Earnings Call Transcript - FOLD Q1 2025

Operator, Operator

Good morning, ladies and gentlemen, and welcome to the Amicus Therapeutics First Quarter 2025 Financial Results Conference Call and Webcast. At this time, participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference call over to your host, Mr. Andrew Faughnan, Vice President of Investor Relations. You may now begin.

Andrew Faughnan, Vice President of Investor Relations

Thank you, Travis. Good morning. Thank you for joining our conference call to discuss Amicus Therapeutics First Quarter 2025 financial results and corporate highlights. Leading today's call, we have Bradley Campbell, President and Chief Executive Officer; Sebastien Martell, Chief Business Officer; Dr. Jeff Castelli, Chief Development Officer; and Simon Harford, Chief Financial Officer. Joining for Q&A is Ellen Rosenberg, Chief Legal Officer. As referenced on Slide 2 of the presentation, I would like to remind you that we will be making forward-looking statements on today's call. I encourage you to read the disclaimers in our slide presentation, the press release we issued this morning, and the disclosures in our SEC filings, which are all available on the IR portion of our corporate website. Forward-looking statements are subject to substantial risks and uncertainties, speak only as of the call's original date, and we undertake no obligation to update or revise any of the statements. Additionally, you are cautioned not to place undue reliance on any forward-looking statements. At this time, it is my pleasure to turn the call over to Bradley Campbell, President and Chief Executive Officer. Bradley?

Bradley Campbell, President and Chief Executive Officer

Great. Thank you, Andrew, and welcome, everyone, to our first quarter conference call. Before we get into the details with the backdrop of what has certainly been a tumultuous quarter in biotech, I thought it would be valuable for me to frame the incredibly positive outlook we see for Amicus going forward. First of all, I’m very pleased to share that we have delivered yet another quarter of strong double-digit revenue growth on our core business in Pompe and Fabry. This is now our eleventh consecutive quarter with double-digit sales growth, and we see that trend continuing for years to come. Second, we were thrilled to have entered into a strategic collaboration with Dimerix that, for a modest upfront, brings into our pipeline the U.S. commercialization rights to a first-in-class compound in late Phase III development for a rare, fatal kidney disease with blockbuster market potential. Third, we continue to strengthen and diversify our supply chain. Through prudent operations and planning, we were able to effectively neutralize exposure to any potential tariffs this year. We also announced today that we are onshoring a portion of our drug product manufacturing from Pombiliti to enhance our diversification strategy even further. Fourth, while quarterly revenues for Galafold and Pom-Op were impacted by some unexpected factors, we are highly confident in the acceleration in sales we’ll see through the remainder of the year, resulting in combined revenue projections within 2% of our original guidance and yet another year of double-digit growth. Fifth, we reiterated our confidence that these two products, each with potential blockbuster sales at peak, will reach combined sales of $1 billion by the end of 2028. And finally, as we maintain our financial discipline, we reiterated that we are on track to achieve GAAP profitability in the second half of this year. Taken together, we are confident that what we have achieved this quarter leaves Amicus uniquely well positioned to create substantial value for shareholders and deliver on our mission for patients. With that, let me hand the call over to Sebastien to dive into the business in more detail. Sebastien?

