Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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, 2024

☐ 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 class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	FOLD	NASDAQ 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 26, 2024 was 296,590,931 shares.

AMICUS THERAPEUTICS, INC.

Form 10-Q for the Quarterly Period Ended June 30, 2024

Page

PART I. FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements and Notes (unaudited)

Consolidated Balance Sheets as of June 3 0 , 2024 and December 31, 2023

Consolidated Statements of Operations for the Three and Six Months Ended June 3 0 , 2024 and 2023

Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 3 0 , 2024 and 2023

Consolidated Statements of Changes in Stockholders' Equity for the Three and Six Months Ended June 3 0 , 2024 and 2023

Consolidated Statements of Cash Flows for the Six Months Ended June 3 0 , 2024 and 2023

Notes to Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibits

SIGNATURES

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 "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 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;

•any changes in laws, rules or regulations affecting our ability to manufacture, transport, test, develop, or commercialize our products, including Galafold®, Pombiliti® + Opfolda®, or our product candidates;

•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® + 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® and Pombiliti® + Opfolda®;

•our ability to obtain reimbursement for Galafold® and Pombiliti® + Opfolda®;

•our ability to satisfy post-marketing commitments or requirements for continued regulatory approval of Galafold® and Pombiliti® + Opfolda®;

•our ability to obtain market acceptance of Galafold® and Pombiliti® + Opfolda®, or any other product developed or acquired that has received regulatory approval;

•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 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 economic benefits from any such collaborators;

•the costs associated with, and our ability to comply with, emerging environmental, social and governance standards, including climate reporting requirements at the local, state and national levels;

•our ability to successfully protect our information technology systems and maintain our global operations and supply chain without interruption;

•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, 2023, 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, 2023 (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.

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, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	209,335	$	246,994
Investments in marketable securities	50,727		39,206
Accounts receivable	85,174		87,632
Inventories	81,320		59,696
Prepaid expenses and other current assets	35,145		49,533
Total current assets	461,701		483,061
Operating lease right-of-use assets, net	22,611		26,312
Property and equipment, less accumulated depreciation of $27,844 and $25,429 at June 30, 2024 and December 31, 2023, respectively	31,161		31,667
Intangible assets, less accumulated amortization of $4,147 and $2,510 at June 30, 2024 and December 31, 2023, respectively	18,853		20,490
Goodwill	197,797		197,797
Other non-current assets	17,361		18,553
Total Assets	$	749,484	$	777,880
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	32,057	$	15,120
Accrued expenses and other current liabilities	127,897		144,245
Operating lease liabilities	8,112		8,324
Total current liabilities	168,066		167,689
Long-term debt	388,939		387,858
Operating lease liabilities	47,007		48,877
Other non-current liabilities	12,949		13,282
Total liabilities	616,961		617,706
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 500,000,000 shares authorized, 296,428,877 and 293,594,209 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively	2,923		2,918
Additional paid-in capital	2,868,925		2,836,018
Accumulated other comprehensive income (loss):
Foreign currency translation adjustment	8,991		5,429
Unrealized loss on available-for-sale securities	(197)		(188)
Warrants	71		71
Accumulated deficit	(2,748,190)		(2,684,074)
Total stockholders’ equity	132,523		160,174
Total Liabilities and Stockholders’ Equity	$	749,484	$	777,880

See accompanying Notes to Consolidated Financial Statements

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,
	2024		2023		2024		2023
Net product sales	$	126,669	$	94,503	$	237,072	$	180,773
Cost of goods sold	11,261		9,114		24,828		16,056
Gross profit	115,408		85,389		212,244		164,717
Operating expenses:
Research and development	24,683		35,149		53,012		76,648
Selling, general, and administrative	73,576		65,423		161,605		139,380
Changes in fair value of contingent consideration payable	—		337		—		588
Restructuring charges	—		—		6,045		—
Loss on impairment of assets	—		1,134		—		1,134
Depreciation and amortization	2,182		2,206		4,336		3,463
Total operating expenses	100,441		104,249		224,998		221,213
Income (loss) from operations	14,967		(18,860)		(12,754)		(56,496)
Other expense:
Interest income	1,370		1,737		2,910		3,936
Interest expense	(12,512)		(12,492)		(24,948)		(24,336)
Other expense	(3,717)		(10,902)		(8,683)		(16,840)
Income (loss) before income tax	108		(40,517)		(43,475)		(93,736)
Income tax expense	(15,805)		(2,715)		(20,641)		(2,428)
Net loss attributable to common stockholders	$	(15,697)	$	(43,232)	$	(64,116)	$	(96,164)
Net loss attributable to common stockholders per common share — basic and diluted	$	(0.05)	$	(0.15)	$	(0.21)	$	(0.33)
Weighted-average common shares outstanding — basic and diluted	303,773,922		292,797,002		303,336,787		292,071,201

See accompanying Notes to Consolidated Financial Statements

Amicus Therapeutics, Inc.

