Catalyst Pharmaceuticals Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 8, 2024

There are 11 speakers on the call.

Operator

Greetings, and welcome to the Catalyst Pharmaceuticals Second Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Michael Kaul, CFO.

Operator

Thank you, Michael. You may begin.

Speaker 1

Thank you. Good morning, everyone, and thank you for joining our conference call to discuss Catalyst's Q2 2024 Financial Results and Business Highlights. Richard Daley, President and CEO, will lead the call today and Jeffrey Del Carmen, our Chief Commercial Officer and I will also present. Additionally, Doctor. Stephen Miller, our Chief Operating Officer and Chief Scientific Officer will be available for the Q and A.

Speaker 1

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 do not guarantee future performance. They involve risks, uncertainties and assumptions that are difficult to predict and may not prove to be accurate. 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 factors described in our 20 23 Annual Report on Form 10 ks filed with the SEC on February 28, 2024, and in our Q2 2024 Quarterly Report on Form 10 Q, which was filed yesterday August 7, 2024 with the SEC.

Speaker 1

At this time, I'll turn the call over to Rich.

Speaker 2

Thanks, Mike, and thank you all for joining today's call. Today, we'll review our Q2 2024 corporate performance, provide an update on our regulatory and strategic growth initiatives, dive deeper into individual product performance and conclude with a comprehensive overview of our financial results. In the Q2 of 2024, we achieved outstanding results across our commercial portfolio with total revenues of $122,700,000 a 23.2% increase over quarter 2 2023, underscored by a record organic revenue growth from Firdapse. The successful ongoing commercialization of AGAMRI for Duchenne's muscular dystrophy and the continued solid performance of Fycompa. We are reiterating our full year 2024 net product guidance for both Firdapse and Fycompa.

Speaker 2

AGAMRI continues to deliver strong performance and we are updating our AGAMRI full year 2024 net product revenue guidance from the $25,000,000 to $30,000,000 range we provided earlier this year to $35,000,000 to $40,000,000 As a result of our strong performance, we are also updating our full year 2024 total revenue financial guidance. Previously, we guided to a full year total revenue range of between $455,000,000 to $475,000,000 Due to the solid performance of both Firdapse and Fycompa and the outstanding uptake of a gamma ray, we now believe that we will achieve total revenue in the upper end of the range. Jeff will provide further details about our commercial performance during this discussion and Mike will give a deeper dive into the financials later in this call. Now let's review our regulatory, clinical and business development milestones. First up, regulatory.

Speaker 2

In May, we received U. S. Approval for Firdapse's expanded maximum daily dose of 100 milligrams for treating LEMS, up from the previous 80 milligrams. This milestone enhances treatment flexibility for healthcare professionals, aligning with our mission to address the evolving patient needs and optimize outcomes for LEMS patient community. As awareness of this new dosing option grows among patients and physicians, we anticipate a gradual increase in Firdapse daily dosing over the coming quarters.

Speaker 2

In parallel, we continue to actively collaborate with our partner in Japan, Daido Pharma, as we await the next regulatory milestones for Firdapse. The NDA decision from Japanese regulatory authorities, which is expected at the end of Q3 or the beginning of Q4 this year. In clinical, the SUMMIT study, a 5 year initiative to collect long term safety and quality of life data for AGAMRI continues to advance. The study, once initiated, will gather long term patient safety and quality of life data, offering a deeper understanding of the product's potential benefit for patients. Site identification and initiation are on track.

Speaker 2

Annual analysis of patient data is planned, potentially leading to future FDA submissions for updated product labeling, furthering our commitment to enhancing patient, payer and providing the latest safety information. Moving to business development, subsequent to the end of Q2, in July 2024, we entered into a license agreement with KAI Pharma for them to commercialize a gamma ray in Canada. As you know, CHI already holds commercial rights for Firdapse in Canada. CHI expects to submit an application to Health Canada for regulatory approval of a gamma ray in early 2025. Our growing partnership with KAI is a great example of our commitment to improving access for patients in targeted ex U.

Speaker 2

S. Markets. In our efforts to build our portfolio, we hear consistent feedback from potential partners. 1st, our strong commercial execution across a diverse portfolio makes us an excellent partner for companies looking for a U. S.

