Catalyst Pharmaceuticals Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 29, 2024

There are 10 speakers on the call.

Operator

Hello, and welcome to the Catalyst Pharmaceuticals Inc. 4th Quarter and Full Year 2023 Financial Results Conference Call and Webcast. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to CFO, Mike Kalb. Please go ahead, Mike.

Speaker 1

Thank you. Good morning, everyone, and thank you for joining our conference call to discuss Catalyst's 4th quarter and full year 2023 financial results and business highlights. Leading the call today is Richard Daley, CEO. We are also joined by Doctor. Stephen Miller, our Chief Operating Officer and Chief Scientific Officer Jeffrey Del Carmen, our Chief Commercial Officer.

Speaker 1

Further for the Q and A session, Doctor. Gary Ingenito, our Chief Medical and Regulatory Officer will be available for questions. Before we begin, I would like to remind you that in our remarks this morning and in the Q and A session, we will make statements about expected future results, which may be forward looking statements for purposes of federal securities laws. These statements relate to our current expectations, estimates and projections and are not guarantees of future performance. They involve risks, uncertainties and assumptions that are difficult to predict may prove not to be accurate.

Speaker 1

Actual results may vary from the expectations contained in our forward looking statements. These forward looking statements should be considered only in conjunction with the detailed information contained in our SEC filings, including the risk described in our 2023 Annual Report on Form 10 ks. At this time, I'll turn the call over to Rich.

Speaker 2

Thanks, Mike, and welcome, everyone, to the call. First, I'd like to say that our entire team is proud of the work that we do on behalf of the orphan and rare disease communities that we serve, and we're especially excited to be speaking to you today on Rare Disease Day. 2023 was an outstanding year for Catalyst,

Speaker 3

and we are

Speaker 2

proud of all that the team has achieved. We are pleased to highlight the progress we have made during this transformational year that we just completed and we are proud to provide insight into the year ahead. But before the team dives into this, I'd like to offer some high level comments. We operate our business around 4 key pillars. 1st, commercial execution with supreme focus on patient care and access.

Speaker 2

2nd, portfolio expansion through business development 3rd, life cycle management and partnerships and finally, financial discipline. Our discussion today will provide you with updates on each of these areas. 2023 was a transformational year for Catalyst. Let's start with our first pillar, our commercial execution. The core Firdapse business remains strong evidenced by our sustained organic growth.

Speaker 2

We continue to reach more patients in this market by working diligently to increase awareness of Firdapse and the disease it treats LEMS. To further enhance our business, in 2023, we expanded our commercial portfolio with our acquisition of Fycompa. Seamless integration of Fycompa franchise into our company has yielded promising results. We're pleased with the product's performance. This addition enriches our portfolio by enhancing income diversity, fostering stable revenue streams and fortifying our balance sheet in preparation for future acquisitions.

Speaker 2

Our second pillar, portfolio expansion. In addition to Ficompa, in the Q3 of 2023, we licensed the North American rights to AGAMRI, a U. S. NDA filed asset for Duchenne's muscular dystrophy. AGAMRI was approved in the Q4 and we remain on track for the launch of AGAMRI before the end of the Q1 in 2024.

Speaker 2

We're excited to have this innovative product in our portfolio. More importantly, we know through our outreach to patients, caregivers and providers that the Duchenne's community is excited as well. We are well prepared for the successful launch of AGAMRI, providing further revenue growth and diversification, while addressing a significant unmet need for improved therapeutic options for patients. The future potential for Agambri represents an opportunity for incremental growth that can continue to propel the company forward. We are committed to our buy and build strategy, and our results bear testament to its success.

Speaker 2

In 2023 alone, we allocated approximately $300,000,000 toward acquiring assets without debt, bolstering the company's commercial position. Furthermore, our recent common stock offering combined with our robust balance sheet underscores our ability to persistently pursue strategic investments aimed at expanding and diversifying our portfolio. Jeff will provide an overview of our performance in 2023 with respect to commercializing Firdapse and Fycompa and our plans for our portfolio in 2024, including Gamri in his section this morning. Pillar number 3, lifecycle management and partnerships. We await the FDA's decision on the expansion of the Firdapse label to include 100 milligram dosing, which is expected in the Q2 of 2024.

