Catalyst Pharmaceuticals, Inc. (CPRX) Q1 2019 Earnings Report, Transcript and Summary

Greetings. Welcome to Catalyst Pharmaceuticals First Quarter 2019 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Alicia Grande, Chief Financial Officer. Thank you. You may begin.

Good morning, everyone, and thanks for joining today’s conference call. On today’s call, we have Pat McEnany, Chairman and Chief Executive Officer; Dr. Steve Miller, Chief Operating Officer and Chief Scientific Officer; Dr. Gary Ingenito, Chief Medical Officer and Head of Regulatory Affairs; and Dan Brennan, Chief Commercial Officer. Before we begin, I would like to remind you that in the following comments and in the Q&A session, we will make statements about expected future results, which may be forward-looking statements for purposes of the 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 and which may prove not to be accurate. Actual results may vary. These forward-looking statements should be considered only in conjunction with the detailed information contained in our SEC filings, including the risk factors in our Annual Report on Form 10-K. At this time, I will turn the call over to Pat.

Thank you, Ali. Good morning everyone and thank you for joining us on our first quarter 2019 results conference call. First quarter of 2019 was a very important one for us, beginning with the mid-January launch of Firdapse for adult patients with Lambert-Eaton Myasthenic Syndrome or LEMS. With the launch of Firdapse, we are now starting to deliver on our mission to make a positive and meaningful impact in the lives of patients suffering with rare neuromuscular diseases like LEMS, as well as driving value for Catalyst shareholders. We have heard from doctors and patients alike that have – since the availability of Firdapse has helped many to access treatment for the first time. Before Firdapse’s approval, many patients were poorly served with very limited access. Under a diagnosis by physicians was the norm. We’ve taken a full approach on generating awareness, educating the patient population, and equipping all docs nationwide with what they need to provide this life altering medicine to LEMS patients. We’ll spend most in today’s call discussing our first quarter results and metrics that we believe support that our launch of Firdapse has been a success by any measure. However, it is important that I first discuss the news from last Monday of the FDA’s decision to approve an NDA from Jacobus Pharmaceuticals for an amifampridine product to treat pediatric LEMS patients, six to less than 17 years of age. One of the press reports regarding their approval stated that there are less than 15 pediatric LEMS patients in the United States. We believe that this action by the FDA may affect whether pharmaceutical companies will invest in the development of other therapies to treat patients suffering from ultra-rare orphan designated diseases. Our management and legal teams along with our regulatory advisors are actively assessing the impact of the decision on our Company, the legality of the FDA’s actions and our options going forward. We will have more to say about this subject in the very near future. Turning back to our business activities. We’re continuing to run our business according to our plans as designed for 2019. I’d like to remind everyone on this call today about the three strategic priorities that we have previously highlighted: the successful execution of our Firdapse launch plan; the continued execution of our clinical pipeline evaluating Firdapse for other rare-neuromuscular diseases; and our development plan for a longer acting, potentially more convenient and patient-friendly formulation of Firdapse. First, we are pleased with the success that we have had with the initial launch of Firdapse for LEMS, particularly in our initial phase of transitioning patients on investigational drug to commercial Firdapse. We are encouraged by the strong momentum that we’ve experienced in the first few months of the launch, including the breadth of prescribers and the number of patients initiating therapy with commercial Firdapse. We are probably most gratified by the number of LEMS patients that have come into our program who were previously naive to any form of amifampridine. Having said that, we are still in the early stages of our launch in learning more every day about our patients needs and the patients journey to a definitive diagnosis, and as a result, we’ll have a great deal of work in front of us to achieve our longer-term goals. As we have reported, we recorded 12 [ph] million in net revenue for the first quarter and an operating loss of $645,000. As we have previously stated, we expect by the end of the second quarter to have most of all of the estimated 300 LEMS patients, they were participating in both early access programs to be transitioned to commercial Firdapse. As we progress into the second half of this year, we expect a steady, slower pace of patient enrollments from this very meaningful base that is being established. Previously, I’ve stated that we expected to be in a position to provide you with revenue guidance for the full year 2019 on today’s call. In light of the FDA’s decision last week with the approval of a different formulation of amifampridine for pediatric use, we will need to fully assess the impact of this approval before we can give you guidance for the full year. But I can tell you today, as we go -- as we are about halfway through the second quarter that we expect to substantially increase revenue in this quarter over the quarter ending March 31, 2019. Ali will be providing more information on the financial results for the first quarter shortly. I’ll now take a minute to provide you with some of the launch key performance indicators that we monitor on a daily basis to track our analytics. As of last Thursday, May 9, we had 409 LEMS patients that had been prescribed Firdapse by their physician. 380 LEMS patients are now active on Firdapse, 214 unique prescribers that have written at least one prescription. What is most gratifying again to me is the fact that there are now 81 unique patients that have been prescribed Firdapse during the past three months that previously did not have access to any form of amifampridine. Dan will provide more details on our commercial launch activities shortly. An important part of the successful uptake of the commercial Firdapse is building a great working relationship with the payers. We are pleased to report continued progress regarding reimbursement in our overall experience with payers. Along with Catalyst Pathways, I stated earlier, we continue to develop our patient and physician education programs. We have dedicated medical affairs team and MSL’s that are working diligently with both physicians and patients to educate them on the diagnosis, treatment, and experience with LEMS. We recently hosted a LEMS Firdapse Ambassador Fellows program in Dallas, in which neuromuscular fellows from 15 institutions came to learn more about the facets of LEMS disease, as well as the clinical benefits of Firdapse. We remain committed to these programs and we will continue to prioritize education of the entire LEMS community with patients and physicians. Our second priority is to continue the effort to advance our clinical pipeline and ongoing trials evaluating Firdapse in additional indications. In 2018, we enrolled our first patient in the Phase III MuSK-MG trial and expect top line results from that trial by the end of this year. We also have an ongoing Phase III study in CMS or Congenital Myasthenic Syndromes and our SMA Type three proof-of-concept study. Steve will speak further to the details regarding each of these programs. We’re looking forward to top-line results in each of these indications. Impending positive results, we’ll look to supplement our Firdapse label beyond LEMS to include these additional neuromuscular diseases. Our third priority is our effort to develop a longer-acting formulation of Firdapse. As we have stated previously, physicians and patients have expressed the need and desire for a formulation that is longer-acting and permits normal activities of daily living without the need to plan activities and medication dosing around the peaks of the effectiveness, typically which occur with immediate release medications. This work is in the early stages, but the project is beginning to take shape. We are very excited about the success of the initial launch and I am grateful for the efforts of all of our employees to bring evidence-based FDA approved therapy to the LEMS community. I’m especially proud of our full commercial team, as well as medical peers who are making this happen. I’ll now turn the call over to Dan Brennan, our Chief Commercial Officer, who will provide more detail regarding our commercial activities. Dan?