Speaker 2

Partner. 2nd, our launch capabilities engender trust with potential partners and are an attractive selling point. 3rd, our strong balance sheet makes us a formidable negotiator in acquiring new assets. Our strategy remains focused on delivering value for our stakeholders by continuing to execute our buy and build plan. With the ongoing commercialization of Aganry, we continue to prove our capabilities in identifying, integrating and launching products that deliver value for patients, providers and payers.

Speaker 2

We are confident in our ability to leverage the focused execution of our strategic initiatives, while maintaining our commitment to advancing patient care, unlocking growth potential and delivering value for stakeholders. Underpinned by our exemplary track record and dedicated team, we believe that we are ideally positioned to drive further growth and achieve sustained success. To summarize, we remain focused on our threefold growth strategy, outstanding execution, portfolio diversification and ex U. S. Expansion through partnerships.

Speaker 2

1st, let's focus on outstanding execution. Our consistent performance continues to demonstrate our commitment to improving the lives of patients we serve and delivering on the promise of growing the company. 2nd, portfolio diversification. Our expanded focus in orphan therapeutics and adjacent orphan assets has yielded increased opportunities and our team is rigorously evaluating each for fit and value. We continue in our tireless efforts to bring on new products and we are excited about our prospects.

Speaker 2

We remain opportunistic in pursuing the right deals at the right time and we are well positioned to leverage our strong balance sheet to capitalize on accretive or near accretive opportunities. 3rd, targeted ex U. S. Partnerships. We are building alliances with companies that can leverage our portfolio outside the U.

Speaker 2

S. In high value markets to bring improved care options to patients and providers. As we add to our portfolio, we expect to build our global presence through these cost effective partnerships. In the Q2, we successfully navigated an increasingly dynamic business environment, delivered on our top line across the portfolio, successfully drove the commercialization of the Camry and expanded our commercial footprint. We will continue to work for the remainder of the year to deliver on our strategy, executing and delivering our plan, diversifying our portfolio and expanding our ex U.

Speaker 2

S. Partnerships. Now I'll turn the call to Jeff, who will provide a

Speaker 3

commercial update. Thanks, Rich, and good morning, everyone. We are incredibly pleased to report the tremendous quarterly performance across our entire commercial portfolio. These results showcase our strategic focus and operational excellence that drive our commercial success. As Rich mentioned, Catalyst had an excellent Q2 driven by the combination of sustained organic growth of Firdapse, stable revenues from Fycompa and the strong commercial launch of AGAMRI.

Speaker 3

Q2 total net revenues of $122,700,000 a 23.2% growth versus the same quarter last year positions Catalyst well to achieve the upper end of our previously provided combined 2024 total revenue guidance of between $455,000,000 to $475,000,000 I will now provide a breakdown of Q2 net revenues by product. First, let me start with Firdapse performance. Q2 net sales of $77,400,000 represent a 19.2% increase over the same quarter last year, a direct result of steady new patient enrollments and annual discontinuation rate below the forecasted 20% and a high refill rate. Net new patients in Q2 were above our forecast and the highest quarterly total since Q1 2022. Prescription approval rates were greater than 90% across all payers, government or private commercial insurers.

Speaker 3

Ordering patterns and refill rates of 95% in Q2 were greater than historical norms of 90%. We expect to return to 90% refill rates in Q3 and Q4 and the resulting 15% or greater growth quarter versus the same quarter in 2023. We remain confident in achieving Firdapse full year 2024 guidance of between $295,000,000 $310,000,000 dollars Our demonstrated strategic growth initiatives continue to drive organic growth. We maintain a pipeline of about 500 diagnosed LEMS patients in various stages of their diagnostic journey not yet on Firdapse. Half of our new patient enrollments typically come from this group, a prime reason for our ability to consistently deliver 15% to 20% annual growth.