Consolidated Statements of Comprehensive Loss

(Unaudited)

(in thousands)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Net loss	$	(15,697)	$	(43,232)	$	(64,116)	$	(96,164)
Other comprehensive gain, net of tax:
Foreign currency translation adjustment gain	2,144		10,880		3,562		16,326
Unrealized gain (loss) on available-for-sale securities	6		24		(9)		(61)
Other comprehensive gain	2,150		10,904		3,553		16,265
Comprehensive loss	$	(13,547)	$	(32,328)	$	(60,563)	$	(79,899)

See accompanying Notes to Consolidated Financial Statements

Amicus Therapeutics, Inc.

Consolidated Statements of Changes in Stockholders' Equity

(Unaudited)

(in thousands, except share amounts)


Three Months Ended June 30, 2024

	Common Stock			Additional Paid-In Capital		Warrants		Other Comprehensive Income		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at March 31, 2024	296,159,417	$	2,922	$	2,853,550	$	71	$	6,644	$	(2,732,493)	$	130,694
Stock options exercised, net	136,052	1		862		—		—		—		863
Vesting of restricted stock units, net of taxes	133,408	—		(1,684)		—		—		—		(1,684)
Stock-based compensation	—	—		16,197		—		—		—		16,197
Unrealized gain on available-for-sale securities	—	—		—		—		6		—		6
Foreign currency translation adjustment	—	—		—		—		2,144		—		2,144
Net loss	—	—		—		—		—		(15,697)		(15,697)
Balance at June 30, 2024	296,428,877	$	2,923	$	2,868,925	$	71	$	8,794	$	(2,748,190)	$	132,523


Six Months Ended June 30, 2024

	Common Stock			Additional Paid-In Capital		Warrants		Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at December 31, 2023	293,594,209	$	2,918	$	2,836,018	$	71	$	5,241	$	(2,684,074)	$	160,174
Stock options exercised, net	580,549	5		4,312		—		—		—		4,317
Vesting of restricted stock units, net of taxes	2,254,119	—		(18,405)		—		—		—		(18,405)
Stock-based compensation	—	—		47,000		—		—		—		47,000
Unrealized loss on available-for-sale securities	—	—		—		—		(9)		—		(9)
Foreign currency translation adjustment	—	—		—		—		3,562		—		3,562
Net loss	—	—		—		—		—		(64,116)		(64,116)
Balance at June 30, 2024	296,428,877	$	2,923	$	2,868,925	$	71	$	8,794	$	(2,748,190)	$	132,523


Three Months Ended June 30, 2023

	Common Stock			Additional Paid-In Capital		Warrants		Other Comprehensive (Loss) Income		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at March 31, 2023	283,300,585	$	2,820	$	2,691,836	$	83	$	(6,744)	$	(2,585,422)	$	102,573
Stock options exercised, net	269,109	4		1,746		—		—		—		1,750
Vesting of restricted stock units, net of taxes	155,776	—		(1,202)		—		—		—		(1,202)
Stock-based compensation	—	—		16,577		—		—		—		16,577
Issuance of shares in connection with at-the-market offering, net of issuance costs	2,047,353	20		24,179		—		—		—		24,199
Warrants exercised	1,220,100	12		12		(12)		—		—		12
Unrealized gain on available-for-sale securities	—	—		—		—		24		—		24
Foreign currency translation adjustment	—	—		—		—		10,880		—		10,880
Net loss	—	—		—		—		—		(43,232)		(43,232)
Balance at June 30, 2023	286,992,923	$	2,856	$	2,733,148	$	71	$	4,160	$	(2,628,654)	$	111,581


Six Months Ended June 30, 2023

	Common Stock			Additional Paid-In Capital		Warrants		Other Comprehensive (Loss) Income		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at December 31, 2022	281,108,273	$	2,815	$	2,664,744	$	83	$	(12,105)	$	(2,532,490)	$	123,047
Stock options exercised, net	653,217	7		4,398		—		—		—		4,405
Vesting of restricted stock units, net of taxes	1,768,751			(14,008)		—		—		—		(14,008)
Stock-based compensation	—	—		51,471		—		—		—		51,471
Warrants exercised	1,220,100	12		12		(12)		—		—		12
Issuance of shares in connection with at-the-market offering, net of issuance costs	2,242,582	22		26,531		—		—		—		26,553
Unrealized loss on available-for-sale securities	—	—		—		—		(61)		—		(61)
Foreign currency translation adjustment	—	—		—		—		16,326		—		16,326
Net loss	—	—		—		—		—		(96,164)		(96,164)
Balance at June 30, 2023	286,992,923	$	2,856	$	2,733,148	$	71	$	4,160	$	(2,628,654)	$	111,581