Sebastien Martell, Chief Business Officer

Thank you, Bradley, and good morning to everyone. For Galafold on Slide 5, you see that revenue reached $104.2 million, up 6% at constant exchange rates. The underlying growth of this product remains very positive, with a number of new patient starts globally up 14% in the quarter. This puts us on track to deliver the highest level of patient starts this year. We ended the quarter with more than 69% of the global market share of treated Fabry patients with amenable mutations. Galafold is clearly positioned as the treatment amongst prescribers, and there’s still many more potential patients eligible for our therapy. Turning to Slide 6, our leading markets continue to be the biggest driver of strong patient demand. The U.S. contributed significantly to growth, and we reached a record number of patients on Galafold in Australia following the first line listing. When we look at the global mix, which is about 65% naïve and 35% switch, we’re seeing stronger uptake in naïve populations. We continue to achieve high market shares in countries where we’ve been approved the longest, but there’s still plenty of opportunity to switch patients over to Galafold and to keep growing the market as we penetrate the diagnosed untreated and newly diagnosed segments. Turning to the revenue impacts in the quarter. While the U.S. grew at 18% this quarter, we observed nonlinear order patterns ex-U.S. And Q1 sales in the UK were impacted by the higher VPAG rebates than prior industry guidance had assumed. With underlying growth in patient demand at 14%, our projection of a record level of new patient starts this year, we remain highly confident in our full year 2025 growth guidance for Galafold. The key drivers behind the growing demand for Galafold, which we expect to continue well beyond 2025, are the following. First, finding new patients and reaching the diagnosed untreated population, including shortening the pathway to diagnosis. Second, expanding Galafold into new markets and extending the label. Third, driving Galafold’s share of treated amenable patients. We’re actually seeing in our most mature markets that we can reach up to 85%, 90% share. So we know that there’s the potential to reach those levels globally. And fourth, sustaining compliance and adherence above 90% rates so that patients who go on Galafold predominantly stay on Galafold. So with our strong IP protection, we think Galafold has a long runway well into the next decade and a clear path to surpassing $1 billion in revenue in the next 12 years. Turning now to Pompe disease on Slide 8, we outline our global launch progress with Pombiliti and Opfolda. In the first quarter, revenue reached $21 million, up 92% at constant exchange rates. The majority of growth was driven by three of our initial launch countries, the U.S., Germany, and Spain. The U.S. represented approximately 45% of revenue and contributed to 65% of Pombiliti and Opfolda growth in the quarter. Outside of the U.S., revenue growth was largely driven by Germany and Spain, with UK sales impacted by the VPAG clawback. We continue to see patients switching proportionally based on market share, as well as broadening and deepening of prescriptions with more sites coming online and multiple new prescriptions from physicians. We expect the benefit of patient starts in new launch markets to be weighted towards the second half of the year. Additionally, in the U.S., we anticipate sales to accelerate over the remainder of 2025 as the pool of patients eligible continues to expand. We’re already seeing some of this acceleration in the month of April, with the largest number of net new commercial patients globally driven by the U.S., as well as the largest number of countries with new prescriptions since launch. Despite this momentum, we do not expect that we’ll be able to fully catch up with our prior 2025 guidance. And so that’s why we’re adjusting our full year 2025 revenue growth guidance for Pombiliti and Opfolda from 65% to 85% to 50% to 65% at constant exchange rates. Our revised revenue guidance implies a healthy exit rate heading into next year. We remain highly confident in the long-term outlook of this therapy. We expect Pombiliti and Opfolda to be major contributors to multi-year growth for Amicus based on key growth drivers, namely continuing to increase the number of net new patients, increasing the depth and breadth of prescribers, launching in new countries, including up to 10 in 2025, differentiating our therapy through evidence generation and real-world evidence, and maintaining 90% plus compliance and adherence rates. Moving to Slide 9, looking at the geographic expansion of Pombiliti and Opfolda. We recorded revenue in Q1 in 7 countries: the U.S., Germany, Austria, Spain, the UK, as well as Switzerland and Sweden. Of the five recently reimbursed countries, two markets, namely Sweden and Switzerland, had a first patient start during the quarter. In Q2, we anticipate first patients in four more countries, namely Italy, the Czech Republic, Portugal, and the Netherlands. We’re very pleased to share that we have recently been selected as the preferred treatment for adults with Pompe disease in the Netherlands. This is a five-year agreement enabling broad and sustained access for adults with Pompe disease currently on enzyme replacement therapy. We also recently received regulatory approvals in Australia and Canada, and in Japan, our DCA is under review, and we anticipate approval later this year. We’re also securing broad patient access throughout the EU. Moving to Slide 10, I’d like to take a few moments to provide additional color on the actions we’ve taken to further strengthen our global supply chain and access to our medicines. Firstly, regarding tariffs, which we recognize are still evolving, we do not expect a material impact on our business operations this year due to our proactive supply chain planning and careful management of expenses. We already have our 2025 sales inventory inside the U.S. We’ve also been proactive in diversifying our global supply chain. In addition to our second source of Pombiliti drug substance manufacturing in Ireland, we’re announcing today a manufacturing and supply services agreement with Sharp Sterile Manufacturing. This agreement will bring a portion of Pombiliti drug product manufacturing to the U.S. And with that, I will now hand over the call to Jeff to highlight the work we do to further differentiate Pombiliti and Opfolda.

