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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, 2023
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)
47 Hulfish Street, Princeton, NJ
08542
(Address of Principal Executive Offices)(Zip Code)
(609)
662-2000
(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 25, 2023 was 293,245,738 shares.



AMICUS THERAPEUTICS, INC.
 
Form 10-Q for the Quarterly Period Ended September 30, 2023
 
 Page
 
Item 1.
Item 2.
Item 3.
Item 4.
  
 Item 1.
    
 Item 1A.
    
 Item 2.
    
 Item 3.
    
 Item 4.
    
 Item 5.
    
 Item 6.
  
  

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," "might," "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 clinical trials for our drug candidates;
the cost of manufacturing drug supply for our commercial, clinical and preclinical studies, including the cost of manufacturing Pombiliti (also referred to as "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;
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;
the costs of commercialization activities, including product marketing, sales, and distribution;
the emergence of competing technologies and other adverse market developments;
the estimates regarding the potential market opportunity for our products and product candidates;
our ability to successfully commercialize Galafold® (also referred to as "migalastat HCl");
our ability to successfully commercialize Pombiliti and Opfolda (together, also referred to as "AT-GAA") in the E.U., U.K., and U.S., and elsewhere, if regulatory applications are approved;
our ability to manufacture or supply sufficient clinical or commercial products, including Galafold®, Pombiliti and Opfolda;
our ability to obtain reimbursement for Galafold®, Pombiliti and Opfolda;
our ability to satisfy post-marketing commitments or requirements for continued regulatory approval of Galafold®, Pombiliti and Opfolda;
our ability to obtain market acceptance of Galafold®, Pombiliti and Opfolda;
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, including Hatch-Waxman litigation;
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 costs associated with, and our ability to comply with, emerging environmental, social and governance standards;
1


our ability to accurately forecast revenue, operating expenditures, or other metrics impacting profitability;
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, 2022, 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, 2022 (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, 2023December 31, 2022
Assets
Current assets:
Cash and cash equivalents$263,320 $148,813 
Investments in marketable securities16,980 144,782 
Accounts receivable73,331 66,196 
Inventories56,936 23,816 
Prepaid expenses and other current assets52,689 40,209 
Total current assets463,256 423,816 
Operating lease right-of-use assets, net29,511 29,534 
Property and equipment, less accumulated depreciation of $25,018 and $22,281 at September 30, 2023 and December 31, 2022, respectively
31,072 30,778 
Intangible assets, less accumulated amortization of $1,682 and $0 at September 30, 2023 and December 31, 2022, respectively
21,318 23,000 
Goodwill197,797 197,797 
Other non-current assets21,130 19,242 
Total Assets$764,084 $724,167 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$23,154 $15,413 
Accrued expenses and other current liabilities138,535 93,636 
Contingent consideration payable 21,417 
Operating lease liabilities7,765 8,552 
Total current liabilities169,454 139,018 
Long-term debt394,071 391,990 
Operating lease liabilities52,454 51,578 
Deferred reimbursements5,906 4,656 
Deferred income taxes 4,939 
Other non-current liabilities8,962 8,939 
Total liabilities630,847 601,120 
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 500,000,000 shares authorized, 290,667,041 and 281,108,273 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
2,890 2,815 
Additional paid-in capital2,787,275 2,664,744 
Accumulated other comprehensive loss:
Foreign currency translation adjustment(6,573)(11,989)
Unrealized loss on available-for-sale securities(195)(116)
Warrants71 83 
Accumulated deficit(2,650,231)(2,532,490)
Total stockholders’ equity133,237 123,047 
Total Liabilities and Stockholders’ Equity$764,084 $724,167 

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,
2023202220232022
Net product sales$103,501 $81,691 $284,274 $241,137 
Cost of goods sold9,946 13,436 26,002 29,215 
Gross profit93,555 68,255 258,272 211,922 
Operating expenses:
Research and development40,704 52,970 117,352 212,806 
Selling, general, and administrative65,651 47,272 205,031 158,767 
Changes in fair value of contingent consideration payable1,995 567 2,583 (506)
Loss on impairment of assets  1,134 6,616 
Depreciation and amortization2,228 1,286 5,691 4,031 
Total operating expenses110,578 102,095 331,791 381,714 
Loss from operations(17,023)(33,840)(73,519)(169,792)
Other income (expense):
Interest income1,471 563 5,407 1,052 
Interest expense(12,986)(9,620)(37,322)(26,024)
Other income (expense)3,833 13,634 (13,007)22,804 
Loss before income tax (24,705)(29,263)(118,441)(171,960)
Income tax benefit (expense)3,128 (4,023)700 (8,743)
Net loss attributable to common stockholders$(21,577)$(33,286)$(117,741)$(180,703)
Net loss attributable to common stockholders per common share — basic and diluted$(0.07)$(0.12)$(0.40)$(0.63)
Weighted-average common shares outstanding — basic and diluted295,759,435289,223,709293,314,167288,841,092
                                                                                    
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,
 2023202220232022
Net loss$(21,577)$(33,286)$(117,741)$(180,703)
Other comprehensive (loss) gain:
Foreign currency translation adjustment (loss) gain(10,910)(22,121)5,416 (43,975)
Unrealized (loss) gain on available-for-sale securities(18)283 (79)(84)
Other comprehensive (loss) gain(10,928)(21,838)5,337 (44,059)
Comprehensive loss$(32,505)$(55,124)$(112,404)$(224,762)

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, 2023
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Loss
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at June 30, 2023286,992,923 $2,856 $2,733,148 $71 $4,160 $(2,628,654)$111,581 
Stock options exercised, net372,467 4 3,438 — — — 3,442 
Vesting of restricted stock units, net of taxes299,297 — (2,347)— — — (2,347)
Stock-based compensation— — 16,511 — — — 16,511 
Issuance of shares in connection with at-the-market offering, net of issuance costs3,002,354 30 36,525 — — — 36,555 
Unrealized loss on available-for-sale securities— — — — (18)— (18)
Foreign currency translation adjustment— — — — (10,910)— (10,910)
Net loss— — — — — (21,577)(21,577)
Balance at September 30, 2023290,667,041 $2,890 $2,787,275 $71 $(6,768)$(2,650,231)$133,237 

