities in the near term and in the future.

At this time, we cannot accurately estimate or know the nature, timing and costs of the efforts that will be necessary to complete the clinical development of avexitide, AMX0035 and any future product candidates.

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

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• the number of product candidates we are developing.

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

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

• the timing and progress of preclinical and clinical development activities;

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• 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 successful implementation and compliance with the 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 successful receipt and related terms of regulatory approval for AMX0035 for the treatment of ALS, if approved in the future by the European Commission;

• 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;

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

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

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

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

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

• the successful commercialization of ALBRIOZA in Canada and RELYVRIO in the U.S.

of AMX0035 in other potential jurisdictions, if and when approved;

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

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

• the acceptance of our products and product candidates, if approved, by patients, the medical community and third-party payors;

• competition with other product;

• competition with other products;

• 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, as applicable, regulatory approval for AMX0035 or any future product candidates.

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

We may never succeed in obtaining or maintaining, as applicable, regulatory approval for avexitide, AMX0035 or any other current or future product candidates.

Selling, General and Administrative Expenses

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facility-related and other operating costs.

We anticipate that our selling, general and administrative expenses will continue to increase in the future as we further increase our headcount to support our continued research activities and development of AMX0035 and as we commercialize AMX0035.

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

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

Other Income, 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 net realized and unrealized losses on foreign exchange transactions.

Income taxes are determined using the asset and liability approach.

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

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

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

During 2023, a portion of our valuation allowance has been reversed with respect to amounts we realized through current year U.S.

federal and state taxable income.

We continue to maintain a full valuation allowance against all of our U.S.

deferred tax assets as of December 31, 2023 based on management’s evaluation of all available evidence, including our history of incurring significant losses from operations.

Our evaluation of all available evidence also includes consideration of regulatory approvals of and developments related to ALBRIOZA and RELYVRIO, including actual and forecasted revenues generated from the sale of these products.

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

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

however, the release of the valuation allowance, as well as the exact timing and the amount of such release, continue to be subject to,

among other things, our level of profitability, revenue growth, clinical program progression and expectations regarding future profitability.

As of December 31, 2023 and 2022, we had NOL carryforwards of approximately $69.8 million and $203.2 million, respectively, and state NOL carryforwards of approximately $124.6 million and $164.1 million, respectively, which are available to reduce future taxable income.

federal NOL carryforwards as of December 31, 2023 carry forward indefinitely.

Of the $124.6 million state net operating loss carryforwards, $82.8 million relate to Massachusetts and begin to expire in 2035.

As of December 31, 2023 and 2022, we also had federal tax credits of $6.8 million and $4.6 million, respectively, and state tax credits of $1.6 million and $1.2 million, respectively.

The tax credit carryforwards will expire at various dates beginning in 2035.

In April 2024, we announced the Restructuring Plan designed to focus our resources on key clinical and preclinical programs.

The restructuring included a reduction in force which reduced our workforce by approximately 70% and a decrease in external financial commitments outside our priority areas.

As a result, our selling, general and administrative expenses decreased in 2024 as compared to 2023.

However, we expect that general and administrative expenses will increase in future periods as we advance our clinical pipeline.

Restructuring Expenses

Restructuring expenses consists primarily of employee severance and termination benefits, contract termination costs, impairment of long-lived assets and other costs.

Such costs are based on estimates of fair value in the period liabilities are incurred.

We evaluate and adjust these costs as appropriate for changes in circumstances as additional information becomes available.

We have historically not incurred significant income taxes.

We continue to maintain a full valuation allowance against all of our deferred tax assets based on management’s evaluation of all available evidence, including our history of incurring significant losses from operations.

As a result, we don’t expect to incur material income taxes for the foreseeable future.

Results of Operations

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Cost of sales

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

Acquired in-process research and development

Research and development

Selling, general and administrative

Restructuring expenses

Total operating expenses

Income (loss) from operations

(Loss) income from operations

Other income, net:

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Total other income, net

Income (loss) before income taxes

Provision for income taxes

Net income (loss)

(Loss) income before income taxes

(Benefit) provision for income taxes

Net (loss) income

* 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 years ended December 31, 2023 and 2022, we recorded approximately $380.8 million and $22.2 million of product revenue, net, respectively.

The increase is primarily related to RELYVRIO and ALBRIOZA being sold for the entirety of 2023 compared to the majority being sold in the fourth quarter in 2022.

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.

Product revenue, net was $87.4 million for the year ended December 31, 2024, compared to $380.8 million for the year ended December 31, 2023.

Product revenue, net was related to units of RELYVRIO and ALBRIOZA sold in the U.S.

and Canada, respectively, prior to the RELYVRIO®/ALBRIOZA Discontinuation.