Speaker 2

We believe this has the potential to provide an important option for patients who live with LEMS. We are also making great strides in our ex U. S. Partnerships. Japanese regulatory authorities have accepted Daito's NDA for Firdapse, and we expect a decision on their application later this year.

Speaker 2

This also bodes well for expanding our ex U. S. Opportunities as the Japanese NDA acceptance triggers the expansion of our territorial rights for Firdapse in certain APAC and LatAm markets. Finally, pillar number 4. We are well known for our financial discipline and we plan to continue to deliver the rigor you have come to expect.

Speaker 2

Mike will go into great detail in his section of the call. Now to our 2023 results. We delivered outstanding performance in 2023, exceeding our guidance for the year, delivering record total revenues, both organically and through expansion of our product portfolio. These results continue to drive our momentum as we move through 2024. Our full year total revenue for 2023 were $398,200,000 an 85.9% increase year over year compared to $214,200,000 in 2022.

Speaker 2

Additionally, we achieved record 4th quarter total revenues of 110.6 an 82% increase compared to $60,800,000 in quarter 4 of 2022. We achieved our results by delivering 21 percent revenue growth for the full year of 2023 for Firdapse, up sales of $258,400,000 and delivering $138,100,000 in sales for Fycompa. We are proud of these results, and we thank our team for delivering such a strong performance. Looking ahead to 2024, our full year 2024 guidance reflects our confident outlook projecting a sustained growth and strategic advancements in line with our long term objectives. We believe that 2024 will provide opportunities for continued growth of our portfolio, and we are forecasting full year total net revenues of between $55,000,000 $475,000,000 representing a 14% to 19% increase in our total net revenues compared to 2023.

Speaker 2

To provide you with more color on each of these pillars, I'll turn the presentation over to the team. Let's begin with Jeff Del Carmen, our Chief Commercial Officer. Jeff?

Speaker 3

Thanks, Rich, and good morning, everyone. First, I want to reiterate rare disease day in all the people touched by rare diseases. We are pleased with the outstanding performance delivered in 2023, highlighted by full year combined total revenues of $398,200,000 exceeding the upper end of guidance of $395,000,000 dollars This remarkable performance was fueled by Firdapse reaching an all time high of 258,400,000 and the consistent strong contribution from Fycompa, which generated $138,100,000 in net revenues. Let's start by reviewing our advancements with Firdapse, the only evidence based FDA approved treatment for Lambert Eaton Myasthenic Syndrome. In the Q4, net revenues amounted to $69,800,000 showcasing a remarkable year on year growth 15%.

Speaker 3

Moreover, the overall net revenues of 2023 displayed a robust 20.8% growth compared to the previous year propelled by consistent initiation of new patients and an annual low discontinuation rate trending below 20 percent consistent with previous years and internal expectations. Prescription approval rates exceeded 90% for all types of payers, including government and private commercial insurers. Patients enrolled in Catalyst Pathways, including those with Medicare coverage accessing 3rd party foundation assistance experienced an average monthly co pay of less than $2 We are confident in the continued Firdapse organic growth in 2024 will be between 15% 20%, building upon the momentum from 2023. This growth will primarily be fueled by several key factors. Firstly, the conversion of a portion of the 500 identified LEMS patients to Firdapse treatment will play a significant role.

Speaker 3

Additionally, the anticipated approval of the 100 milligram expanded label in June 2024 should help contribute to this growth trajectory, providing patients the opportunity for a higher daily dose when appropriate. Furthermore, the expansion of educational programs targeting small cell lung cancer LEMS healthcare providers is poised to accelerate LEMS diagnosis rates. Lastly, our efforts to broaden the addressable LEMS market through 3,600. Data suggests it could potentially reach 5,400 individuals. This figure marks a notable rise from the previously estimated prevalence of 3,000.

Speaker 3

Our estimate stems from a thorough analysis of real world data, particularly emphasizing the prevalence of LEMS diagnosis among patients with small cell lung cancer. Presently, we gauge that over 80% of small cell lung cancer LEMS patients remain undiagnosed, indicating a substantial growth opportunity. Now I'd like to share some key updates regarding our progress with Fycompa. The commercialization of Fycompa has surpassed our initial expectations. In May 2023, we seamlessly integrated Fycompa into our product offerings as a strategic and highly accretive product.