Nine Months Ended September 30, 2023
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at December 31, 2022281,108,273 $2,815 $2,664,744 $83 $(12,105)$(2,532,490)$123,047 
Stock options exercised, net1,025,684 11 7,836 — — — 7,847 
Vesting of restricted stock units, net of taxes2,068,048 (16,355)— — — (16,355)
Stock-based compensation— — 67,982 — — — 67,982 
Warrants exercised1,220,100 12 12 (12)— — 12 
Issuance of shares in connection with at-the-market offering, net of issuance costs5,244,936 52 63,056 — — — 63,108 
Unrealized loss on available-for-sale securities— — — — (79)— (79)
Foreign currency translation adjustment— — — — 5,416 — 5,416 
Net loss— — — — — (117,741)(117,741)
Balance at September 30, 2023290,667,041 $2,890 $2,787,275 $71 $(6,768)$(2,650,231)$133,237 
6


Three Months Ended September 30, 2022
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at June 30, 2022280,456,667 $2,811 $2,631,110 $83 $(17,240)$(2,443,339)$173,425 
Stock options exercised, net172,118 2 1,331 — — — 1,333 
Vesting of restricted stock units, net of taxes258,351 — (1,841)— — — (1,841)
Stock-based compensation— — 14,772 — — — 14,772 
Unrealized gain on available-for-sale securities— — — — 283 — 283 
Foreign currency translation adjustment— — — — (22,121)— (22,121)
Net loss— — — — — (33,286)(33,286)
Balance at September 30, 2022280,887,136 $2,813 $2,645,372 $83 $(39,078)$(2,476,625)$132,565 

Nine Months Ended September 30, 2022
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
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, net506,823 5 3,186 — — — 3,191 
Vesting of restricted stock units, net of taxes1,467,513 — (11,119)— — — (11,119)
Stock-based compensation— — 57,886 — — — 57,886 
Unrealized loss on available-for-sale securities— — — — (84)— (84)
Foreign currency translation adjustment— — — — (43,975)— (43,975)
Net loss— — — — — (180,703)(180,703)
Balance at September 30, 2022280,887,136 $2,813 $2,645,372 $83 $(39,078)$(2,476,625)$132,565 


See accompanying Notes to Consolidated Financial Statements
7


Amicus Therapeutics, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Nine Months Ended September 30,
20232022
Operating activities
Net loss$(117,741)$(180,703)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount and deferred financing2,080 1,963 
Depreciation and amortization5,691 4,031 
Stock-based compensation67,982 57,886 
Non-cash changes in the fair value of contingent consideration payable2,583 (506)
Foreign currency remeasurement loss18,121 2,828 
Deferred taxes(4,939) 
Asset impairment charges and other asset write-offs2,360 17,271 
Changes in operating assets and liabilities:
Accounts receivable(8,614)(7,426)
Inventories(42,233)4,913 
Prepaid expenses and other current assets(26,010)(5,583)
Accounts payable, accrued expenses, and other current liabilities41,101 25,465 
Other non-current assets and liabilities(4,993)(5,942)
Payment of contingent consideration(7,937) 
Net cash used in operating activities$(72,549)$(85,803)
Investing activities
Sale and redemption of marketable securities180,828 259,920 
Purchases of marketable securities(53,098)(99,811)
Capital expenditures(5,709)(1,089)
Net cash provided by investing activities$122,021 $159,020 
Financing activities
Payment of finance leases(82)(92)
Withholding taxes paid on vested restricted stock units(16,355)(11,119)
Proceeds from stock options exercised, net7,847 3,191 
Proceeds from warrants exercised, net12  
Proceeds from the issuance of shares in connection with at-the-market offering, net of issuance costs63,108  
Payment of contingent consideration(1,063) 
Net cash provided by (used in) financing activities$53,467 $(8,020)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash$10,218 $(33,120)
Net increase in cash, cash equivalents, and restricted cash at the end of the period113,157 32,077 
Cash, cash equivalents, and restricted cash at the beginning of period153,115 249,456 
Cash, cash equivalents, and restricted cash at the end of period$266,272 $281,533 
Supplemental disclosures of cash flow information
Cash paid during the period for interest $35,448 $24,058 
Cash paid for taxes$6,473 $935 
Capital expenditures unpaid at the end of period$877 $53 