Speaker 3

Furthermore, LEMS education programs targeting healthcare providers and potential LEMS patients continue to yield a high level of voltage gated calcium channel antibody testing, shortening the diagnostic journey for LEMS patients and leading to more patients being eligible for treatment with Firdapse. Lastly, as we have mentioned before, more than 90% of small cell lung cancer LEMS patients are undiagnosed. Therefore, we are working with key thoracic oncology institutions to institute screening for newly diagnosed small cell lung cancer patients, resulting in a greater diagnosis of small cell lung cancer LEMS patients. Now let me provide an update on VYCOMPA. Q2 net revenues of $36,500,000 further fortifies our revenue diversification.

Speaker 3

We expect continued stable net revenues in the second half of twenty twenty four, in line with the full year 2024 net revenue guidance of between $130,000,000 $135,000,000 As I mentioned last quarter, epilepsy regional account managers are enhancing Firdapse's share of voice by conducting secondary Firdapse calls with healthcare providers. This strategy leverages the 45% overlap in physician call points between Fycompa and Firdapse, boosting Firdapse' visibility, we have seen early indicators that this tactic is working as several patient enrollments have been a direct result of this initiative. Let's shift our focus to a gamma ray. Q2 product net revenues were 8,700,000 dollars Thanks to our dedicated efforts leading up to the March 13, 2024 product launch, we successfully exceeded our initial launch expectations. Thus far, 46% of new enrollments are transitions from Emflaza, while 42% are switches from prednisone, which we believe is a positive sign for the acceptance of a gamma ray.

Speaker 3

In addition, approximately 80% of the top DMD Centers of Excellence and greater than 140 healthcare providers have submitted at least 1 gamma ray enrollment form. Around 89% of our current patients are reimbursed patients and average less than 30 days to approval. We expect the time to approval to decrease as payers finalize their policies over the next couple of months. Based on the promising demand trend and encouraging payer landscape, we are revising our Aginmarie full year 2024 guidance to between $35,000,000 $40,000,000 of net product revenue. In summary, we are confident in our ability to continue the significant strides we are making with Firdapse, reflecting our commitment to sustained organic growth.

Speaker 3

We continue to achieve stable net revenues with Vycompa and are surpassing our revenue projections for a gamma ray. Our emphasis remains on maintaining excellence in commercial execution, while strategically leveraging our capabilities to optimize our performance.

Speaker 4

I want

Speaker 3

to thank the entire team at Catalyst for their unwavering commitment to patients and look forward to a successful second half of 2020. I will now turn the call back over to Mike.

Speaker 1

Thanks, Jeff. Our performance during the Q2 of 2024 has set us on pace for another strong year, driven by our solid financial performance and strong execution. With the successful launch of AGAMRI in mid March, along with the continued performance of Firdapse and Fycompa, we have established the foundation to achieve another revenue record breaking year in 2024. As you heard from Jeff, we had an outstanding quarter in product revenue performance. In the Q2 of 2024, net income before income taxes was $55,800,000 a 15% increase compared to $48,500,000 for the Q2 of 2023.

Speaker 1

We reported GAAP net income of $40,800,000 or $0.33 per diluted share, an increase of 8% year over year compared to Q2 of 2023 of $37,800,000 or $0.33 per diluted share. Coupled with our disciplined approach to cost management, this increase in net income is driven by organic growth of Firdapse and Fycompa and the addition of a gamma ray. Non GAAP net income for the Q2 of 2024 was $69,600,000 or $0.56 per diluted share, which excludes from GAAP net income, amortization of intangible assets related to our acquisitions of Fycompa, Agamri and Resurgi of $9,300,000 stock based compensation expense of $4,400,000 the income tax provision of $15,000,000 and depreciation of $91,000 This compares to non GAAP net income in the Q2 of 2023 of $60,400,000 or $0.53 per diluted share, which excludes from GAAP net income amortization of intangible assets related to our acquisitions of Fycompa and Resurgi of 8 point compensation expense of $3,300,000 the income tax provision of $10,800,000 and depreciation of $82,000 Our effective tax rate through the first half of twenty twenty four was 24.5% compared to 21.5% through the first half of 2023. The effective tax rate is affected by many factors, including the number of stock options exercised in any given period and is likely to fluctuate in future periods.

