fold-20220331

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 March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-33497

Amicus Therapeutics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

71-0869350

(State or Other Jurisdiction of

(I.R.S. Employer

Incorporation or Organization)

Identification Number)

3675 Market Street,

Philadelphia,

19104

(Address of Principal Executive Offices)

(Zip Code)

(215)

921-7600

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each 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 April 27, 2022 was 280,162,619 shares.

AMICUS THERAPEUTICS, INC.

Form 10-Q for the Quarterly Period Ended March 31, 2022

Page

PART I. FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements and Notes (unaudited)

Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021

Consolidated Statements of Operations for the Three Months Ended March 31, 2022 and 2021

Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2022 and 2021

Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended March 31, 2022 and 2021

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2022 and 2021

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

We have filed applications to register certain trademarks in the United States and abroad, including AMICUS THERAPEUTICS and design, AMICUS ASSIST and design, CHART and design, AT THE FOREFRONT OF THERAPIES FOR RARE AND ORPHAN DISEASES, HEALING BEYOND DISEASE, OUR GOOD STUFF, and Galafold® and design.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks, uncertainties, and assumptions. Forward-looking statements are all statements, other than statements of historical facts, that discuss our current expectation and projections relating to our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, and objectives of management. These statements may be preceded by, followed by or include the words "aim," "anticipate," "believe," "can," "could," "estimate," "expect," "forecast," "intend," "likely," "may," "outlook," "plan," "potential," "predict," "project," "seek," "should," "will," "would," the negatives or plurals thereof, and other words and terms of similar meaning, although not all forward-looking statements contain these identifying words.

We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct. You should understand that the following important factors could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:

•the scope, progress, results and costs of our clinical trials of our drug candidates;

•the cost of manufacturing drug supply for our commercial, clinical and preclinical studies, including the cost of manufacturing Pompe Enzyme Replacement Therapy ("ERT" or "ATB200" or "cipaglucosidase alfa");

•the future results of preclinical research and subsequent clinical trials for pipeline candidates we may identify from time to time, including our ability to obtain regulatory approvals and commercialize these therapies and obtain market acceptance for such therapies;

•the costs, timing, and outcome of regulatory review of our product candidates, including AT-GAA;

•any changes in regulatory standards relating to the review of our product candidates, including AT-GAA;

•the number and development requirements of other product candidates that we pursue;

•the costs of commercialization activities, including product marketing, sales, and distribution;

•the emergence of competing technologies and other adverse market developments;

•our ability to successfully commercialize Galafold® (also referred to as "migalastat HCl") and, if our regulatory filings are accepted and approved, AT-GAA;

•our ability to manufacture or supply sufficient clinical or commercial products, including Galafold® and AT-GAA;

•our ability to obtain reimbursement for Galafold® and, if our regulatory filings are accepted and approved, AT-GAA;

•our ability to satisfy post-marketing commitments or requirements for continued regulatory approval of Galafold®, and, if approved and applicable, AT-GAA;

•our ability to obtain market acceptance of Galafold® and, if our regulatory filings are accepted and approved, AT-GAA;

•the costs of preparing, filing, and prosecuting patent applications and maintaining, enforcing, and defending intellectual property-related claims, including Hatch-Waxman litigation;

•the impact of litigation that has been or may be brought against us or of litigation that we are pursuing or may pursue against others;

•the extent to which we acquire or invest in businesses, products, and technologies;

•our ability to successfully integrate our acquired products and technologies into our business, or successfully divest or license existing products and technologies from our business, including the possibility that the expected benefits of the transactions will not be fully realized by us or may take longer to realize than expected;

•our ability to establish licensing agreements, collaborations, partnerships or other similar arrangements and to obtain milestone, royalty, or other payments from any such collaborators;

•the extent to which our business could be adversely impacted by the effects of the novel coronavirus ("COVID-19") outbreak, including due to actions by us, governments, our customers, our suppliers, or other third parties to control the spread of COVID-19, or by other health epidemics or pandemics;

•the costs associated with, and our ability to comply with, emerging environmental, social and governance standards;

•our ability to accurately forecast revenue, operating expenditures, or other metrics impacting profitability;

•fluctuations in foreign currency exchange rates; and

•changes in accounting standards.

In light of these risks and uncertainties, we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in Part I Item 1A — Risk Factors of the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Those factors and the other risk factors described herein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Our forward-looking statements do not reflect the potential impact of any future collaborations, alliances, business combinations, partnerships, strategic out-licensing of certain assets, the acquisition of preclinical-stage, clinical-stage, marketed products or platform technologies or other investments we may make. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements.