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 developed and commercialized the first oral monotherapy for Fabry disease that has achieved widespread global approval and the first two-component therapy for late-onset Pompe disease that has been approved in the European Union (“E.U.”), the United Kingdom (“U.K.”), and in the United States (“U.S.”). 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 U.S., E.U., U.K., and Japan, with multiple additional approvals granted and applications pending in several geographies around the world.
Pombiliti + Opfolda (also referred to as AT-GAA, ATB200/AT2221, or cipaglucosidase alfa-atga/miglustat), is a novel, two-component treatment for late-onset Pompe disease that was approved by the European Commission ("EC") in June 2023, the U.K. Medicines and Healthcare products Regulatory Agency ("MHRA") in August 2023, and the U.S. Food and Drug Administration ("FDA") in September 2023. The Company began launch activities for Pombiliti + Opfolda in these markets and have commenced the reimbursement processes with healthcare authorities in additional European countries.
The Company had an accumulated deficit of $2.7 billion as of September 30, 2023 and anticipates incurring losses through the fiscal year ending December 31, 2023. The Company has historically funded its operations through stock offerings, Galafold® revenues, debt issuances, collaborations, and other financing arrangements.
In October 2023, the Company entered into a $400 million loan agreement (the “Senior Secured Term Loan due 2029”) with Blackstone Alternative Credit Advisors LP and Blackstone Life Sciences Advisors L.L.C. (collectively, “Blackstone”) with an interest rate equal to 3-month Term SOFR, subject to a 2.5% floor, plus a Term SOFR adjustment of 0.26161% and a margin of 6.25% that requires interest-only payments until early-2027 and matures in six years in 2029. This transaction resulted in net proceeds of $387.4 million, after deducting fees and estimated expenses. There were no warrants or equity conversion features associated with the Senior Secured Term Loan due 2029. Simultaneously, the Company also entered into a securities purchase agreement with funds managed by Blackstone, for the private placement of an aggregate of 2,467,104 shares of the Company’s common stock, at a purchase price of $12.16 per share. Proceeds from the private placement, net of offering costs, were $29.8 million.
The Company used proceeds from the Senior Secured Term Loan due 2029 and the private placement to prepay the Senior Secured Term Loan due 2026, inclusive of the outstanding principal amount, accrued interest and prepayment premium. The remaining proceeds will be used to fund ongoing operations.
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 for at least the next 12 months. Potential 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, 2022. 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, 2022.
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.
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 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 primarily related to its product sales of Galafold®. The Company's accounts receivable at September 30, 2023 have arisen from product sales primarily in Europe, the U.S., and Japan. 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, 2023, the Company's allowance for doubtful accounts was $0.1 million.
Revenue Recognition
The Company has recorded revenue on sales where its products are available either on a commercial basis or through a reimbursed early access program. Product orders 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. 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 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 disaggregated by product:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
Galafold®
$100,733 $81,631 $281,177 $241,056 
Pombiliti + Opfolda
2,768 60 3,097 81 
Total net product sales$103,501 $81,691 $284,274 $241,137 
The following table summarizes the Company's net product sales disaggregated by geographic area:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
U.S.$37,801 $30,222 $103,760 $81,940 
Ex-U.S.65,700 51,469 180,514 159,197 
Total net product sales$103,501 $81,691 $284,274 $241,137 
Inventories and Cost of Goods Sold
Until regulatory approval of Pombiliti + Opfolda, the Company expensed all manufacturing costs as research and development expense. Upon regulatory approval, the Company began capitalizing costs related to the purchase and manufacture of Pombiliti + Opfolda.
11


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 Company's 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. A portion of inventory available for sale was expensed as research and development costs prior to regulatory approval and as such, the cost of goods sold and related gross margins are not necessarily indicative of future costs of goods sold and gross margin.
Intangible Assets and Goodwill
The Company records goodwill in a business combination when the total consideration exceeds the fair value of the net tangible and identifiable intangible assets acquired. Goodwill is assessed annually for impairment on October 1 and whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. The Company first assesses the qualitative factors to determine if a quantitative test is necessary. If required, or if the Company elects to bypass the qualitative assessment, a quantitative goodwill impairment test is conducted. If it is determined the Company's single reporting unit's carrying value, including goodwill, exceeds its fair value, an impairment loss is recorded for the difference.
Finite-lived intangible assets are recorded at cost, net of accumulated amortization, and, if applicable, impairment charges. Amortization of finite-lived intangible assets is recorded over the assets’ estimated useful lives on a straight-line basis or based on the pattern in which economic benefits are consumed, if reliably determinable. The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be 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 asset over its estimated fair value in the period at which such a determination is made.
No indicators of impairment were noted during the nine months ended September 30, 2023.
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. Intangible Assets
As of September 30, 2023, the Company's intangible assets consisted of lead enzyme replacement therapy assets acquired with the Callidus Biopharma, Inc. acquisition in 2013, previously accounted for as in-process research and development. In March 2023, as a result of the EC's approval of Pombiliti, the Company began amortizing the assets over the initial regulatory exclusivity period of 7 years. The Company completed an impairment assessment before changing the classification to definite-lived intangible asset noting no impairment. Amortization expense for the three and nine months ended September 30, 2023 was $0.8 million and $1.7 million, respectively. Total estimated amortization for the finite-lived intangible assets is estimated to be $2.5 million for the year ending December 31, 2023 and $3.3 million for the next four years thereafter.

12


4. Cash, Cash Equivalents, Marketable Securities, and Restricted Cash
As of September 30, 2023, the Company held $263.3 million in cash and cash equivalents and $17.0 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) gain 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 and money market funds, as well as fixed income investments 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, in accordance with Company policy, securities are of high credit rating. Investments that have original maturities greater than three months but less than one year are classified as current.
Cash, cash equivalents and marketable securities are classified as current unless mentioned otherwise below and consisted of the following:
 As of September 30, 2023
(in thousands)CostGross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
Cash and cash equivalents$263,320 $— $— $263,320 
Commercial paper16,826 3  16,829 
Money market100   100 
Certificates of deposit51   51 
$280,297 $3 $ $280,300 
Included in cash and cash equivalents$263,320 $— $— $263,320 
Included in marketable securities16,977 3  16,980 
Total cash, cash equivalents, and marketable securities$280,297 $3 $ $280,300 

 As of December 31, 2022
(in thousands)CostGross
Unrealized
Gain
Gross
Unrealized
Loss
Fair
Value
Cash and cash equivalents$148,813 $— $— $148,813 
Commercial paper144,299 82  144,381 
Money market350   350 
Certificate of deposit51   51 
$293,513 $82 $ $293,595 
Included in cash and cash equivalents$148,813 $— $— $148,813 
Included in marketable securities144,700 82  144,782
Total cash, cash equivalents, and marketable securities$293,513 $82 $ $293,595 
For both the nine months ended September 30, 2023 and the fiscal year ended December 31, 2022, 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 September 30, 2023 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 Company had no securities in an unrealized loss position as of both September 30, 2023 and December 31, 2022.
13


The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Company's Consolidated Balance Sheets that sum to the total of the same such amounts shown in the Company's Consolidated Statements of Cash Flows.
As of September 30,
(in thousands)20232022
Cash and cash equivalents$263,320 $277,592 
Restricted cash2,952 3,941 
Cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows$266,272 $281,533 
5. Inventories
Inventories as of September 30, 2023 and December 31, 2022 consisted of the following:
(in thousands)September 30, 2023December 31, 2022
Raw materials$36,062 $10,054 
Work-in-process14,316 9,615 
Finished goods6,558 4,147 
Total inventories$56,936 $23,816 
The Company's reserve for inventory was $0.3 million and $0.4 million as of September 30, 2023 and December 31, 2022, respectively.