Jeffrey Castelli, Chief Development Officer

Thank you, Sebastien, and good morning, everyone. On Slide 11, we highlight a few examples from the rapidly expanding and diverse body of evidence supporting the differentiation of Pombiliti and Opfolda in Pompe. First on clinical trials and long-term data, we continue to see differentiated durability of effect in our ongoing clinical studies, including long-term data from our Phase II and Phase III open-label extensions, which reinforce the sustained efficacy and safety profile of Pombiliti and Opfolda. Second, mechanistic and translational insights, emerging data continues to support the unique dual mechanism of action of our therapy. This includes not only the benefits of the upholstery stabilizer but also the differentiated design of the enzyme alone which offers increased BISM6P for greater cell uptake together with retained proteolytic and N-glycan processing for maximal enzyme activity. These mechanistic features are increasingly recognized as key drivers of clinical outcomes. Third, on comparative and real-world evidence, real-world data from early access programs and treatment registries are showing consistent effects that mirror what we’ve seen in clinical trials, supporting both the efficacy and safety of Pombiliti and Opfolda in broader real-world settings. Comparative analyses continue to also add important context for how our therapy performs relative to other enzyme replacement therapies. And finally, we’re seeing a growing number of powerful and illustrative real-world patient stories. This includes individuals switching to Pombiliti and Opfolda from high-dose, high-frequency Lumizyme, as well as dose switching from Nexviazyme. These real-world transitions further reinforce the clinical value and differentiation of Pombiliti and Opfolda as perceived by both physicians and patients. Importantly, beyond what’s shown here, we continue to actively enroll in our pediatric clinical trials and enrollment continues to accelerate in the Amicus Pompe registry, which will generate invaluable additional real-world data on the long-term use of Pombiliti and Opfolda across broader populations and geographies. Altogether, the strength and consistency of our data continue to give us great confidence that Pombiliti and Opfolda will continue to deliver meaningful and lasting impact for people living with Pompe. I’ll now hand the call back over to Sebastien.

Sebastien Martell, Chief Business Officer

Thank you, Jeff. So moving to Slide 13. As we announced last evening, we took a major step forward in our strategy to strengthen our portfolio through a successful U.S. licensing agreement with Dimerix to commercialize DMX-200, a first-in-class treatment in late-stage development for FSGS, a rare and potentially fatal kidney disease. This collaboration expands our late-stage pipeline with a potential best-in-class treatment and brings significant opportunities to leverage our regulatory, commercial, medical, and patient advocacy capabilities. As a promising late-stage rare disease investigational medicine with blockbuster market potential, we believe this asset adds significant value to Amicus today and will create value for patients and shareholders. Slide 14 summarizes the transaction details. Dimerix will receive an upfront of $30 million paid from Amicus cash on hand. The deal is heavily weighted to success-based milestones, of which the next potential milestone payments would be for positive readouts from the Phase III study. Dimerix would receive tiered royalties of U.S. sales of DMX-200 that start in the low teens up to the low 20s. Dimerix will fund and execute the Phase III study, and Amicus will be responsible for submission and maintenance of the regulatory dossier in the United States, as well as all costs of commercialization activities. Let me hand over the call to Jeff to give you more insights on FSGS and the ongoing Phase III study.

Jeffrey Castelli, Chief Development Officer

Thanks, Sebastien. First, I would like to again just reiterate how extremely excited we are to work with Dimerix on the further development of DMX-200 to bring this potentially transformative treatment to patients suffering from FSGS. So starting here on Slide 15, focal segmental glomerulosclerosis or FSGS is a rare and serious kidney disorder characterized by segmental scarring of the glomeruli, which are the filtering units of the kidney, proteinuria, which is the leakage of protein out of the kidney into the urine, and a progressive decline in kidney function, often culminating in end-stage renal disease. The underlying causes of FSGS are various including immune factors, genetic, viruses, and adaptive factors, but the key is that all of these converge on inflammatory injury that triggers a pathogenic feedback loop of hemodynamic stress and inflammation that drives further fibrosis and progressive kidney damage. The average time from diagnosis to the onset of complete kidney failure is typically in the 5- to 10-year range. In the U.S., FSGS affects more than forty thousand people with about five thousand new cases diagnosed each year. There are currently no FDA-approved therapies, and standard of care includes nonspecific therapies like corticosteroids, calcineurin inhibitors, and angiotensin receptor blockers, none of which adequately address the monocyte-driven inflammatory component of FSGS. DMX-200 is an oral small molecule taken in combination with ARBs to target the monocyte-driven inflammatory component of the disease by specifically inhibiting the inflammatory signaling from angiotensin one receptor and chemokine receptor type two heteromers that are on inflamed kidney cells. Moving on to Slide 16, we’re impressed by the strong momentum Dimerix has built and the growing body of evidence supporting DMX-200 and FSGS. Mechanistic data show that DMX-200 is a precision therapy targeting the monocyte-driven inflammatory feedback loop without broadly suppressing immune function. This is reinforced by compelling preclinical proof of concept data. Phase II studies across 80 patients have demonstrated encouraging efficacy and safety signals with meaningful reductions in both proteinuria and inflammation shown in FSGS patients. The pivotal Phase III ACTION trial is progressing very well with 185 of the target 286 patients enrolled. The study is very robustly designed and strongly powered. Importantly, there is also now FDA alignment on proteinuria as the primary endpoint for approval. Notably, the first interim analysis conducted by Dimerix last year after thirty-six weeks of treatment showed DMX-200 outperforming placebo in reducing proteinuria. Taken together, we believe these results strongly position DMX-200 to be a truly meaningful advance in the treatment of FSGS. Turning to Slide 17, as I mentioned, ACTION trial is well underway. This is a global randomized double-blind placebo-controlled study of DMX-200 versus placebo in patients receiving ARBs. They are followed for 104 weeks. Based on a successful meeting, as I mentioned with the FDA just here in March, the primary endpoint of the study will be a change in proteinuria measured as urine protein to creatinine ratio, with eGFR slope serving as a secondary endpoint. Subject to recruitment rates, which is going very well, full enrollment of ACTION is expected around the end of the calendar year. An additional blinded interim analysis is also planned to occur once additional interactions have happened with Dimerix and with the FDA to align on the final primary and secondary endpoint parameters. With that, let me now hand the call back over to Simon, or sorry, to Simon to review our financial results and outlook. Simon?

