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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
(Mark One)
 
      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
OR
      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to
Commission file number 001-33497
Amicus Therapeutics, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 71-0869350
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
3675 Market Street,
Philadelphia,
PA
19104
(Address of Principal Executive Offices)(Zip Code)
(215)
921-7600
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per share
FOLDNASDAQ Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒
The number of shares outstanding of the registrant's common stock, $0.01 par value per share, as of October 27, 2021 was 278,638,872 shares.




AMICUS THERAPEUTICS, INC.
 
Form 10-Q for the Quarterly Period Ended September 30, 2021
 
 Page
 
Item 1.
Item 2.
Item 3.
Item 4.
  
 Item 1.
    
 Item 1A.
    
 Item 2.
    
 Item 3.
    
 Item 4.
    
 Item 5.
    
 Item 6.
  
  
 
We have filed applications to register certain trademarks in the United States and abroad, including AMICUS THERAPEUTICS and design, AMICUS ASSIST and design, CHART and design, AT THE FOREFRONT OF THERAPIES FOR RARE AND ORPHAN DISEASES, HEALING BEYOND DISEASE, OUR GOOD STUFF, and Galafold® and design.

i


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks, uncertainties, and assumptions. Forward-looking statements are all statements, other than statements of historical facts, that discuss our current expectation and projections relating to our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, and objectives of management. These statements may be preceded by, followed by, or include the words "aim," "anticipate," "believe," "can," "could," "estimate," "expect," "forecast," "intend," "likely," "may," "outlook," "plan," "potential," "predict," "project," "seek," "should," "will," "would," the negatives or plurals thereof, and other words and terms of similar meaning, although not all forward-looking statements contain these identifying words.
We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct. You should understand that the following important factors could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:
the scope, progress, results and costs of our clinical trials of our drug candidates and gene therapy candidates, including but not limited to AT-GAA, CLN6 and CLN3;
the cost of manufacturing drug supply for our clinical and preclinical studies, including the cost of manufacturing our Enzyme Replacement Therapy ("ERT" or "ATB200" or "cipaglucosidase alfa") for the treatment of Pompe disease and gene therapies;
the future results of on-going preclinical research and subsequent clinical trials for cyclin-dependent kinase-like 5 ("CDKL5") deficiency disorder, Pompe gene therapy, Fabry gene therapy, Mucopolysaccharidosis Type IIIB ("MPSIIIB"), next generation Mucopolysaccharidosis Type IIIA ("MPSIIIA") and other pipeline candidates we may identify from time to time, including our ability to obtain regulatory approvals and commercialize these therapies and obtain market acceptance for such therapies;
the costs, timing, and outcome of regulatory review of our product candidates, including AT-GAA;
any changes in regulatory standards relating to the review of our product candidates;
the number and development requirements of other product candidates that we pursue;
our ability to realize the expected benefits of our business combination agreement for our gene therapy business, which could result in additional unanticipated costs and risks;
the costs of commercialization activities, including product marketing, sales, and distribution;
the emergence of competing technologies and other adverse market developments;
our ability to successfully commercialize Galafold® (also referred to as "migalastat HCl") and, if our regulatory filings are accepted and approved, AT-GAA;
our ability to manufacture or supply sufficient clinical or commercial products, including Galafold®, AT-GAA and our gene therapy candidates;
our ability to obtain reimbursement for Galafold® and, if our regulatory filings are accepted and approved, AT-GAA;
our ability to satisfy post-marketing commitments or requirements for continued regulatory approval of Galafold®;
our ability to obtain market acceptance of Galafold® and, if our regulatory filings are accepted and approved, AT-GAA;
the costs of preparing, filing, and prosecuting patent applications and maintaining, enforcing, and defending intellectual property-related claims;
the impact of litigation that has been or may be brought against us or of litigation that we are pursuing or may pursue against others;
the extent to which we acquire or invest in businesses, products, and technologies;
our ability to successfully integrate our acquired products and technologies into our business, including the possibility that the expected benefits of the transactions will not be fully realized by us or may take longer to realize than expected;
1


our ability to establish collaborations, partnerships or other similar arrangements and to obtain milestone, royalty, or other payments from any such collaborators;
our ability to adjust to changes in the European and United Kingdom markets in the wake of the United Kingdom leaving the European Union;
the extent to which our business could be adversely impacted by the effects of the novel coronavirus ("COVID-19") outbreak, including due to actions by us, governments, our customers or suppliers or other third parties to control the spread of COVID-19, or by other health epidemics or pandemics;
fluctuations in foreign currency exchange rates; and
changes in accounting standards.
In light of these risks and uncertainties, we may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in Part I Item 1A — Risk Factors of the Annual Report on Form 10-K for the fiscal year ended December 31, 2020, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Those factors and the other risk factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, collaborations, or investments we may make. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements.
You should read this Quarterly Report on Form 10-Q in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (including the documents incorporated by reference therein) completely and with the understanding that our actual future results may be materially different from what we expect. These forward-looking statements speak only as of the date of this report. We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statements, even if experience or future developments make it clear that projected results expressed or implied in such statements will not be realized, except as may be required by law. 
2