Speaker 1

Cost of sales expense was approximately $15,400,000 in the Q2 of 2024 compared to $12,000,000 in the Q2 of 2023 and consisted principally of royalties. As a reminder, royalties for Firdapse increased by 3% when net product sales exceed $100,000,000 in any calendar year, which would surpass during the Q2 of 2024. As a result, we expect cost of sales to trend higher as the year progresses. Additionally, Gamri carries a royalty in the range of low double digits to mid-20s as a percent of net revenue depending on sales achievements within a calendar year. Further details on our royalty obligations for Gamri are disclosed in our Q2 2024 Form 10 Q and are expanded upon within the MD and A section.

Speaker 1

Research and development expenses were $3,000,000 in the Q2 of 2024, slightly down from $4,000,000 in the Q2 of 2023. SG and A expenses for the Q2 of 2024 totaled $40,700,000 compared to $28,400,000 in Q2 2023. The overall difference in SG and A expenses in the Q2 of 2024 was principally due to incremental operating expenses in support of the launch of the gamma ray. As reported, we ended the Q2 of 2024 with cash and cash equivalents of $375,700,000 compared to $137,600,000 at December 31, 2023. Increase in cash of $238,100,000 was driven in part by the January 9, 2024 capital raise that resulted in 140 point $7,000,000 in net cash proceeds.

Speaker 1

The remaining increase in cash is driven primarily by $96,100,000 generated from operations of the business. I'd like to note that we generated approximately $53,200,000 more in cash from operations for the first half of twenty twenty four than we did for the first half of twenty twenty three. This underscores our strategic and effective capital utilization, driving incremental cash flows for the company's benefit. We believe our current funds continue to provide the financial flexibility to support our strategic initiatives, including business development and portfolio expansion, meet our potential contractual obligations and sustain our commercial and R and D programs. More detailed information and analysis of our Q2 2024 financial performance may be found in our quarterly report on Form 10 Q, which was filed with the Securities and Exchange Commission yesterday, August 7, and can be found on the Investor Relations page on our website at www.catalystpharma.com.

Speaker 1

At this time, I will turn the call back over to Rich. Rich?

Speaker 2

Thanks, Mike. The momentum in our portfolio is exciting. Firdapse continues to grow as predicted due to the incredible focus of our field teams. AGAMRI is off to a great launch due to the strong partnership between our medical, commercial and patient advocacy teams. And Fycompa continues to deliver in the highly competitive market because of the relentless focus of our epilepsy team.

Speaker 2

We had a robust start to this year and we look forward to a strong second half in 2024. We are confident in our ability to capitalize on the opportunities ahead. Our unwavering commitment to advancing patient care, unlocking growth potential and delivering value to our stakeholders remain to the forefront of our efforts. Supported by our exemplary track record and our dedicated team, we are ideally positioned to drive further growth and achieve sustained success. At Catalyst, our mission is Resolute, to pioneer innovative medicines for patients with rare orphan diseases.

Speaker 2

We look forward to providing updates on our progress and we thank our Catalyst team for their commitment and all of you for your continued support. We now turn the call back over to our operator. We look forward to answering your questions. Thank you.

Operator

Our first question is from Charles Duncan with Cantor Fitzgerald. Please proceed with your question.

Speaker 5

Hey, good morning, Rich, Jeff and team. Congratulations on a really nice 2Q And thanks for taking our questions. I had a couple. First of all, on a Camry, do you believe that there was any bolus in the Q1 of sales because patients or caregivers were waiting for the drug to be approved and launched? And then secondarily, I know you don't have any experience with this yet in this market, but what would you anticipate for summer in terms of patient and prescriber attendance, if you will?

Speaker 2

Charles, thanks for the question. This is something we thought a lot about, especially as we queued up the patients beginning in December of last year. I'm going to turn it to Jeff. Jeff will give you the answer. Thanks.

Speaker 3

Hi, Charles, and thanks for your question. There was significant pent up demand leading up to the commercial launch that we had in March. So yes, to answer your first question, we did see significant interest prior to that, which helped the late launch, the late part of Q1, but also it helped Q2. So again, strong pent up demand there. We are seeing, again, significant demand and interest moving forward.