Speaker 3

We actively engage with healthcare providers and key opinion leaders, expanded our outreach to establish vital significant role in that have played a significant role in Fycompa's success. Fycompa's net revenues have exceeded the anticipated full year estimate of 130,000,000 dollars reaching a total product revenue of $138,100,000 surpassing expectations by 6%. This achievement was propelled by robust end to the year with revenues for Q4 2023 reaching $39,300,000 We forecast 20 24 Fi Compa net revenues will be approximately $130,000,000 to $135,000,000 based on changes in gross to net. When products transition to companies with a smaller portfolio, like we experienced with Fycompa, you typically encounter higher fees from service providers such as wholesalers. Let's turn to agamri, a promising novel anti inflammatory corticosteroid aimed at addressing a significant gap in treatment for the estimated 11000 to 13000 boys living with Duchenne muscular dystrophy or DMD.

Speaker 3

As previously disclosed, we are on track for a commercial launch in the Q1 of 2024. A gamma ray will be integrated into our neuromuscular franchise, capitalizing on the team's proven capabilities, commercial expertise and experience. We have finalized the recruitment of 10 commercial personnel to bolster the impending launch, primarily focusing on marketing and patient services. Our existing neuromuscular sales force, comprising 16 regional account managers and 2 area business directors will assume responsibility for both Firdapse and Agamri. Furthermore, Agamri will benefit from the support of our top notch Catalyst Pathways program, ensuring that all eligible patients have to the product.

Speaker 3

Based on the feedback from our constituents and analysis of the DMD market, the wholesale acquisition cost of a gamma ray will be at a slight discount to Emflaza. We will implement the same financial programs as we have for Firdapse with the goal to ensure the average out of pocket cost per patient will be less than $2 per month. More details on the commercial launch will be available in the coming weeks. We began accepting pre commercial launch new patient enrollments on December 1, 2023. Based on the volume of new patient enrollments and observed pent up demand, our 2024 net revenue guidance for a Camry is between 25 $1,000,000 $30,000,000 In conclusion, we are extremely proud of our achievements in 20 23 and maintain strong confidence in meeting our targets for 2024.

Speaker 3

As we prepare for the launch of a gamma ray, we will leverage our established commercial proficiency. I express sincere appreciation to the entire Catalyst team for their unwavering dedication to patients and I eagerly look forward to a prosperous 2024 ahead. I will now turn the call over to Doctor. Stephen Miller, our Chief Operating Officer and Chief Scientific Officer for an update on R and D activities.

Speaker 4

Thank you, Jeff. I would first like to discuss our development efforts to increase the indicated maximum dose of Firdapse. As previously reported in October of 2023, the FDA accepted for review the company's supplemental new drug application to increase the indicated maximum 80 milligram daily dosage of Firdapse to 100 milligrams for the treatment of Lambert Eaton Mysinix syndrome or LEMS. Catalyst continues to anticipate approval of the application on or about June 4, 2023, which is the PDUFA action date granted by the FDA. About 40% of patients are on the current indicated maximum dose of 80 milligrams per day and their physicians would like the option to increase the daily dosage above 80 milligrams per day based upon disease progression.

Speaker 4

Catalyst believes that this expansion of the Firdapse label, if approved, would address an important opportunity for patients and their healthcare providers and may lead to about a 5% to 10% increase in the prescribed average daily dose of Firdapse over time. In 2023, we focused on expanding our intellectual property portfolio for Firdapse, resulting in the granting of 2 additional patents for Firdapse. These patents were issued in 20232024, bringing the total number patents protecting Firdapse to 9. This further strengthens our intellectual property estate for Firdapse, which has patent protection to 2,037. Catalyst expansion to global markets is continuing to progress.