See accompanying Notes to Consolidated Financial Statements

Amicus Therapeutics, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Six Months Ended June 30,
	2024		2023
Operating activities
Net loss	$	(64,116)	$	(96,164)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount and deferred financing	1,091		1,359
Depreciation and amortization	4,336		3,463
Stock-based compensation	47,000		51,471
Non-cash changes in the fair value of contingent consideration payable	—		588
Foreign currency remeasurement loss	9,391		23,904
Deferred taxes	—		(4,939)
Other	6,520		2,060
Changes in operating assets and liabilities:
Accounts receivable	(447)		2,705
Inventories	(26,901)		(27,483)
Prepaid expenses and other current assets	13,959		(12,263)
Accounts payable, accrued expenses, and other current liabilities	2,641		31,620
Other non-current assets and liabilities	(478)		(2,586)
Payment of contingent consideration	—		(7,937)
Net cash used in operating activities	$	(7,004)	$	(34,202)
Investing activities
Sale and redemption of marketable securities	62,335		126,848
Purchases of marketable securities	(73,866)		(36,448)
Capital expenditures	(2,909)		(4,144)
Net cash (used in) provided by investing activities	$	(14,440)	$	86,256
Financing activities
Payment of finance leases	(78)		(51)
Withholding taxes paid on vested restricted stock units	(18,405)		(14,008)
Proceeds from stock options exercised, net	4,317		4,405
Proceeds from warrants exercised, net	—		12
Proceeds from the issuance of shares in connection with at-the-market offering, net of issuance costs	—		26,553
Payment of contingent consideration	—		(1,063)
Net cash (used in) provided by financing activities	$	(14,166)	$	15,848
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	$	(2,110)	$	(6,684)
Net (decrease) increase in cash, cash equivalents, and restricted cash at the end of the period	(37,720)		61,218
Cash, cash equivalents, and restricted cash at the beginning of period	250,077		153,115
Cash, cash equivalents, and restricted cash at the end of period	$	212,357	$	214,333
Supplemental disclosures of cash flow information
Cash paid during the period for interest	$	23,790	$	23,155
Cash paid for taxes	$	1,126	$	5,978
Tenant improvements paid through lease incentives	$	120	$	—
Capital expenditures unpaid at the end of period	$	90	$	297

See accompanying Notes to Consolidated Financial Statements

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 seeks to deliver the highest quality therapies that have the potential to obsolete current treatments, provide significant benefits to patients, and be first- or best-in-class. The Company's two marketed therapies are Galafold®, the first oral monotherapy for people living with Fabry disease who have amenable genetic variants, and Pombiliti® + Opfolda®, a novel treatment designed to improve uptake of active enzyme into key disease relevant tissues for adults living with late-onset Pompe disease.

Galafold® (also referred to as "migalastat"), is approved in over 40 countries around the world, including the United States ("U.S."), European Union ("E.U."), United Kingdom ("U.K."), and Japan. Additionally, Galafold® has been granted orphan drug designation in the U.S., E.U., U.K., Japan and several other countries.

Pombiliti® + Opfolda® (also referred to as "cipaglucosidase alfa-atga/miglustat"), is approved in the U.S., the E.U., the U.K., and Switzerland. Multiple regulatory submissions and reimbursement processes with global health authorities are currently underway. Additionally, Pombiliti® + Opfolda® has been granted orphan drug designation in the U.S., E.U., U.K., Japan and several other countries.

The Company had an accumulated deficit of $2.7 billion as of June 30, 2024 and anticipates incurring losses through the fiscal year ending December 31, 2024. The Company has historically funded its operations through stock offerings, product revenues, debt issuances, collaborations, and other financing arrangements.

Based on its current operating model, which includes expected revenues, the Company believes the current cash position is sufficient to fund the Company's operations and ongoing research programs for at least the next 12 months. Potential business development opportunities, pipeline expansion, and investment in manufacturing capabilities could impact the Company's long-term capital requirements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited Consolidated Financial Statements have been prepared 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, certain financial information that is normally included in annual financial statements prepared in accordance with U.S. GAAP, but that is not required for interim reporting purposes, has been omitted. 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. Management has determined that the Company operates in one segment focused on the discovery, development, and commercialization of advanced therapies to treat a range of devastating rare and orphan diseases.

