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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
(Mark One)
 
      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
OR
      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to
Commission file number 001-33497
Amicus Therapeutics, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 71-0869350
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
1 Cedar Brook Drive,
Cranbury,
NJ
08512
(Address of Principal Executive Offices)(Zip Code)
(609)
662-2000
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockFOLDNASDAQ Global Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No ☒
The number of shares outstanding of the registrant's common stock, $0.01 par value per share, as of July 27, 2020 was 258,787,743 shares.




AMICUS THERAPEUTICS, INC.
 
Form 10-Q for the Quarterly Period Ended June 30, 2020
 
 Page
 
Item 1.
Item 2.
Item 3.
Item 4.
  
 Item 1.
    
 Item 1A.
    
 Item 2.
    
 Item 3.
    
 Item 4.
    
 Item 5.
    
 Item 6.
  
  
 
We have filed applications to register certain trademarks in the United States and abroad, including AMICUS THERAPEUTICS and design, AMICUS ASSIST and design, CHART and design, AT THE FOREFRONT OF THERAPIES FOR RARE AND ORPHAN DISEASES, HEALING BEYOND DISEASE, OUR GOOD STUFF, and Galafold® and design.

i


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks, uncertainties, and assumptions.  Forward-looking statements are all statements, other than statements of historical facts, that discuss our current expectation and projections relating to our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans, and objectives of management. These statements may be preceded by, followed by, or include the words "aim," "anticipate," "believe," "can," "could," "estimate," "expect," "forecast," "intend," "likely," "may," "outlook," "plan," "potential," "predict," "project," "seek," "should," "will," "would," the negatives or plurals thereof, and other words and terms of similar meaning, although not all forward-looking statements contain these identifying words.
We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct. You should understand that the following important factors could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:
the progress and results of our preclinical and clinical trials of our drug candidates and gene therapy candidates, including but not limited to AT-GAA, CLN6 and CLN3;
the cost of manufacturing drug supply for our clinical and preclinical studies, including the cost of manufacturing Pompe Enzyme Replacement Therapy ("ERT" or "ATB200" or "cipaglucosidase alfa") and gene therapies;

the scope, progress, results, and costs of preclinical development, laboratory testing, and clinical trials for our product candidates including those testing the use of a pharmacological chaperone co-administered with ERT for the treatment of Pompe disease ("AT-GAA") and gene therapies for the treatment of rare genetic metabolic diseases;
the future results of on-going preclinical research and subsequent clinical trials for cyclin-dependent kinase-like 5 ("CDKL5") deficiency disorder, Pompe gene therapy, Fabry gene therapy, Mucopolysaccharidosis Type IIIB ("MPS IIIB") and next generation Mucopolysaccharidosis Type IIIA ("MPS IIIA"), including our ability to obtain regulatory approvals and commercialize these gene therapies and obtain market acceptance for such therapies;

the costs, timing, and outcome of regulatory review of our product candidates;
any changes in regulatory standards relating to the review of our product candidates;
the number and development requirements of other product candidates that we pursue;
the costs of commercialization activities, including product marketing, sales, and distribution;
the emergence of competing technologies and other adverse market developments;
our ability to successfully commercialize Galafold® (also referred to as "migalastat HCl");
our ability to manufacture or supply sufficient clinical or commercial products, including Galafold®, AT-GAA and our gene therapy candidates;
our ability to obtain reimbursement for Galafold®;
our ability to satisfy post-marketing commitments or requirements for continued regulatory approval of Galafold®;
our ability to obtain market acceptance of Galafold®;
the costs of preparing, filing, and prosecuting patent applications and maintaining, enforcing, and defending intellectual property-related claims;
the extent to which we acquire or invest in businesses, products, and technologies;
our ability to successfully integrate our acquired products and technologies into our business, including the possibility that the expected benefits of the transactions will not be fully realized by us or may take longer to realize than expected;
our ability to establish collaborations, partnerships or other similar arrangements and to obtain milestone, royalty, or other payments from any such collaborators;
our ability to adjust to changes in the European and United Kingdom markets in the wake of the United Kingdom leaving the European Union;
1


