Amylyx ALS Drug Approval: Unexpected, Welcome, & Conditional

Investment Thesis

I last covered Amylyx (NASDAQ:AMLX) for Seeking Alpha earlier this month, just before the FDA’s Advisory Committee convened to discuss the upcoming Prescription Drug User Fee Act (“PDUFA”) date for the biotech’s Amyotrophic Lateral Sclerosis (“ALS”) candidate AMX0035.

I suggested that, based on the generally negative briefing documents provided by the FDA in advance of the meeting, the chances of a positive outcome were slim, and that in turn reduced the chances of the drug being approved when the PDUFA arrived on September 29th. As it transpires, I could not have been more wrong!

AMX0035 has been approved to treat ALS, or Lou Gehrig’s Disease, and will now be marketed and sold under the brand name Relyvrio. Amylyx announced this morning. The company’s stock price, which rose from $17 to $30 when the second AdComm voted strongly in favor of approval, has not spiked on the approval news, perhaps owing to the fact that this is a conditional approval and Amylyx still needs to deliver positive results from its ongoing PHOENIX Phase 3 study.

Klee and Cohen released a statement calling the approval “an exciting milestone for the ALS community” and “a major step toward achieving our mission to one day end the suffering caused by neurodegenerative diseases”. Leading ALS organizations also released a statement as follows:

With today’s approval, we are encouraged that RELYVRIO can offer people living with ALS and their families the potential of more time with functional independence. This is especially important for a rapidly progressive disease with a median survival time from diagnosis of just two to three years. This is significant for people living with ALS, their loved ones, caregivers, clinicians, researchers, and advocacy, as we now have a new treatment option that could be a big step forward for the future of ALS care

Journey To Approval – The First Negative AdComm Vote

Relyvrio is a combination of 2 different drugs – a dual UPR-Bax apoptosis inhibitor composed of sodium phenylbutyrate (“PB”), and TURSO (also known as tauroursodeoxycholic acid, or TUDCA). The mechanism of action is described in the company’s 10Q submissions as follows:

Through the resolution of the unfolded protein response, or UPR, and by inhibiting translocation of the Bcl-2 Associated X-protein, or 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 stress, mitochondrial dysfunction, oxidative stress and disease-specific models of a variety of other conditions, as well as in vivo models of Alzheimer’s Disease, or AD, and multiple sclerosis.

The drug has been approved based on data from a Phase 2 CENTAUR study of 137 patients with ALS comprised of a 6-month placebo controlled phase, followed by an open label extension follow-up phase.

The primary endpoint of CENTAUR was the rate of decline in total Amyotrophic Lateral Sclerosis Functional Rating Scale (“ALSFRS-R”) – a 5-minute questionnaire using an ordinal rating scale of 0-4, covering 12 functional activities relevant to ALS across four functional domains. AMX0035 was able to show a statistically significant slowing of ALS disease progression, and a longer duration of survival of 25 months, compared to 18.5 months in the placebo arm.

Initially, the FDA requested that Amylyx complete a further Phase 3 trial, but the agency accepted Amylyx’ New Drug Application (“NDA”) in the last quarter of 2021. An AdComm was convened for March 30th, and the FDA released briefing documents which were somewhat critical of the CENTAUR trial.

The agency queried whether the statistical significance of the improvement in ALSFRS-R scale – 2.32 points on a 48-point scale – was significant enough particularly given that no secondary endpoints were met – and also objected to missing data, the use of 2 already approved ALS therapies – Edaravone and Riluzole – in patients during the study, and issues with randomisation, which meant that the first 18 participants in the study were assigned to the AMX0035 arm.

The question put before the AdComm was as follows:

Do the data from the single randomized, controlled trial and the open-label extension study [Phase 2 CENTAUR trial] establish a conclusion that sodium phenylbutyrate/taurursodiol [AMX0035] is effective in the treatment of patients with amyotrophic lateral sclerosis (ALS)?

The AdComm voted 4-6 against.

The Second AdComm And The FDA’s Volte Face

That was by no means the end of the drug candidates journey to approval however. The FDA took the unusual step of convening a second AdComm, in response to fresh data supplied to the agency by Amylyx.

Amylyx shared new biomarker data from a Phase 2 study of AMX-0035 in Alzheimer’s Disease, supporting the evidence gained from the CENTAUR trial, and also 3 new pieces of analysis, described by the FDA as follows in its second set of briefing documents.

• A new analysis utilizing a statistical method to adjust for the effect of treatment crossover;
• A new analysis comparing observed survival in the CENTAUR study to predicted survival using the ENCALS ALS survival prediction model derived from an ALS natural history database;
• A new analysis comparing observed survival from CENTAUR treatment group to survival of matched treatment naïve participants from historical clinical trials of ALS.

The briefing notes then went on to negatively critique the studies and reject the Alzheimer’s biomarker data as relevant to the push for approval in ALS. As most observers drew the conclusion that AMX0035 would again fail to convince the AdComm panel, Amylyx share price sank from ~$25, to ~$18.

Perhaps the verdict – shared by myself in my last note on Amylyx – should not have been so negative however – after all, the briefing documents concluded as follows:

The placebo controlled survival benefit in the intent-to-treat population provides important confirmatory evidence for the clinical benefit of AMX0035 and new analyses, including comparisons to extend controls confirm and strengthen this finding.