Speaker 4

Our partner in Japan, Daito Pharma achieved a notable priority review cycle time of 9 months and if approved, a potential launch in early 2025 with 10 years of market exclusivity in Japan after approval. Next, I'll move on to our newest approved product, AGAMRI, for the treatment of Duchenne muscular dystrophy or DMD. AGAMRI was approved October 26 of last year and was granted new chemical entity exclusivity and orphan drug exclusivity, conferring market exclusivity to October 2027 and 2,030 respectively. This FDA granted exclusivity is augmented by 6 Orange Book listed patents that provide protection to 2,040 for a gamma ray. As part of our ongoing effort to maximize value, we'll continue to seek opportunities to strengthen the gamma ray's patent protection and explore new indications for label agents.

Speaker 4

Gamma ray or vomerolone in clinical studies has shown efficacy for treatment of DMD patients while holding the potential for a reduction in the burden of steroid associated side effects compared to steroids. This includes the potential for notable benefits for bone health, growth and behavioral outcomes based on preliminary data. Out of the estimated 11000 to 13000 DMD patients in the U. S, roughly 90% have undergone corticosteroid treatment at some stage. Presently, it is estimated that about 70% of DMD patients currently under treatment receive steroids.

Speaker 4

Steroids serve as the cornerstone of DMD therapy highlighting the pressing demand for a more tolerable steroid option. The short term safety and efficacy of vemoralone was demonstrated in a 24 week randomized double blind placebo and active controlled study and it is well tolerated and was associated with maintenance of muscle strength and function. To determine what specific safety benefits a gamma ray may have, if any, relative to other approved corticosteroids, Catalyst is investing in a registry to study the long term safety and quality of life in males with DMD that are treated with AGAMRI. As this data is collected and analyzed, catalysts will periodically seek to update the AGAMRI prescribing information with the latest information regarding the safety of the drug based upon FDA guidance documents for real world data. Education and information on new and unique products is the focus of Catalyst Medical Science liaisons for our products.

Speaker 4

They have critical support to the medical community by providing information that is in the public domain to the medical community in order to educate them on these rare disease states and on the academic research that may have been published about these medications. This assists healthcare providers in selecting the best treatment for their patients. PomoroLone has generated a high level of interest within the healthcare community. The neuromuscular MSL team is engaging with the DMD medical community since the Gammri's approval in October of last year. There are numerous publications on Vemoralen's pharmacology and effect in the MD patient population.

Speaker 4

I'll now turn the call over to Mike Howe, our Chief Financial Officer.

Speaker 1

Thank you, Steve. Catalyst 4th quarter and full year 2023 financial performance resulted in another record breaking year, driven by exceptional execution by all facets of our business. In addition to our outstanding results, the company has successfully closed 2 transactions in 2023, the acquisition of the U. S. Rights to license for Gammari.

Speaker 1

Both transactions provide the company with additional opportunity to continue to create incremental net positive cash flow through disciplined execution. I'd like to take a moment to reiterate some of the key accounting implications and accounting treatment of the Gamri transaction. As a result of the FDA approval of the Gamri on October 26, 2023, we made a 36 dollars milestone payment to Centerra in the Q4 of 2023, which was capitalized on the balance sheet as an intangible asset and will be amortized on a straight line basis over its estimated useful life of 10.5 years. I would like to reinforce that based on the timing of the Agamri approval, amortization expense was prorated in the Q4 of 2023. Catalyst also made a strategic equity investment in Synthera, which was recorded with an initial fair value of 13,500,000 dollars and will be mark to market value on a quarterly basis using the observable market price.

Speaker 1

Now on to 2023 results. Our total net revenue for 2023 sorry, for 2023 was $398,200,000 a 95.9 percent increase when compared to total net revenue of $214,200,000 for 2022. Product revenue net for 2023 for Firdapse was $258,400,000 a 20.8 percent increase year over year compared to $213,900,000 for 'twenty two. Product revenue net for Fycompa was $138,100,000 for 'twenty three. As mentioned in our press release, 20 24 FiCompa net product revenue will be adversely affected by gross to net adjustments.

Speaker 1

In 2023, our gross to net for FiCompa was booked under a size arrangements with distributors and government agencies. However, starting in 2024, all such costs are tied to arrangements between us and those distributors and government agencies. Since our costs under these arrangements are likely to be higher than the size costs, we expect to be impacted by an increase in gross to net deductions net $104,700,000 year over year compared to $104,700,000 for 2022. Net income for 2023 was adversely impacted by the 81,500,000 dollars charge for in process R and D resulting from the gamma license acquisition. We reported U.