6. Debt
The Company's debt consists of the following:
(in thousands)September 30, 2023December 31, 2022
Senior Secured Term Loan due 2026:
Principal$400,000 $400,000 
Less: debt discount (1)
(3,384)(4,571)
Less: deferred financing (1)
(2,545)(3,439)
Net carrying value of Long-term debt(2)
$394,071 $391,990 
______________________________
(1) Included in the Company's 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.
(2) The Company classifies the current portion of long-term debt as non-current liabilities on the Consolidated Balance Sheets when it has the intent and ability to refinance the obligations on a long-term basis, in accordance with ASC 470-50 “Debt.” Accordingly, as of September 30, 2023, the debt was recorded as a long-term liability in the Company’s Consolidated Balance Sheet.
In October 2023, the Company entered into a $400 million loan agreement (the “Senior Secured Term Loan due 2029”) with Blackstone with an interest rate equal to 3-month Term SOFR, subject to a 2.5% floor, plus a Term SOFR adjustment of 0.26161% and a margin of 6.25% that requires interest-only payments until early-2027 and matures in six years in 2029. This transaction resulted in net proceeds of $387.4 million, after deducting fees and estimated expenses. There were no warrants or equity conversion features associated with the Senior Secured Term Loan due 2029.
The Company used proceeds from the Senior Secured Term Loan due 2029 and the private placement to prepay the Senior Secured Term Loan due 2026, inclusive of the outstanding principal amount, accrued interest and prepayment premium. In connection with the prepayment, the Company expects to record a loss from early extinguishment of debt of approximately $13.9 million in the fourth quarter of 2023, primarily related to the prepayment premium and write-off of unamortized debt discount and deferred financing costs.
14


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, 2023 and 2022, respectively:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
Contractual interest expense$12,270 $8,945 $35,289 $24,034 
Amortization of debt discount$411 $382 $1,187 $1,121 
Amortization of deferred financing$310 $286 $893 $842 

7. Stockholder's Equity
During the three and nine months ended September 30, 2023, the Company issued and sold an aggregate of 3,002,354 and 5,244,936 shares, respectively, through its at-the-market equity program ("ATM program") at weighted-average public offering prices of $12.68 and $12.50 per share, resulting in net proceeds of $36.6 million and $63.1 million, respectively. As of September 30, 2023, an aggregate of $184.4 million worth of shares remain available to be issued and sold under the ATM program.
In October 2023, in connection with the Senior Secured Term Loan due 2029, the Company entered into a securities purchase agreement with funds managed by Blackstone, for the private placement of an aggregate of 2,467,104 shares of the Company’s common stock, at a purchase price of $12.16 per share. Proceeds from the private placement, net of offering costs, were $29.8 million.

8. Stock-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.
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,
 2023202220232022
Expected stock price volatility58.4 %61.0 %59.2 %62.2 %
Risk free interest rate4.3 %3.1 %3.9 %1.7 %
Expected life of options (years)5.55.35.55.3
Expected annual dividend per share$ $ $ $ 
 A summary of the Company's stock options for the nine months ended September 30, 2023 were as follows:
15


Number of
Shares
Weighted Average Exercise 
Price
Weighted Average Remaining
Years
Aggregate
Intrinsic
Value
 (in thousands)  (in millions)
Options outstanding, December 31, 202219,064 $11.31   
Granted5,522 $12.03   
Exercised(1,032)$7.61   
Forfeited(248)$11.51   
Expired(50)$14.39 
Options outstanding, September 30, 202323,256 $11.64 6.7$32.1 
Vested and unvested expected to vest, September 30, 202321,389 $11.58 6.5$31.1 
Exercisable at September 30, 202313,246 $11.12 5.1$27.9 
As of September 30, 2023, the total unrecognized compensation cost related to non-vested stock options granted was $39.8 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, 2023 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, 20229,717 $13.07   
Granted4,514 $13.08   
Vested(3,252)$12.25   
Forfeited(648)$10.07   
Non-vested units as of September 30, 202310,331 $13.56 2.2$125.6 
As of September 30, 2023, there was $63.1 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.
Compensation Expense Related to Equity Awards
The following table summarizes information related to compensation expense recognized in the Company's Consolidated Statements of Operations related to the equity awards:
 Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
Research and development expense$4,380 $5,428 $16,987 $19,172 
Selling, general, and administrative expense12,131 9,344 50,995 38,714 
Total equity compensation expense$16,511 $14,772 $67,982 $57,886 
16


9. 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 September 30, 2023 are identified in the following tables:
(in thousands) Level 2Total
Assets:  
Commercial paper$16,829 $16,829 
Money market6,818 6,818 
 $23,647 $23,647 
(in thousands) Level 2Total
Liabilities:  
Deferred compensation plan liability$6,718 $6,718 
 $6,718 $6,718 
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, 2022 are identified in the following tables:
(in thousands)Level 2Total
Assets:
Commercial paper$144,381 $144,381 
Money market5,808 5,808 
 $150,189 $150,189 
(in thousands)Level 2Level 3Total
Liabilities:   
Contingent consideration payable$ $21,417 $21,417 
Deferred compensation plan liability5,458  5,458 
 $5,458 $21,417 $26,875 
The Company's Senior Secured Term Loan due 2026 falls into the Level 2 category within the fair value level hierarchy and the fair value was determined using quoted prices for similar liabilities in active markets, as well as inputs that are observable for the liability (other than quoted prices), such as interest rates that are observable at commonly quoted intervals. The carrying value of the Senior Secured Term Loan due 2026 approximates the fair value. Deferred compensation plan liability is recorded as a component of other non-current liabilities on the Company's Consolidated Balance Sheets.
The Company did not have any Level 3 assets as of September 30, 2023 or December 31, 2022. Liabilities measured at fair value using Level 3 inputs consisted of contingent consideration.
17