Cost of sales

Cost of sales were $124.6 million for the year ended December 31, 2024, compared to $25.4 million for the year ended December 31, 2023.

During these periods, cost of sales consisted of costs to procure, manufacture and distribute our marketed products, RELYVRIO and ALBRIOZA.

In addition, included in cost of sales are costs to manufacture our marketed products, which have been provided to certain patients at no cost to them through either our interim access or patient assistance programs.

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 years ended December 31, 2023 and 2022, or approximately $11.2 million and $3.4 million, respectively, were expensed prior to obtaining regulatory approvals and, therefore, are not included in cost of sales during these periods.

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 the second quarter of 2024.

Cost of sales consisted of costs to procure, manufacture and distribute our marketed products, RELYVRIO and ALBRIOZA.

As a result of the RELYVRIO®/ALBRIOZA Discontinuation, we recorded approximately $118.7 million of charges associated with the write-down of inventory and losses on firm purchase commitments for the year ended December 31, 2024.

Acquired In-process Research and Development Expenses

On July 9, 2024, we completed the acquisition of substantially all the assets and interests in the development, manufacture and commercialization of avexitide, an investigational, first-in-class GLP-1 receptor antagonist, from Eiger, or the Seller, or the Eiger Acquisition.

During the year ended December 31, 2024, we recorded a charge of approximately $36.2 million associated with the acquired in-process research and development assets of avexitide with no alternative future use.

Research and Development Expenses

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(in thousands)

Direct research and development expenses by program:

AMX0035 - ALS

AMX0035 - PSP

Payroll and personnel-related

Other programs

Total direct research and development expenses by program

Personnel-related research and development

* NM - not meaningful

Research and development expenses were $104.1 million for the year ended December 31, 2024, compared to $128.2 million for the year ended December 31, 2023.

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

The increase of $34.7 million was primarily due to a $16.2 million increase in payroll and personnel-related costs, which includes a $4.2 million increase in stock-based compensation, a $5.4 million increase in spending on AMX0035 for the treatment of PSP, a $4.3 million increase in spending on AMX0035 for the treatment of ALS and a $8.8 million increase in all other costs.

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 increase in spending on AMX0035 for the treatment of PSP was primarily related to costs to support the initiation of the ORION Phase 3 trial.

The increase in spending on AMX0035 for ALS was primarily related to costs associated with our global Phase 3 PHOENIX trial, including its open label extension phase and the increase in other costs were primarily due to an increase in preclinical development activities.

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

The decrease of $24.1 million was primarily due to a $24.1 million decrease in spending on AMX0035 for the treatment of ALS following topline data from the PHOENIX trial in April 2024, an $8.1 million decrease in payroll and personnel-related costs due to a decrease in the number of employees following the completion of our Restructuring Plan, and a $5.2 million decrease in other costs due to an decrease in preclinical development activities.

The decrease in research and development expenses was offset by a $10.5 million increase in spending on AMX0035 for the treatment of PSP, and a $2.8 million increase in expenses for the development of avexitide following the Eiger Acquisition.

The increase in spending on AMX0035 for the treatment of PSP was primarily related to costs to support the continuation of the ORION Phase 2b/3 global clinical trial.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $114.3 million for the year ended December 31, 2024 compared to $188.4 million for the year ended December 31, 2023.

The increase of $61.2 million was primarily due to increases of $30.2 million in payroll and personnel-related costs, which includes an $11.2 million increase in stock-based compensation, $16.1 million in consulting and professional services and $14.9 million in other expenses.

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

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

Other Income, Net

Interest Income

Interest income for the year ended December 31, 2023 was $16.2 million compared to $4.3 million for the year ended December 31, 2022.

The increase was primarily attributable to favorable interest rates and higher short-term investment and cash equivalent balances driven by the proceeds received from our 2022 follow-on offering and cash receipts from sales of AMX0035.

Provision for Income Taxes

We recorded an income tax provision of $5.0 million and $0.8 million for the years ended December 31, 2023 and 2022, respectively.

The income tax provision for the year ending December 31, 2023 includes the release of a portion of our valuation allowance with respect to amounts expected to be realized through current year U.S.

federal and state taxable income.

Current year U.S.

federal and state taxable income is significantly impacted by a TCJA tax law change in effect from January 1, 2022 that requires capitalization and amortization of all research and experimentation costs under Section 174 of the IRC.

The decrease was primarily due to a decrease of $39.5 million in payroll and personnel-related costs, $25.5 million in consulting and professional services, and $9.1 million in other expenses.

The decrease in payroll and personnel-related costs was primarily related to a decrease in the number of employees as a result of the Restructuring Plan.