PART I.    FINANCIAL INFORMATION
ITEM 1.    CONSOLIDATED FINANCIAL STATEMENTS AND NOTES (UNAUDITED)
Amicus Therapeutics, Inc.
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share amounts)
September 30, 2021December 31, 2020
Assets
Current assets:
Cash and cash equivalents$385,903 $163,240 
Investments in marketable securities171,057 320,029 
Accounts receivable51,427 46,923 
Inventories22,072 19,556 
Prepaid expenses and other current assets20,081 29,721 
Total current assets650,540 579,469 
Operating lease right-of-use assets, net21,270 23,296 
Property and equipment, less accumulated depreciation of $18,789 and $14,487 at September 30, 2021 and December 31, 2020, respectively
41,991 43,863 
In-process research & development23,000 23,000 
Goodwill197,797 197,797 
Other non-current assets22,077 19,095 
Total Assets$956,675 $886,520 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$24,474 $17,063 
Accrued expenses and other current liabilities72,453 96,841 
Contingent consideration payable17,000 8,900 
Operating lease liabilities7,175 6,872 
Total current liabilities121,102 129,676 
Deferred reimbursements7,406 7,406 
Long-term debt388,719 389,254 
Contingent consideration payable7,605 16,925 
Deferred income taxes4,896 4,896 
Operating lease liabilities43,495 45,604 
Other non-current liabilities6,823 6,379 
Total liabilities580,046 600,140 
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 500,000,000 shares authorized, 278,585,092 and 262,063,461 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively
2,805 2,650 
Additional paid-in capital2,579,953 2,308,578 
Accumulated other comprehensive income (loss):
Foreign currency translation adjustment6,617 8,412 
Unrealized loss on available-for-sale securities(184)(185)
Warrants83 12,387 
Accumulated deficit(2,212,645)(2,045,462)
Total stockholders’ equity376,629 286,380 
Total Liabilities and Stockholders’ Equity$956,675 $886,520 
See accompanying Notes to Consolidated Financial Statements
3


Amicus Therapeutics, Inc.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share amounts)
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
Net product sales$79,545 $67,437 $223,360 $190,315 
Cost of goods sold11,696 8,399 26,615 21,627 
Gross profit67,849 59,038 196,745 168,688 
Operating expenses:
Research and development59,333 70,419 186,453 229,150 
Selling, general, and administrative46,107 37,850 135,109 112,722 
Changes in fair value of contingent consideration payable3,288 1,034 4,780 2,680 
Depreciation and amortization1,520 2,496 4,691 6,299 
Total operating expenses110,248 111,799 331,033 350,851 
Loss from operations(42,399)(52,761)(134,288)(182,163)
Other income (expense):
Interest income108 518 323 2,898 
Interest expense(8,165)(6,784)(24,307)(14,148)
Loss on extinguishment of debt (257)(7,276)(257)(7,276)
Other income (expense)237 3,019 (2,729)29 
Loss before income tax (50,476)(63,284)(161,258)(200,660)
Income tax benefit (expense) 182 (727)(5,925)(4,791)
Net loss attributable to common stockholders$(50,294)$(64,011)$(167,183)$(205,451)
Net loss attributable to common stockholders per common share — basic and diluted$(0.19)$(0.25)$(0.63)$(0.80)
Weighted-average common shares outstanding — basic and diluted267,464,637259,161,799266,085,788258,091,170
                                                                                    
See accompanying Notes to Consolidated Financial Statements
4


Amicus Therapeutics, Inc.
Consolidated Statements of Comprehensive Loss
(Unaudited)
(in thousands)
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Net loss$(50,294)$(64,011)$(167,183)$(205,451)
Other comprehensive gain (loss):
Foreign currency translation adjustment gain (loss), net of tax impact of $(581), $1,203, $(397), and $649, respectively
(2,638)(289)(1,795)1,791 
Unrealized gain (loss) on available-for-sale securities, net of tax impact of $(3), $(91), $0, and $(25), respectively
(11)(344)1 (96)
Other comprehensive (loss) income$(2,649)$(633)$(1,794)$1,695 
Comprehensive loss$(52,943)$(64,644)$(168,977)$(203,756)
See accompanying Notes to Consolidated Financial Statements
5


Amicus Therapeutics, Inc.
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
(in thousands, except share amounts)
Three Months Ended September 30, 2021
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at June 30, 2021266,532,536 $2,685 $2,364,494  $9,082 $(2,162,351)$213,910 
Stock options exercised, net248,617 3 1,693 — — — 1,696 
Employee withholding taxes related to restricted stock unit vesting39,007 — (262)— — — (262)
Stock-based compensation— — 11,841 — — — 11,841 
Equity component of the convertible notes468,272 5 2,635 — — — 2,640 
Common stock issued from equity financing and pre-funded warrants11,296,660 112 199,552 83 — — 199,747 
Unrealized holding gain on available-for-sale securities— — — — (11)— (11)
Foreign currency translation adjustment— — — — (2,638)— (2,638)
Net loss— — — — — (50,294)(50,294)
Balance at September 30, 2021278,585,092 $2,805 $2,579,953 $83 $6,433 $(2,212,645)$376,629 