Cash, Money Market Funds, and Marketable Securities
The Company classifies its cash within the fair value hierarchy as Level 1 as these assets are valued using quoted prices in an active market for identical assets at the measurement date. The Company considers its investments in marketable securities as available-for-sale and classifies these assets and the money market funds within the fair value hierarchy as Level 2 primarily utilizing broker quotes in a non-active market for valuation of these securities.
Contingent Consideration Payable
The contingent consideration payable resulted from the acquisition of Callidus Biopharma, Inc. ("Callidus") in November 2013. The Company reached regulatory milestones of $9.0 million in March 2023 and $15.0 million in September 2023 associated with the approval of Pombilitiby the EC and FDA, respectively. The $9.0 million milestone payment was paid in the second quarter of 2023 and the $15.0 million milestone payment, which is payable in cash, is recorded as a component of accounts payable on the Company's Consolidated Balance Sheets as of September 30, 2023.
The following table shows the change in the balance of contingent consideration payable for the three and nine months ended September 30, 2023 and 2022, respectively:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2023202220232022
Balance, beginning of the period$13,005 $19,266 $21,417 $20,339 
Changes in fair value during the period, included in the Consolidated Statements of Operations1,995 567 2,583 (506)
Milestone paid or payable in cash(15,000) (24,000) 
Balance, end of the period$ $19,833 $ $19,833 

10. Basic and Diluted Net Loss per Common Share
The following table provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss attributable to common stockholders per common share:
 Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except per share amounts) 2023202220232022
Numerator:  
Net loss attributable to common stockholders$(21,577)$(33,286)$(117,741)$(180,703)
Denominator:
Weighted average common shares outstanding — basic and diluted295,759,435 289,223,709 293,314,167 288,841,092 
Dilutive common stock equivalents would include the dilutive effect of outstanding common stock options and unvested RSUs. Potentially dilutive common stock equivalents were excluded from the diluted earnings per share denominator for all periods because of their anti-dilutive effect. Weighted average common shares outstanding includes outstanding pre-funded warrants with an exercise price of $0.01.
The table below presents potential shares of common stock that were excluded from the computation as they were anti-dilutive using the treasury stock method:
 As of September 30,
(in thousands) 20232022
Options to purchase common stock23,256 19,236 
Unvested restricted stock units10,331 9,839 
Total number of potentially issuable shares33,587 29,075 