The decrease in consulting and professional services was primarily due to a decrease in commercial sales and marketing activity as a result of the RELYVRIO®/ALBRIOZA Discontinuation.

The decrease in other expenses is primarily due to a decrease in charitable contributions.

Restructuring Expenses

In April 2024, we announced a restructuring to focus our financial resources on upcoming clinical milestones.

Under the restructuring, we reduced our workforce by approximately 70% and decreased external financial commitments outside of our priority areas.

Restructuring expenses were approximately $22.9 million for the year ended December 31, 2024 which includes employee severance and termination benefits of approximately $21.9 million, contract termination costs, impairment of long-lived assets and other costs of $1.0 million.

We completed the Restructuring Plan in 2024.

Liquidity and Capital Resources

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In the second half of 2022, we began 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 and convertible notes.

As of December 31, 2023, we had cash, cash equivalents and short-term investments of $371.4 million.

From inception through December 31, 2023, we have raised $669.3 million in aggregate proceeds, net of issuance costs, primarily from the issuance of common stock, convertible preferred stock, convertible notes and grant agreements.

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

and Canada and our existing cash, cash equivalents, and short-term investments, 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 these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect.

In April 2024, we announced the RELYVRIO®/ALBRIOZA Discontinuation.

We also announced the Restructuring Plan, which was designed to focus our resources on key clinical and preclinical programs and included a reduction in force which reduced our workforce by approximately 70% and decreased external financial commitments outside of our priority areas.

We completed the Restructuring Plan in the second half of 2024.

In January 2025, we entered into an underwriting agreement with Leerink Partners LLC, as representative of the several underwriters named therein, relating to the issuance and sale of an aggregate of 19,714,285 shares of our common stock, which includes the exercise in full by the underwriters of their option to purchase an additional 2,571,428 shares, or the January 2025 Offering.

The offering price per share was $3.50.

The January 2025 Offering resulted in estimated proceeds of approximately $65.5 million, net of underwriting discounts and estimated offering expenses (see Note 18 Subsequent events).

As of December 31, 2024, we had cash, cash equivalents and marketable securities of $176.5 million and an accumulated deficit of $606.7 million.

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

As of December 31, 2024, we have funded our operations primarily through public offerings of our common stock, private sales of preferred stock, convertible notes, and through revenue from sales of RELYVRIO and ALBRIOZA in the U.S.

and Canada, respectively between July 2022 and April 2024.

We expect to finance our near-term operations through our existing cash, cash equivalents and marketable securities and if needed, the sale of equity, debt financings or other capital sources, including potential collaborations with other companies, royalty financings, or other strategic transactions.

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

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

Capital Resources

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

Despite the decline in research and development and general administrative expenses in 2024 as compared to 2023, we expect our expenses to increase in connection with our ongoing activities, particularly as we advance the preclinical activities, manufacturing and clinical trials of avexitide, AMX0035 and any other current or future product candidates or acquire or in-license additional product candidates or products.

We may also incur expenses related to business development activities, such as in-licensing or acquisition of product candidates.

In addition, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses.

Because we no longer qualify as an emerging growth company as defined in the JOBS Act and we are now considered a large accelerated filer, we are no longer entitled to rely on exemptions from certain compliance requirements that are applicable to companies that are emerging growth companies including, among other requirements, the auditor attestation requirements of Section 404(b) and reduced reporting requirements.

Our expenses will also increase as we:

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

• continue to develop AMX0114, antisense oligonucleotide, for the treatment of people living 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 other jurisdictions, if approved;

We expect to incur significant expenses as we:

• continue our research and development efforts of avexitide in PBH, or any other indications, and conduct clinical trials of avexitide;

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

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

• pursue INDs of AMX0035 for additional indications;

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• 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;

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

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

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

• 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;

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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 AMX0035 in the U.S.

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

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

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

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

• the costs, timing and outcome of regulatory review of avexitide, 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 any future outbreak of any highly infectious or contagious diseases;

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

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

• costs associated with identifying and developing, acquiring or in-licensing additional product candidates or products;

• the costs of any future expansion of our facilities to accommodate our potential 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 sales price and availability of adequate third-party coverage and reimbursement for any future product candidates, if and when approved;

• the costs of current and potential legal proceedings that may not be covered by our insurance;

• the costs of operating as a public company.

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(in thousands)

Net cash provided by (used in) operating activities

Net cash provided by (used in) investing activities

Net cash (used in) provided by operating activities

Net cash provided by investing activities

Net cash provided by financing activities

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and restricted cash equivalents

Net increase in cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash equivalents

Operating Activities

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

Changes in working capital totaled $45.8 million, primarily consisting of a $59.8 million decrease in accrued expenses, a $19.1 million decrease in accounts payable, a $9.3 million decrease in inventories and partially offset by a $39.6 million decrease in accounts receivable, net.