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, 2023. 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, 2023.

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 weighted 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. Transactions which are not in the functional currency of the entity are remeasured into the functional currency with gains or losses resulting from the remeasurement recorded in other expense.

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 gain 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 as a component of other non-current assets on the Company's Consolidated Balance Sheets.

Concentration of Credit Risk

The Company's financial instruments that are exposed to concentration of credit risk consist primarily of cash, cash equivalents, marketable securities, and accounts receivable.

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's accounts receivable at June 30, 2024 have primarily arisen from Galafold® sales in Europe, the U.S., and Japan. The Company periodically assesses 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, 2024, the Company's allowance for doubtful accounts was $0.4 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.

The Company recognizes revenue when its performance obligation to its customers have been satisfied, which occurs at a point in time when the pharmacies or distributors obtain control of the products. 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 primarily consist of 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 June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Galafold®	$	110,817	$	94,331	$	210,176	$	180,443
Pombiliti® + Opfolda®	15,852		172		26,896		330
Total net product sales	$	126,669	$	94,503	$	237,072	$	180,773

The following table summarizes the Company's net product sales disaggregated by geographic area:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
U.S.	$	50,138	$	37,128	$	87,513	$	65,959
Ex-U.S.	76,531		57,375		149,559		114,814
Total net product sales	$	126,669	$	94,503	$	237,072	$	180,773

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 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 Pombiliti® + Opfolda® inventory 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.

Recent Accounting Developments - Guidance Adopted in 2024

In November 2023, the Financial Accounting Standards Board ("FASB") issued the Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments expand reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The amendments require, among other things, disclosure of the title and position of the chief operating decision maker and require that public entities with a single reportable segment provide all disclosures required by this update and existing segment disclosures in Topic 280. Annual disclosures are required for fiscal years beginning after December 15, 2023 and interim disclosures are required for periods within fiscal years beginning after December 15, 2024. Retrospective application is required unless it is impracticable, and early adoption is permitted. The Company adopted this guidance on January 1, 2024. This ASU applies to disclosure requirements only, and the Company will provide required annual disclosures as part of the 2024 Annual Report on Form 10-K and required interim disclosures as part of 2025 Quarterly Reports on Form 10-Q.

Recent Accounting Developments - Guidance Not Yet Adopted

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, must be applied prospectively with an option to apply retrospectively, and early adoption is permitted. The adoption of this guidance is not expected to have a significant impact on the Company's consolidated financial statements.

3. Cash, Cash Equivalents, Marketable Securities, and Restricted Cash

As of June 30, 2024, the Company held $209.3 million in cash and cash equivalents and $50.7 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 gain in the 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 the Consolidated Statements of Operations 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 the Consolidated Statements of Operations.

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, in accordance with Company policy, such 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 June 30, 2024
(in thousands)	Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Cash and cash equivalents	$	209,335	$	—	$	—	$	209,335
Commercial paper	45,658		—		(1)		45,657
Treasury bill	4,916		2		—		4,918
U.S. government agency bonds	1		—		—		1
Money market	100		—		—		100
Certificates of deposit	51		—		—		51
	$	260,061	$	2	$	(1)	$	260,062
Included in cash and cash equivalents	$	209,335	$	—	$	—	$	209,335
Included in marketable securities	50,726		2		(1)		50,727
Total cash, cash equivalents, and marketable securities	$	260,061	$	2	$	(1)	$	260,062


	As of December 31, 2023
(in thousands)	Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Cash and cash equivalents	$	246,994	$	—	$	—	$	246,994
Commercial paper	14,651		12		—		14,663
Treasury bill	12,944		2		—		12,946
U.S. government agency bonds	11,450		—		(4)		11,446
Money market	100		—		—		100
Certificate of deposit	51		—		—		51
	$	286,190	$	14	$	(4)	$	286,200
Included in cash and cash equivalents	$	246,994	$	—	$	—	$	246,994
Included in marketable securities	39,196		14		(4)		39,206
Total cash, cash equivalents, and marketable securities	$	286,190	$	14	$	(4)	$	286,200

For both the six months ended June 30, 2024 and June 30, 2023, 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, 2024 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 as a component of other comprehensive gain. The fair value of these marketable securities in unrealized loss positions are $45.7 million and $11.4 million as of June 30, 2024 and December 31, 2023, 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 shown in the Consolidated Statements of Cash Flows.