Nine Months Ended September 30, 2021
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at December 31, 2020262,063,461 $2,650 $2,308,578 $12,387 $8,227 $(2,045,462)$286,380 
Stock options exercised, net1,171,279 12 8,345 — — — 8,357 
Employee withholding taxes related to restricted stock unit vesting1,026,337 — (14,700)— — — (14,700)
Stock-based compensation— — 43,931 — — — 43,931 
Warrants exercised2,554,999 26 31,591 (12,387)— — 19,230 
Equity component of the convertible notes472,356 5 2,656 — — — 2,661 
Common stock issued from equity financing and pre-funded warrants11,296,660 112 199,552 83 — — 199,747 
Unrealized holding gain on available-for-sale securities— — — — 1 — 1 
Foreign currency translation adjustment— — — — (1,795)— (1,795)
Net loss— — — — — (167,183)(167,183)
Balance at September 30, 2021278,585,092 $2,805 $2,579,953 $83 $6,433 $(2,212,645)$376,629 
6


Amicus Therapeutics, Inc.
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
(in thousands, except share amounts)
Three Months Ended September 30, 2020
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at June 30, 2020258,223,842 $2,614 $2,250,849 $12,387 $5,153 $(1,910,050)$360,953 
Stock options exercised, net1,223,075 12 9,283 — — — 9,295 
Employee withholding taxes related to restricted stock unit vesting153,733 — (1,243)— — — (1,243)
Stock-based compensation— — 15,908 — — — 15,908 
Unrealized holding gain on available-for-sale securities— — — — (344)— (344)
Foreign currency translation adjustment— — — — (289)— (289)
Net loss— — — — — (64,011)(64,011)
Balance at September 30, 2020259,600,650 $2,626 $2,274,797 $12,387 $4,520 $(1,974,061)$320,269 

Nine Months Ended September 30, 2020
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at December 31, 2019255,417,869 $2,598 $2,227,225 $12,387 $2,825 $(1,768,610)$476,425 
Stock options exercised, net2,832,310 28 20,000 — — — 20,028 
Employee withholding taxes related to restricted stock unit vesting1,350,471 — (9,340)— — — (9,340)
Stock-based compensation— — 36,912 — — — 36,912 
Unrealized holding gain on available-for-sale securities— — — — (96)— (96)
Foreign currency translation adjustment— — — — 1,791 — 1,791 
Net loss— — — — — (205,451)(205,451)
Balance at September 30, 2020259,600,650 $2,626 $2,274,797 $12,387 $4,520 $(1,974,061)$320,269 
See accompanying Notes to Consolidated Financial Statements
7


Amicus Therapeutics, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Nine Months Ended September 30,
20212020
Operating activities
Net loss$(167,183)$(205,451)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount and deferred financing1,852 1,124 
Depreciation and amortization4,691 6,299 
Stock-based compensation43,931 36,912 
Loss on extinguishment of debt257 7,276 
Non-cash changes in the fair value of contingent consideration payable4,780 2,680 
Foreign currency remeasurement loss (gain)4,247 (1,084)
Changes in operating assets and liabilities:
Accounts receivable(6,372)(10,845)
Inventories(3,022)2,182 
Prepaid expenses and other current assets9,080 4,377 
Accounts payable and accrued expenses(22,068)(23,424)
Other non-current assets and liabilities(2,170)(2,264)
Deferred reimbursements (1,250)
Net cash used in operating activities$(131,977)$(183,468)
Investing activities
Sale and redemption of marketable securities342,343 272,679 
Purchases of marketable securities(193,369)(261,322)
Capital expenditures(2,124)(2,160)
Net cash provided by investing activities$146,850 $9,197 
Financing activities
Payment of long-term debt (155,249)
Proceeds from long-term debt, net of issuance costs 385,929 
Proceeds from issuance of common stock from equity financing and pre-funded warrants199,750  
Proceeds from warrants exercised19,230  
Payment of finance leases(460)(58)
Payments of employee withholding taxes related to restricted stock unit vesting(14,700)(9,340)
Proceeds from stock options exercised, net8,357 20,028 
Net cash provided by financing activities$212,177 $241,310 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash$(4,141)$45 
Net increase in cash, cash equivalents, and restricted cash at the end of the period222,909 67,084 
Cash, cash equivalents, and restricted cash at beginning of period166,162 146,341 
Cash, cash equivalents, and restricted cash at the end of period$389,071 $213,425 
Supplemental disclosures of cash flow information
Tenant improvements paid through lease incentives$67 $470 
Cash paid during the period for interest $22,788 $16,712 
Capital expenditures unpaid at the end of period$327 $265 
Cash paid for taxes$9,854 $5,912 
See accompanying Notes to Consolidated Financial Statements
8