CENTAUR is a single adequate and well controlled study with confirmatory evidence that meets the appropriate standards for approval especially in the context of a rare and fatal disease such as ALS.

Personally I have to admit that I was too swayed by the critical aspects of the briefing notes and should have paid more attention to these final conclusions, but in my defense I was not alone in believing that the second AdComm would go the way of the first. It did not however.

During the AdComm, the FDA’s Billy Dunn surprised everyone by pointedly asking Amylyx’ co-founders Justin Klee and Josh Cohen if they would be prepared to withdraw AMX0035 from the market if data from an ongoing Phase 3 clinical study of the drug failed to support the positive data from a Phase 2 trial that was being presented as evidence.

Both co-founders stated that the would do so – Justin Klee stated:

To be clear, if [the trial] is not successful, we will do what is right for patients, which includes voluntarily removing the product from the market.”

That set the tone for a positive outcome, with the AdComm voting 7:2 in favor in answer to a slightly differently worded question:

that the available evidence of effectiveness is sufficient to support approval of AMX0035 (sodium phenylbutyrate and taurursodiol [also known as ursodoxicoltaurine]) for the treatment of amyotrophic lateral sclerosis (ALS).

It was an outcome that took most people by surprise, although given the lack of treatment options for patients with ALS, with no disease modifying therapies available, plus Relyvrio’s relatively clean safety profile – the most common adverse events occurring in the CENTAUR study (at least 15% of patients, and at least 5% greater than placebo) were diarrhea, abdominal pain, nausea, and upper respiratory tract infection, the approval press release states – perhaps there were more reasons for optimism that most people, including myself, believed.

What Happens Now? Getting Relyvrio Into The Hands of Patients

AMX0035 has already been approved in Canada, where the drug will be marketed and sold as Albioza, although it is not commercially available yet other than for privately paying patients, as pricing negotiations are apparently yet to be completed.

Interestingly, in its press release announcing full approval, Amylyx states that:

After considering the input of many stakeholders throughout the ALS community in the U.S., Amylyx made the decision to price RELYVRIO below the latest FDA-approved product available to people with ALS.

According to Reuters, Relyvrio’s list price will be $158k per annum for the first year of treatment, and analysts have speculated the drug will likely achieve peak sales of ~$750m – $1bn. The challenge now for Amylyx is essentially two-fold. First of all, the company needs to persuade physicians across the US and Canada that the evidence supporting approval of the drug is sufficiently strong for the drug to be prescribed to patients.

Secondly, Amylyx needs to complete its Phase 3 PHOENIX study, which will attempt to enroll up to 600 patients, evaluated over a period of 48 weeks. The study is apparently already 50% enrolled, and ought to be complete by late 2023 / early 2024.

It’s possible that Relyvrio may work best in combo with other approved drugs for ALS, which are Riluzole – there are 3 different versions available as discussed in my last note on Amylyx – and Radicava, marketed and sold by Mitsubishi Tanabe. An oral version of Radicava was recently approved by the FDA, and is likely to be Relyvrio’s main competition. Radicava has also shown a statistically significant improvement in ALSFRS-R in clinical trials in patients with forced vital capacity (“FVC”) >80%, although other studies have shown no positive effect.

Conclusion – Unexpected, Welcomed, But Still Under Scrutiny – There May Be More To Come From Relyvrio

As mentioned, Amylyx’ stock price has not skyrocketed on the approval news, perhaps owing to the fact that its co-founders have promised to withdraw the drug from the market if the Phase 3 Phoenix drug fails.

It is a unique scenario – how, for example, with ALS organizations react to the news if PHOENIX data does not support CENTAUR data? Having part-funded the studies, they will surely not want to see the drug taken away from patients.

The FDA is certainly blazing a new trial here, and in many senses it is a sensible response to a situation where patients are desperate for a better treatment, which Relyvrio could provide, whilst the drug apparently does not present any serious safety concerns.

Reimbursement is the next hurdle for Amylyx to overcome, and again it may be seen as problematic for insurers and payers to provide reimbursement for a drug that could be withdrawn from the market in 18 months’ time when PHOENIX data is released.

The next 18 months may be characterized by intense negotiation between Amylyx and physicians, payers, pricing authorities and with the FDA, and it could be that this puts the company’s share price in statis as nobody knows quite what to expect, or how the situation will play out.

On the other hand, it’s interesting to note that biomarker data in patients with Alzheimer’s has shown some positive trends. This could be the beginning of a journey to approval in other devastating diseases characterized by cognitive decline, and if that were to be the case, the market opportunity grows exponentially, and the share price ought to do as well.

ALS is a devastating disease that affects ~200k people worldwide, and ~29k people in the US, ~30k people and Europe, and ~3k people in Canada, and it is welcome news that there is now another treatment option for patients to consider that is free of the potentially damaging side effects that Biogen’s controversial Alzheimer’s drug Aduhelm has, for example.

The FDA’s decision to grant patients access to Relyvrio could mark a sea of change in the agency’s approach to approving drugs where the unmet need is high. In the meantime, Amylyx is looking at a market opportunity of up to $1bn, in my view, which, given its market cap is just $1.7bn at the time of writing, suggests there is plenty of room for further upside.

Unfortunately, the risk also remains that the drug fails to show efficacy in its Phase 3 trial, which would lead to crushing losses for investors. It may be another 18 months before we really know what to make of the Relyvrio approval decision.