the extent to which our business could be adversely impacted by the effects of the novel coronavirus ("COVID-19") outbreak, including due to actions by us, governments, our customers or suppliers or other third parties to control the spread of COVID-19, or by other health epidemics or pandemics;
fluctuations in foreign currency exchange rates; and
changes in accounting standards. 
In light of these risks and uncertainties, we may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions, and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in Part I Item 1A — Risk Factors of the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Part II Item 1A – Risk Factors on this Form 10-Q, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Those factors and the other risk factors described therein are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, collaborations, or investments we may make. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. Given these uncertainties, investors are cautioned not to place undue reliance on such forward-looking statements.

You should read this Quarterly Report on Form 10-Q in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 completely and with the understanding that our actual future results may be materially different from what we expect. These forward-looking statements speak only as of the date of this report. We undertake no obligation, and specifically decline any obligation, to publicly update or revise any forward-looking statements, even if experience or future developments make it clear that projected results expressed or implied in such statements will not be realized, except as may be required by law. 
2


PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS AND NOTES (UNAUDITED)
Amicus Therapeutics, Inc.
Consolidated Balance Sheets
(Unaudited)
(in thousands, except share and per share amounts)
June 30,
2020
December 31, 2019
Assets
Current assets:
Cash and cash equivalents$164,573  $142,837  
Investments in marketable securities145,017  309,903  
Accounts receivable43,040  33,284  
Inventories12,979  14,041  
Prepaid expenses and other current assets18,275  20,008  
Total current assets383,884  520,073  
Operating lease right-of-use assets, less accumulated amortization of $6,219 and $5,342 at June 30, 2020 and December 31, 2019, respectively
23,949  33,315  
Property and equipment, less accumulated depreciation of $21,194 and $17,604 at June 30, 2020 and December 31, 2019, respectively
46,945  47,705  
In-process research & development23,000  23,000  
Goodwill197,797  197,797  
Other non-current assets25,876  28,317  
Total Assets$701,451  $850,207  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$14,306  $21,722  
Accrued expenses and other current liabilities85,478  99,901  
Operating lease liabilities8,516  7,189  
Total current liabilities108,300  128,812  
Deferred reimbursements8,906  8,906  
Convertible notes2,203  2,131  
Senior secured term loan147,834  147,374  
Contingent consideration payable20,027  22,681  
Deferred income taxes5,051  5,051  
Operating lease liabilities43,666  53,531  
Other non-current liabilities4,511  5,296  
Total liabilities340,498  373,782  
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 500,000,000 shares authorized, 258,223,842 and 255,417,869 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
2,614  2,598  
Additional paid-in capital2,250,849  2,227,225  
Accumulated other comprehensive loss:
Foreign currency translation adjustment4,865  2,785  
Unrealized gain on available-for-sale securities288  40  
Warrants12,387  12,387  
Accumulated deficit(1,910,050) (1,768,610) 
Total stockholders’ equity360,953  476,425  
Total Liabilities and Stockholders’ Equity$701,451  $850,207  
See accompanying Notes to Consolidated Financial Statements
3


