Hello and welcome to the Catalyst Pharmaceuticals Second Quarter 2020 Results Conference. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to Ali Grande, CFO. Please go ahead.

Good morning, everyone, and welcome to today's conference call. Joining me on today's call are members of the Catalyst team, including Patrick McEnany, Chairman and Chief Executive Officer; Dr. Steven Miller, Chief Operating Officer and Chief Scientific Officer; Dr. Gary Ingenito, Chief Medical Regulatory Officer; and Jeffrey Del Carmen, Chief Commercial Officer.

Thanks Ali and thanks everyone for joining us this morning for our second quarter results and business update call. I hope that everyone is staying safe and healthy during these unprecedented and challenging times. We have a number of items to update you on this morning. I will start with how pleased we are with the second quarter financial results that were achieved. Despite operating under very difficult conditions in the COVID-19 environment we managed to generate $29.6 million in net revenue and net income of $9.8 million which included a non-cash stock-based compensation expense of $1.8 million. Additionally, we ended the quarter with $115.1 million in cash and cash equivalents and no funded debt. Ali will provide you with more financial details in a few minutes. I want to emphasize how proud I am of our team's ongoing effort to demonstrate their steadfast commitment to the patients that we serve. They have shown a remarkable resilience and ability to continue to expand the number of patients benefiting from products to treat their LEMS condition. COVID-19 continues to make it difficult for patients who may have LEMS and have not received a definitive diagnosis from their physician because of their inability to schedule or concerns about in-person meeting with their physician. That has had an impact on the number of patients enrolled in Catalyst pathways. As we have previously anticipated travel for our sales representatives to physicians’ offices continues to be mostly restricted by the pandemic. Having said that our base of adult LEMS patients remain solid and intact as we add new patients albeit at a slower pace than we projected before the pandemic. We are resolute in our decision at the beginning of this year to double our field sales force and to add our inside marketing support team to assist Catalyst outreach to physicians and patients suffering from LEMS. When the effect of the COVID-19 pandemic are behind us I believe that we will see that we are well-positioned the company for our future growth. Jeff will provide you with more details on our commercial operations momentarily.

Thank you Pat and good morning everyone. I'm very excited about the opportunity to lead the Catalyst commercial team and continue the success that we've had since launch. As we previously shared COVID-19 has impacted certain aspects of our commercial business. However, we continue to drive key areas of our business forward. In mid-march we announced the suspension of all travel, face-to-face interactions to ensure the safety of our team, our patients and all healthcare professionals.

Thanks for the commercial update Jeff. I will now provide an update on our clinical pipeline to develop Firdapse for additional neuromuscular indications. First I will turn to our phase 3 clinical trial results for MuSK MG to evaluate the safety, tolerability and potential efficacy of Firdapse for the symptomatic treatment of these patients. Yesterday we announced top-line results from our phase 3 clinical trial MSK-002 evaluating Firdapse for the treatment of adults with MuSK MG. As Pat previously stated based on our review of the top-line data from the trial statistical significance for the primary endpoint of Myasthenia Gravis activities of daily living score or MG-ADL was not achieved nor was it achieved for the secondary endpoint of quantitative Myasthenia Gravis score or QMG with p-values of 0.22 and 0.37 for each of these endpoints respectively. This trial was a multi-site international trial conducted in the United States, Italy and Serbia. It was double-blind placebo-controlled clinical trial conducted under a special protocol assessment with the FDA. The trial enrolled more than 60 MuSK antibody positive patients. It also enrolled more than 10 anti-acetylcholine receptor antibody Myasthenia Gravis or AChR-MG patients who were assessed with the same clinical endpoints. However, achieving statistical significance in this subgroup of patients was not required by the protocol. Additional details of this trial are available on clinicaltrials.gov.

Thanks Steve. Yesterday we filed our second quarter 2020 form 10-Q and reported GAAP net income of $9.8 million or $0.09 per basic undiluted share compared to GAAP net income of $11 million or $0.11 per basic and $0.10 per diluted share in the same period of 2019. For the second quarter of 2020 non-GAAP net income excluding $1.8 million of expenses related to non-cash subjects compensation was $11.6 million for $0.11 per basic undiluted share. In comparison second quarter 2019 non-GAAP net income excluding 925,000 of expenses related to non-cash stock-based compensation was $11.9 million or $0.12 per basic and $0.11 per diluted share. Net product revenue for Firdapse was $29.6 million for the second quarter of 2020 with related cost of sales of $4.1 million. For the second quarter of 2019 net product revenue from Firdapse was $28.8 million with related costs of sales in the quarter of $4.3 million. It's important to remember that our gross margins in both the 2020 and 2019 periods continue to benefit from the inventory manufactured and expense prior to the FDA approval of Firdapse. Research and development expenses were $4.3 million for the second quarter of 2020 as compared to $4.6 million for the second quarter of 2019. Research and development expenses for the second quarter of 2020 were in line with those of the second quarter of 2019 and primarily consisted of expenses for medical and regulatory affairs or quality assurance programs expenses from our ongoing Firdapse clinical trials and studies and costs for our expanded access programs. We expect that research and development costs will continue to be substantial in 2020 as we continue our ongoing clinical trials and studies in MUSK MG and SMA Type 3 continue our expanded access program and our long-acting formulation program for Firdapse.…

Thanks Ali. I just want to reiterate how pleased I am with the operational results that our team has realized during 2020. We look forward to continuing our effort to assist adult LEMS patients and their treating physicians to find their way to an FDA approved therapy for this debilitating disease. We will continue our efforts to study Firdapse for other rare neuromuscular conditions that are without an effective therapy as well as advancing our work on a more patient-friendly long-acting formulation of Firdapse. This morning's announcement regarding the notice of allowance for our pending patent is very important as we continue to invest in Firdapse as a potential therapy for other rare neuromuscular conditions. Lastly we are excited to see our global footprint expand as we gain approval in Canada and continue our efforts to prepare to seek approval in Japan as well as our concerted effort to bring other molecules and/or companies under the Catalyst umbrella. And with that we'll open the line for questions. Operator?