	As of June 30,
(in thousands)	2024		2023
Cash and cash equivalents	$	209,335	$	211,307
Restricted cash	3,022		3,026
Cash, cash equivalents, and restricted cash shown in the Consolidated Statements of Cash Flows	$	212,357	$	214,333

4. Inventories

The following table summarizes the components of the Company’s inventories for each of the periods indicated:


(in thousands)	June 30, 2024		December 31, 2023
Raw materials	$	44,909	$	30,230
Work-in-process	29,397		22,597
Finished goods	7,014		6,869
Total inventories	$	81,320	$	59,696

The Company's reserve for inventory was $3.1 million and $0.5 million as of June 30, 2024 and December 31, 2023, respectively.

5. Debt

The following table summarizes the Company's debt for each of the periods indicated:


(in thousands)	June 30, 2024		December 31, 2023
Senior Secured Term Loan due 2029:
Principal	$	400,000	$	400,000
Less: debt discount (1)	(8,794)		(9,652)
Less: deferred financing (1)	(2,267)		(2,490)
Net carrying value of long-term debt	$	388,939	$	387,858

______________________________

(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 2029 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, 2024 and 2023, respectively:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Contractual interest expense	$	11,941	$	11,789	$	23,915	$	23,019
Amortization of debt discount	$	436	$	395	$	858	$	776
Amortization of deferred financing	$	124	$	297	$	233	$	583

6. Restructuring

In the first quarter of 2024, restructuring charges were primarily related to an initiative to reduce operating costs by abandoning one of the Company's leases that it no longer believes is necessary to conduct its operations. There were no restructuring charges in the second quarter of 2024.

The associated liabilities are recorded in accrued expenses and other current liabilities in the Company’s Consolidated Balance Sheets. Total charges incurred are summarized as follows:


(in thousands)	Other Facility and Non-Lease Costs		Accelerated Depreciation		Total
Balance as of December 31, 2023	$	—	$	—	$	—
Restructuring Charges	3,201		2,844		6,045
Non-cash items	—		(2,844)		(2,844)
Cash settled	(939)		—		(939)
Balance as of June 30, 2024	$	2,262	$	—	$	2,262

7. Stock-Based Compensation

The 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 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 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 were 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,
	2024			2023			2024			2023
Expected stock price volatility	56.6		%	59.2		%	57.2		%	59.3		%
Risk free interest rate	4.3		%	3.8		%	4.0		%	3.9		%
Expected life of options (years)	5.6			5.5			5.6			5.5
Expected annual dividend per share	$	—		$	—		$	—		$	—

A summary of the Company's stock options for the six months ended June 30, 2024 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, 2023	23,002	$	11.69
Granted	4,521	$	13.79
Exercised	(576)	$	7.50
Forfeited	(305)	$	12.61
Expired	(106)	$	15.44
Options outstanding, June 30, 2024	26,536	$	12.11	6.3	$	8.6
Vested and non-vested expected to vest, June 30, 2024	24,787	$	12.07	6.1	$	8.5
Exercisable at June 30, 2024	16,639	$	11.67	4.9	$	8.3

As of June 30, 2024, the total unrecognized compensation cost related to non-vested stock options granted was $49.7 million and is expected to be recognized over a weighted average period of three years.

Restricted Stock Units and Performance-Based Restricted Stock Units (collectively "RSUs")

RSUs awarded under the Plan are generally subject to graded vesting and are contingent on an employee's continued service. RSUs are generally subject to forfeiture if employment terminates prior to the release of vesting restrictions. The Company expenses the cost of the RSUs, which is determined to be the fair market value of the shares of common stock underlying the RSUs at the date of grant, ratably over the period during which the vesting restrictions lapse. A summary of non-vested RSU activity under the Plan for the six months ended June 30, 2024 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, 2023	10,033	$	13.37
Granted	3,430	$	15.07
Vested	(3,503)	$	13.36
Forfeited	(415)	$	14.57
Non-vested units as of June 30, 2024	9,545	$	13.90	2.4	$	94.7

As of June 30, 2024, there was $70.0 million of total unrecognized compensation cost related to non-vested 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 June 30,				Six Months Ended June 30,
(in thousands)	2024		2023		2024		2023
Research and development expense	$	3,061	$	4,117	$	7,932	$	12,607
Selling, general, and administrative expense	13,136		12,460		39,068		38,864
Total equity compensation expense	$	16,197	$	16,577	$	47,000	$	51,471

8. 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, 2024 are identified in the following tables:


(in thousands)	Level 1		Level 2		Total
Assets:
Commercial paper	$	—	$	45,657	$	45,657
Treasury bill	—		4,918		4,918
U.S. government agency bonds	—		1		1
Money market	7,441		—		7,441
	$	7,441	$	50,576	$	58,017


(in thousands)	Level 1		Level 2		Total
Liabilities:
Deferred compensation plan liability	$	7,341	$	—	$	7,341
	$	7,341	$	—	$	7,341

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, 2023 are identified in the following tables:


(in thousands)	Level 1		Level 2		Total
Assets:
Commercial paper	$	—	$	14,663	$	14,663
Treasury bill	—		12,946		12,946
U.S. government agency bonds	—		11,446		11,446
Money market	7,631		—		7,631
	$	7,631	$	39,055	$	46,686


(in thousands)	Level 1		Level 2		Total
Liabilities:
Deferred compensation plan liability	7,531		—		7,531
	$	7,531	$	—	$	7,531

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 or liabilities as of June 30, 2024 or December 31, 2023.