Speaker 1

S. GAAP net income for 2023 of $71,400,000 or $0.67 per basic share and $0.63 per diluted share, a decrease of 14% year over year compared to GAAP net income for $22,000,000 of $83,100,000 or $0.80 per basic and $0.75 per diluted share. The decrease in net income is attributed to the one time and gamma related IP R and D expense recorded during the Q3 of 2023. Non GAAP net income for 2023 was $223,200,000 or $2.10 per basic and $1.96 per diluted share, which excludes the IPR and D expense with the income tax provision of $23,100,000 amortization of intangible assets related to our acquisitions of Resurgi, Fi Comp and Agamri of $32,600,000 stock based compensation expense of $14,300,000 and depreciation expense of $316,000 from GAAP net income. This compares to non GAAP net income for 2022 of $113,900,000 or 1 point $1.0 per basic and $1.02 per diluted share, which excludes from GAAP net income the income tax provision of $21,600,000 stock based compensation of $7,900,000 amortization expense of Resurgency and tangible assets of 1 point $1,000,000 and depreciation expense of $141,000 The above represents an approximate 96% increase of non GAAP net income year over year.

Speaker 1

Without consideration for potential M and A activity, we expect amortization expense for our acquired and intangible assets to be approximately $9,300,000 beginning with the Q1 of 2024 and continuing until the depletion of the intangibles related to Fi Compa in 2027. Our effective tax rate for 2023 was 24.4%. We anticipate our effective tax rate to increase slightly for 2024. Our tax rate is affected by many factors and therefore may fluctuate quarterly. Cost of sales were approximately $52,000,000 in 2023 compared to $34,400,000 in 20 22 and consisted principally of royalties.

Speaker 1

As a reminder, royalties for Firdapse paid to our licensor for that product increased by 3% once net product sales exceed $100,000,000 in any calendar year. Research and development expenses were $93,200,000 in 2023. This compares to $19,800,000 in 2022. As previously mentioned, the driver behind the increase in research and development expenses relates to the one time of Gamri IP R and D expense during the Q3 of 2023. Relative to normal course of business, absent another acquisition, we expect R and D costs in 2024 to trend similarly to R and D costs in 2022.

Speaker 1

SG and A expenses for 2023 totaled $133,700,000 compared to $57,100,000 in 2022. The increase in SG and A year over year is principally due to expenses related to the integration of Fycompa, including commercial expenses incurred under the transaction service agreement and an increase in headcount principally in sales and marketing as well as certain increases in corporate headcount required to support the company's growth. During the Q4 of 2023, the company incurred significant selling and marketing expenses for the preparation of the Yammer launch. With regard to the Q1 of 2024, we anticipate a significant increase in 2024 SG and A expenses compared to Q1 of 2023 due to the upcoming Gammari launch and the accompanying support of 3 commercial products compared to 2 in Q1 'twenty three. Further, I would like to note that consistent with prior years as a result of U.

Speaker 1

S. GAAP requirements, the company expects an increase in SG and A expense in the Q1 of 2024 as compared to other quarters due to its 501c3 donations. As reported, we ended 2023 with cash and cash equivalents of $137,600,000 compared to $298,400,000 at December 31, 'twenty two. The decrease in cash of $160,800,000 was largely driven by approximately 2 and $93,300,000 in payments in connection with acquisitions, including equity securities, which was offset by net positive cash flows generated from operations of $141,400,000 On a related note, I would like to mention that on January 9, 2024, the company issued 10,000,000 shares of common stock for total net cash proceeds of approximately $140,100,000 which was intended to fund the potential acquisition of new product candidates as well as for general corporate purposes. We believe our current funds continue to allow us the financial flexibility to fund our existing R and D programs, meet our potential contractual obligations and support our strategic initiatives, business development and portfolio expansion efforts, leading to long term growth and value creation.

Speaker 1

More detailed information and analysis of Q4 and full year 2023 financial performance may be found in our Annual Report on Form 10 ks, which was filed with the Securities and Exchange Commission yesterday, February 28, and can be found on the Investor Relations page of our website at www.catalystpharma.com. And with that, I will turn the call back over to Rich. Rich?