Simon Harford, Chief Financial Officer

Thank you, Jeff. Our financial summary begins on Slide 19 with our income statement for the first quarter ending March 31, 2025. For Q1, we achieved total revenue of $125.2 million, which is a 13% increase over the same period last year. At constant exchange rates, revenue grew 15%. The global geographic breakdown of total revenue in the quarter consisted of $75.2 million or 60% of revenue generated outside the United States and the remaining $50 million or 40% coming from within the U.S. Cost of goods sold as a percentage of net sales was 9.3% for the first quarter as compared to 12.3% for the prior year period. Total GAAP operating expenses decreased to $121.5 million for the first quarter as compared to $124.6 million in the first quarter of 2024, a decrease of 2%. On a non-GAAP basis, total operating expenses increased to $94.5 million for the first quarter as compared to $85.6 million in the same period last year, an increase of 10%. We define non-GAAP operating expenses as research and development and SG&A expenses, excluding stock-based compensation expense, loss on impairment of assets, changes in the fair value of contingent consideration, restructuring charges, and depreciation and amortization. On a GAAP basis, the net loss in the first quarter of 2025 was $21.7 million or $0.07 per share compared to a net loss of $48.4 million or $0.16 per share for the first quarter of 2024. In the first quarter of this year, non-GAAP net income was $9 million or a profit of $0.03 per share compared to non-GAAP net loss of $4.6 million or a loss of $0.02 per share in the same period last year. Cash, cash equivalents, and marketable securities were $251 million at March 31, 2025, compared to $25 million at December 31, 2024. On Slide 20, we outline our full year financial guidance for 2025. Total revenue growth guidance is updated to 15% to 22% from the previous 17% to 24%. We are reiterating Galafold revenue growth guidance of 10% to 15%. We are revising Pombiliti and Opfolda revenue growth guidance to 50% to 65% from the previous 65% to 85%. All growth rates are at constant exchange rates. Gross margin is still expected to be in the mid-80s. We are updating our non-GAAP operating guidance to include the $30 million upfront license payment for the DMX-200 licensing. Non-GAAP operating expense guidance is therefore expected to be $380 million to $400 million. We anticipate positive GAAP net income during the second half of 2025. As mentioned earlier this year, we anticipate 2025 to be a hybrid year for Pombiliti and Opfolda COGS as we expect to work through the previously expensed inventory during the first half of the year. As a result, we expect our gross margin to be in the mid-80s for the full year as we begin to recognize Pombiliti and Opfolda COGS through the P&L later this year. In terms of operating expense, as a reminder, we continue to have R&D commitments, including registry studies in both Fabry and Pompe, the ongoing Pompe Phase III study in countries not yet reimbursed, next-generation manufacturing process development for Pombiliti, as well as the DMX-200 upfront licensing fee. And with that, let me turn the call back over to Bradley for our closing remarks.

Bradley Campbell, President and Chief Executive Officer

Great. Thank you, Simon, Jeff, Sebastien. As we come to the end of our presentation, here is a reminder of the strategic priorities for the year reflecting the updates from today’s call. And before I conclude the discussion, I do want to take a moment to acknowledge Mike Cavany, who was our President of The U.S. business at Amicus and retired at the end of Q1. Mike is a great friend and colleague who joined Amicus in 2018 to lead the U.S. commercial team, and he has been a critical part of our success with Galafold and Pombiliti and Opfolda. I want to thank Mike for his contribution to our mission and wish him well in his retirement. By the same token, I also want to give a warm welcome to Gwen Whitney, who has succeeded Mike in this role. Gwen is an energetic and accomplished leader in the rare disease space, and I very much look forward to her help in driving the U.S. business in the next phase of our growth. Finally, on the last slide, let me leave you the way I started. We are very pleased with the growing demand for both of our therapies and are extremely excited to bring in a promising Phase III asset to our portfolio and an indication of significant unmet need. I remain highly confident in our growth projections for the remainder of 2025 and for many years ahead, as well as our ability to deliver significant value for shareholders and for people living with rare diseases. With that, operator, we can now open the call to questions.