Amicus Therapeutics, Inc.
Consolidated Statements of Operations
(Unaudited)
(in thousands, except share and per share amounts)
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Net product sales$62,353  $44,130  $122,878  $78,176  
Cost of goods sold6,676  5,367  13,228  9,422  
Gross profit55,677  38,763  109,650  68,754  
Operating expenses:
Research and development69,611  70,981  158,731  135,574  
Selling, general, and administrative34,657  42,578  74,872  86,881  
Changes in fair value of contingent consideration payable715  480  1,646  1,863  
Depreciation and amortization2,039  1,154  3,803  2,145  
Total operating expenses107,022  115,193  239,052  226,463  
Loss from operations(51,345) (76,430) (129,402) (157,709) 
Other income (expense):
Interest income865  2,599  2,380  5,238  
Interest expense(3,635) (4,625) (7,364) (11,079) 
Loss on exchange of convertible notes  (4,501)   (40,624) 
Other income (expense)5,326  (877) (2,990) 209  
Loss before income tax (48,789) (83,834) (137,376) (203,965) 
Income tax expense(3,703) (717) (4,064) (885) 
Net loss attributable to common stockholders$(52,492) $(84,551) $(141,440) $(204,850) 
Net loss attributable to common stockholders per common share — basic and diluted$(0.20) $(0.36) $(0.55) $(0.91) 
Weighted-average common shares outstanding — basic and diluted257,973,329238,089,824257,548,623225,848,013
See accompanying Notes to Consolidated Financial Statements

4


Amicus Therapeutics, Inc.
Consolidated Statements of Comprehensive Loss
(Unaudited)
(in thousands)
 Three Months Ended June 30,Six Months Ended June 30, 2020
 2020201920202019
Net loss$(52,492) $(84,551) $(141,440) $(204,850) 
Other comprehensive gain (loss):
Foreign currency translation adjustment (loss) gain, net of tax impact of $(2,090), $30, $(554), and $30, respectively
(2,116) 1,881  2,080  77  
Unrealized gain (loss) on available-for-sale securities, net of tax impact of $122, $220, $66, and $220, respectively
457  (22) 248  562  
Other comprehensive income $(1,659) $1,859  $2,328  $639  
Comprehensive loss$(54,151) $(82,692) $(139,112) $(204,211) 
See accompanying Notes to Consolidated Financial Statements
5


Amicus Therapeutics, Inc.
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
(in thousands, except share amounts)
Three Months Ended June 30, 2020
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at March 31, 2020257,449,955  $2,607  $2,238,346  $12,387  $6,812  $(1,857,558) $402,594  
Stock issued from exercise of stock options, net650,288  7  4,649  —  —  —  4,656  
Restricted stock tax vesting123,599  —  (554) —  —  —  (554) 
Stock-based compensation—  —  8,408  —  —  —  8,408  
Unrealized holding gain on available-for-sale securities—  —  —  —  457  —  457  
Foreign currency translation adjustment—  —  —  —  (2,116) —  (2,116) 
Net loss—  —  —  —  —  (52,492) (52,492) 
Balance at June 30, 2020258,223,842  $2,614  $2,250,849  $12,387  $5,153  $(1,910,050) $360,953  
Six Months Ended June 30, 2020
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at December 31, 2019255,417,869  $2,598  $2,227,225  $12,387  $2,825  $(1,768,610) $476,425  
Stock issued from exercise of stock options, net1,609,235  16  10,717  —  —  —  10,733  
Restricted stock tax vesting1,196,738  —  (8,097) —  —  —  (8,097) 
Stock-based compensation—  —  21,004  —  —  —  21,004  
Unrealized holding gain on available-for-sale securities—  —  —  —  248  —  248  
Foreign currency translation adjustment—  —  —  —  2,080  —  2,080  
Net loss—  —  —  —  —  (141,440) (141,440) 
Balance at June 30, 2020258,223,842  $2,614  $2,250,849  $12,387  $5,153  $(1,910,050) $360,953  