Thanks, Pat, and good morning everyone. I would like to reiterate Pat’s enthusiasm for the initial phase of our commercial launch of Firdapse. But first before getting into the commercial numbers and execution, I’d like to step back for a second on what we’re focused on in our commercial organization. There are over 1,500 patients diagnosed and suffering from this previously little known rare disease called LEMS, which is truly debilitating. These patients experience a loss of independence or loss of mobility and often a loss of their livelihood as they try to manage this illness and that is often after they spend years through the healthcare system, trying to understand their symptoms and obtain a firm and accurate diagnosis. The burden of LEMS goes beyond the patient to impact caregivers and loved ones as well. Those with LEMS are mainly adults who are working, often the breadwinners for their family and they get surprised out of nowhere with these debilitating symptoms. I’m proud to say that we’ve helped a great number of these patients, as you have heard from Pat, over 400 of those living with LEMS. We have worked hard to support and will continue to make great efforts to support them in a manner that recognizes the significant impact of LEMS and the anxieties of navigating a complex challenging healthcare system. Back in mid-December, we began describing our commercial priorities and goals for our commercial launch, which included instituting excellent services, programs and support to Catalyst Pathways and to ensure a comprehensive reimbursement access and approval with the majority of payers. Additionally, since then, we have laid out our strategic focus to help patients in three phases. First, commercial product availability to help transition patients on any investigational amifampridine formulations to Firdapse, starting on January 15 having no gap or lapse in therapy for these patients. Second, opening up commercial availability on February 4th to the approximate 1,200 remaining patients who had been diagnosed with LEMS in the past two years but did not have access or opportunity or awareness of amifampridine, but now we can make Firdapse available to them to treat the LEMS. And third, our intention to begin efforts to focus on the estimated 1,500 patients who are experiencing LEMS symptoms for the undiagnosed or misdiagnosed with other diseases such as MS, Parkinson’s disease, fibromyalgia, arthritis, ataxia, and in some cases which is really sad, patients are often led to believe that their symptoms are all in their head, they are getting old, out of shape, overweight or need to exercise more. These three groups are our current patient group focus areas and I’d like to provide an update on our phased approach and progress with these patient groups, along with the support that we provide them through Catalyst Pathways and ensuring comprehensive reimbursement coverage and access to the medication for them. On our last conference call in mid-March, we said that there were more than 300 completed enrollment forms for unique patients, patients receiving at least one Firdapse prescription. As of last week, May 9, to be exact, we have prescriptions and enrollment forms for 409 adult LEMS patients. We believe we have accomplished the first phase for our strategic focus by helping transition to Firdapse for those patients who are experienced with compounded or investigational amifampridine. We are not aware of one patient who has experienced an involuntary gap or lapse in therapy during that transition. We’d like to thank and appreciate the effort from the physicians and patients, as well as our regional account managers, medical science liaisons and our Catalyst Pathways team for their efforts in this transition. We continue to check in with those patients on a regular basis through Catalyst Pathways personnel and our field based patient access liaisons to ensure that things go smoothly and to make sure that their questions and concerns are addressed. Next, for those patients who were never aware or able to obtain access to investigational amifampridine over the years, who were not able to enter into our Firdapse clinical trials, we call these patients for the purposes of this discussion naive to amifampridine. In March, we mentioned that 39 naive to amifampridine patients were already enrolled, and as of May 9, that number has grown to 81 enrolled and prescribed LEMS patients. Many of these people living with LEMS have been waiting patiently for months or years to access Firdapse. When we make contact with these patients and physicians, they are eager and even excited to learn more about Firdapse. We share with them an initial dosing and titration schedule consistent with the package insert, which is not necessarily all that simple or intuitive, guide and support them through the insurance process, explain to them the risks, but also share with them the great results the patients have received in studies and in real life. They are often so appreciative of our efforts and many of them have offered to share their stories and experience with others. We believe we have made significant inroads to that second phase or strategic focus patient group. With this rate of new naive already diagnosed patients – while this rate of new naive already diagnosed patients will moderate as we get into the coming months and years, finding and helping these previously diagnosed LEMS patients, and their physicians will remain a priority and motivates us because we know these patients never had the chance over the past years to experience the product. Finally, in the next few months we will strengthen our efforts to educate physicians and provide diagnostic tools that will help physicians many of whom haven’t thought of Lambert-Eaton Myasthenic Syndrome since medical school or have never heard of it, and help their patients who are undiagnosed or misdiagnosed. In my experience with rare diseases and I have quite a bit of it, this is slow, hard work, a bit more investment intensive but very gratifying when the light bulb goes on and you can see and hear those patients respond and react to the product and the company. These last two groups will be the day in day out focus of our commercial targeting, educational awareness and patient support efforts in the coming months and years. We are encouraged with the breadth of physicians prescribing Firdapse and enrolling their LEMS patients in the Catalyst Pathways with 214 unique physicians who have to-date written a prescription for Firdapse. This strong response affirms the educational opportunity at the center of our commercial strategy. Our sales team has been an instrumental part of the