Operator, Operator

Our first question today comes from Anupam Rama of JPMorgan. Your line is now open.

Anupam Rama, Analyst

Thanks so much for taking the question. Just one from me. Was there something particular noted assessments for both Galafold and Pombiliti-Opfolda that led to the rebate being a little bit higher than anticipated for both products? Thanks so much.

Bradley Campbell, President and Chief Executive Officer

Yes, thanks, Anupam. It’s really frustrating. That’s a negotiated rebate by industry association in the UK, and they give guidance to industry of what to expect for the year. Our guidance was between 12% to 15%, and we assumed the maximum of that rate, 15%, to be conservative. In the end, they came back with a negotiated rate of 22%, so almost a 50% increase in what we had anticipated. The challenge is, of course, that hits you in the quarter and then throughout the year, which is frustrating, but it is what it is. It’s a one-time thing, and it’s reflective of just a negotiated settlement with the government for all of the industry. There’s a lot of coverage of that in the UK press, as you might imagine. Now I think we can confidently say with Galafold, we can make up for that based on the patient growth. And then you saw the revised guidance for Pombiliti and Opfolda.

Operator, Operator

Thank you. Our next question comes from the line of Eli Merrill of UBS. Your line is now open.

Unidentified Analyst, Analyst

This is Tejas on for Eli. I guess just in terms of the cadence of ex-U.S. launches and patient starts, what has changed on your expectations there? And how much of that contributed to you guys taking down the Pom-Op guidance?

Bradley Campbell, President and Chief Executive Officer

Yes, thanks for the question. I think there are really two big elements there. The first is exactly as you said, you saw in previous slides as we came into the year, and then we reiterated here, we reached a number of reimbursement settlements at the end of last year in the early part of the quarter. We had assumed that those patients would start on therapy in the first quarter. Unfortunately, of them started, only a handful started in the first quarter, and many of them are starting in the second quarter. So really that’s a timing thing. So it’s kind of just pushes the curve to the right. And then unfortunately, we do have that impact of VPAG. As a reminder, the UK is one of our top three revenue markets for both Pom-Op and for Galafold. That ends up being a hit for the rest of the year. I would think of it mostly just based on what we’re seeing in that acceleration that we’ve already started to see in April, and that we expect to see in the back half of the year, just a shifting to the right. And we have some great positives that we’re seeing. We’ve already started patients now in Italy and Sweden and some other markets, Switzerland as well. That Netherlands first position will be a big growth driver for us in the second half of the year as well.

Unidentified Analyst, Analyst

Yes, I guess just a quick on the Netherlands, how much of that impact is just coming from Netherlands? I know you mentioned it in the first quarter shifting to the right a little bit.

Bradley Campbell, President and Chief Executive Officer

Well, our 150 plus patients, LLPD patients in the Netherlands and they are, as we mentioned, we have now been awarded first position there. That’s a significant opportunity. One of the challenges is that it’s only one center in the Netherlands that is treating the majority of those patients. There’s a bit of a bottleneck there that is taking a little bit longer to get started. Again, we very much look forward to seeing that play out over the back half of the year and beyond. I would orient you also to Sweden, which has a much smaller patient population; however, a similar outcome where we were awarded first position, and we’re getting 80% to 90% of the patients there. I think in the medium term, it’s going to be a huge opportunity for us. But because of some of that kind of bottlenecking and getting started, those patients will fall into the second, third, and fourth quarter.

Operator, Operator

Thank you. Our next question comes from the line of Joseph Schwartz of Leerink. Your line is now open.

Unidentified Analyst, Analyst

This is Will on for Joe. Thanks for taking our questions today. So I’ll switch it up and ask about DMX-200. So I guess on the licensing agreement here, it would be a bit helpful to hear some more color on the diligence process and how you ultimately ended up settling on an asset in a rare renal disease. And what provided you with the confidence of the asset's differentiation versus late-stage competition? And maybe how do you see this kind of fitting into the overall treatment paradigm as approved? Thank you.

Bradley Campbell, President and Chief Executive Officer

I think you talked a little bit about the strategy, a little bit about the diligence, and then about the differentiation of the molecule. I’ll start with maybe the first two and ask Jeff and Sebastien to add any color, especially on the differentiation, Jeff. So first and foremost, remember as we finished last year and came into this year, what we described as our strategy was bringing into Amicus late-stage, de-risked assets that we believed could meet a significant unmet medical need. We also talked about disease areas that could bring significant synergies. If you think about FSGS as a rare kidney disease, the endpoints, proteinuria, GFR, the call points nephrologists, specialty medical centers, etc., are very much synergistic with our capabilities and our team today. We felt like both the structure of the deal, which was a modest upfront and then really success-based milestones going forward, as well as the strategic fit, was sort of perfect for what we were looking for as our first deal to expand the portfolio. In terms of diligence, of course, we looked very carefully through the data provided. We did a lot of market research, talked to physicians, worked very closely with Dimerix. It was a collaborative process. What gave us particular conviction here from a diligence perspective was, of course, the Phase II data which is very compelling, the unmet need is very compelling. Then also the interim analysis that Dimerix had previously shown that showed statistical favorability for proteinuria in that blinded analysis, which was a planned interim analysis that had already been conducted. If you combine that with the very recent FDA meeting and meeting minutes that we saw confirming proteinuria as the primary endpoint, I think that gives us great confidence that this is again a highly de-risked asset and likely to succeed. Maybe, Jeff, just hit quickly the differentiation point on the molecule itself in FSGS.