6


Amicus Therapeutics, Inc.
Consolidated Statements of Changes in Stockholders' Equity
(Unaudited)
(in thousands, except share amounts)
Three Months Ended June 30, 2019
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at March 31, 2019230,180,714  $2,347  $1,970,607  $12,387  $(1,152) $(1,532,521) $451,668  
Stock issued from exercise of stock options, net561,177  5  2,802  —  —  —  2,807  
Stock issued from equity financing18,720,930  187  188,807  —  —  —  188,994  
Restricted stock tax vesting99,252  —  (615) —  —  —  (615) 
Stock-based compensation—  —  9,935  —  —  —  9,935  
Equity component of the convertible notes4,951,449  50  24,668  —  —  —  24,718  
Termination of capped call confirmations—  —  5,243  —  —  —  5,243  
Unrealized holding loss on available-for-sale securities—  —  —  —  (22) —  (22) 
Foreign currency translation adjustment—  —  —  —  1,881  —  1,881  
Net loss—  —  —  —  —  (84,551) (84,551) 
Balance at June 30, 2019254,513,522  $2,589  $2,201,447  $12,387  $707  $(1,617,072) $600,058  
Six Months Ended June 30, 2019
Common StockAdditional
Paid-In
Capital
WarrantsOther
Comprehensive
Gain (Loss)
Accumulated
Deficit
Total
Stockholders'
Equity
SharesAmount
Balance at December 31, 2018189,383,924  $1,942  $1,740,061  $13,063  $68  $(1,412,222) $342,912  
Stock issued from exercise of stock options, net1,139,628  11  6,749  —  —  —  6,760  
Stock issued from equity financing18,720,930  187  188,807  —  —  —  188,994  
Restricted stock tax vesting400,310  —  (2,555) —  —  —  (2,555) 
Stock issued for contingent consideration771,804  8  9,308  —  —  —  9,316  
Stock-based compensation—  —  22,679  —  —  —  22,679  
Warrants exercised101,787  1  1,487  (676) —  —  812  
Equity component of the convertible notes43,995,139  440  215,036  —  —  —  215,476  
Termination of capped call confirmations—  —  19,875  —  —  —  19,875  
Unrealized holding gain on available-for-sale securities—  —  —  —  562  —  562  
Foreign currency translation adjustment—  —  —  —  77  —  77  
Net loss—  —  —  —  —  (204,850) (204,850) 
Balance at June 30, 2019254,513,522  $2,589  $2,201,447  $12,387  $707  $(1,617,072) $600,058  
See accompanying Notes to Consolidated Financial Statements
7


Amicus Therapeutics, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Six Months Ended June 30,
20202019
Operating activities
Net loss$(141,440) $(204,850) 
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount and deferred financing532  2,104  
Depreciation and amortization3,803  2,145  
Stock-based compensation21,004  22,679  
Loss on exchange of convertible debt  40,624  
Non-cash changes in the fair value of contingent consideration payable1,646  1,863  
Foreign currency remeasurement loss5,604  530  
Changes in operating assets and liabilities:
Accounts receivable(10,388) (6,829) 
Inventories1,351  (1,908) 
Prepaid expenses and other current assets1,375  (3,523) 
Accounts payable and accrued expenses(23,916) 12,453  
Other non-current assets and liabilities(1,031) (819) 
Deferred reimbursements  (1,500) 
Net cash used in operating activities$(141,460) $(137,031) 
Investing activities
Sale and redemption of marketable securities210,139  261,425  
Purchases of marketable securities(45,005) (191,318) 
Capital expenditures(1,876) (5,110) 
Net cash provided by investing activities$163,258  $64,997  
Financing activities
Proceeds from issuance of common stock, net of issuance costs  188,994  
Payment of finance leases(38) (98) 
Purchase of vested restricted stock units(8,097) (2,555) 
Proceeds from termination of capped call confirmations  19,875  
Proceeds from exercise of stock options10,734  6,760  
Proceeds of exercise of warrants  812  
Net cash provided by financing activities$2,599  $213,788  
Effect of exchange rate changes on cash, cash equivalents, and restricted cash$(3,476) $(941) 
Net increase in cash, cash equivalents, and restricted cash at the end of the period20,921  140,813  
Cash, cash equivalents, and restricted cash at beginning of period146,341  82,375  
Cash, cash equivalents, and restricted cash at the end of period$167,262  $223,188  
Supplemental disclosures of cash flow information
Tenant improvements paid through lease incentives$455  $  
Cash paid during the period for interest $10,709  $9,302  
Contingent consideration paid in shares$  $9,316  
Capital expenditures unpaid at the end of period$502  $837  
See accompanying Notes to Consolidated Financial Statements
8