You should read this Quarterly Report on Form 10-Q in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (including the documents incorporated by reference therein) completely and with the understanding that our actual future results may be materially different from what we expect. These forward-looking statements speak only as of the date of this report. We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statements, even if experience or future developments make it clear that projected results expressed or implied in such statements will not be realized, except as may be required by law.

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)


	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	233,317	$	245,197
Investments in marketable securities	177,878		237,299
Accounts receivable	52,421		52,672
Inventories	24,324		26,818
Prepaid expenses and other current assets	30,960		34,848
Total current assets	518,900		596,834
Operating lease right-of-use assets, net	27,509		20,586
Property and equipment, less accumulated depreciation of $20,966 and $19,882 at March 31, 2022 and December 31, 2021, respectively	34,544		42,496
In-process research & development	23,000		23,000
Goodwill	197,797		197,797
Other non-current assets	25,188		24,427
Total Assets	$	826,938	$	905,140
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	22,914	$	21,513
Accrued expenses and other current liabilities	80,379		98,153
Contingent consideration payable	19,151		18,900
Operating lease liabilities	7,255		7,409
Total current liabilities	129,699		145,975
Deferred reimbursements	5,906		5,906
Long-term debt	389,994		389,357
Deferred income taxes	4,930		4,930
Operating lease liabilities	50,457		43,363
Other non-current liabilities	7,335		8,240
Total liabilities	588,321		597,771
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 500,000,000 shares authorized, 280,133,856 and 278,912,800 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	2,809		2,808
Additional paid-in capital	2,617,935		2,595,419
Accumulated other comprehensive (loss) gain:
Foreign currency translation adjustment	(420)		5,251
Unrealized loss on available-for-sale securities	(608)		(270)
Warrants	83		83
Accumulated deficit	(2,381,182)		(2,295,922)
Total stockholders’ equity	238,617		307,369
Total Liabilities and Stockholders’ Equity	$	826,938	$	905,140

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 March 31,
	2022		2021
Net product sales	$	78,715	$	66,402
Cost of goods sold	7,582		6,539
Gross profit	71,133		59,863
Operating expenses:
Research and development	81,517		64,117
Selling, general, and administrative	58,116		46,726
Changes in fair value of contingent consideration payable	(1,188)		471
Loss on impairment of assets	6,616		—
Depreciation and amortization	1,411		1,604
Total operating expenses	146,472		112,918
Loss from operations	(75,339)		(53,055)
Other (expense) income:
Interest income	133		165
Interest expense	(8,147)		(7,992)

Other income (expense)	1,902		(3,200)
Loss before income tax	(81,451)		(64,082)
Income tax expense	(3,809)		(1,582)
Net loss attributable to common stockholders	$	(85,260)	$	(65,664)
Net loss attributable to common stockholders per common share — basic and diluted	$	(0.30)	$	(0.25)
Weighted-average common shares outstanding — basic and diluted	288,481,741		264,369,317

See accompanying Notes to Consolidated Financial Statements

Amicus Therapeutics, Inc.

Consolidated Statements of Comprehensive Loss

(Unaudited)

(in thousands)


	Three Months Ended March 31,
	2022		2021
Net loss	$	(85,260)	$	(65,664)
Other comprehensive (loss) gain:
Foreign currency translation adjustment (loss) gain	(5,671)		608
Unrealized loss on available-for-sale securities	(338)		—
Other comprehensive (loss) gain	$	(6,009)	$	608
Comprehensive loss	$	(91,269)	$	(65,056)

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 March 31, 2022

	Common Stock			Additional Paid-In Capital		Warrants		Other Comprehensive Gain (Loss)		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at December 31, 2021	278,912,800	$	2,808	$	2,595,419	$	83	$	4,981	$	(2,295,922)	$	307,369
Stock options exercised, net	145,449	1		858		—		—		—		859
Vesting of restricted stock units, net of taxes	1,075,607	—		(8,993)		—		—		—		(8,993)
Stock-based compensation	—	—		30,651		—		—		—		30,651
Unrealized holding loss on available-for-sale securities	—	—		—		—		(338)		—		(338)
Foreign currency translation adjustment	—	—		—		—		(5,671)		—		(5,671)
Net loss	—	—		—		—		—		(85,260)		(85,260)
Balance at March 31, 2022	280,133,856	$	2,809	$	2,617,935	$	83	$	(1,028)	$	(2,381,182)	$	238,617