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the unaudited Consolidated Financial Statements and the notes thereto included in this Quarterly Report on Form 10-Q and the audited Consolidated Financial Statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. Some of the statements we make in this section are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this Quarterly Report on Form 10-Q entitled “Special Note Regarding Forward-Looking Statements”. Certain risk factors may cause actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see the section in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 entitled “Risk Factors”.
Overview
We are a global, patient-dedicated biotechnology company focused on discovering, developing, and delivering novel medicines for rare diseases. We have developed and commercialized the first oral monotherapy for Fabry disease that has achieved widespread global approval and the first two-component therapy for late-onset Pompe disease that has been approved in the European Union (“E.U.”), the United Kingdom (“U.K.”), and in the United States (“U.S.”). We are committed to discovering and developing next generation therapies in Fabry and Pompe diseases.
The cornerstone of our 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 U.S., E.U., U.K., and Japan, with multiple additional approvals granted and applications pending in several geographies around the world.
Pombiliti + Opfolda (also referred to as AT-GAA, ATB200/AT2221, or cipaglucosidase alfa-atga/miglustat), is a novel, two-component treatment for late-onset Pompe disease that was approved by the European Commission ("EC") in June 2023, the U.K. Medicines and Healthcare products Regulatory Agency ("MHRA") in August 2023, and the U.S. Food and Drug Administration ("FDA") in September 2023. We began launch activities for Pombiliti + Opfolda in these markets and have commenced the reimbursement processes with healthcare authorities in additional European countries.
Our Strategy
Our strategy is to create, manufacture, test, and deliver the highest quality medicines for people living with rare diseases through internally developed, jointly developed, acquired, or in-licensed products and product candidates that have the potential to obsolete current treatments, provide significant benefits to patients, and be first- or best-in-class. We are leveraging our global capabilities to develop and broaden our lead franchises in Fabry and Pompe disease, with focused discovery work on next generation therapies and novel platform technologies.
Highlights of our progress include:
Commercial and regulatory success in Fabry disease. For the nine months ended September 30, 2023, Galafold® revenue was $281.2 million of consolidated revenue. We continue to see strong commercial momentum and expansion into additional geographies. In countries where we have been operating the longest, we see an increasing proportion of previously untreated patients come onto Galafold® as compared to treatment experienced patients. In the U.S., we continue to see a significant increase in patients from a growing and very wide prescriber base. Across all markets, we see a high rate of compliance and adherence to this oral treatment option.
Pompe disease program milestones. Pombiliti + Opfolda were approved by the EC in June 2023, the MHRA in August 2023, and the FDA in September 2023. Additionally, multiple expanded access mechanisms are in place around the globe.
Pipeline advancement and growth. We are leveraging our global capabilities to develop and broaden our lead franchises in Fabry and Pompe disease, with focused discovery work on next generation therapies and novel platform technologies.
Financial strength. Total cash, cash equivalents, and marketable securities as of September 30, 2023 was $280.3 million. Based on the current operating model, we believe that the current cash position, which includes expected revenues, is sufficient to fund our operations and ongoing research programs for at least the next 12 months. Potential business development collaborations, pipeline expansion, and investment in manufacturing capabilities could impact
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our future capital requirements.
 Our Commercial Products and Product Candidates
Galafold® (migalastat HCl) for Fabry Disease
Our oral precision medicine Galafold® was granted accelerated approval by the FDA in August 2018 under the brand name Galafold® for the treatment of adults with a confirmed diagnosis of Fabry disease and an amenable galactosidase alpha gene ("GLA") variant based on in vitro assay data. The FDA has approved Galafold® for 351 amenable GLA variants. Galafold® was approved in the E.U. and U.K. in May 2016 as a first-line therapy for long-term treatment of adults and adolescents, aged 16 years and older, with a confirmed diagnosis of Fabry disease and who have an amenable mutation (variant). The approved E.U. and U.K. labels include 1,384 mutations amenable to Galafold® treatment, which represent up to half of all patients with Fabry disease. Marketing authorization approvals as well as approvals for adolescents aged 12 years and older weighing 45 kg or more have been granted in over 40 countries around the world. We plan to continue to launch Galafold® in additional countries, including for adolescents aged 12 years and older.
As an orally administered monotherapy, Galafold® is designed to bind to and stabilize an endogenous alpha-galactosidase A ("alpha-Gal A") enzyme in those patients with genetic variants identified as amenable in a Good Laboratory Practice ("GLP") cell-based amenability assay. Galafold® is an oral precision medicine intended to treat Fabry disease in patients who have amenable genetic variants, and at this time, it is not intended for concomitant use with ERT.
The Galafold® U.S. patent portfolio encompasses 54 Orange Book listed patents, including 10 composition-of-matter patents, of which 38 provide protection through at least 2038.
Next Generation for Fabry Disease
We are committed to continued innovation for all people living with Fabry disease. As part of our long-term commitment, we are also continuing discovery for next-generation genetic medicines and have an academic research collaboration agreement to explore next generation pharmacological chaperones for Fabry disease.
Pombiliti (cipaglucosidase alfa-atga) + Opfolda (miglustat) for Pompe Disease
We have leveraged our biologics capabilities to develop Pombiliti + Opfolda, a novel treatment paradigm for late-onset Pompe disease. Pombiliti + Opfolda consists of a uniquely engineered rhGAA enzyme, ATB200, or cipaglucosidase alfa-atga, with an optimized carbohydrate structure to enhance lysosomal uptake, administered in combination with AT2221, or miglustat, that functions as an enzyme stabilizer. Miglustat binds to and stabilizes ATB200 reducing inactivation of rhGAA in circulation to improve the uptake of active enzyme in key disease-relevant tissues. Miglustat is not an active ingredient that contributes directly to glycogen reduction.
Pombiliti + Opfolda were approved by the EC in June 2023, the MHRA in August 2023, and the FDA in September 2023. We began launch activities for Pombiliti + Opfolda in these markets and have commenced the reimbursement processes with healthcare authorities in additional European countries.
In addition, we are conducting ongoing clinical studies in pediatric patients for both late-onset Pompe disease ("LOPD") and infantile-onset Pompe disease ("IOPD") populations.
Next Generation for Pompe Disease
We are committed to continued innovation for all people living with Pompe disease. As part of our long-term commitment, we are also continuing discovery for next-generation genetic medicines for Pompe disease.
Strategic Alliances and Arrangements
We will continue to evaluate business development opportunities as appropriate to build stockholder value and provide us with access to the financial, technical, clinical, and commercial resources necessary to develop and market technologies or products with a focus on rare and orphan diseases. We are exploring potential collaborations, alliances, and other business development opportunities on a regular basis. These opportunities may include business combinations, partnerships, the strategic out-licensing of certain assets, or the acquisition of preclinical-stage, clinical-stage, or marketed products or platform technologies consistent with our strategic plan to develop and provide therapies to patients living with rare and orphan diseases.