Speaker 3

What we see is a lot of the sites, I mentioned it on the call, 80% of our the high volume centers of excellence for DMD have enrolled at least one patient. So and we've seen greater than 140 healthcare providers prescribe or submit an enrollment for a gamma ray. Now what we expect moving forward are the increase in the depth of interest from those physicians in the centers as we move into Q3 and Q4. So yes, we are excited about the demand so far and we expect that to continue.

Speaker 2

So Jeff, as far as Charles' question regarding the summer, do you see any simplicity so far in the summer? Any downward trend or upward?

Speaker 3

We see continued strong interest, Charles. So we expect the launch trajectory to stay the same.

Speaker 2

And then Charles, to the first part of your question, this bolus we saw, so we I think we referred to this in the Q1 call was as a step up. So we had a very light Q1 because we only had 2 weeks. We expected to have this nice step up and then what we say is a continued traditional curve. And that's what I think we're experiencing. Thanks for the question.

Speaker 5

That's helpful. A quick question on Firdapse. Congratulations on the approval of the new higher dose. I had a question about that in terms of the future adoption and persistency, if you will, for patients. Will the new dose impact discontinuations, either fewer discontinuations due to increased efficacy or satisfaction?

Speaker 5

Or will it perhaps result in more discontinuations due to less tolerability? What's your sense of how that adoption of that higher dose will go for continued use?

Speaker 3

Good question, Charles. And what I can tell you is, again, our annual discontinuation rate is under 20 percent. And within that, we see the majority of the discontinuations happen within 6 months of prescribing or initiating therapy on Firdapse. So at this time, we don't expect the discontinuation to change or increase because of that more flexibility in the dose going up to 100 milligrams.

Speaker 5

Okay. Last quick question for Rich, bigger picture strategy, thinking about some of the what you have to bring to the party in terms of in licensing. Do you have a goal for yet this year? And are you focused more on neuromuscular or perhaps rare epilepsy or other areas of call it neuro innovation? Thanks.

Speaker 2

Great question, Charles. So our business development strategy remains the same. We're looking at orphan and differentiated orphan. We're looking at things that are accretive or nearly accretive, and we want to bring in income diversity. So we like the opportunities in neuro because we feel like we have a great footprint there, but we're not stopping.

Speaker 2

We're not just isolating ourselves to neuro because we believe that the infrastructure that we have behind the outward facing organization, the sales organization, the patient advocacy organization really supports just about any orphan condition that we would have. So we really feel like we can bring that strength to anything. So we like the neuro space, but we really want to move within the neuro space if the opportunity presents itself when it does present itself or outside. So we're looking very broadly. We want to take advantage of those opportunities that come our way.

Operator

Our next question is from Samantha Simicchio with Citibank. Please proceed with your question.

Speaker 6

Hi, good morning and thanks for taking the question and let me add my congratulations on a really nice and strong quarter. So while still really early in the launch for Gammury, I'm wondering how you think about the patient mix will evolve over the next several quarters. It seems the percentages that are coming from Emflaza and prednisone thus far really holding steady from what you shared on the Q1. And I'm wondering how generic Emflaza is fitting into the overall steroid landscape as well? And then I have a follow-up.

Speaker 2

Thanks, Samantha. Those are great questions. I'll turn it right over to Jeff for that.

Speaker 3

Hi, Samantha. As far as the mix moving forward, we expect it to remain the same like you said, it's pretty flattened and similar to what we saw early on in the launch and it's carried forward. We're very excited about that because it shows the strong interest in the adoption of a Gammri across all patients that were on steroids, not just a specific segment. So excited about that. As far as the generic entrance for Emflaza coming over and we have not seen an impact so far on adoption of a Gamry for those patients.

Speaker 3

So no impact early on.

Speaker 6

Got it. Great. And then just on Firdapse, I wonder if you could share just any updates on the process or the timing of the ongoing Firdapse Paragraph 4 litigation? And thank you.

Speaker 2

Steve, do you want to take that?

Speaker 7

Sure. Well, Samantha, as you know, it's generally bad practice to comment on ongoing litigation. I can tell you that we are working diligently to bring the cases to a favorable manner as possible for Catalyst.