Amicus Therapeutics, Inc.
Notes to the Consolidated Financial Statements
(Unaudited)
Note 1. Description of Business
Amicus Therapeutics, Inc. (the "Company") is a global, patient-dedicated biotechnology company focused on discovering, developing, and delivering novel medicines for rare diseases. The Company has a portfolio of product opportunities led by the first, oral monotherapy for Fabry disease that has achieved widespread global approval, a differentiated biologic for Pompe disease in the clinic, and an industry leading rare disease gene therapy portfolio.
The cornerstone of the Company's portfolio is Galafold® (also referred to as "migalastat"), the first and only approved oral precision medicine for people living with Fabry disease who have amenable genetic variants. Migalastat is currently approved under the trade name Galafold® in the United States ("U.S."), European Union ("E.U."), United Kingdom ("U.K."), and Japan, with multiple additional approvals granted and applications pending in several other 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, clinical-stage, potential best-in-class treatment paradigm for Pompe disease. In February 2019, the U.S. Food and Drug Administration ("FDA") granted Breakthrough Therapy designation ("BTD") to AT-GAA for the treatment of late onset Pompe disease. In the first quarter of 2020, the British Medicines and Healthcare Products Regulatory Agency issued a Promising Innovative Medicine designation for AT-GAA for the treatment of late-onset Pompe disease.

The Company has established an industry leading gene therapy portfolio of potential therapies for people living with rare metabolic diseases, through a license with Nationwide Children's Hospital ("Nationwide Children's") and an expanded collaboration with the University of Pennsylvania ("Penn"). The Company's pipeline includes gene therapy programs in rare, neurologic lysosomal disorders ("LDs"), specifically: CLN6, CLN3, and CLN1 Batten disease, Pompe disease, Fabry disease, CDKL5 deficiency disorder ("CDD"), Mucopolysaccharidosis Type IIIB ("MPS IIIB"), as well as a next generation program in Mucopolysaccharidosis Type IIIA ("MPS IIIA"). This expanded collaboration with Penn also provides the Company with exclusive disease-specific access and option rights to develop potentially disruptive new gene therapy platform technologies and programs for most LDs and a broader portfolio of more prevalent rare diseases, including Rett Syndrome, Angelman Syndrome, Myotonic Dystrophy, and select other muscular dystrophies. In the first quarter of 2020, the FDA granted Fast Track designation to the CLN3 Batten disease gene therapy, AT-GTX-502, for the treatment of pediatric patients less than 18 years of age.

The Company's operations have not yet been significantly impacted from the novel coronavirus (“COVID-19”) pandemic. The Company has maintained operations in all geographies, secured its global supply chain for its commercial and clinical products, and maintained its clinical trials, with minimal disruption. The Company believes its ability to continue to operate without any significant disruptions will depend on the continued health of its employees, the ongoing demand for Galafold® and the continued operation of its global supply chain. The Company has continued to provide uninterrupted access to medicines for those in need of treatment, while prioritizing the health and safety of its global workforce. However, the Company's results of operations in future periods may be negatively impacted by unknown future impacts from the COVID-19 pandemic.

The Company had an accumulated deficit of $1.9 billion as of June 30, 2020 and anticipates incurring losses through the fiscal year ending December 31, 2020 and beyond. The Company has historically funded its operations through stock offerings, debt issuances, Galafold® revenues, collaborations, and other financing arrangements.
In July 2020, the Company entered into a definitive agreement for a $400 million credit facility with Hayfin Capital Management (“2020 Senior Secured Term Loan”) with an interest rate equal to 3-month LIBOR, subject to a 1% floor, plus 6.5% per annum and requires interest-only payments until mid-2024 and matures in six years in 2026. This transaction resulted in net proceeds of $386.1 million, after deducting fees and estimated expenses. There were no warrants or equity conversion features associated with the 2020 Senior Secured Term Loan. Additionally, the Company used $156.3 million of the proceeds to voluntary settle the principal amount, accrued interest, and early settlement premiums of the Senior Secured Term Loan with BioPharma Credit PLC that was due in 2023. The remaining proceeds will be used for other general corporate and product development purposes.
Based on current operating models, the Company believes that the current cash position, along with the net proceeds from the 2020 Senior Secured Term Loan and expected revenues, is sufficient to fund the Company's operations and ongoing research programs through to profitability. Potential future impact of the COVID-19 pandemic, future business development collaborations, pipeline expansion, and investment in manufacturing capabilities could impact the Company's future capital requirements.
9