Cash, Money Market Funds, and Marketable Securities

The Company classifies its cash and money market funds 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 within the fair value hierarchy as Level 2 primarily utilizing broker quotes in a non-active market for valuation of these securities.

9. 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 June 30,				Six Months Ended June 30,
(in thousands, except per share amounts)	2024		2023		2024		2023
Numerator:
Net loss attributable to common stockholders	$	(15,697)	$	(43,232)	$	(64,116)	$	(96,164)
Denominator:
Weighted average common shares outstanding — basic and diluted	303,773,922		292,797,002		303,336,787		292,071,201

Dilutive common stock equivalents would include the dilutive effect of outstanding common stock options and non-vested 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 June 30,
(in thousands)	2024	2023
Options to purchase common stock	26,536	23,408
Non-vested restricted stock units	9,545	10,365
Total number of potentially issuable shares	36,081	33,773

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, 2023. 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, 2023 entitled “Risk Factors”.

Overview

We are a global, patient-dedicated biotechnology company focused on discovering, developing, and delivering novel medicines for rare diseases. We seek to deliver the highest quality therapies that have the potential to obsolete current treatments, provide significant benefits to patients, and be first- or best-in-class. Our two marketed therapies are Galafold®, the first oral monotherapy for people living with Fabry disease who have amenable genetic variants, and Pombiliti® + Opfolda®, a novel treatment designed to improve uptake of active enzyme into key disease relevant tissues for adults living with late-onset Pompe disease.

Galafold® (also referred to as "migalastat") is approved in over 40 countries around the world, including the United States ("U.S."), European Union ("E.U."), United Kingdom ("U.K."), and Japan. Additionally, Galafold® has been granted orphan drug designation in the U.S., E.U., U.K., Japan and several other countries.

Pombiliti® + Opfolda® (also referred to as "cipaglucosidase alfa-atga/miglustat") is approved in the U.S., the E.U., the U.K., and Switzerland. Multiple regulatory submissions and reimbursement processes with global health authorities are currently underway. Additionally, Pombiliti® + Opfolda® has been granted orphan drug designation in the U.S., E.U., U.K., Japan and several other 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. We are leveraging our global capabilities to develop and broaden our franchises in Fabry and Pompe disease, with focused discovery work on next generation therapies and novel technologies.

Highlights of our progress include:

•Commercial success in Fabry disease. For the six months ended June 30, 2024, Galafold® revenue was $210.2 million of consolidated revenue, which represented an increase of $29.7 million compared the same period in the prior year. We continue to see strong commercial momentum and expansion into additional geographies.

•Commercial and regulatory success in Pompe disease. For the six months ended June 30, 2024, Pombiliti® + Opfolda® revenue was $26.9 million of consolidated revenue. Pombiliti® + Opfolda® was approved by the European Commission ("EC") in June 2023, the Medicines and Healthcare products Regulatory Agency ("MHRA)" of the United Kingdom in August 2023, the U.S. Food and Drug Administration ("FDA") in September 2023, and the Swissmedic of Switzerland in July 2024.

•Pipeline advancement and growth. We are leveraging our global capabilities to develop and broaden our franchises in Fabry and Pompe disease, with focused discovery work on next generation therapies and novel technologies.

•Financial strength. Total cash, cash equivalents, and marketable securities as of June 30, 2024 was $260.1 million.

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 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. 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 variant. 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, upon receipt of marketing authorization.

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.

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® was approved by the EC in June 2023, the MHRA in August 2023, the FDA in September 2023, and the Swissmedic in July 2024. Additional regulatory submissions and reimbursement processes with global health authorities are currently underway.

Pombiliti® + Opfolda® consists of a uniquely engineered rhGAA enzyme, cipaglucosidase alfa-atga, with an optimized carbohydrate structure to enhance lysosomal uptake, administered in combination with miglustat that functions as an enzyme stabilizer. Miglustat binds to and stabilizes cipaglucosidase alfa-atga reducing inactivation of rhGAA in circulation to improve the uptake of active enzyme into key disease relevant tissues. Miglustat is not an active ingredient that contributes directly to glycogen reduction.