strong results during this launch for Firdapse. They call on approximately 1,200 neurologists or neuromuscular specialists who have the high potential to have a LEMS diagnosed patient in the practice. On the last call, we mentioned that we had broken out these physicians into four tiers and we’re pleased to report that we have reached 80% of our Tier 1 and Tier 2 priority targets with our sales force and are on track to reach greater than 95% of them by the end of the second quarter to educate them or remind them about LEMS and raise awareness of Firdapse availability. The Catalyst Pathways patient services and specialty pharmacy delivery system has been a priority and has proven to be an integral part of the successful initial launch. As a reminder, Catalyst Pathways is our personalized support program which serves both patients and their families as they navigate the treatment journey and any challenges their journey involves. This includes care coordinators, insurance navigators and the important patient access liaisons or PALs that call and visit to provide one-on-one patient support across various topics ranging from providing disease education, product education or financial assistance programs. The PALs have extensive experience in clinical communications with patients as well as insurance navigation and it is great to see that the patients who have met with their PAL have really appreciated this level of personalized attention which often has greater level of interaction than phone calls from the care center and pharmacists. Our Catalysts Pathways program has been essential for transitioning patients on to Firdapse and we remain committed to the Catalyst Pathways program as even more patients begin their treatment journey with Firdapse. The other priority that I would like to touch on is the market access and reimbursement uptake for Firdapse. We reported last call that we had seen strong progress through market access and pleased to report that we have seen continued and additional positive coverage by insurers such as Express Scripts, Cigna, Caremark, Aetna, United Optum and Prime Therapeutics, and now Kaiser as well as the VA and TRICARE. We care about the patients ability to pay for this medication, and if they don’t have an insurance or are underinsured, they will be eligible for the very generous criteria into our patient assistance or PAP program or free medication. For those with insurance coverage and electing to utilize the financial support available to them, their average monthly copay in Q1 was $5.66 a month. We are pleased that this represents financial accessibility for LEMS patients to this important medication to treat their disease. We continue to do all we can to make this medication accessible to LEMS patients without the financial hardship that can be created by the copays or deductibles that their insurance inquires with them. You may have seen in our press release that there are 380 LEMS patients currently on active therapy with Firdapse. Of those 380 patients as of May 9, 306 are on insurer reimbursed prescriptions. This represents great initial coverage from insurance companies and I’m proud of our reimbursement team efforts in communicating the benefit Firdapse provides to these patients and encourage that insurance companies have quickly appreciated and responded to coverage requests from them. This is progressing much better than the 90 to 120 day delays that we expected and have seen from other medicines in their initial launch period. Finally, we remain committed to those patients who do not have insurance or underinsured or cannot afford their copay or deductibles. In the first three months of our launch, we have given away over 364 months worth of free bridge medication or patient assistance program medication which equates to over 38 patient years worth of free drug. We are not aware of any patient that was turned away from treatment unless they decided that they did not want to pursue the support available to them. And we look forward to continuing that level of commitment to help adult LEMS patients obtain this life changing medication. A final note. We continue to listen to patients in the community and patients that have been prescribed Firdapse in Catalyst Pathways. We aren’t perfect and no company is perfect in the launch of a new product, but we strive to listen and adjust to the needs or valid complaints of patient and physicians. We have heard from many patients that the blister packages that housed the Firdapse tablets are hard to handle, not easy to utilize when they have multiple medications to take another feedback. We were proud of the blister sleeve package design we came up with, but the patients in the end are the ones that direct our decision on what works and it turns out when you have weak hands and fingers, the design we came up with needed to be adjusted and patients will now have the option of packaging in bottles. We worked as quickly as we could to make bottles available and patients can now choose for their next prescriptions, whether or not they want to continue to receive blister sleeve packaging or bottles. This is just one example of the listening and nimbleness that we can provide as a small focused company to help align to LEMS patients need. In closing, we continue to inform, educate and support the entire LEMS community, including their payers. We are proud to work closely with these patients, families, caregivers and physicians to navigate their entire experience, beginning from diagnosis to initial treatment and initial – and in insurance navigation, and finally in experiencing the effects of treatment on their daily life. We are happy all of the resources that – we are happy with all of the resources that we have been able to provide the community, but more importantly, we’re pleased with all of that the LEMS community has taught us about what they feel is important to them as they navigate through this rare disease. We’re encouraged by the enthusiasm and support that we have received from the community and we’re motivated by each of the stories we have heard from these patients. We are most thrilled to hear about the positive impact that Firdapse is having on their lives and the positive experiences that these patients have been having with Catalyst Pathways programs. We look forward to getting to know the LEMS community even better, learning more about how we can make their experience with Firdapse even better, and then hopefully make Firdapse available to more and more people with neuromuscular diseases as we study its potential benefits in patients with other rare diseases and indications. And with that, I’ll turn it over to Steve.