Note 2. Summary of Significant Accounting Policies
Basis of Presentation
The Company has prepared the accompanying unaudited Consolidated Financial Statements in accordance with 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, 2019. 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, 2019.
Consolidation
The Consolidated Financial Statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions are eliminated in consolidation.
Foreign Currency Transactions
The functional currency for most of the Company's foreign subsidiaries is their local currency. For non-U.S. subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange at the balance sheet date. Income and expense items are translated at the average foreign exchange rates for the period. Adjustments resulting from the translation of the financial statements of the Company's foreign operations into U.S. dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive income, a separate component of stockholders' equity.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
Additionally, the Company assessed the impact COVID-19 pandemic has had on its operations and financial results as of June 30, 2020 and through the issuance of this report. The Company’s analysis was informed by the facts and circumstances as they were known to the Company. This assessment considered the impact COVID-19 may have on financial estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses.

Cash, Cash Equivalents, Marketable Securities, and Restricted Cash
The Company considers all highly liquid investments purchased with a maturity of three months or less at the date of acquisition to be cash equivalents. Marketable securities consist of fixed income investments with a maturity of greater than three months and other highly liquid investments that can be readily purchased or sold using established markets. These investments are classified as available-for-sale and are reported at fair value on the Company's Consolidated Balance Sheets. Unrealized holding gains and losses are reported within comprehensive income (loss) in the Statements of Comprehensive Loss. Fair value is based on available market information including quoted market prices, broker or dealer quotations, or other observable inputs.
Restricted cash consists primarily of funds held to satisfy the requirements of certain agreements that are restricted in their use and is included in non-current assets on the Company's Consolidated Balance Sheets.
10


Concentration of Credit Risk
The Company's financial instruments that are exposed to concentration of credit risk consist primarily of cash, cash equivalents, and marketable securities. The Company maintains its cash and cash equivalents in bank accounts, which, at times, exceed federally insured limits. The Company invests its marketable securities in high-quality commercial financial instruments. The Company has not recognized any losses from credit risks on such accounts during any of the periods presented. The Company believes it is not exposed to significant credit risk on its cash, cash equivalents, or marketable securities.
The Company is subject to credit risk from its accounts receivable related to its product sales of Galafold®. The Company's accounts receivable at June 30, 2020 have arisen from product sales primarily in Europe and the U.S. The Company will periodically assess the financial strength of its customers and the geographic economic environments and conditions 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, 2020, the Company recorded an allowance for doubtful accounts of $0.1 million.

Revenue Recognition
The Company's net product sales consist of sales of Galafold® for the treatment of Fabry disease. The Company has recorded revenue on sales where Galafold® is available either on a commercial basis or through a reimbursed early access program ("EAP"). Orders for Galafold® are generally received from distributors and pharmacies with the ultimate payor often a government authority.
The Company recognizes revenue when its performance obligations to its customers have been satisfied, which occurs at a point in time when the pharmacies or distributors obtain control of Galafold®. The transaction price is determined based on fixed consideration in the Company's customer contracts and is recorded net of estimates for variable consideration, which are third party discounts and rebates. The identified variable consideration is recorded as a reduction of revenue at the time revenues from the sale of Galafold® are 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 June 30,Six Months Ended June 30,
(in thousands)2020201920202019
U.S.$20,807  $12,181  $38,579  $21,249  
Ex-U.S.