Three Months Ended March 31, 2021

	Common Stock			Additional Paid-In Capital		Warrants		Other Comprehensive Gain (Loss)		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance at December 31, 2020	262,063,461	$	2,650	$	2,308,578	$	12,387	$	8,227	$	(2,045,462)	$	286,380
Stock options exercised, net	488,111	4		4,157		—		—		—		4,161
Vesting of restricted stock units, net of taxes	897,063	—		(14,194)		—		—		—		(14,194)
Stock-based compensation	—	—		20,354		—		—		—		20,354
Warrants exercised	2,554,999	26		31,591		(12,387)		—		—		19,230
Equity component of the convertible notes	4,084	—		21		—		—		—		21
Foreign currency translation adjustment	—	—		—		—		608		—		608
Net loss	—	—		—		—		—		(65,664)		(65,664)
Balance at March 31, 2021	266,007,718	$	2,680	$	2,350,507	$	—	$	8,835	$	(2,111,126)	$	250,896

See accompanying Notes to Consolidated Financial Statements

Amicus Therapeutics, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)


	Three Months Ended March 31,
	2022		2021
Operating activities
Net loss	$	(85,260)	$	(65,664)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount and deferred financing	637		555
Depreciation and amortization	1,411		1,604
Stock-based compensation	30,651		20,354

Non-cash changes in the fair value of contingent consideration payable	(1,188)		471
Foreign currency remeasurement loss	673		2,846
Loss on impairment of assets	6,616		—
Changes in operating assets and liabilities:
Accounts receivable	(1,000)		839
Inventories	1,812		741
Prepaid expenses and other current assets	3,332		7,669
Accounts payable, accrued expenses, and other current liabilities	(14,563)		(40,191)
Other non-current assets and liabilities	(1,436)		(1,578)
Net cash used in operating activities	$	(58,315)	$	(72,354)
Investing activities
Sale and redemption of marketable securities	108,328		163,680
Purchases of marketable securities	(49,244)		(76,247)
Capital expenditures	(871)		(868)
Net cash provided by investing activities	$	58,213	$	86,565
Financing activities
Payment of finance leases	(20)		(368)
Proceeds from warrants exercised	—		19,230
Purchase of vested restricted stock units, net of taxes	(8,993)		(14,194)
Proceeds from stock options exercised, net	859		4,161
Net cash (used in) provided by financing activities	$	(8,154)	$	8,829
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	$	(3,377)	$	(1,153)
Net (decrease) increase in cash, cash equivalents, and restricted cash at the end of the period	(11,633)		21,887
Cash, cash equivalents, and restricted cash at the beginning of period	249,456		166,162
Cash, cash equivalents, and restricted cash at the end of period	$	237,823	$	188,049
Supplemental disclosures of cash flow information
Cash paid during the period for interest	$	7,509	$	7,513
Capital expenditures unpaid at the end of period	$	72	$	188
Cash paid for taxes	$	456	$	2,472

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 has a portfolio of product opportunities including the first, oral monotherapy for Fabry disease that has achieved widespread global approval and a differentiated biologic for Pompe disease, that is under review with the U.S. Food and Drug Administration ("FDA") as well as the European Medicines Agency ("EMA"). We are committed to discovering and developing next generation therapies in Fabry and Pompe diseases.

The cornerstone of the Company's portfolio is Galafold® (also referred to as "migalastat"), the first and only approved oral precision medicine for people living with Fabry disease who have amenable genetic variants. Migalastat is currently approved under the trade name Galafold® in the United States ("U.S."), European Union ("E.U."), United Kingdom ("U.K."), and Japan, with multiple additional approvals granted and applications pending in several geographies around the world.

The lead biologics program of the Company's pipeline is Amicus Therapeutics GAA ("AT-GAA", also known as ATB200/AT2221, or cipaglucosidase alfa/miglustat), a novel, two-component, potential best-in-class treatment for Pompe disease. In February 2019, the FDA granted Breakthrough Therapy designation ("BTD") to AT-GAA for the treatment of late onset Pompe disease. In September 2021, the FDA set the Prescription Drug User Fee Act ("PDUFA") target action date of May 29, 2022 for the New Drug Application ("NDA") for miglustat and July 29, 2022 for the Biologics License Application ("BLA") for cipaglucosidase alfa. The EMA validated the Marketing Authorization Application (“MAA”) in the fourth quarter of 2021. On May 9, 2022, the FDA extended the review period for the NDA for miglustat and the BLA for cipaglucosidase alfa resulting in revised PDUFA action dates of August 29, 2022 and October 29, 2022, respectively.