Operator

Our next question is from Jason Kirberry with Bank of Please proceed with your question.

Speaker 8

Hey, good morning. Thanks for taking my questions. Maybe just first on bizdev, are you generally inclined to do more deals funded with cash and backend success based milestones or talk about maybe appetite to take on some leverage to go after some larger targets that could be more transformational?

Speaker 2

Great question, Jason. So we would be looking for opportunities to add to the income statement right now and look for that opportunity. I think we could handle a deal or 2 with the cash that we have and then I think we would probably look to dip into the leverage opportunity. After that, think we would be looking to look for more of a transformational opportunity. We like the building of the income diversity as a stepwise function for the company.

Speaker 2

We think that's the best path forward for us. We like our product mix at this point in time and we want to build up that strength of the income statement and continue to build the balance sheet. And at that point, I think looking at more of a transformational opportunity. Mike, any comments?

Speaker 1

I think you covered it. We have a strong balance sheet. We're ready.

Speaker 8

Yes. So it sounds like maybe more of a sequencing of deals where something that involve leverage would be after other deals that maybe improve your profitability and your cash flow base, then you consider larger transformational deals. Is that the right way to think about it?

Speaker 2

I think so, yes. Look, when you think about what we're trying to do is build up the strength of the company. We feel like we're really in a great position right now. We feel like we're strong. We know we're strong.

Speaker 2

And then as we think about the long term of the company, we want to work our way back in the pipeline. So as we build that future orientation of the company, we want to So as we build that future orientation of the company, we want to have that strong cash flow, strong balance sheet to be able to take on that transformational opportunity.

Speaker 8

Okay. And then if I can ask a question about Firdapse. Just the growth that you're seeing, it looks like maybe 2 thirds volume, maybe a third price mix. I assume that that volume is mostly patients that don't have small cell lung as a component of their disease. So is that kind of what you're seeing in terms of the mix and what's driving this kind of 15% to 20% growth?

Speaker 8

It's

Speaker 3

pretty accurate there. We are seeing from the non small cell lung cancer LEMS patients, we've seen steady about low 20% as far as our mix goes of our total LEMS patients that have small cell. So we expect that it's our opportunity moving forward to help increase that share. As I mentioned on the call, about 90% of those patients, small cell lung cancer LEMS patients are undiagnosed there or undiagnosed at this time. So we're applying a lot of resources towards helping those patients get diagnosed sooner.

Speaker 3

So that's where our growth will be coming from. But far as today, you're accurate about how you described dividing up that growth.

Speaker 8

Got it. Thanks so much

Speaker 2

guys. Thank you.

Operator

Thank you. Our next question is from Joon Lee with Truist Securities. Please proceed with your question.

Speaker 4

Good morning. This is Austin on for Joon. Congrats on the quarter and thanks for taking the questions. It was mentioned in the prepared remarks that refill rates were higher than historical norm for Firdapse. Can you explain what led to that and why you expect to return back from 90% in the following quarters?

Speaker 4

And then also on Firdapse, how soon after approval of the 100 milligram dose did you start seeing patients switch at a higher dose? And how much of an impact do you think they had in the quarter? Thank you.

Speaker 2

Thanks, June, and thanks for your support as well. Jeff, do you want to take that? Sure.

Speaker 3

As I had mentioned on the Q1 earnings call, we saw some impact from the Change Healthcare that impacted the refill rate in February. Overall for the quarter in Q1, we were at about 86%. And so traditionally our historical norms are 90%. In April May, we saw a recovery there and we saw higher than the 90% historical norm refill rate and it actually went up to 95% because of that. So patients that were impacted by that in Q1 filled their rates fill their prescriptions more in Q2.

Speaker 3

We expect that to normalize and return to the 90% for Q3 and Q4 and still delivering the 15% or greater growth for Firdapse. Patients and healthcare providers. It really does give them the flexibility to manage and treat their LEMS symptoms. And also just a quick step back, 40% of LEMS patients prior to the label expansion were on 80 milligrams. And those patients, the average daily dose went up by about a milligram, 1.1 milligram since that label expansion.