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Consolidated Results of Operations
Three Months Ended September 30, 2023 compared to September 30, 2022
The following table provides selected financial information for the Company:
Three Months Ended September 30,
(in thousands)20232022Change
Net product sales$103,501 $81,691 $21,810 
Cost of goods sold9,946 13,436 (3,490)
Cost of goods sold as a percentage of net product sales9.6 %16.4 %(6.8)%
Operating expenses:
Research and development40,704 52,970 (12,266)
Selling, general, and administrative65,651 47,272 18,379 
Changes in fair value of contingent consideration payable1,995 567 1,428 
Depreciation and amortization2,228 1,286 942 
Other income (expense):
Interest income1,471 563 908 
Interest expense(12,986)(9,620)(3,366)
Other income3,833 13,634 (9,801)
Income tax benefit (expense)3,128 (4,023)7,151 
Net loss attributable to common stockholders$(21,577)$(33,286)$11,709 
Net Product Sales. Net product sales increased $21.8 million during the three months ended September 30, 2023 compared to the same period in the prior year. The increase was primarily due to continued growth of Galafold® in the U.S., Europe and Japan markets, launch of Pombiliti + Opfolda in Europe, and a $3.8 million favorable impact of foreign currency exchange.
Cost of goods sold. Cost of goods sold includes manufacturing costs as well as royalties associated with net product sales of Galafold®. Cost of goods sold as a percentage of net product sales decreased 6.8% primarily due to inventory write-offs in the prior year.
Research and Development Expense. The following table summarizes our principal development programs and the out-of-pocket, third-party expenses incurred:
(in thousands)Three Months Ended September 30,
Projects20232022
Third party direct project expenses  
Galafold® (Fabry Disease)
$4,505 $2,613 
Pombiliti + Opfolda (Pompe Disease)
15,233 24,052 
Gene therapy programs1,137 462 
Pre-clinical and other programs616 
Total third-party direct project expenses21,491 27,133 
Other project costs  
Personnel costs15,194 18,691 
Other costs4,019 7,146 
Total other project costs19,213 25,837 
Total research and development costs$40,704 $52,970 
The $12.3 million decrease in research and development costs was primarily driven by a decrease in Pompe disease program spend due to reduced clinical manufacturing costs. Personnel and other costs decreased in connection with the reallocation of resources to support our Pombiliti + Opfoldacommercial launch and continued growth of Galafold®.
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Selling, General, and Administrative Expense. Selling, general, and administrative expense increased $18.4 million, primarily driven by personnel costs including the reallocation of resources to support our Pombiliti + Opfoldacommercial launch activities and third-party professional fees.
Interest Expense. The $3.4 million increase was due to a higher variable interest rate on debt period over period.
Other Income. The $9.8 million variance was primarily related to movement in foreign exchange rates caused by remeasurement of foreign-denominated balances.
Income Tax Benefit. We are subject to income taxes in various jurisdictions. The income tax benefit was primarily due to the discrete treatment of certain tax matters that resulted in changes to the forecasted income in our tax jurisdictions.
Consolidated Results of Operations
Nine Months Ended September 30, 2023 compared to September 30, 2022
The following table provides selected financial information for the Company:
Nine Months Ended September 30,
(in thousands)20232022Change
Net product sales$284,274 $241,137 $43,137 
Cost of goods sold26,002 29,215 (3,213)
Cost of goods sold as a percentage of net product sales9.1 %12.1 %(3.0)%
Operating expenses:
Research and development117,352 212,806 (95,454)
Selling, general, and administrative205,031 158,767 46,264 
Changes in fair value of contingent consideration payable2,583 (506)3,089 
Loss on impairment of assets1,134 6,616 (5,482)
Depreciation and amortization5,691 4,031 1,660 
Other (expense) income:
Interest income5,407 1,052 4,355 
Interest expense(37,322)(26,024)(11,298)
Other (expense) income(13,007)22,804 (35,811)
Income tax benefit (expense)700 (8,743)9,443 
Net loss attributable to common stockholders$(117,741)$(180,703)$62,962 
Net Product Sales. Net product sales increased $43.1 million during the nine months ended September 30, 2023 compared to the same period in the prior year. The increase was primarily due to continued growth of Galafold® in the U.S., Europe and Japan markets, and the launch of Pombiliti + Opfoldain Europe.
Cost of goods sold. Cost of goods sold includes manufacturing costs as well as royalties associated with net product sales of Galafold®. Cost of goods sold as a percentage of net product sales decreased 3.0% primarily due to inventory write-offs in the prior year.
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Research and Development Expense. The following table summarizes our principal development programs and the out-of-pocket, third-party expenses incurred:
(in thousands)Nine Months Ended September 30,
Projects20232022
Third party direct project expenses  
Galafold® (Fabry Disease)
$10,971 $9,652 
Pombiliti + Opfolda (Pompe Disease)
44,126 72,615 
Gene therapy programs1,892 45,379 
Pre-clinical and other programs1,326 99 
Total third-party direct project expenses58,315 127,745 
Other project costs  
Personnel costs47,108 62,518 
Other costs11,929 22,543 
Total other project costs59,037 85,061 
Total research and development costs$117,352 $212,806 
The $95.5 million decrease in research and development costs was primarily driven by the strategic deprioritization of our gene therapy portfolio, which resulted in the recognition of contract exit costs in the prior year. Additionally, Pompe disease program spend decreased due to reduced clinical manufacturing costs. Personnel and other costs decreased in connection with the reallocation of resources to support our Pombiliti + Opfoldacommercial launch and continued growth of Galafold®.
Selling, General, and Administrative Expense. Selling, general, and administrative expense increased $46.3 million, primarily driven by personnel costs in connection with the reallocation of resources to support our Pombiliti + Opfolda commercial launch and third-party professional fees, partially offset by the write-off of cloud computing costs and software licensing fees in the prior year in connection with the strategic deprioritization of our gene therapy portfolio.
Loss on Impairment of Assets. The $5.5 million decrease was primarily in connection with the strategic deprioritization of our gene therapy portfolio in the prior year, which resulted in us recognizing a loss on impairment of assets.
Interest Expense. The $11.3 million increase was due to a higher variable interest rate on debt period over period.
Other (Expense) Income. The $35.8 million variance was primarily related to movement in foreign exchange rates caused by remeasurement of foreign-denominated balances.
Income Tax Benefit. We are subject to income taxes in various jurisdictions. The income tax benefit was primarily due to the recognition of tax benefit in connection with a partial release of a valuation allowance on deferred tax assets resulting from the reclassification of in-process research and development to a definite-lived intangible asset.
Liquidity and Capital Resources
As a result of our significant research and development expenditures, as well as expenditures to build a commercial organization to support the launch of Galafold®, we have not been profitable and have generated operating losses since we were incorporated in 2002. We have historically funded our operations through stock offerings, product revenues, debt issuance, collaborations, and other financing arrangements.
Sources of Liquidity
In November 2022, we entered into a Sales Agreement with The Goldman Sachs & Co. LLC to create an at-the-market equity program ("ATM program"), pursuant to which we may offer to sell shares of our common stock having an aggregate offering gross proceeds of up to $250.0 million. During the three and nine months ended September 30, 2023, we issued and sold an aggregate of 3,002,354 and 5,244,936 shares through our ATM program at a weighted-average public offering price of $12.68 and $12.50 per share, resulting in net proceeds of $36.6 million and $63.1 million, respectively. As of September 30, 2023, an aggregate of $184.4 million worth of shares remain available to be issued and sold under the ATM program.