The Company's operations have not been significantly impacted by the novel coronavirus (“COVID-19”) pandemic to date. The Company continued to observe increased lag times between patient identification and Galafold® initiation due to the resurgence of COVID-19 in certain markets. The Company has maintained operations in all geographies, secured its global supply chain for its commercial and clinical products, as well as maintained the operational integrity of its clinical trials, with minimal disruptions. Whether the Company will continue to operate without any significant disruptions will depend on the continued health of its employees, the ongoing demand for Galafold® and the continued operation of its global supply chain. The Company has continued to provide uninterrupted access to medicines for those in need of treatment, while prioritizing the health and safety of its global workforce. However, the Company's results of operations in future periods may be negatively impacted by unknown future impacts from the COVID-19 pandemic.

The Company had an accumulated deficit of $2.4 billion as of March 31, 2022 and anticipates incurring losses through the fiscal year ending December 31, 2022 and beyond. The Company has historically funded its operations through stock offerings, Galafold® revenues, debt issuances, collaborations, and other financing arrangements.

Based on its current operating model, the Company believes that the current cash position, which includes expected revenues, is sufficient to fund the Company's operations and ongoing research programs to achieve self-sustainability. Potential impacts of the COVID-19 pandemic, business development collaborations, pipeline expansion, and investment in manufacturing capabilities could impact the Company's future capital requirements.

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company has prepared the accompanying unaudited Consolidated Financial Statements in accordance with the U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited financial statements reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company's interim financial information.

The accompanying unaudited Consolidated Financial Statements and related notes should be read in conjunction with the Company's financial statements and related notes as contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021. For a complete description of the Company's accounting policies, please refer to the Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Consolidation

The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions are eliminated in consolidation.

Foreign Currency Transactions

The functional currency for most of the Company's foreign subsidiaries is their local currency. For non-U.S. subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange at the balance sheet date. Income and expense items are translated at the average foreign exchange rates for the period. Adjustments resulting from the translation of the financial statements of the Company's foreign operations into U.S. dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive income, a separate component of stockholders' equity.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Additionally, the Company assessed the impact COVID-19 pandemic has had on its operations and financial results as of March 31, 2022 and through the issuance of these financial statements. The Company’s analysis was informed by the facts and circumstances as they were known to the Company. This assessment considered the impact COVID-19 may have on financial estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses.

Cash, Cash Equivalents, Marketable Securities, and Restricted Cash

The Company considers all highly liquid investments purchased with a maturity of three months or less at the date of acquisition to be cash equivalents. Marketable securities consist of fixed income investments with a maturity of greater than three months and other highly liquid investments that can be readily purchased or sold using established markets. These investments are classified as available-for-sale and are reported at fair value on the Company's Consolidated Balance Sheets. Unrealized holding gains and losses are reported within other comprehensive loss in the Company's Consolidated Statements of Comprehensive Loss. Fair value is based on available market information including quoted market prices, broker or dealer quotations, or other observable inputs.

Restricted cash consists primarily of funds held to satisfy the requirements of certain agreements that are restricted in their use and is included in other current assets and other non-current assets on the Company's Consolidated Balance Sheets.

Concentration of Credit Risk

The Company's financial instruments that are exposed to concentration of credit risk consist primarily of cash, cash equivalents, and marketable securities. The Company maintains its cash and cash equivalents in bank accounts, which, at times, exceed federally insured limits. The Company invests its marketable securities in high-quality commercial financial instruments. The Company has not recognized any losses from credit risks on such accounts during any of the periods presented. The Company believes it is not exposed to significant credit risk on its cash, cash equivalents, or marketable securities.

The Company is subject to credit risk from its accounts receivable related to its product sales of Galafold®. The Company's accounts receivable at March 31, 2022 have arisen from product sales primarily in Europe and the U.S. The Company will periodically assess the financial strength of its customers to establish allowances for anticipated losses, if any. For accounts receivable that have arisen from named patient sales, the payment terms are predetermined, and the Company evaluates the creditworthiness of each customer on a regular basis. As of March 31, 2022, the Company recorded an allowance for doubtful accounts of $0.2 million.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is calculated over the estimated useful lives of the respective assets, which range from three to five years, or the lesser of the related initial term of the lease or useful life for leasehold improvements.

The initial cost of property and equipment consists of its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Expenditures incurred after the fixed assets have been put into operation, such as repairs and maintenance, are charged to income in the period in which the costs are incurred. Major replacements, improvements, and additions are capitalized in accordance with Company policy.