Amicus Therapeutics, Inc.
Notes to the Consolidated Financial Statements
(Unaudited)
Note 1. Description of Business
Amicus Therapeutics, Inc. (the "Company") is a global, patient-dedicated biotechnology company focused on discovering, developing, and delivering novel medicines for rare diseases. The Company has a portfolio of product opportunities led by the first, oral monotherapy for Fabry disease that has achieved widespread global approval, a differentiated biologic for Pompe disease that is under review with the U.S. Food and Drug Administration ("FDA"), and an industry leading rare disease gene therapy portfolio.
The cornerstone of the Company's portfolio is Galafold® (also referred to as "migalastat"), the first and only approved oral precision medicine for people living with Fabry disease who have amenable genetic variants. Migalastat is currently approved under the trade name Galafold® in the United States ("U.S."), European Union ("E.U."), United Kingdom ("U.K."), and Japan, with multiple additional approvals granted and applications pending in several additional geographies around the world.
The lead biologics program of the Company's pipeline is Amicus Therapeutics GAA ("AT-GAA", also known as ATB200/AT2221, or cipaglucosidase alfa/miglustat), a novel, two-component, potential best-in-class treatment for Pompe disease. In February 2019, the FDA granted Breakthrough Therapy designation ("BTD") to AT-GAA for the treatment of late-onset Pompe disease. In September 2021, the FDA set the Prescription Drug User Fee Act ("PDUFA") target action date of May 29, 2022 for the New Drug Application ("NDA") for miglustat and July 29, 2022 for the Biologics License Application ("BLA") for cipaglucosidase alfa.
The Company has established an industry leading gene therapy portfolio of potential therapies for people living with rare metabolic diseases, through a license with Nationwide Children's Hospital ("Nationwide Children's") and a research collaboration with the University of Pennsylvania ("Penn"). The Company's pipeline includes gene therapy programs in rare, neurologic/neuromuscular diseases lysosomal disorders ("LDs"), specifically: CLN6 Batten disease ("CLN6"), CLN3 Batten disease ("CLN3"), and CLN1 Batten disease ("CLN1"), Pompe disease, Fabry disease, CDKL5 deficiency disorder ("CDD"), Mucopolysaccharidosis Type IIIB ("MPSIIIB"), as well as a next generation program in Mucopolysaccharidosis Type IIIA ("MPSIIIA"). In the first quarter of 2020, the FDA granted Fast Track designation to the CLN3 gene therapy, AT-GTX-502, for the treatment of pediatric patients less than 18 years of age. In September 2020 and February 2021, the European Medicines Agency granted Priority Medicines designation and the FDA granted Fast Track Designation, respectively, to the CLN6 gene therapy, AT-GTX-501, for the treatment of patients with variant late infantile neuronal ceroid lipofuscinosis 6 ("vLINCL6"). The research collaboration with Penn also provides the Company with exclusive disease-specific access and option rights to develop potentially disruptive new gene therapy platform technologies and programs for most LDs and a broader portfolio of more prevalent rare diseases, including Rett Syndrome, Angelman Syndrome, Myotonic Dystrophy, and select other muscular dystrophies.
In September 2021, the Company announced its intent to launch a next-generation genetic medicine company, Caritas Therapeutics, Inc. (“Caritas”) through a definitive business combination agreement pursuant to which the Amicus gene therapy business will be acquired by ARYA Sciences Acquisition Corp IV ("ARYA"), a special purpose acquisition company (or "SPAC"), sponsored by Perceptive Advisors.
Concurrent with the closing of the transaction, the Company and Caritas will enter into a co-development and commercialization agreement (the “Co-Development and Collaboration Agreement”) pursuant to which, among other things, (i) the Company and Caritas will collaborate in the research and development of gene therapy product candidates for the treatment of Fabry disease and Pompe diseases, (ii) Caritas will grant the Company an exclusive license under Caritas’ intellectual property to clinically develop and commercialize certain existing and future gene therapy candidates and (iii) Caritas will grant the Company a right of first negotiation for the Company to negotiate an exclusive license to develop and commercialize therapeutic products incorporating gene therapy technologies being developed by Caritas for certain muscular dystrophy indications, in each case, subject to the terms and conditions therein.

The Company and Caritas will also enter into a transition services agreement pursuant to which, among other things, (i) the Company and/or one or more of its affiliates will provide certain transitional services to Caritas and/or one or more of its affiliates and (ii) Caritas and/or one or more its affiliates will provide certain transitional services to the Company and/or one or more of its affiliates, in each case, in order to facilitate the orderly transition of the Company’s gene therapy business to Caritas.