In addition, clinical studies are ongoing in pediatric patients for both the late-onset Pompe disease ("LOPD") and infantile-onset Pompe disease ("IOPD") populations.

Next Generation Therapies

We are committed to continued innovation for all people living with Fabry or Pompe disease. As part of our long-term commitment, we are also continuing discovery for next-generation genetic medicines for Fabry and 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 and intellectual property necessary to develop and market technologies or products with a focus on rare and orphan diseases. We are exploring potential collaborations, alliances, and various 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 novel technologies consistent with our strategic plan to develop and provide therapies to patients living with rare and orphan diseases.

Consolidated Results of Operations

Three Months Ended June 30, 2024 compared to June 30, 2023

The following table provides selected financial information for the Company:


	Three Months Ended June 30,
(in thousands)	2024			2023			Change
Net product sales	$	126,669		$	94,503		$	32,166
Cost of goods sold	11,261			9,114			2,147
Cost of goods sold as a percentage of net product sales	8.9		%	9.6		%	(0.7)		%
Operating expenses:
Research and development	24,683			35,149			(10,466)
Selling, general, and administrative	73,576			65,423			8,153
Changes in fair value of contingent consideration payable	—			337			(337)
Loss on impairment of assets	—			1,134			(1,134)
Depreciation and amortization	2,182			2,206			(24)
Other expense:
Interest income	1,370			1,737			(367)
Interest expense	(12,512)			(12,492)			(20)
Other expense	(3,717)			(10,902)			7,185
Income tax expense	(15,805)			(2,715)			(13,090)
Net loss attributable to common stockholders	$	(15,697)		$	(43,232)		$	27,535

Net Product Sales. Net product sales increased $32.2 million during the three months ended June 30, 2024 compared to the same period in the prior year. The increase was primarily due to both the continued growth of Galafold® in Europe and the U.S. as well as the launch of Pombiliti® + Opfolda® in Europe and the U.S., partially offset by the $1.5 million unfavorable impact of foreign currency exchange.

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 June 30,
Projects	2024		2023
Third party direct project expenses
Galafold® (Fabry Disease)	$	2,225	$	3,822
Pombiliti® + Opfolda® (Pompe Disease)	9,093		13,117
Pre-clinical and other programs	832		865
Total third-party direct project expenses	12,150		17,804
Other project costs
Personnel costs	9,675		13,662
Other costs	2,858		3,683
Total other project costs	12,533		17,345
Total research and development costs	$	24,683	$	35,149

The $10.5 million decrease in research and development costs was primarily driven by our Pombiliti® + Opfolda® commercial launch, decreasing both clinical spend and the number of employees supporting research and development efforts.

Selling, General, and Administrative Expense. Selling, general, and administrative expense increased $8.2 million, primarily driven by personnel costs resulting from an increase in the number of employees to support our commercial launch activities and external costs required to support the manufacture and sale of our commercial products.

Other Expense. The $7.2 million variance was primarily related to movement in foreign exchange rates caused by remeasurement of foreign-denominated balances.

Income Tax Expense. We are subject to income taxes in various jurisdictions. Our tax liabilities are largely dependent on the mix of pre-tax earnings among the many jurisdictions in which we operate and differences in the timing of the recognition of such earnings under the relevant accounting standards and tax rules.

Consolidated Results of Operations

Six Months Ended June 30, 2024 compared to June 30, 2023

The following table provides selected financial information for the Company:


	Six Months Ended June 30,
(in thousands)	2024			2023			Change
Net product sales	$	237,072		$	180,773		$	56,299
Cost of goods sold	24,828			16,056			8,772
Cost of goods sold as a percentage of net product sales	10.5		%	8.9		%	1.6		%
Operating expenses:
Research and development	53,012			76,648			(23,636)
Selling, general, and administrative	161,605			139,380			22,225
Changes in fair value of contingent consideration payable	—			588			(588)
Restructuring charges	6,045			—			6,045
Loss on impairment of assets	—			1,134			(1,134)
Depreciation and amortization	4,336			3,463			873
Other expense:
Interest income	2,910			3,936			(1,026)
Interest expense	(24,948)			(24,336)			(612)
Other expense	(8,683)			(16,840)			8,157
Income tax expense	(20,641)			(2,428)			(18,213)
Net loss attributable to common stockholders	$	(64,116)		$	(96,164)		$	32,048

Net Product Sales. Net product sales increased $56.3 million during the six months ended June 30, 2024 compared to the same period in the prior year. The increase was primarily due to both the continued growth of Galafold® in Europe and the U.S. as well as the launch of Pombiliti® + Opfolda® in Europe and the U.S., partially offset by the $1.6 million unfavorable 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. Cost of goods sold as a percentage of net product sales increased 1.6% primarily due to inventory write-offs associated with validation efforts in the current period.