During the year ended December 31, 2023, operating activities provided $11.9 million of cash, primarily resulting from our net income of $49.3 million, non-cash stock-based compensation expense of $37.2 million and $1.1 million of depreciation expense, offset by an increase of $65.7 million in net cash used in our operating assets and liabilities and net amortization of premiums and discounts on investments of $9.9 million.

Net cash used in our operating assets and liabilities primarily consisted of a $21.6 million increase in accrued expenses, a $15.9 million increase in accounts payable and a $1.8 million decrease in operating lease right-of-use assets.

Net cash used in our operating assets and liabilities in 2023 primarily consisted of a $21.6 million increase in accrued expenses, a $15.9 million increase in accounts payable and a $1.8 million decrease in operating lease right-of-use assets.

This was offset by a $73.1 million increase in inventories, a $24.7 million increase in accounts receivable, a $4.8 million increase in prepaid expenses and other current assets and a $2.0 million decrease in operating lease liabilities.

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.

Investing Activities

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

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

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

Financing Activities

During the year ended December 31, 2024, net cash provided by financing activities was $0.3 million.

This amount consisted of $7.0 million of proceeds from exercises of stock options, offset by $3.3 million of withholding taxes paid on stock-based awards and $0.1 million in payments of deferred offering costs.

This amount consisted of $2.1 million of proceeds from exercises of stock options, offset by $1.8 million of withholding taxes paid on stock-based awards.

During the year ended December 31, 2023, net cash provided by financing activities was $3.5 million.

This amount consisted of $200.9 million of proceeds from our initial public offering, or 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.

Purchase Commitment s

Contractual Obligations and Commitments

We enter into agreements in the normal course of business with contract manufacturing organizations for raw material purchases and manufacturing services.

As of December 31, 2023, we had committed approximately $195.0 million under these agreements related to raw material purchases and manufacturing services, which are expected to be paid through 2028.

As of December 31, 2024, the amounts committed under these agreements are not material.

Critical Accounting Policies and Significant Judgments and Estimates

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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.

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

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

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

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

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

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

We will adjust our GTN estimates based on new information, including information regarding actual activity, as it becomes available.

Prior to the RELYVRIO®/ALBRIOZA Discontinuation, our accounting policy for revenue recognition had a substantial impact on reported results and relied on certain estimates.

Specifically, revenue was reduced by variable consideration related to certain gross-to-net, or GTN.

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

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

To date, actual GTN activity has not differed materially from our estimates.

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 accrual calculations require us to estimate the magnitude of our revenue that will be subject to these rebates.

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.

Because of the time elapsed since the RELYVRIO®/ALBRIOZA Discontinuation the remaining estimates and judgments related to revenue recognition are not considered significant as of December 31, 2024.

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.

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;

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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.

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

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

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

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, 2023, we continued to maintain a full valuation allowance against all of our U.S.

federal and state 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 revenue generated from the sale of ALBRIOZA and RELYVRIO in 2023.

Given the early stage of our product launch, we are uncertain about the timing and amount of future sales that would result in sustained profitability that provides sufficient positive objective evidence of the recoverability of our deferred tax assets.

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.

Inventory Valuation

We value our inventories at the lower of cost or estimated net realizable value.

We determine the cost of our inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis.

We classify inventory as long-term when consumption or sale of the inventory is expected beyond twelve months.

We perform an assessment of the recoverability of capitalized inventory during each reporting period, and we write down any excess and obsolete inventories to their estimated net realizable value in the period in which impairment is first identified.

Such impairment charges, should they occur, are recorded within cost of sales.

The determination of whether inventory costs will be realizable requires estimates by management such as the future demand of our products, estimated future sales, the remaining shelf life of goods on hand, and our current and future strategic plans.

If actual demand for our product declines, or if actual market conditions are less favorable than those projected by management, additional write-downs of inventory may be required which would be recorded as cost of sales in the consolidated statements of operations.

Additionally, our product is subject to strict quality control and monitoring that we perform throughout the manufacturing process.

In the event that certain batches or units of product do not meet quality specifications, we will record a charge to cost of sales, to write down any unmarketable inventory to its estimated net realizable value.

Although we believe that the assumptions we use in estimating inventory write-downs are reasonable, no assurance can be given that significant future changes in these assumptions or changes in future events and market conditions could result in different estimates.

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 Securities Exchange Act of 1934, as amended, 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.

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 7. Management’s Discussion and Analysis