Jeffrey Castelli, Chief Development Officer

Yes, thanks, Brad. One of the things we’re really excited about is the mechanism of action of DMX-200 and how differentiated it is. When you look at standard of care, some of the other development compounds, none of them are targeting this monocyte-driven inflammatory component of the feedback loop. A lot of them are focused more on controlling the hemodynamic side of things through A1TR or endothelin. DMX-200 specifically targets the inflammatory signaling in the damaged kidney. FSGS is a very diverse disease with lots of underlying causes. I think some patients will respond better if it’s mainly a hemodynamic-driven challenge to ARBs or to new drugs like sparsentan that are targeting that side of things. For patients where ongoing monocyte/macrophage driven inflammation is driving things, they might respond better to DMX-200. Down the line, I think there’s room for complementary approaches here because all the drugs are targeting different aspects of the disease. You might see that in some patients combination of these approaches might work best ultimately. But that also feeds into how we see this fitting in, as there’s going to be some subset of patients that respond better to one treatment than the other. Those will be the patients that I think doctors will want to focus on.

Operator, Operator

So our next question comes from the line of Ritu Baral of TD Cohen. Your line is now open.

Joshua Fleishman, Analyst

This is Joshua Fleishman on the line for Ritu. Thanks for taking our question. Hi, Josh. On DMX-200, even if qPCR is a fully approvable primary endpoint, what is any benefit in eGFR the FDA is looking for besides the primary? Two, what timeline should we expect for the next interim analysis which is gated by Dimerix and FDA? Does nine months sound reasonable? And three, what have you seen to justify acceleration of U.S. switches for Pombiliti and Opfolda in 2HAP-25?

Bradley Campbell, President and Chief Executive Officer

Great. I’ll start with Pom-Op first, and then Jeff, you can speak to those other points. Look, I think as Sebastien shared with you on the call, we’re already seeing a significant acceleration in switches in Pombiliti and Opfolda in the U.S. and around the world just in the month of April. It was actually our best month for new commercial starts, not clinical trial conversions, but new commercial starts since we’ve launched. That’s really exciting. Why are we seeing that? Part of it for sure is just the dynamic we had already talked about, which is more and more Nexviazyme patients entering that two-year period. The majority of the switchers are coming from Nexviazyme. I think part of it is what Jeff talked about, which is the growing body of real-world evidence. We presented, for the first time, or one of our thought leaders did at a medical congress, case studies supporting the switch from Nexviazyme. I think that’s really important real-world evidence that will continue to grow. We’ve always seen Q1 as a nonlinear quarter in Fabry, and I think you may start to see that in Pompe as well. This could be a reflection of that. If you add in those one-time factors we talked about ex-U.S., I think that kind of explains the quarter. Jeff, do you want to talk about FSGS and both the proteinuria and GFR feedback from the FDA, which is fantastic from the Type C meeting, and then also some of the early timelines we have line of sight to?

Jeffrey Castelli, Chief Development Officer

Yes, thanks. Importantly, the alignment with FDA was proteinuria as a primary endpoint for full approval, not accelerated approval within some other TBD endpoint like GFR for confirmatory in some other kidney diseases. What’s exciting is we’re seeing the FDA more towards recognizing proteinuria as being strongly tied to GFR decline and ultimate kidney progression, moving more towards qPCR as the provable full endpoint. That’s driven by data in FSGS from the Parasol Initiative, which has 50 different researchers with 1,600 plus FSGS patients. It’s been key in showing that tight association between proteinuria changes and GFR changes for kidney progression. In terms of GFR, we need to see supportive data with our design to show it effectively. In terms of the interim analysis, the main discussion with FDA is that alignment on proteinuria as the single primary endpoint. There was also talk about potentially an interim analysis to support accelerated approval, which will require additional analysis of that Parasol dataset collaborating with them. That will take about three to six months, then go back to FDA to align on all potential interim or accelerated endpoints, then conduct that analysis. Nine months does sound reasonable.

Operator, Operator

Thank you. Our next question comes from the line of Dennis Ding of Jefferies. Your line is now open.