9


Concurrent with the closing of the transaction, the Company will enter into the tax receivable agreement with Caritas, ARYA and the other persons from time to time that become a party thereto (such other persons and the Company, collectively, the “TRA Participants”). Pursuant to the tax receivable agreement, ARYA will be required to pay the TRA Participants 85% of the amount of savings, if any, in U.S. federal, state and local income tax that ARYA actually realizes (computed using certain simplifying assumptions) as a result of the increases in tax basis related to any exchanges of Units for Caritas Common Stock. All such payments to the TRA Participants will be ARYA’s obligation, and not that of Caritas.
The business combination agreement and the transactions contemplated thereby were unanimously approved by the respective boards of directors of the Company and ARYA. The transaction is expected to close in late 2021 or early 2022, following the approval of the transaction by ARYA’s stockholders and the fulfillment of other customary closing conditions.
Prior to the closing, all expenses will continue to be reported within the Company's Consolidated Statements of Operations. Following the close of the transaction, Amicus will become the largest stockholder of Caritas with an approximate 36% ownership stake (assuming no redemptions by ARYA’s stockholders), through transfer of assets constituting the Company's gene therapy business and contributing $50 million in exchange for a number of units of Caritas as an equity investment.
As of September 30, 2021, the Company will continue to fully consolidate the gene therapy business until the close of the transaction and has not applied accounting treatment under the "held for sale" guidance due to the conditional regulatory and stockholder approvals.
Additionally, in September 2021, the Company entered into securities purchase agreements with certain investors for the private placement of an aggregate of 11,296,660 shares of the Company's common stock, at a purchase price of $10.18 per share and pre-funded warrants to purchase an aggregate of 8,349,705 shares of common stock, at a purchase price of $10.17 per pre-funded warrant. The net proceeds from these private placements were approximately $199.8 million. The Company expects to use the net proceeds to further fund initiatives in the global commercialization of Galafold® and the anticipated global launch of AT-GAA and, in connection with the business combination, to invest $50 million in cash in Caritas.
The Company's operations have not been significantly impacted by the novel coronavirus (“COVID-19”) pandemic thus far. However, the Company continued to observe periodic increase in lag times between patient identification and Galafold® initiation due to the resurgence of COVID-19 into 2021. The Company has maintained operations in all geographies, secured its global supply chain for its commercial and clinical products, and maintained the operational integrity of its clinical trials, with minimal disruption. The Company believes its ability to continue to operate without any significant disruptions will depend on the continued health of its employees, the ongoing demand for Galafold® and the continued operation of its global supply chain. The Company has continued to provide uninterrupted access to medicines for those in need of treatment, while prioritizing the health and safety of its global workforce. However, the Company's results of operations in future periods may be negatively impacted by unknown future impacts from the COVID-19 pandemic.
The Company had an accumulated deficit of $2.2 billion as of September 30, 2021 and anticipates incurring losses through the fiscal year ending December 31, 2021 and beyond. The Company has historically funded its operations through stock offerings, Galafold® revenues, debt issuances, collaborations, and other financing arrangements.
Based on the current operating model, the Company believes that the current cash position, which includes expected revenues, and net proceeds from the September 2021 private placement of securities, is sufficient to fund the Company's operations and ongoing research programs to achieve self-sustainability. Potential impacts of the COVID-19 pandemic, business development collaborations, pipeline expansion, and investment in manufacturing capabilities could impact the Company's future capital requirements.
10


Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The Company has prepared the accompanying unaudited Consolidated Financial Statements in accordance with the U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's interim financial information.
The accompanying unaudited Consolidated Financial Statements and related notes should be read in conjunction with the Company's financial statements and related notes as contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020. For a complete description of the Company's accounting policies, please refer to the Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Consolidation
The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions are eliminated in consolidation.
Foreign Currency Transactions
The functional currency for most of the Company's foreign subsidiaries is their local currency. For non-U.S. subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange at the balance sheet date. Income and expense items are translated at the average foreign exchange rates for the period. Adjustments resulting from the translation of the financial statements of the Company's foreign operations into U.S. dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive income, a separate component of stockholders' equity.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Additionally, the Company assessed the impact COVID-19 pandemic has had on its operations and financial results as of September 30, 2021 and through the issuance of this report. The Company’s analysis was informed by the facts and circumstances as they were known to the Company. This assessment considered the impact COVID-19 may have on financial estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses.
Cash, Cash Equivalents, Marketable Securities, and Restricted Cash
The Company considers all highly liquid investments purchased with a maturity of three months or less at the date of acquisition to be cash equivalents. Marketable securities consist of fixed income investments with a maturity of greater than three months and other highly liquid investments that can be readily purchased or sold using established markets. These investments are classified as available-for-sale and are reported at fair value on the Company's Consolidated Balance Sheets. Unrealized holding gains and losses are reported within comprehensive income (loss) in the Statements of Comprehensive Loss. Fair value is based on available market information including quoted market prices, broker or dealer quotations, or other observable inputs.
Restricted cash consists primarily of funds held to satisfy the requirements of certain agreements that are restricted in their use and is included in other current assets and other non-current assets on the Company's Consolidated Balance Sheets.
11