Speaker 3

We did not expect or do not expect that bolus to just happen immediately. We expect that increase of the average daily dose to reach its full impact in the subsequent quarters.

Speaker 2

Thank you. So I just want to clarify, a statement Jeff made. The 15% growth is 15% growth over Q2 2023, just to clarify. So we've turned to that growth as we do a comparison. We look at Q3 2024, the 15% growth we'll see is versus Q2 2020 sorry, Q3, versus Q3 2023.

Speaker 2

Thanks.

Operator

Thank you. Our next question is from Leland Gershell with Oppenheimer and Company. Please proceed with your question.

Speaker 9

Hi, good morning. My congrats on the strong quarter as well and thanks for taking the question. Just a question again on a Gammury. These patients with Duchenne often are not seeing their specialists that frequently if they're medically stable, maybe once every 3 months, sometimes once every 6 months. I'm just wondering if you've been seeing patients coming in to switch to a gamma ray because it's now available or are they sort of waiting for their next scheduled deployment to change steroids?

Speaker 9

Just sort of an observational question if you have any perspective there. Thank you.

Speaker 3

Hi, Leland. It's really Center of Excellence specific. Some sites had that pent up demand like I mentioned earlier, where they were ready to go as soon as it became commercially available. And then over time, they are will wait for other patients to come in and have that discussion. And in other cases, there's outreach going on to the boys living with DMD and their caregivers about switching.

Speaker 3

So it really is specific. It's dependent on the staff and the physicians, how they want to go the process that they put in place.

Speaker 9

Okay. Thanks very much.

Operator

Thank you. Our next question is from Joe Catanzaro with Piper Sandler. Please proceed with your question.

Speaker 10

Great. Hey, everybody. Thanks for taking my questions. Maybe first one, honing in on Firdapse a bit more. Curious, Jeff, what do you attribute the sort of highest level of new patient starts in the quarter too?

Speaker 10

I know you cited a couple of things. Maybe you could just speak to that, which of those you expect to sort of continue and maybe which factors maybe fade, if at all? That'd be super helpful. And then I have one quick follow-up. Thanks.

Speaker 3

Sure. Hey, Joe. As we constantly mentioned, and I think it's very important in ultra orphan disease is to maintain that pipeline that we always do. And that's over 500 patients that are in various stages of their LEMS journey. And so we have ongoing conversations between the field and the healthcare providers with those patients.

Speaker 3

That's where we have the most success and about 40% to 50% of our new enrollments come from those leads. So as a team, what we constantly focus on are increasing the voltage gated antibody testing, the VGCC antibody testing. And then when those patients are tested and if they are positive, we usually can identify where those patients are through our lead sources and then we try to help those patients by giving those leads to our ramps. But we that's how we ensure that we always have a robust pipeline for future enrollments. And we will continue to do that and we're always on the search to find additional sources of new leads.

Speaker 10

Great. That's helpful. And then my quick follow-up, I guess, on portfolio expansion. Rich, I read into maybe some of your comments as they're being sort of inbound inquiries to you guys. Wondering if you could characterize the current projects that you're diligencing, how many of those what percent originated as inbound inquiries versus outbound inquiries?

Speaker 10

Thanks.

Speaker 2

That's a great question, Joe. Really, I think what we've seen now is an uptick in inbound inquiries because of the performance that we see. We're seeing I guess the best way I could characterize it is that we're looking at the performance of the company and now the execution, we're getting these inquiries because we're a place that people want to place their products. So I would say we're probably at a 30%, 35% of the inquiries I'm sorry, of the products that we're talking about are inbound, where people are calling us and saying, hey, we'd like to talk to you about an opportunity. And I think that's really exciting.

Speaker 2

When you go from 1 product to 3 products in the space of about 18 months and you're really hustling for products and we continue to hustle for products, I want to emphasize that we are working diligently to bring on new products that fit who we are and are differentiated, which is critical for us to have companies approach us with products that are in our space and fit, we're excited about that. So I'd say about 30%, 35%.

Speaker 10

Okay, great. That's helpful and interesting. Thanks for taking my questions.

Speaker 2

Thank you. Thanks for your support as well.

Operator

Thank you. There are no further questions at this time. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

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