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. If indications of impairment exist, projected future undiscounted cash flows associated with the asset or asset group are compared to the carrying value of the asset to determine whether the asset or asset group's value is recoverable. If impairment is determined, the Company writes down the asset to its estimated fair value and records an impairment loss equal to the excess of the carrying value of the long-lived asset over its estimated fair value in the period at which such a determination is made.

During the three months ended March 31, 2022, in connection with the strategic prioritization of its gene therapy portfolio, the Company performed an assessment of its fixed assets. As a result, the Company recognized an impairment charge of $6.6 million.

Revenue Recognition

The Company's net product sales consist of sales of Galafold® for the treatment of Fabry disease. The Company has recorded revenue on sales where Galafold® is available either on a commercial basis or through a reimbursed early access program. Orders for Galafold® are generally received from distributors and pharmacies, with the ultimate payor often a government authority.

The Company recognizes revenue when its performance obligations to its customers have been satisfied, which occurs at a point in time when the pharmacies or distributors obtain control of Galafold®. The transaction price is determined based on fixed consideration in the Company's customer contracts and is recorded net of estimates for variable consideration, which are third party discounts and rebates. The identified variable consideration is recorded as a reduction of revenue at the time revenue from the sale of Galafold® is recognized. The Company recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. These estimates may differ from actual consideration received. The Company evaluates these estimates each reporting period to reflect known changes.

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


	Three Months Ended March 31,
(in thousands)	2022		2021
U.S.	$	24,178	$	20,853
Ex-U.S.	54,537		45,549
Total net product sales	$	78,715	$	66,402

Inventories and Cost of Goods Sold

Inventories are stated at the lower of cost and net realizable value, determined by the first-in, first-out method. Inventories are reviewed periodically to identify slow-moving or obsolete inventory based on projected sales activity as well as product shelf-life. In evaluating the recoverability of inventories produced, the probability that revenue will be obtained from the future sale of the related inventory is considered and inventory value is written down for inventory quantities in excess of expected requirements. Expired inventory is disposed of and the related costs are recognized as cost of goods sold in the Consolidated Statements of Operations.

Cost of goods sold includes the cost of inventory sold, manufacturing and supply chain costs, product shipping and handling costs, provisions for excess and obsolete inventory, as well as royalties payable.

Recent Accounting Developments

The Company has evaluated recent accounting pronouncements and believes that none of them will have a material effect on the Company's Consolidated Financial Statements or related disclosures.

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

As of March 31, 2022, the Company held $233.3 million in cash and cash equivalents and $177.9 million of marketable securities which are reported at fair value on the Company's Consolidated Balance Sheets. Unrealized holding gains and losses are generally reported within other comprehensive loss in the Company's Consolidated Statements of Comprehensive Loss. If a decline in the fair value of a marketable security below the Company's cost basis is determined to be other-than-temporary or if an available-for-sale debt security’s fair value is determined to be less than the amortized cost and the Company intends or is more than likely to sell the security before recovery and it is not considered a credit loss, such security is written down to its estimated fair value as a new cost basis and the amount of the write-down is included in earnings as an impairment charge. If the unrealized loss of an available-for-sale debt security is determined to be a result of credit loss, the Company would recognize an allowance and the corresponding credit loss would be included in earnings.

The Company regularly invests excess operating cash in deposits with major financial institutions, money market funds, notes issued by the U.S. government, as well as fixed income investments and U.S. bond funds, both of which can be readily purchased and sold using established markets. The Company believes that the market risk arising from its holdings of these financial instruments is mitigated as many of these securities are either government backed or of the highest credit rating. Investments that have original maturities greater than three months but less than one year are classified as current.

Cash, cash equivalents and marketable securities are classified as current unless mentioned otherwise below and consisted of the following:


	As of March 31, 2022
(in thousands)	Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Cash and cash equivalents	$	233,317	$	—	$	—	$	233,317
Commercial paper	132,131		—		(311)		131,820
U.S. government agency bonds	35,229		—		(78)		35,151
Asset-backed securities	6,013		—		(15)		5,998
Corporate debt securities	4,514		—		(6)		4,508
Money market	350		—		—		350
Certificates of deposit	51		—		—		51
	$	411,605	$	—	$	(410)	$	411,195
Included in cash and cash equivalents	$	233,317	$	—	$	—	$	233,317
Included in marketable securities	178,288		—		(410)		177,878
Total cash, cash equivalents, and marketable securities	$	411,605	$	—	$	(

SEC Form 10-Q filed by Amicus Therapeutics Inc.