Concentration of Credit Risk
The Company's financial instruments that are exposed to concentration of credit risk consist primarily of cash, cash equivalents, and marketable securities. The Company maintains its cash and cash equivalents in bank accounts, which, at times, exceed federally insured limits. The Company invests its marketable securities in high-quality commercial financial instruments. The Company has not recognized any losses from credit risks on such accounts during any of the periods presented. The Company believes it is not exposed to significant credit risk on its cash, cash equivalents, or marketable securities.
The Company is subject to credit risk from its accounts receivable related to its product sales of Galafold®. The Company's accounts receivable at September 30, 2021 have arisen from product sales primarily in Europe and the U.S. The Company will periodically assess the financial strength of its customers to establish allowances for anticipated losses, if any. For accounts receivable that have arisen from named patient sales, the payment terms are predetermined, and the Company evaluates the creditworthiness of each customer on a regular basis. As of September 30, 2021, the Company recorded an allowance for doubtful accounts of $0.1 million.    
Revenue Recognition
The Company's net product sales consist of sales of Galafold® for the treatment of Fabry disease. The Company has recorded revenue on sales where Galafold® is available either on a commercial basis or through a reimbursed early access program ("EAP"). Orders for Galafold® are generally received from distributors and pharmacies with the ultimate payor often a government authority.
The Company recognizes revenue when its performance obligations to its customers have been satisfied, which occurs at a point in time when the pharmacies or distributors obtain control of Galafold®. The transaction price is determined based on fixed consideration in the Company's customer contracts and is recorded net of estimates for variable consideration, which are third party discounts and rebates. The identified variable consideration is recorded as a reduction of revenue at the time revenue from the sale of Galafold® is recognized. The Company recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. These estimates may differ from actual consideration received. The Company evaluates these estimates each reporting period to reflect known changes.
The following table summarizes the Company's net product sales from Galafold® disaggregated by geographic area:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2021202020212020
U.S.$25,636 $20,278 $70,167 $58,857 
Ex-U.S.53,909 47,159 153,193 131,458 
Total net product sales$79,545 $67,437 $223,360 $190,315 
Inventories and Cost of Goods Sold
Inventories are stated at the lower of cost and net realizable value, determined by the first-in, first-out method. Inventories are reviewed periodically to identify slow-moving or obsolete inventory based on projected sales activity as well as product shelf-life. In evaluating the recoverability of inventories produced, the probability that revenue will be obtained from the future sale of the related inventory is considered and inventory value is written down for inventory quantities in excess of expected requirements. Expired inventory is disposed of and the related costs are recognized as cost of goods sold in the Consolidated Statements of Operations.
Cost of goods sold includes the cost of inventory sold, manufacturing and supply chain costs, product shipping and handling costs, provisions for excess and obsolete inventory, as well as royalties payable.
Leases
The Company primarily enters into lease agreements for office space, equipment, and vehicles. The leases have varying terms, some of which could include options to renew, extend, and early terminate. The Company determines if an arrangement is a lease at contract inception. Operating leases are included in right-of-use ("ROU") assets and lease liabilities on the Consolidated Balance Sheets.
12


ROU assets represent the Company's right to control the use of an explicitly or implicitly identified fixed asset for a period of time and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
Lease payments included in the measurement of the lease liability are comprised of fixed payments. Variable lease payments are excluded from the ROU asset and lease liability and are recognized in the period in which the obligation for those payments is incurred. Variable lease payments are presented in the Consolidated Statements of Operations in the same line item as expenses arising from fixed lease payments for operating leases. The Company has lease agreements that include lease and non-lease components, which the Company accounts for as a single lease component for all underlying asset categories.
The lease term for all of the Company's leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor.
Leases with an initial term of 12 months or less are not recorded on the Consolidated Balance Sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company applies this policy to all underlying asset categories.
Recent Accounting Developments - Guidance Adopted in 2021
ASU 2019-12 - In December 2019, the Financial Accounting Standard Board issued Accounting Standard Update ("ASU") 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). This new guidance removes specific exceptions to the general principles in Topic 740. It eliminates the need for an organization to analyze whether the following applies in a given period: (i) exception to the incremental approach for intraperiod tax allocation; (ii) exceptions to accounting for basis differences when there are ownership changes in foreign investments; and (iii) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 also improves financial statement preparers’ application of income tax-related guidance and simplifies the following: (i) franchise taxes that are partially based on income; (ii) transactions with a government that result in a step up in the tax basis of goodwill; (iii) separate financial statements of legal entities that are not subject to tax; and (iv) enacted changes in tax laws in interim periods. ASU 2019-12 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The Company adopted this guidance prospectively on January 1, 2021. The adoption did not have a material impact on the Company's Consolidated Financial Statements or related disclosures.
Recent Accounting Developments - Guidance Not Yet Adopted
The Company has evaluated recent accounting pronouncements and believes that none of them will have a material effect on the Company's Consolidated Financial Statements or related disclosures.
Note 3. Cash, Cash Equivalents, Marketable Securities, and Restricted Cash
As of September 30, 2021, the Company held $385.9 million in cash and cash equivalents and $171.1 million of marketable securities which are reported at fair value on the Company's Consolidated Balance Sheets. Unrealized holding gains and losses are generally reported within accumulated other comprehensive loss in the Statements of Comprehensive Loss. If a decline in the fair value of a marketable security below the Company's cost basis is determined to be other-than-temporary or if an available-for-sale debt security’s fair value is determined to less than the amortized cost and the Company intends or is more than likely to sell the security before recovery and it is not considered a credit loss, such security is written down to its estimated fair value as a new cost basis and the amount of the write-down is included in earnings as an impairment charge. If the unrealized loss of an available-for-sale debt security is determined to be a result of credit loss the Company would recognize an allowance and the corresponding credit loss would be included in earnings.
The Company regularly invests excess operating cash in deposits with major financial institutions, money market funds, notes issued by the U.S. government, as well as fixed income investments and U.S. bond funds, both of which can be readily purchased and sold using established markets. The Company believes that the market risk arising from its holdings of these financial instruments is mitigated as many of these securities are either government backed or of the highest credit rating. Investments that have original maturities greater than three months but less than one year are classified as current.
13