Dennis Ding, Analyst

Hi, good morning. Thanks for taking my question. I had one on FSGS specifically on the CCR2 mechanism. I appreciate that Dimerix had already had positive Phase II and Phase III interim, but hemosynchronous failed the Phase II a few years ago in FSGS with the same mechanism. Can you comment on what happened there? If there was a drug target or trial design issue, and how may the drugs be different at this time?

Bradley Campbell, President and Chief Executive Officer

Yes, it’s a great question. I think it’s important that Jeff highlighted this. DMX-200 is a differentiated CCR2 inhibitor molecule. It’s very important to highlight those differences. Jeff, maybe share a little bit more of that color specifically on how it acts within the kidney.

Jeffrey Castelli, Chief Development Officer

Yes, thanks. That’s a great question. There have been CCR2 inhibitors historically that have been tried by several companies for various diseases, mainly to try to knock down monocyte-driven inflammation. The difference with DMX-200 is it’s not a direct inhibitor of the binding of MCP1, which is the inflammatory signal to the CCR2 receptor. Instead, DMX-200 acts downstream and blocks the signaling coming out of the A1TR CCR2 heteromer that’s on damaged kidney tissue, which acts as the amplification for inflammation. Traditional binding inhibitors led to a rebound effect where MCP1 levels dramatically increase, which would lead to a muting of effect. The beauty of the downstream blocking is that MCP1 can still dock, which leads to MCP1 degradation, stopping the signal. We’re actually seeing MCP1 levels come down with DMX-200 versus an increase, which maximizes the ability to shut down inflammation. It also allows monocytes to continue their job elsewhere since we’re not directly blocking the MCP1 binding to monocytes.

Operator, Operator

All right. Thank you. Our next question comes from the line of Tazeen Ahmad of Bank of America Securities. Your line is now open.

Unidentified Analyst, Analyst

Hi, good morning. This is Yeung on for Tazeen. Thank you for taking our questions. So you mentioned that this VPAG rebate drag is a one-time thing. I wonder if you could clarify on that? Can you make sure that this is not a recurring event? Our second question is how do you plan to message the positioning of Pom-Op versus the traditional ERT in the new 10 countries you plan to launch? What have you heard so far from the payers and providers? Our third question is whether this in-license deal represents the beginning of a broader plan into neurology or inflammation-related rare disease? Thank you.

Bradley Campbell, President and Chief Executive Officer

Yes. So I think the first question was around VPAG. To be clear, we had anticipated based on the guidance from the industry association up to a 15% rebate, and what was decided and given to us was a 22% rebate. That will impact revenue over the course of the year. That’s part of why with Pom-Op, we’ve adjusted our guidance downwards. With Galafold, because of strong patient growth, we believe we will be able to make up for that over the course of the year, which is great. VPAG has always been part of the arrangement between industry and the UK government, so the unusual increase in the eventual rate was something surprising. As it relates to positioning, we’ve done a great job working through the reimbursement process in Europe. We were the first product to get approval by NICE ahead of MHRA approval. We got first position in Sweden and the Netherlands, and a fast launch in Spain. We’re clearly demonstrating the value proposition of the product through data, continuing to show that we can improve patients who switch from enzyme replacement therapy. Hopefully that helps you understand our positioning.

Sebastien Martell, Chief Business Officer

Yes, Brad. We did highlight in the past our areas of interest from a strategic standpoint. We’ve shared that we tend to think in adjacencies to our existing businesses, focusing on neuromuscular, rare kidney, or rare cardiology assets and more broadly, rare metabolic diseases. This particular deal is for U.S. rights in FSGS, as well as in other indications, given our excitement around DMX-200. We see clearly the opportunity to expand in the rare kidney space with this specific asset in the U.S. We’re also eager to continue to grow our portfolio on a global scale.

Operator, Operator

Thank you. Our next question comes from the line of Kristen Kluska of Cantor Fitzgerald. Your line is now open.

Unidentified Analyst, Analyst

Hey, guys. This is Rick Miller on for Kristen. Thanks for taking our question. Just one question on FSGS. You talked about being subsets of patients, maybe some that respond better from a hemodynamic-driven mechanism versus inflammatory-driven in FSGS. Is there any stat around what percentage of FSGS patients seem to be poor responders on ARBs? How should we be thinking about that?

Bradley Campbell, President and Chief Executive Officer

Yes, just as a reminder, Jeff, I’ll turn it over to you. There are over forty thousand patients with primary FSGS in the U.S., and we believe a sizable subset of those patients would be prime candidates for this product. Jeff, maybe talk about the most obvious responders and other opportunities as well.