Thank you, Daniel, and good morning everyone. As Pat mentioned, we are pleased with our launch while remaining focused on our clinical development plan for additional neuromuscular indications for Firdapse. I would like to remind everyone that when we submitted our NDA for Firdapse for launch, we decided not to include an indication for CMS. By doing this, we sought to simplify the NDA review process and allow for a timely approval for Firdapse to launch. However, we currently have a Phase III trial ongoing in CMS. We expect to report top-line results from that trial in the second half of this year. And in completion of this trial, we anticipate filing a supplemental NDA to the FDA for CMS in 2020. There are currently no approved therapies for off label alternatives for the treatment of CMS. So we are excited about potentially bringing this important treatment option to these patients. In addition to CMS, we also have an ongoing Phase III trial for MuSK-MG. This trial is currently enrolling across about 30 trial sites in the U.S. and Europe, and the trial follows a successful proof-of-concept trial that completed in 2017. The proof-of-concept trial demonstrated clinical improvement with statistical significance and multiple assessments and we look forward to seeing the top-line results from this Phase III trial in the second half of this year. As a reminder, the study is being conducted under a Special Protocol Assessment Agreement or SPA with the FDA. Again, having positive results for this Phase III study, we look forward to filing a supplemental NDA to our approved label for Firdapse to include the additional indications for MuSK, myasthenia gravis. Our third clinical program that we are focused on is Firdapse for the treatment of Spinal Muscular Atrophy or SMA Type 3. We recently enrolled the first patient in this trial and we expect top-line results in the first half of 2020. As we have discussed, we have been transitioning our LEMS patients from our Expanded Access Program, but we continue to support the patients in this program as Firdapse is still being studied in CMS. In patients with CMS, the Expanded Access Program provides these patients access to amifampridine phosphate free of charge that the patients have no other treatment option and their physicians believe this is the proper treatment for them. We remain committed to supporting these patients and their access to an appropriate treatment. We also are working diligently to ensure that there are always adequate uninterrupted supplies of medication so that we can provide Firdapse to every patient that needs it. We work hard to make sure that there are no unforeseen interruptions to medication and maintain an inventory of tablets to ensure we always have medication available for patients in need. When we focus on these clinical programs, we also are in the early stages of developing a longer acting formulation of Firdapse in order to provide a better treatment alternative for patients that will integrate well with their daily activities. We're working to develop a formulation that provides optimum level of efficacies throughout the day and through the night in order to optimize patient performance of the drug. I will now turn the call over to Ali Grande, Chief Financial Officer, to review our financial results.

Thanks, Steve. All references to per share in this call refer to basic and diluted shares. On Friday May 10, we filed our Quarterly Report on Form 10-Q for the first quarter ended March 31, 2019, in which we reported a net loss of $645,000 or $0.01 per share for the first quarter of 2019 as compared to a net loss of $5.7 million or $0.06 per share for the first quarter of 2018. For the quarter ended March 31, 2019, net product revenue from the launch of Firdapse during January 2019 was $12.4 million. Related cost of sales for the same quarter were $1.7 million. Research and development expenses were $3.3 million for the first quarter of 2019, in line with the comparable quarter of 2018. Research and development expenses for the first three months of 2018 primarily consisted of expenses in medical, regulatory affairs and quality assurance program, as well as expenses from our Firdapse clinical trials and studies, and our Expanded Access Programs. Research and development expenses in the comparable period in 2018, primarily consisted of consulting expenses as we prepared to submit our NDA for Firdapse for the treatment of LEMS during March 2018, as well as expenses from our Fridapse clinical trials and studies and our Expanded Access Program. The Company expects that the costs related to research and development activities will continue to be substantial throughout 2019 as we continue our ongoing clinical trials and studies in the MuSK-MG, CMS and SMA Type 3 and our Expanded Access Program for Firdapse. Selling, general and administrative expenses for the first quarter of 2019 totaled $8.4 million as compared to $2.7 million in the first quarter of 2018. The increase when compared to the same period 2018 is primarily due to increased selling expenses, including cost of our sales force and supporting personnel, product launch expenses, patient support programs, market access and market research expenses. The Company expects selling, general and administrative expenses to increase in 2019 as we continue to build up our infrastructure and commercial and patient programs in support of Firdapse sales activities in 2019. At March 31, 2019, Catalyst had cash and investments of $50.6 million and no funded debt. Although there can be no assurance, based on current available information, we believe that these resources will be sufficient to support our planned operations for at least the next 12 months. More detailed financial information and analysis may be found in the Company's annual report on Form 10-Q, which was filed with the Securities and Exchange Commission Friday, May 10, 2019, and can be found on the Investor Relations page of our website at www.catalystpharma.com. I will now turn the call back to Pat.

Thank you, Ali. I'd like to continue to reiterate how pleased we are with our initial launch results, while remaining cautiously optimistic as we know a lot of work lies ahead. We will continue our work to better understand our patients and their needs in order to refine the patient experience. We look forward to providing additional information regarding our advisors' assessment of the Jacobus pediatric approval, as well as our progress in other areas of our business. This ends the formal presentation. I'll now turn the call over to the operator for questions.

Thank you. [Operator Instructions] Our first question is from Charles Duncan with Cantor Fitzgerald. Please proceed.

First of all, congratulations on first quarter of launch and execution on that. Secondly, thanks for taking my questions. I had a couple of them, a little bit surprised by the 81 new patients – surprised and impressed. And I guess I'm wondering, if you think that some of those patients were newly diagnosed patients or are they mostly patients that were known to have been previously diagnosed with Firdapse – or with LEMS, excuse me, and then were not able to get the drug either in the Expanded Access or in other ways?

Yes, I'll turn that call – that question over to Dan, Charles.

Charles, yes, I think there's a mix, a majority of them have been diagnosed and had been aware of or awaiting but just hadn't had access to clinical studies or to a site that was providing amifampridine previously. But we do also know of many patients that are newly diagnosed as well and a lot of the attention that's been generated around our entire launch has brought, we know, phone calls even into our office here. People like saying, you know I think I have these symptoms, how can I learn more about LEMS and we get them in touch with their doctors. So, I think it's a mixm but it predominantly thus far has been people that had already had a diagnosis. We're not accessing our drug and perhaps were on mestinon steroids in many cases and are happy to be switched over to Firdapse.

And then perhaps as a follow-up and this may be difficult to answer, but have you -- just take a shot at it. If you think about the difference between the number of patients that had access to the drug and the possible incidence and prevalence of LEMS, do you think that that difference is driven by under diagnosis primarily or lack of access and insurance coverage to the medication previously, or is it really driven by a lack of clear evidence based dosing information that's based on published clinical data?

Well, again, I think we've shared before that we've done a pretty exhaustive claims data analysis, and in the most recent two years of claims data from a very good source, we saw approximately 1,500 patients that have been diagnosed. So the patients that are diagnosed with LEMS are out there, and they're suffering as I mentioned and it's sad to know that they're out there without a medication like this. But we know from the claims data that they're out there. But we also know from stories and even some of our own experience right now that they are also the undiagnosed and misdiagnosed with other diseases and many of these patients have been going from doctor to doctor with different diagnoses that are sometimes close and sometimes way off. And ultimately, we know that many of these patients will get the proper diagnosis. We're going to be educating and helping, provide diagnostic tools to neurologists. We were just at AAN, we had a good number of physicians come by our booth and say that you know what, I do have LEMS patients or I was thinking that this might be LEMS and so we see a tremendous opportunity to educate on both sides of that – for both the ones that are already diagnosed as well as ones that are yet to be diagnosed.

Okay, that's helpful. My last question is regarding the progress with payers. It does seem like you're getting traction, I think, you mentioned 306 patients of 380 that have some insurance coverage. And I guess, I'm wondering what has been the feedback with regard to payors? Do they appreciate the burden of disease relative to the pharmacoeconomic value that Firdapse can create for those patients? And then the last question regarding that is would you expect reimbursement policies that are established for adults to also cover pediatric approved only drug?

Yes, the initial positive response from payers does go in line with when we had a lot of our conversations with them before launch and it's very much in line with those conversations then when they understand what this disease is, they do realize the debilitating nature. They see a lot of these patients are on a bunch of different prescriptions that they're hoping are going to work, a lot of them are on IVIG, or plasmapheresis, or even other kind of a hard and challenging medications that have no proof. And so I think when they hear FDA approve, they understand how it works, they realize that patients will know quickly whether or not they're going to respond and they combine that with a debilitating disease like this, they say this makes sense. And we've seen that in action and it's gone very quickly compared to any expectations we would see from coverage, from payers across other medications, especially orphan medications when they first come out. As far as your second part of your question, we don't – I've never seen before a policy that where insurance company puts something that's off label on to a formulary or policy, but we'll see how that plays out. I don't know, Pat, if you want to provide any color on that.

Yes, Charles, we're trying to get our arms around them now and we're fully assessing this and we're not ready to comment on that beyond what Dan said.

Okay, thanks. That's helpful. I appreciate all the granularity in terms of how things are going so far. I'll hop back in the queue.

Thank you, Charles.

Our next question is from Joe Catanzaro with Piper Jaffray. Please proceed.

Hey guys, thanks for taking the question. Just a few from me. I just wanted to follow-up maybe on the naive population. It sounds like patients are being – those type of patients are actively reaching out to you guys. But I was wondering if there's work you guys are doing on your end to go out and find these LEMS patients who are naive to amifampridine? And maybe if you could just speculate on how many naive patients you expect to have by the end of the year, see you at 81, maybe just think about how that number grows moving forward?

Okay. So yes, there's a number of different ways that we're aware of in targeting education efforts for those naive patients. I mentioned before we have Tier 1 to Tier 4 physicians out of those 1,200 neurologists and neuromuscular physicians. Our Tier 1 and Tier 2s are physicians that are known to have seen in this most recent two years worth of data. They're known to have seen at least one LEMS diagnosed patients. And so we're actively going out and talking with those physicians. We have a great sales force, very experienced rare disease sales force, and in some cases, they know in rare diseases you'll have one physician that was associated with the patient and they realize, well, no, actually I don't treat that patient but it's so and so down the street or in this other office and it's investigative work, but these physicians or these sales reps are experienced in tracking down these physicians to educate them to make them aware that a product is now available, and in some cases these physicians because it is so rare, they forget that they forget in some cases what LEMS is, but much less that they have a patient in their practice. And so it's a lot of work from the sales force, but we also send out digital means, and emails and targeted communications to these physicians in their offices and other ways and we've seen that as being fruitful thus far as well. So a number of different ways that we can try to raise the awareness, and in some cases, educate and reeducate these physicians that they have a patient with LEMS in their practice.

So, Joe, the second part of your question about the guidance on number of naive patients by the end of the year. As we stated earlier, we're just not in a position to comfortably make an estimate of that number as the year progresses and we have more experience and data. I think we'll be comfortable in talking about what our goal is for the year, but we don't have that at this point.

Okay, great. So maybe my next question, I appreciate it's only been a few days since the Jacobus approval and that you guys probably can't speak too much to it. But maybe just a question around your interactions with the FDA, I was just wondering, when you applied did the FDA or you guys ever bring up the potential for a pediatric label? And if I look at your FDA approval letter, it specifically states in there that because of your Orphan Drug Designation, you're exempt from having to test the efficacy, and safety and the claims indication in pediatric patients. Just wondering how you guys read that wording?

Joe, we've been advised not to comment on that at this point, and we're again doing a full assessment with our regulatory and legal counsel. And just not prepared to talk about that at this point. We think over the coming days we will be able to elaborate further on questions like that.

Okay, fair enough. Maybe just one more, would you be able to point to anything similar where the FDA has approved the drug for pediatric indication the way they did for Jacobus or if there's any specific cases that have been litigated that you can point to?

Joe, we've not at this point.

Okay. Okay, thanks. That's all I have.

Okay. Thanks Joe.

Our next question is from Edward Nash with SunTrust Robinson Humphrey. Please proceed.

Hi, good morning guys. Appreciate you were taking my call. I wanted to ask, first of all, could you give us an idea of what the gross to net was for Firdapse in the first quarter?

Yes, I don't think that we've elaborated on that in our 10-Q, but I don't think we have an issue discussing that, Dan.

No. I think originally we expected somewhere in the 15% to 20% range. We're seeing that it's on the low end of that and actually is even lower in the first quarter, but we do expect that to increase over time for a variety of different reasons, including 340B coming in potentially, more Medicaid patients. So we're definitely on low end of that, and we're going to keep an eye on that and we'll update that throughout the remainder of the year. But we're very comfortable with our initial estimates.

Okay, great. Thank you. And in your 10-Q that you filed on Friday, you mentioned the Company is taking steps to seek approval for Firdapse from candidate. Could you let us know what the timing for a filing or potential approval would be there for Canada.

Edward, we will have more to say about that. For competitive reasons, we're going to be a bit guarded on some of the things we talk about going forward. So -- but the initiative is under way at this point I can say that.

Great, understood. And my last question is with regard to, you might have mentioned this, what percent of patients are currently unable to obtain coverage despite having insurance?

I don't want to get into all the granularity, because there's different levels of not obtaining insurance, there's initial benefits investigation and then you go through your PA and appeals and in some cases – and we're working through all of these different cases and types of cases. But probably the easiest directional answer I can give to you is, the difference between that 380 patients that are active on treatment and the 306 that I mentioned that are receiving insurance reimbursed prescriptions in there are people that are on this bridge therapy. So they're on therapy and they're working through the PA process and also in some cases appeals, but also when there are patient assistance programs patients who have already received the final determination that their insurance company may not approve the treatment. So there's a mix. I don't want to get down into, because it moves around quite a bit, but your best guide there is the difference between the 380 and 306.

Okay, great. Thank you. And I didn't say it before, but congratulations. Really outstanding first quarter.

Thank you, Edward.

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

Good morning, Pat. Thanks for taking my questions and congratulations as well.

Thank you, Leland.

Yes, in terms of the patient numbers with a 380 active, 409 prescribed and I think the guidance earlier maybe that was a number that wasn't completely well-defined, but about 300 who were on previous forms of 34-DAP, whether under your program or other. It would seem that you effectively converted all or just about all of the prior patients. I know you've guided to end of Q2 conversion, but it seems like that's pretty much complete. Is that correct?

Yes.

Okay great. And then just along the same lines, you had mentioned agreements that you'd entered into with some of the centers, the academic centers that had been providing amifampridine before. Any updates on those agreements or other relationships?

No nothing there.

Okay. Well, that's all for me. Thanks very much and congratulations again.

Thank you, Leland.

Thank you.

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

Thank you, operator. And thank you to everyone who joined us on today's call. As always, we appreciate your continued support of Catalyst. We'd like to thank all of our shareholders, employees, and most importantly, our patients and physicians. Have a great day.

Thank you. This concludes today's conference. You may disconnect your lines at this time and thank you for your participation.