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In October 2023, we entered into the Senior Secured Term Loan due 2029. This transaction resulted in net proceeds of $387.4 million, after deducting fees and estimated expenses. There were no warrants or equity conversion features associated with the Senior Secured Term Loan due 2029. Simultaneously, we also entered into a securities purchase agreement with funds managed by Blackstone, for the private placement of an aggregate of 2,467,104 shares of our common stock, at a purchase price of $12.16 per share. Proceeds from the private placement, net of offering costs, were $29.8 million. We used proceeds from the Senior Secured Term Loan due 2029 and the private placement to prepay the Senior Secured Term Loan due 2026, inclusive of the outstanding principal amount, accrued interest and prepayment premium. The remaining proceeds will be used to fund ongoing operations.
Cash Flow Discussion
As of September 30, 2023, we had cash, cash equivalents, and marketable securities of $280.3 million. We invest cash in excess of our immediate requirements in regard to liquidity and capital preservation in a variety of interest-bearing instruments, including money market accounts. Wherever possible, we seek to minimize the potential effects of concentration and degrees of risk. Although we maintain cash balances with financial institutions in excess of insured limits, we do not anticipate any losses with respect to such cash balances. For more details on the cash, cash equivalents, and marketable securities, refer to "— Note 4. Cash, Cash Equivalents, Marketable Securities, and Restricted Cash," in our Notes to Consolidated Financial Statements.
Net Cash Used in Operating Activities
Net cash used in operations for the nine months ended September 30, 2023 was $72.5 million. The components of net cash used in operations included the net loss for the nine months ended September 30, 2023 of $117.7 million offset by $68.0 million of stock compensation, $25.9 million of other non-cash adjustments, and a net increase in changes in operating assets and liabilities of $48.7 million. The changes in operating assets and liabilities were primarily due to an increase in inventory of $42.2 million and an increase in prepaid expenses and other current assets of $26.0 million, partially offset by an increase in accounts payable and accrued expenses of $41.1 million associated with Pombiliti + Opfolda launch activities and increases in sales rebates associated with increased commercial sales of Galafold®.
Net cash used in operations for the nine months ended September 30, 2022 was $85.8 million. The components of net cash used in operations included the net loss for the nine months ended September 30, 2022 of $180.7 million offset by $57.9 million of stock compensation, $25.6 million of other non-cash adjustments, and a net increase in changes in operating assets and liabilities of $11.4 million. The changes in operating assets and liabilities were primarily due to an increase in accounts payable and accrued expenses of $25.5 million associated with the strategic deprioritization of our gene therapy portfolio resulting in the non-recurring expense of contractual obligations from which we will no longer receive further economic benefit, as well as tax accruals and sales rebates, offset by payments of contract manufacturing, third party research and development services, and annual performance bonus. The net cash used in operations was also impacted by an increase in accounts receivable of $7.4 million due to increased commercial sales of Galafold®.
Net Cash Provided by Investing Activities
Net cash provided by investing activities for the nine months ended September 30, 2023 was $122.0 million. Our investing activities have consisted primarily of purchases, sales, and maturities of investments and capital expenditures. Net cash provided by investing activities reflects $180.8 million for the sale and redemption of marketable securities, partially offset by $53.1 million for the purchase of marketable securities and $5.7 million for capital expenditures.
Net cash provided by investing activities for the nine months ended September 30, 2022 was $159.0 million. Our investing activities have consisted primarily of purchases, sales and maturities of investments and capital expenditures. Net cash provided by investing activities reflects $259.9 million for the sale and redemption of marketable securities, partially offset by $99.8 million for the purchase of marketable securities and $1.1 million for capital expenditures.
Net Cash Provided by (Used in) Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2023 was $53.5 million. Net cash provided by financing activities primarily reflects $63.1 million of proceeds from the issuance of shares in connection with the ATM program offering, net of issuance costs, and $7.8 million of proceeds from the exercise of stock options, partially offset by the withholding taxes paid on vested restricted stock units of $16.4 million.
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Net cash used in financing activities for the nine months ended September 30, 2022 was $8.0 million. Net cash used in financing activities primarily reflects the withholding taxes paid on vested restricted stock units of $11.1 million, partially offset by $3.2 million of proceeds from the exercise of stock options.
Funding Requirements
We expect to continue to incur significant costs in the foreseeable future primarily due to research and development expenses, including expenses related to conducting clinical trials. Our future capital requirements will depend on a number of factors, including:
the scope, progress, results and costs of clinical trials for our drug candidates;
the cost of manufacturing drug supply for our commercial, clinical and preclinical studies, including the cost of manufacturing Pombiliti(also referred to as "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;
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;
the costs of commercialization activities, including product marketing, sales, and distribution;
the emergence of competing technologies and other adverse market developments;
the estimates regarding the potential market opportunity for our products and product candidates;
our ability to successfully commercialize Galafold® (also referred to as "migalastat HCl");
our ability to successfully commercialize Pombiliti and Opfolda (together, also referred to as "AT-GAA") in the E.U., U.K., and U.S., and elsewhere, if regulatory applications are approved;
our ability to manufacture or supply sufficient clinical or commercial products, including Galafold®, Pombiliti and Opfolda;
our ability to obtain reimbursement for Galafold®, Pombiliti and Opfolda;
our ability to satisfy post-marketing commitments or requirements for continued regulatory approval of Galafold®, Pombiliti and Opfolda;
our ability to obtain market acceptance of Galafold®, Pombiliti and Opfolda;
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, including Hatch-Waxman litigation;
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 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;
fluctuations in foreign currency exchange rates; and
changes in accounting standards.
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We may seek additional funding through public or private financings of debt or equity. Based on our current operating model, we believe that the current cash position, which includes expected revenues, is sufficient to fund our operations and ongoing research programs for at least the next 12 months. Potential impacts of business development collaborations, pipeline expansion, and investment in manufacturing capabilities could impact our future capital requirements.
Critical Accounting Policies and Significant Judgments 
The discussion and analysis of our financial condition and results of operations are based on our financial statements, which we have prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There were no significant changes during the nine months ended September 30, 2023 to the items that we disclosed as our significant accounting policies and estimates described in "—Note 2. Summary of Significant Accounting Policies" to the Company's financial statements as contained in the Company's Annual Report on Form 10-K for the fiscal year ended Decemb