Jeffrey Castelli, Chief Development Officer

Yes, it’s a great question. The focus of the patients for DMX-200 in the trial are primary FSGS patients with significant proteinuria despite ARBs and corticosteroids. Unfortunately, that’s actually a majority of FSGS patients who still display significantly elevated proteinuria despite treatments. In that group, the higher the proteinuria levels, the more likely they have an uncontrolled inflammatory component going on. There might not be great numbers on how many patients in that group have elevated MCP1, but we believe that’s a significant percentage. These are the patients where we expect to see a robust response in terms of reduction in proteinuria. In others that might not be as elevated but are treated down the line, inflammation can start to kick up, so you might see a response to prevent worsening in those patients. We think DMX-200 is going to address a significant percentage of those patients with ongoing inflammation.

Operator, Operator

Thank you. Our last question comes from the line of Gil Blum of Needham & Company. Your line is now open.

Gil Blum, Analyst

Good morning, everyone, and thanks for taking my question. Just, maybe a couple of macro items. You mentioned very limited impact of tariffs in 2025, but looking into the future, will additional investment be required to control the potential for tariff impact in later years? What is the impact of the weakening dollar?

Bradley Campbell, President and Chief Executive Officer

On the manufacturing side, I don’t foresee significant additional investment to navigate around tariffs. You might remember that we’re moving the majority of our manufacturing to Ireland, which will help diversify and mitigate manufacturing costs and geopolitical location. Sebastien and I mentioned on the call, we’re moving some of the drug product manufacturing to the U.S. This diversification strategy helps us manage going forward despite the uncertainty. Regarding the dollar, a significant portion of our revenue comes from the pound, the euro, and the yen. A weak dollar generally gives us an FX benefit. However, we’ve tried to show in our slides what changes in the dollar's value could impact our revenue. That’s why we focus on growth from a constant exchange rate perspective; a weakening dollar tends to help us on the top line due to the majority of revenues coming outside the U.S.

Operator, Operator

Thank you. Our next question comes from the line of Salveen Richter of Goldman Sachs. Your line is now open.

Unidentified Analyst, Analyst

This is Shunitra for Salveen. Thank you for taking our question. Regarding Pom-Op, could you give more color on the competitive dynamics in the U.S. with a portion of patients on Nexviazyme coming into that appropriate window for switching? How are physicians deciding between the two products at this point? What sort of market feedback have you been getting?

Bradley Campbell, President and Chief Executive Officer

Great questions. One thing we would note, and this is just public information, the global franchise for Sanofi and Pompe actually declined by 5% in the first quarter. I think that shows that we are starting to take share and impact their growth meaningfully. You could see our 90% growth in stark contrast. In terms of positioning, once physicians start a patient on Nexviazyme, they want to give about two years of time before they’re ready to switch again. Having lots of Nexviazyme patients entering that switch period is helpful. The acceleration that Sebastien discussed and the majority of patients coming from Nexviazyme suggest we will continue to switch those patients. They look at the decline in both six-minute walk and forced vital capacity but also some other patient-reported outcomes. The data that Jeff mentioned and the growing body of evidence demonstrating long-term impact across those endpoints, plus the case studies showing improvement support the switch from Nexviazyme to Pombiliti.

Operator, Operator

Thank you. Our last question comes from the line of Maxwell of Morgan Stanley. Your line is now open.

Unidentified Analyst, Analyst

Thank you for taking my questions. Could you elaborate a bit more on other potential indications amenable to DMX-200’s mechanism of action? Given the evolving regulatory landscape, could you share any insights or potential changes you might like to see at the agency to improve rare disease drug development or review efficiencies? Thank you.

Bradley Campbell, President and Chief Executive Officer

I’ll start with the second one. There’s maybe a silver lining in all the craziness out there; senior officials, including the new FDA director, are nodding towards rare disease drug development. We’d love to see more use of real-world evidence acknowledged. In rare diseases, you can’t always have a placebo control arm, and we’d like to see incentives to modernize regulatory abilities and clinical trial design. There may be good opportunities there. Jeff, could you take the second part about potential indications?

Jeffrey Castelli, Chief Development Officer

With the mechanism of action being kidney specific, we’re looking at rare kidney diseases where monocyte/macrophage inflammation is key and not well addressed. Diabetic nephropathy and IgA nephropathy have been looked at; I think there are potential players there. Proliferative lupus nephritis also seems like an area where this mechanism could be vital. We’re considering a range of different areas to see where the mechanism fits best, building off of our FSGS learnings clinically and where we’ll focus our calling efforts.

Bradley Campbell, President and Chief Executive Officer

Yes, turning profitable in the second half of this year leads eventually to positive free cash flows. That gives us our own capabilities and resources to expand the portfolio even within the products we have and now with DMX-200 that should give us an opportunity as well.

Operator, Operator

All right. Thank you. That concludes today’s conference call, and I do hope everyone has a great day. Thank you.