Research and Development Expense. The following table summarizes our principal development programs and the out-of-pocket, third-party expenses incurred:


(in thousands)	Six Months Ended June 30,
Projects	2024		2023
Third party direct project expenses
Galafold® (Fabry Disease)	$	4,040	$	6,466
Pombiliti® + Opfolda® (Pompe Disease)	20,413		28,893
Pre-clinical and other programs	1,449		1,465
Total third-party direct project expenses	25,902		36,824
Other project costs
Personnel costs	21,580		31,914
Other costs	5,530		7,910
Total other project costs	27,110		39,824
Total research and development costs	$	53,012	$	76,648

The $23.6 million decrease in research and development costs was primarily driven by our Pombiliti® + Opfolda® commercial launch, decreasing both clinical spend and the number of employees supporting research and development efforts.

Selling, General, and Administrative Expense. Selling, general, and administrative expense increased $22.2 million, primarily driven by personnel costs resulting from an increase in the number of employees to support our commercial launch activities, external costs required to support the manufacture and sale of our commercial products, and third-party professional fees.

Restructuring Charges. In the first quarter of 2024, restructuring charges were primarily related to an initiative to reduce operating costs by abandoning a lease that we no longer believe is useful in our operations. There were no restructuring charges in the second quarter of 2024.

Other Expense. The $8.2 million variance was primarily related to movement in foreign exchange rates caused by remeasurement of foreign-denominated balances.

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® and Pombiliti® + Opfolda®, 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. As of June 30, 2024, an aggregate of $184.4 million worth of shares remain available to be issued and sold under the ATM program.

Cash Flow Discussion

As of June 30, 2024, we had cash, cash equivalents, and marketable securities of $260.1 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 obligations of U.S. government agencies and 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 3. 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 six months ended June 30, 2024 was $7.0 million. The components of net cash used in operations included the net loss for the six months ended June 30, 2024 of $64.1 million and a net decrease in changes in operating assets and liabilities of $11.2 million offset by $47.0 million of stock compensation and $21.3 million of other non-cash adjustments. The changes in operating assets and liabilities were primarily due to an increase in inventory of $26.9 million to support our continued commercial growth, partially offset by a decrease in prepaid expenses and other current assets of $14.0 million.

Net cash used in operations for the six months ended June 30, 2023 was $34.2 million. The components of net cash used in operations included the net loss for the six months ended June 30, 2023 of $96.2 million offset by $51.5 million of stock compensation, $26.4 million of other non-cash adjustments, and a net increase in changes in operating assets and liabilities of $15.9 million. The changes in operating assets and liabilities were primarily due to an increase in inventory of $27.5 million and an increase in prepaid expenses and other current assets of $12.3 million, partially offset by an increase in accounts payable and accrued expenses of $31.6 million associated with Pombiliti® + Opfolda® launch activities and increases in sales rebates associated with increased commercial sales of Galafold®.

Net Cash (Used in) Provided by Investing Activities

Net cash used in investing activities for the six months ended June 30, 2024 was $14.4 million. Our investing activities have consisted primarily of purchases, sales, and maturities of investments and capital expenditures. Net cash used in investing activities reflects $73.9 million for the purchase of marketable securities and $2.9 million for capital expenditures, partially offset by $62.3 million from the sale and redemption of marketable securities.

Net cash provided by investing activities for the six months ended June 30, 2023 was $86.3 million. Our investing activities have consisted primarily of purchases, sales and maturities of investments and capital expenditures. Net cash provided by investing activities reflects $126.8 million from the sale and redemption of marketable securities, partially offset by $36.4 million for the purchase of marketable securities and $4.1 million for capital expenditures.

Net Cash (Used in) Provided by Financing Activities

Net cash used in financing activities for the six months ended June 30, 2024 was $14.2 million. Net cash used in financing activities primarily reflects the withholding taxes paid on vested restricted stock units of $18.4 million, partially offset by proceeds from the exercise of stock options of $4.3 million.

Net cash provided by financing activities for the six months ended June 30, 2023 was $15.8 million. Net cash provided by financing activities primarily reflects $26.6 million of proceeds from the issuance of shares in connection with the ATM program offering, net of issuance costs, and $4.4 million of proceeds from the exercise of stock options, partially offset by the withholding taxes paid on vested restricted stock units of $14.0 million.

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: