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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 June 30, 2022
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 July 27, 2022 was 280,498,461 shares.




AMICUS THERAPEUTICS, INC.
 
Form 10-Q for the Quarterly Period Ended June 30, 2022
 
 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;
the cost of manufacturing drug supply for our commercial, clinical and preclinical studies, including the cost of manufacturing Pompe Enzyme Replacement Therapy ("ERT" or "ATB200" or "cipaglucosidase alfa");
the future results of preclinical research and subsequent clinical trials for 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, including AT-GAA;
the number and development requirements of other product candidates that we pursue;
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 applications are approved, AT-GAA;
our ability to manufacture or supply sufficient clinical or commercial products, including Galafold® and AT-GAA;
our ability to obtain reimbursement for Galafold® and, if our regulatory applications are approved, AT-GAA;
our ability to satisfy post-marketing commitments or requirements for continued regulatory approval of Galafold®, and, if approved and applicable, AT-GAA;
our ability to obtain market acceptance of Galafold® and, if our regulatory applications are approved, AT-GAA;
the costs of preparing, filing, and prosecuting patent applications and maintaining, enforcing, and defending intellectual property-related claims, including Hatch-Waxman litigation;
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, or successfully divest or license existing products and technologies from 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;
our ability to establish licensing agreements, collaborations, partnerships or other similar arrangements and to obtain milestone, royalty, or other payments from any such collaborators;
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, our suppliers, or other third parties to control the spread of COVID-19, or by other health epidemics or pandemics;
the costs associated with, and our ability to comply with, emerging environmental, social and governance standards;
our ability to accurately forecast revenue, operating expenditures, or other metrics impacting profitability;
1


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, 2021, 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 herein 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 collaborations, alliances, business combinations, partnerships, strategic out-licensing of certain assets, the acquisition of preclinical-stage, clinical-stage, marketed products or platform technologies or other 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, 2021 (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)
June 30,
2022
December 31, 2021
Assets
Current assets:
Cash and cash equivalents$235,639 $245,197 
Investments in marketable securities151,202 237,299 
Accounts receivable52,556 52,672 
Inventories20,879 26,818 
Prepaid expenses and other current assets37,367 34,848 
Total current assets497,643 596,834 
Operating lease right-of-use assets, net30,447 20,586 
Property and equipment, less accumulated depreciation of $22,188 and $19,882 at June 30, 2022 and December 31, 2021, respectively
33,657 42,496 
In-process research & development23,000 23,000 
Goodwill197,797 197,797 
Other non-current assets18,045 24,427 
Total Assets$800,589 $905,140 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$23,113 $21,513 
Accrued expenses and other current liabilities114,703 98,153 
Contingent consideration payable19,266 18,900 
Operating lease liabilities7,543 7,409 
Total current liabilities164,625 145,975 
Long-term debt390,652 389,357 
Operating lease liabilities52,844 43,363 
Deferred reimbursements5,906 5,906 
Deferred income taxes4,930 4,930 
Other non-current liabilities8,207 8,240 
Total liabilities627,164 597,771 
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 500,000,000 shares authorized, 280,456,667 and 278,912,800 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively
2,811 2,808 
Additional paid-in capital2,631,110 2,595,419 
Accumulated other comprehensive (loss) gain:
Foreign currency translation adjustment(16,603)5,251 
Unrealized loss on available-for-sale securities(637)(270)
Warrants83 83 
Accumulated deficit(2,443,339)(2,295,922)
Total stockholders’ equity173,425 307,369 
Total Liabilities and Stockholders’ Equity$800,589 $905,140 
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 June 30,Six Months Ended June 30,
2022202120222021
Net product sales$80,731 $77,413 $159,446 $143,815 
Cost of goods sold8,197 8,380 15,779 14,919 
Gross profit72,534 69,033 143,667 128,896 
Operating expenses:
Research and development78,319 63,003 159,836 127,120 
Selling, general, and administrative53,379 42,276 111,495 89,002 
Changes in fair value of contingent consideration payable115 1,021 (1,073)1,492 
Loss on impairment of assets  6,616  
Depreciation and amortization1,334 1,567 2,745 3,171 
Total operating expenses133,147 107,867 279,619 220,785 
Loss from operations(60,613)(38,834)(135,952)(91,889)
Other (expense) income:
Interest income356 50 489 215 
Interest expense(8,257)(8,150)(16,404)(16,142)
Other income7,268 234 9,170 (2,966)
Loss before income tax (61,246)(46,700)(142,697)(110,782)
Income tax expense(911)(4,525)(4,720)(6,107)
Net loss attributable to common stockholders$(62,157)$(51,225)$(147,417)$(116,889)
Net loss attributable to common stockholders per common share — basic and diluted$(0.21)$(0.19)$(0.51)$(0.44)
Weighted-average common shares outstanding — basic and diluted291,970,562266,398,516288,646,587265,384,865
                                                                                    
See accompanying Notes to Consolidated Financial Statements
4


Amicus Therapeutics, Inc.
Consolidated Statements of Comprehensive Loss
(Unaudited)
(in thousands)
 Three Months Ended June 30,Six Months Ended June 30,
 2022202120222021
Net loss$(62,157)$(51,225)$(147,417)$(116,889)
Other comprehensive (loss) gain:
Foreign currency translation adjustment (loss) gain$(16,183)$235 $(21,854)$843 
Unrealized (loss) gain on available-for-sale securities$(29)$12 $(367)$12 
Other comprehensive (loss) gain$(16,212)$247 $(22,221)$855 
Comprehensive loss$(78,369)$(50,978)$(169,638)$(116,034)
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 June 30, 2022
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at March 31, 2022280,133,856 $2,809 $2,617,935 $83 $(1,028)$(2,381,182)$238,617 
Stock options exercised, net189,256 2 997 — — — 999 
Vesting of restricted stock units, net of taxes133,555 — (285)— — — (285)
Stock-based compensation— — 12,463 — — — 12,463 
Unrealized holding loss on available-for-sale securities— — — — (29)— (29)
Foreign currency translation adjustment— — — — (16,183)— (16,183)
Net loss— — — — — (62,157)(62,157)
Balance at June 30, 2022280,456,667 $2,811 $2,631,110 $83 $(17,240)$(2,443,339)$173,425 

Six Months Ended June 30, 2022
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at December 31, 2021278,912,800 $2,808 $2,595,419 $83 $4,981 $(2,295,922)$307,369 
Stock options exercised, net334,705 3 1,855 — — — 1,858 
Vesting of restricted stock units, net of taxes1,209,162 — (9,278)— — — (9,278)
Stock-based compensation— — 43,114 — — — 43,114 
Unrealized holding loss on available-for-sale securities— — — — (367)— (367)
Foreign currency translation adjustment— — — — (21,854)— (21,854)
Net loss— — — — — (147,417)(147,417)
Balance at June 30, 2022280,456,667 $2,811 $2,631,110 $83 $(17,240)$(2,443,339)$173,425 
6


Three Months Ended June 30, 2021
Common StockAdditional
Paid-In
Capital
Other
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at March 31, 2021266,007,718 $2,680 $2,350,507 $8,835 $(2,111,126)$250,896 
Stock options exercised, net434,551 5 2,495 — — 2,500 
Vesting of restricted stock units, net of taxes90,267 — (244)— — (244)
Stock-based compensation— — 11,736 — — 11,736 
Unrealized holding gain on available-for-sale securities— — — 12 — 12 
Foreign currency translation adjustment— — — 235 — 235 
Net loss— — — — (51,225)(51,225)
Balance at June 30, 2021266,532,536 $2,685 $2,364,494 $9,082 $(2,162,351)$213,910 

Six Months Ended June 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, net922,662 9 6,652 — — — 6,661 
Vesting of restricted stock units, net of taxes987,330 — (14,438)— — — (14,438)
Stock-based compensation— — 32,090 — — — 32,090 
Warrants exercised2,554,999 26 31,591 (12,387)— — 19,230 
Equity component of the convertible notes4,084 — 21 — — — 21 
Unrealized holding gain on available-for-sale securities— — — — 12 — 12 
Foreign currency translation adjustment— — — — 843 — 843 
Net loss— — — — — (116,889)(116,889)
Balance at June 30, 2021266,532,536 $2,685 $2,364,494 $ $9,082 $(2,162,351)$213,910 

See accompanying Notes to Consolidated Financial Statements
7


Amicus Therapeutics, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Six Months Ended June 30,
20222021
Operating activities
Net loss$(147,417)$(116,889)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount and deferred financing1,295 1,200 
Depreciation and amortization2,745 3,171 
Stock-based compensation43,114 32,090 
Non-cash changes in the fair value of contingent consideration payable(1,073)1,492 
Foreign currency remeasurement loss353 3,235 
Asset impairment charges and other asset write-offs12,265  
Changes in operating assets and liabilities:
Accounts receivable(4,424)(3,127)
Inventories3,537 (4,445)
Prepaid expenses and other current assets(4,481)5,265 
Accounts payable, accrued expenses, and other current liabilities22,671 (28,485)
Other non-current assets and liabilities(2,762)(1,784)
Net cash used in operating activities$(74,177)$(108,277)
Investing activities
Sale and redemption of marketable securities184,061 258,767 
Purchases of marketable securities(98,330)(145,255)
Capital expenditures(1,226)(1,234)
Net cash provided by investing activities$84,505 $112,278 
Financing activities
Payment of finance leases(41)(389)
Proceeds from warrants exercised 19,230 
Purchase of vested restricted stock units, net of taxes(9,278)(14,438)
Proceeds from stock options exercised, net1,858 6,661 
Net cash (used in) provided by financing activities$(7,461)$11,064 
Effect of exchange rate changes on cash, cash equivalents, and restricted cash$(12,462)$(1,439)
Net (decrease) increase in cash, cash equivalents, and restricted cash at the end of the period(9,595)13,626 
Cash, cash equivalents, and restricted cash at the beginning of period249,456 166,162 
Cash, cash equivalents, and restricted cash at the end of period$239,861 $179,788 
Supplemental disclosures of cash flow information
Cash paid during the period for interest $15,108 $15,109 
Cash paid for taxes$710 $4,526 
Capital expenditures unpaid at the end of period$53 $191 
Tenant improvements paid through lease incentives$ $67 
See accompanying Notes to Consolidated Financial Statements
8


Amicus Therapeutics, Inc.
Notes to the Consolidated Financial Statements
(Unaudited)
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 including the first, oral monotherapy for Fabry disease that has achieved widespread global approval and a differentiated biologic for Pompe disease, that is under review with the U.S. Food and Drug Administration ("FDA") as well as the European Medicines Agency ("EMA"). The Company is committed to discovering and developing next generation therapies in Fabry and Pompe diseases.
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 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 EMA validated the Marketing Authorization Application (“MAA”) in the fourth quarter of 2021. On May 9, 2022, the FDA extended the review period for the NDA for miglustat and the BLA for cipaglucosidase alfa resulting in revised PDUFA action dates of August 29, 2022 and October 29, 2022, respectively.
The Company's operations have not been significantly impacted by the novel coronavirus (“COVID-19”) pandemic to date. The Company continued to observe increased lag time between patient identification and Galafold® initiation due to the continued prevalence of COVID-19 and its ongoing impact on access to treatment for people living with Fabry disease in certain markets. The Company has maintained operations in all geographies, secured its global supply chain for its commercial and clinical products, as well as maintained the operational integrity of its clinical trials, with minimal disruptions. Whether the Company will 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 $2.4 billion as of June 30, 2022 and anticipates incurring losses through the fiscal year ending December 31, 2022 and beyond. The Company has historically funded its operations through stock offerings, Galafold® revenues, debt issuances, collaborations, and other financing arrangements.
Based on its current operating model, the Company believes that the current cash position, which includes expected revenues, 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.
9


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 Consolidated 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, 2021. 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, 2021.
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 June 30, 2022 and through the issuance of these financial statements. 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 other comprehensive loss in the Company's Consolidated 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.
10


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 June 30, 2022 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 June 30, 2022, the Company recorded an allowance for doubtful accounts of $0.1 million.
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated over the estimated useful lives of the respective assets, which range from three to five years, or the lesser of the related initial term of the lease or useful life for leasehold improvements.
The initial cost of property and equipment consists of its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditures incurred after the fixed assets have been put into operation, such as repairs and maintenance, are charged to income in the period in which the costs are incurred. Major replacements, improvements, and additions are capitalized in accordance with Company policy.
The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If indications of impairment exist, projected future undiscounted cash flows associated with the asset or asset group are compared to the carrying value of the asset to determine whether the asset or asset group's value is recoverable. If impairment is determined, the Company writes down the asset to its estimated fair value and records an impairment loss equal to the excess of the carrying value of the long-lived asset over its estimated fair value in the period at which such a determination is made.
During the six months ended June 30, 2022, in connection with the strategic prioritization of its gene therapy portfolio, the Company performed an assessment of its fixed assets. As a result, the Company recognized an impairment charge of $6.6 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. 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.
11


The following table summarizes the Company's net product sales from Galafold® disaggregated by geographic area:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
U.S.$27,540 $23,678 $51,718 $44,531 
Ex-U.S.53,191 53,735 107,728 99,284 
Total net product sales$80,731 $77,413 $159,446 $143,815 
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.
Research and Development Costs
Research and development costs are expensed as incurred. Research and development expense consist primarily of costs related to personnel, including salaries and other personnel related expenses, consulting fees, and the cost of facilities and support services used in drug development. Assets acquired that are used for research and development and have no future alternative use are expensed as in-process research and development.
In the second quarter of 2022, as part of the Company’s strategic prioritization of its gene therapy portfolio, the Company recorded a non-recurring $20.0 million liability associated with the expense of contractual obligations from which the Company will no longer receive further economic benefit. A liability for costs that will continue to be incurred under a contract for its remaining term without economic benefit to the entity is recognized at the cease-use date. This liability is presented as a component of accrued expenses and other current liabilities within the Company's Consolidated Balance Sheets.
Recent Accounting Developments
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.

3. Cash, Cash Equivalents, Marketable Securities, and Restricted Cash
As of June 30, 2022, the Company held $235.6 million in cash and cash equivalents and $151.2 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 other comprehensive loss in the Company's Consolidated 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 be 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.
12


Cash, cash equivalents and marketable securities are classified as current unless mentioned otherwise below and consisted of the following:
 As of June 30, 2022
(in thousands)CostGross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
Cash and cash equivalents$235,639 $— $— $235,639 
Commercial paper103,084 1 (239)102,846 
U.S. government agency bonds45,157  (193)44,964 
Asset-backed securities3,000  (9)2,991 
Money market350   350 
Certificates of deposit51   51 
$387,281 $1 $(441)$386,841 
Included in cash and cash equivalents$235,639 $— $— $235,639 
Included in marketable securities151,642 1 (441)151,202 
Total cash, cash equivalents, and marketable securities$387,281 $1 $(441)$386,841 

 As of December 31, 2021
(in thousands)CostGross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
Cash and cash equivalents$245,197 $— $— $245,197 
Commercial paper174,578 7 (54)174,531 
Corporate debt securities32,322  (11)32,311 
Asset-backed securities30,070  (14)30,056 
Money market350   350 
Certificate of deposit51   51 
$482,568 $7 $(79)$482,496 
Included in cash and cash equivalents$245,197 $— $— $245,197 
Included in marketable securities237,371 7 (79)237,299
Total cash, cash equivalents, and marketable securities$482,568 $7 $(79)$482,496 
For both the six months ended June 30, 2022 and the fiscal year ended December 31, 2021, there were no realized gains or losses. The cost of securities sold is based on the specific identification method.
Unrealized loss positions in the marketable securities as of June 30, 2022 and December 31, 2021 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 (loss) gain. The fair value of these marketable securities in unrealized loss positions was $140.5 million and $173.4 million as of June 30, 2022 and December 31, 2021, 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.
As of June 30,
(in thousands)20222021
Cash and cash equivalents$235,639 $176,538 
Restricted cash4,222 3,250 
Cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows$239,861 $179,788 

13


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)June 30, 2022December 31, 2021
Raw materials$11,508 $12,289 
Work-in-process5,943 10,699 
Finished goods3,428 3,830 
Total inventories$20,879 $26,818 
The Company recorded a reserve for inventory of $1.1 million as of both June 30, 2022 and December 31, 2021.
5. Debt
The Company's debt consists of the following:
(in thousands)June 30, 2022December 31, 2021
Senior Secured Term Loan due 2026:
Principal$400,000 $400,000 
Less: debt discount (1)
(5,334)(6,074)
Less: deferred financing (1)
(4,014)(4,569)
Net carrying value of Long-term debt$390,652 $389,357 
______________________________
(1) Included in the Consolidated Balance Sheets within long-term debt and amortized to interest expense over the remaining life of the Senior Secured Term Loan due 2026 using the effective interest rate method.
Interest Expense
The following table sets forth interest expense recognized related to the Company's debt for the three and six months ended June 30, 2022 and 2021, respectively:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Contractual interest expense$7,589 $7,604 $15,089 $15,125 
Amortization of debt discount$375 $383 $739 $720 
Amortization of deferred financing$283 $262 $556 $485 

6. 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.
14


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 June 30,Six Months Ended June 30,
 2022202120222021
Expected stock price volatility61.3 %65.5 %62.2 %66.4 %
Risk free interest rate3.0 %0.7 %1.6 %0.5 %
Expected life of options (years)5.35.45.35.4
Expected annual dividend per share$ $ $ $ 
 A summary of the Company's stock options for the six months ended June 30, 2022 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, 202114,731 $11.08   
Granted5,402 $11.55   
Exercised(339)$5.60   
Forfeited(333)$12.36   
Expired(178)$11.98 
Options outstanding, June 30, 202219,283 $11.28 7.0$22.2 
Vested and unvested expected to vest, June 30, 202217,589 $11.18 6.8$21.5 
Exercisable at June 30, 202210,377 $10.38 5.2$18.3 
As of June 30, 2022, the total unrecognized compensation cost related to non-vested stock options granted was $39.5 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 six months ended June 30, 2022 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, 20217,341 $13.90   
Granted4,815 $11.97   
Vested(1,738)$12.40   
Forfeited(252)$12.10   
Non-vested units as of June 30, 202210,166 $13.13 2.4$109.2 
All non-vested units are expected to vest over their normal term. As of June 30, 2022, there was $65.8 million of total unrecognized compensation cost related to unvested RSUs with service-based vesting conditions. These costs are expected to be recognized over a weighted average period of two years.
15


Compensation Expense Related to Equity Awards
The following table summarizes information related to compensation expense recognized in the Consolidated Statements of Operations related to the equity awards:
 Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2022202120222021
Research and development expense$4,379 $3,152 $13,744 $9,457 
Selling, general, and administrative expense8,084 8,584 29,370 22,633 
Total equity compensation expense$12,463 $11,736 $43,114 $32,090 

7. Assets and Liabilities Measured at Fair Value
The Company's financial assets and liabilities are measured at fair value and classified within the fair value hierarchy, which is defined as follows:
Level 1 — Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
Level 2 — Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly.
Level 3 — Inputs that are unobservable for the asset or liability.
A summary of the fair value of the Company's recurring assets and liabilities aggregated by the level in the fair value hierarchy within which those measurements fall as of June 30, 2022 are identified in the following tables:
(in thousands) Level 2Total
Assets:  
Commercial paper$102,846 $102,846 
U.S. government agency bonds44,964 44,964 
Asset-backed securities2,991 2,991 
Money market5,362 5,362 
 $156,163 $156,163 
(in thousands) Level 2Level 3Total
Liabilities:   
Contingent consideration payable$ $19,266 $19,266 
Deferred compensation plan liability4,977  4,977 
 $4,977 $19,266 $24,243 
16


A summary of the fair value of the Company's recurring assets and liabilities aggregated by the level in the fair value hierarchy within which those measurements fall as of December 31, 2021 are identified in the following tables:
(in thousands)Level 2Total
Assets:
Commercial paper$174,531 $174,531 
Corporate debt securities32,311 32,311 
Asset-backed securities30,056 30,056 
Money market5,150 5,150 
 $242,048 $242,048 
(in thousands)Level 2Level 3Total
Liabilities:   
Contingent consideration payable$ $20,339 $20,339 
Deferred compensation plan liability4,800  4,800 
 $4,800 $20,339 $