Speaker 2

Thanks, Mike. I'd like to thank the leadership team and all our employees at Catalyst for the effort they put forth to deliver such outstanding results in 2023. We're off to a strong start in 'twenty four with continued momentum to sustain our long term durable growth. We continue to be committed to excellent execution. We are focused on increasing the scope and scale of our business through our disciplined approach in identifying derisked innovative therapies that address critical unmet medical needs in the rare orphan neuro and adjacent rare orphan therapeutic areas.

Speaker 2

We also hope to increase our geographic footprint through ex U. S. Partnerships. In short, we are prepared to invest in opportunities that add value to Catalyst, further grow our portfolio and provide improved care for patients. Our team is dedicated to improving the lives of more patients by working on key lifecycle management projects that have the potential to expand the use of the products we offer.

Speaker 2

We believe our financial rigor, strength of our financial results and our cash flow position us to advance our critical initiatives. In summary, we are focused on our strategic priorities for 2024. Number 1, continue to deliver double digit growth for our portfolio. Number 2, successfully launched and commercialized at Gamry. Number 3, expansion of our product portfolio and partnerships in the CNS orphan and orphan adjacent therapeutic spaces.

Speaker 2

And we look forward to providing you with updates on our progress. At this time, we'll turn the call back over to our operator, Kevin. Kevin?

Operator

Thank you. We'll now be conducting a question and answer session. Our first question is coming from Charles Duncan from Cantor Fitzgerald. Your line is now live.

Speaker 5

Hey, good morning, Rich and team. Congratulations on a transformative year and appreciate the guidance going forward. Had a quick question on Firdapse with regard to that label expansion. Steve did a great job helping us understand the percentage of patients really that are looking for a higher dose. But I'm wondering what is the driver of that?

Speaker 5

Would there be anticipated short term efficacy or long term durability?

Speaker 4

Charles, we believe that it will be long term durability. There's really 2 driving forces behind them. The first is disease progression as these patients age. And so they very gradually need a higher dose. The other thing also is that there are a handful of fast metabolizers out there who have higher weights that also need a higher dose and so we'll be able to support those patients if and when the FDA approves this one kilogram maximum daily dose.

Speaker 5

Got it. And then with jumping over to a gamma ray, one quick question for Jeff or others on the team. I guess I'm wondering if you could provide a little bit more color on the registry. I think you mentioned that you would be starting that. And the from that that you anticipate that could drive awareness of the Mora Lone's value proposition versus other standard of care?

Speaker 5

Thanks.

Speaker 4

Charles, the registry, the size is going to depend on how many patients agree to join the registry. It is voluntary. We anticipate that a significant number of patients will join the registry and be tracked for as long as they are in the patient registry. In terms of duration, it will be carried on for many years as collect data for long term safety evaluation of the gamma.

Speaker 2

Gary, do you want to make any commentary about the number of sites, excuse me, number of sites as well?

Speaker 6

So we will be looking at all of the sites that potentially enroll and commercial or to have commercial agammarie patients and evaluate them for their ability to collect data rigorously in the registry. So at the present time, we haven't set a specific number. But we'll again, as Steve said, look at how many patients are prescribed, what the locations are in order to determine the site and patient numbers.

Speaker 2

But you'd say just a sense of it's a pretty broad we're looking at a pretty broad based approach, though. Would that be safe to say?

Speaker 7

Yes.

Speaker 2

Right. Okay. So we'll follow-up as I think become clearer, Charles.

Speaker 5

Got it. Thanks. Thanks, Rich for the update.

Speaker 2

Thank you.

Operator

Thank you. Next question is coming from Joon Lee from Truist Securities. Your line is now live.

Speaker 7

Great. Congrats on another strong quarter and thanks for taking our questions. I'm really impressed that you're able to provide guidance on Agamori, which has yet to launch. I can only imagine that you must be getting a lot of inbound interest to be able to provide guidance. Is this why you think just having additional sales force will be sufficient to launch into a word-of-mouth awareness?

Speaker 7

Or do you have any DTC efforts in mind? And I have a quick follow-up.