Cash, cash equivalents and marketable securities are classified as current unless mentioned otherwise below and consisted of the following:
 As of September 30, 2021
(in thousands)CostGross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
Cash and cash equivalents$385,903 $— $— $385,903 
Corporate debt securities12,143  (2)12,141 
Commercial paper127,943 14  127,957 
Asset-backed securities20,547 2  20,549 
U.S. government agency bonds10,009   10,009 
Money market350   350 
Certificates of deposit51   51 
$556,946 $16 $(2)$556,960 
Included in cash and cash equivalents$385,903 $— $— $385,903 
Included in marketable securities171,043 16 (2)171,057 
Total cash, cash equivalents, and marketable securities$556,946 $16 $(2)$556,960 

 As of December 31, 2020
(in thousands)CostGross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
Cash and cash equivalents$163,240 $— $— $163,240 
Corporate debt securities39,525 4 (16)39,513 
Commercial paper217,087 14 (6)217,095 
Asset-backed securities9,420 18  9,438 
U.S. government agency bonds53,583 3 (4)53,582 
Money market350   350 
Certificates of deposit51   51 
$483,256 $39 $(26)$483,269 
Included in cash and cash equivalents$163,240 $— $— $163,240 
Included in marketable securities320,016 39 (26)320,029
Total cash, cash equivalents, and marketable securities$483,256 $39 $(26)$483,269 
For the nine months ended September 30, 2021 there were no realized gains or losses. For the fiscal year ended December 31, 2020, there were nominal realized gains. The cost of securities sold is based on the specific identification method.
Unrealized loss positions in the marketable securities as of September 30, 2021 and December 31, 2020 reflect temporary impairments and are not a result of credit loss. Additionally, as these positions have been in a loss position for less than twelve months and the Company does not intend to sell these securities before recovery, the losses are recognized in other comprehensive gain (loss). The fair value of these marketable securities in unrealized loss positions was $13.5 million and $124.9 million as of September 30, 2021 and December 31, 2020, respectively.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Consolidated Statements of Cash Flows.
(in thousands)September 30, 2021September 30, 2020
Cash and cash equivalents$385,903 $210,631 
Restricted cash3,168 2,794 
Cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows$389,071 $213,425 

14


Note 4. Inventories
Inventories consist of raw materials, work-in-process, and finished goods related to the manufacture of Galafold®. The following table summarizes the components of inventories:
(in thousands)September 30, 2021December 31, 2020
Raw materials$5,350 $5,547 
Work-in-process11,975 7,693 
Finished goods4,747 6,316 
Total inventories$22,072 $19,556 
The Company recorded a reserve for inventory of $0.1 million as of September 30, 2021 and December 31, 2020, respectively.
Note 5. Debt
The Company's debt consists of the following:
(in thousands)September 30, 2021December 31, 2020
Senior Secured Term Loan due 2026:
Principal$400,000 $400,000 
Less: debt discount (1)
(6,438)(7,434)
Less: deferred financing (1)
(4,843)(5,592)
Net carrying value of the Senior Secured Term Loan$388,719 $386,974 
Convertible Notes due 2023:
Principal$ $2,825 
Less: debt discount (1)
 (518)
Less: deferred financing (1)
 (27)
Net carrying value of the Convertible Notes$ $2,280 
Net carrying value of Long-term debt$388,719 $389,254 
______________________________
(1) Included in the Consolidated Balance Sheets within long-term debt and amortized to interest expense over the remaining life of the Convertible Notes and Senior Secured Term Loan using the effective interest rate method.
During the first and third quarters of 2021, the Company entered into separate, privately negotiated exchange agreements with a limited number of holders ("Holders") of the unsecured Convertible Notes due in 2023 ("Convertible Notes"). Under the terms of the Exchange Agreements, the Holders agreed to exchange the remaining aggregate principal amount of $2.8 million of Convertible Notes held by them in exchange for an aggregate of approximately 472,356 shares of Company common stock, par value $0.01 per share. This transaction resulted in $2.7 million in additional paid-in-capital and common stock of five thousand dollars on the Consolidated Balance Sheets as of September 30, 2021. Additionally, the Company recognized a net loss from extinguishment of debt of $0.3 million in the Consolidated Statements of Operations during the nine months ended September 30, 2021.
15