Speaker 3

Sure. So thanks for the question, June. We with DMD, it's a very defined market. There are only primarily 250 prescribers that prescribe 95% of the corticosteroids for boys living with DMD. Those 250 prescribers are housed in about 90 to 100 centers of excellence.

Speaker 3

So it's a focused call point that our team has the capacity, the team that was selling Firdapse had the capacity to handle and handle effectively. And these are very experienced and tenured people. So we're very confident in that structure. Now as far as the pent up demand that you had mentioned and it sounds like, as I mentioned on the call, we've been accepting pre commercial launch enrollment since December. And based on those enrollments and the number of enrollments that we've seen and also the other stakeholders that have talked about their interest in going on to Gamry, We do believe we're confident in the number that we provided.

Speaker 3

So that's one thing. As far as DTC, we have personal promotion along with our sales force efforts to help provide education on a gamma ray as well as DMD, that will be focused on not only the physicians, but also to other stakeholders like patients and caregivers.

Speaker 7

Great. Thanks for the color. And on the continued strength of your Firdapse franchise, you mentioned conversion of 500 additional LEMS patients that you've identified and the anticipated approval of the higher 100 milligram dose. But how does the small cell lung cancer LEMS patients factor into that guidance? Is that really in the guidance or is it more upside or help us navigate that component of the population?

Speaker 7

Thank you.

Speaker 3

So, Jun, great question about that. And it is factored in the small cell lung cancer LEMS opportunity is factored in into the growth potential, but we also see it as upside from there too. Like I mentioned, about 80% of these small cell lung cancer LEMS patients are unfortunately undiagnosed at this point. So our efforts to accelerate that diagnosis or the diagnosis for these patients will increase the addressable market over time, which will help with our growth too.

Speaker 7

Great. Congrats again on the strong quarter. Thank you.

Speaker 2

Thank you. Thanks very much, Jim.

Operator

Thank you. Next question is coming from Joe Catanzaro from Piper Sandler. Your line is now live.

Speaker 8

Yes. Hi, guys. Appreciate you taking my question and congrats on all the great progress here. So, Steve, I think you mentioned the percent of patients that are on the current maximum dose of Firdapse. But I think you've previously said that you would expect even patients on lower doses to be taken to higher doses.

Speaker 8

I wonder if that's still your expectation and if that's sort of factored into the Firdapse guidance for 2024? Thanks. And I have one quick follow-up.

Speaker 4

I'll let Jeff address the factored into the neuromuscular physician community is somewhat conservative. It's a go slow start low and go slow mentality with regard to medication treatment. Many of them like to leave what I'll call some headspace in terms of the dose that patients are receiving, so that if the patient gets worse, they can increase the dose. With the increase in the daily maximum dosage, we would expect some of those conservative physicians who have been concerned about the overall efficacy of, say, a 60 milligram dose that a patient may have been receiving, may be more likely to increase the dose knowing that they still have more room to further increase the dose for those patients. So that is you are correct that some of those patients at below 80 milligrams may increase as well.

Speaker 4

And Jeff, did you want to address factored into the Sure, Joe.

Speaker 3

Before I get into that question, just wanted to reiterate the percentages that 40% of our patients are currently on 80 milligrams. Then there's an incremental 3% of patients are on greater than 80 milligrams currently. Over time, we do expect the average daily dose to increase and that increase, that gradual increase is factored in to the forecast. But keep in mind with the PDUFA date for this June, it's over time. So it's just the impact from June through December of this year.

Speaker 8

Okay. Thanks. That's helpful. And then maybe my follow-up question on sort of future cadence of business development and maybe one for you, Rich. As we look back at sort of the historical approach to business development, how are you thinking about potential opportunities moving forward?

Speaker 2

Great question. So obviously, we feel that our balance sheet is prime right now and we're really confident. And Preetha and her team are continuing to look and we have a very wide aperture. So we consider ourselves an orphan company, obviously, in the CNS space. So that would include epilepsy as well.

Speaker 2

And we're looking at those opportunities that are not only just in CNS because we believe our infrastructure is one that supports getting the patient on and keeping the patient on. That's critical. We see that as a foundational element of who we are as a company. We believe that infrastructure is transferable to other orphan states outside of CNS, metabolic, cardiovascular, etcetera. So our aperture is quite wide.