Interest Expense
The following table sets forth interest expense recognized related to the Company's debt for the three and nine months ended September 30, 2021 and 2020, respectively:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2021202020212020
Contractual interest expense$7,681 $6,250 $22,806 $13,245 
Amortization of debt discount$383 $395 $1,098 $869 
Amortization of deferred financing$269 $197 $754 $255 

Note 6. Stockholders' Equity
During the first quarter of 2021, 1,260,000 and 1,294,999 warrants were exercised at $7.06 and $7.98 per share of common stock, respectively, resulting in gross cash proceeds of $19.2 million.
As discussed in ''— Note 5. Debt'' during the first and third quarters of 2021, the Company entered into separate, privately negotiated Exchange Agreements with the Holders of the Convertible Notes. Under the terms of the Exchange Agreements, the Holders agreed to exchange the remaining aggregate principal amount of $2.8 million of Convertible Notes held by them in exchange for an aggregate of approximately 472,356 shares of Company common stock, par value $0.01 per share. This transaction resulted in an increase of $2.7 million and five thousand dollars to additional paid-in-capital and common stock, respectively.
Amicus Private Placement
In September 2021, the Company entered into a securities purchase agreement with certain entities, the (“Purchase Agreements”) for the private placement of an aggregate of 11,296,660 shares of the Company’s common stock, at a purchase price of $10.18 per share and pre-funded warrants to purchase an aggregate of 8,349,705 shares of common stock, at a purchase price of $10.17 per pre-funded warrant. Proceeds from the private placement, net of offering costs, were $199.8 million. Each pre-funded warrant has an initial exercise price of $0.01 per share and is exercisable at any time after its original issuance, subject generally to the lock-up period, at the option of each holder, in such holder’s discretion, by (i) payment in full in immediately available funds of the initial exercise price for the number of shares of common stock purchased upon such exercise or (ii) a cashless exercise, in which case the holder would receive upon such exercise the net number of shares of common stock determined according to the formula set forth in the pre-funded warrant. Certain of the Purchase Agreements provide for a lock-up period of either 60 days or nine months based on the individual agreements.
Note 7. Share-Based Compensation
The Company's Amended and Restated 2007 Equity Incentive Plan (the "Plan") provides for the granting of restricted stock units and options to purchase common stock in the Company to employees, directors, advisors, and consultants at a price to be determined by the Company's Board of Directors. The Plan is intended to encourage ownership of stock by employees and consultants of the Company and to provide additional incentives for them to promote the success of the Company's business. The Board of Directors, or its committee, is responsible for determining the individuals to be granted options, the number of options each individual will receive, the option price per share, and the exercise period of each option.

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Stock Option Grants
The fair value of the stock options granted is estimated on the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions:
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Expected stock price volatility62.7 %74.2 %65.8 %75.2 %
Risk free interest rate0.8 %0.3 %0.5 %1.6 %
Expected life of options (years)5.45.75.45.7
Expected annual dividend per share$ $ $ $ 
 A summary of the Company's stock options for the nine months ended September 30, 2021 were as follows:
Number of
Shares
Weighted Average Exercise 
Price
Weighted Average Remaining
Years
Aggregate
Intrinsic
Value
 (in thousands)  (in millions)
Options outstanding, December 31, 202014,032 $9.54   
Granted2,896 $17.20   
Exercised(1,193)$7.19   
Forfeited(739)$12.76   
Expired(198)$13.36 
Options outstanding, September 30, 202114,798 $11.02 6.5$13.8 
Vested and unvested expected to vest, September 30, 202113,460 $10.81 6.4$13.8 
Exercisable at September 30, 20219,071 $9.42 5.2$13.6 
As of September 30, 2021, the total unrecognized compensation cost related to non-vested stock options granted was $30.7 million and is expected to be recognized over a weighted average period of three years.
Restricted Stock Units and Performance-Based Restricted Stock Units (collectively "RSUs")
RSUs awarded under the Plan are generally subject to graded vesting and are contingent on an employee's continued service. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. The Company expenses the cost of the RSUs, which is determined to be the fair market value of the shares of common stock underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse. A summary of non-vested RSU activity under the Plan for the nine months ended September 30, 2021 is as follows:
Number of
Shares
Weighted
Average Grant
Date Fair
Value
Weighted 
Average
Remaining 
Years
Aggregate
Intrinsic
Value
(in thousands)(in millions)
Non-vested units as of December 31, 20207,080 $11.35   
Granted2,790 $17.77   
Vested(