Speaker 2

So we believe our opportunities are very, very broad. So we continue to scan the landscape. We have a number of opportunities that we're evaluating at a very deep level and we're continuing there and we're I would say appropriately aggressive in our search for new opportunities that we believe fit with who we are and our ability to serve the patient community.

Speaker 8

Okay, great. Thanks again. Appreciate you taking the question.

Speaker 2

Thank you.

Operator

Thank you. Our next question is coming from Leland Gershell from Oppenheimer. Your line is now live.

Speaker 9

Hi, yes. Good morning, everyone. Thanks for taking my questions And great to see the strong guidance on the Camry as well as overall. Just a few questions from me. Actually on FiTampa, looks like with your guidance, looks maybe a bit more flattish year on year in 'twenty four than I think previously the company indicated maybe sort of a mid- to high single digits growth.

Speaker 9

Just wondering if any dynamics there we should be aware? And then second, also on Fycompa, is there any update with respect to IP exclusivity? I think kind of base case, we have this protected until sort of spring of 'twenty five and then essentially that extended to 'twenty six. Just wondering if there's any update on the IP there? Thank you.

Speaker 2

Sure, Leland. So Mike will take the first part and Steve will take the second part.

Operator

Sure. Good

Speaker 1

morning, Wieland. Thanks for the question. On Vycompa, as we mentioned in the press release as well as on the call, our arrangements now with wholesalers and distributors and government agencies are through us as opposed to for 2023, they were through Assai. And as is common for companies of our size, smaller companies, smaller product portfolios, those rates are going to be slightly higher.

Speaker 4

Hi, Liam. With regard to the intellectual property, we have completed our work with FDA trying to extend end of exclusivity for that patent for composition of matter. However, we are still evaluating whether or not to enforce the polymorph patents and we hope to conclude that evaluation.

Speaker 2

I just want to make a final comment about Fycompa. One of the reasons why we like this asset a lot is for the financial opportunity. We believe that this compound has life significant life beyond its patent expiry because of the stickiness of epilepsy drugs. Patients with epilepsy do not like to change drugs even post patent expiry. So there is a great willingness for the patient to continue on their branded medication and we see this consistently.

Speaker 2

So there's a significant opportunity for this compound post expiry to continue to deliver good return for the company and that was baked into our calculus when we bought the product. So we continue to see this as a very good opportunity to serve patients and to build the balance sheet and again help us to build our portfolio as we go forward. So we see this as a really good smart financial play and a good play for patients as well.

Speaker 9

Thanks. That's very helpful. Then just one question on Firdapse, if I may. I think the mention of about 500 remaining diagnosed but untreated patients, if I have that correctly. Just wondering if you could point to any particular hurdles that you may face in converting those untreated but diagnosed patients on for the plan?

Speaker 3

So Leland, 50% about 50% of our new enrollments each month or any given quarter come from these leads, these patients that are diagnosed, but never have been treated with Firdapse. We use a variety of sources to continually backfill those patients. So as one patient gets converted on to Firdapse, we find new leads to backfill those patients. So we always try to maintain those 500 or so patient leads. As far as hurdles to get on, a lot of times it's just it's a matter of these patients waiting to get in to see their physicians, whether it's a 3 month or 6 month timeframe that they're waiting to get in.

Speaker 3

That's primarily it. There are some patients within these 500 that have been on the patient lead for over a year. But most of these, the newer leads can be converted within 30 days. That's how we see it. But again, we backfill those patients converted with new leads over time.

Speaker 2

I think, Leland, it's all part of the what we would call this is a patient journey. And so it's really dependent upon the physician and the patient and where they come in and how aggressive they want to be with their own therapy. And so once we identify them, we keep calling on the physician and working with the physician to expedite therapy if it's appropriate. It really comes down to physician. But once we identify the physician who has the patient, we can then begin to help the physician understand the disease state and then the patient journey and how Firdapse can help that patient.

Speaker 9

I appreciate the color. Thank you.

Speaker 2

Thank you.

Operator

Thank you. We've reached the end of our question and answer session.

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Earnings Conference Call
Catalyst Pharmaceuticals Q4 2023
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