Thank you. We will now be conducting the question-and-answer session. Our first question today is coming from Charles Duncan from Cantor Fitzgerald. Your line is now live.

Thank you. Good morning Pat and team. Thanks for taking our questions and congratulations on the commercial performance during this very challenging year.

Thank you Charles.

I had a couple of questions on the commercial side and then one on the pipeline in the future. With regard to the net revenue impressed with that given the challenges of COVID but I'm wondering if you could deconvolute that a little bit and talk about the impact of new patients versus persistence and was there any pricing action in the quarter and then I wanted to ask you to follow up regarding the size of the sales force.

Sure. Jeff, you want to take that?

Yes. No problem. As far as new patient enrollments for the quarter we're not giving out exact numbers but they were slightly lower than we had forecasted but the positive side is we really focused on patients that were already diagnosed but not yet on Firdapse and we have a strong analytics team here that provides us those leads and our sales force goes out there and has those discussions with the physicians and however that physician in the offices want to engage, we are ready to go with virtual engagements or live face-to-face if that city or that institution allows. And so that's where we've been able to help those patients get enrolled is by identifying those patients and as far as the discontinuations like I mentioned Charles we significantly stabilize the discontinuations and we're seeing about 15% of the patients now, the 90 day patients that are discontinuing. So we had a strong month, quarter on that side as well.

Charles, let me just add that. We did gain new patients in second quarter and without being specific as you know is a challenging quarter and we did say when we had our Q1 results call that we were withdrawing guidance because we just didn't know what was going to happen the rest of the year and we're pleasantly surprised that new patient enrollments did grow albeit not at the pace that we had predicted early in the year when we gave guidance but more patients are continuing in Q2 and so far in Q3 to have new naive patients having access to an FDA approved therapy in Firdapse and with regard to pricing there was no in Q2, there was no or actually this year there's been no change in price of Firdapse.

Okay. That's helpful, Pat and to Jeff. I really appreciated all the operating metrics that you shared. Regarding the size of the sales force, do you feel like it's right size now and I guess the 2Q results nice to see but do you feel like the sales force was fully operational there or is it really going to be perhaps a second half of the year impact where we see them being able to get out and talk to new prescribers or deepen the prescriber interactions?

Jeff?

Charles fantastic question and the first thing that I'll stress is we have not seen the full impact of our expansions. We hired such experienced sales representative, regional account managers we call them here. And we do feel this is right sized and we feel that like I mentioned that there is a pent-up demand and the reason why they are still making or providing value is because we find leads, whether it's from inside sales, whether it's from non-personal promotions but ultimately the regional account managers that are reaching out to the healthcare providers to discuss Firdapse and if it's appropriate for that patients and that's how the patient ultimately gets enrolled. So we are seeing the benefit. We feel the team is right-sized and we are excited about the future because we know we have yet to see the full impact that this team will have once the country opens up.

Let me just add to that Charles, as you know early this year we basically doubled the size of our field sales force. We brought on board an inside marketing support team that assists our RAMs, our regional account managers and so that that was completed actually in February and early March and of course we all know what happened in March with the no travel ban or with a travel ban I should say. And so yes it's been challenging and difficult because let me tell you these regional account managers want to get out there and they want to assist patients and finding an approved therapy and so it's been challenging because the meetings for the most part have been virtual they've been on Teams or Zoom or just telephonically and what's exciting is that this very seasoned team is in place. As things turn around we're going to really see the traction that we gain by doubling that sales force and bringing on board the inside marketing support team.

That makes a ton of sense. If I could just ask one question on the pipeline either for Steve or Gary. I guess I'm thinking about that MuSK MG result and I'm a little surprised as well given the randomized withdrawal protocol design and I think you said there's an average of a five-point improvement during the first part of it in the run-in phase of the study. So I guess I'm wondering if you've been able to take a look at patient-level data and if you've identified any outliers or patient heterogeneity that would cause you to think about this result as being perhaps not the result of an ineffective drug but the result of a trial that was somehow confounded and then what you would see as potential next steps if the latter?

Thank you for the question, Charles. As you point out the data is somewhat paradoxical with what appeared to be a good clinical improvement during run-in but yet lack of statistical significance in the randomized portion of the clinical trial. This is top line data that we've only received a few days ago. We haven't had time to go through all the patient data in detail. Our analysis is ongoing and part of that analysis once we work through it will also be to meet with our key opinion leaders for us to try to get a better understanding of exactly what happened in this trial and once we have a clear understanding both among ourselves and our key opinion leaders we will be deciding on what the ultimate future of the program is.

Okay. Last question for Pat, sorry for all the questions, congratulations on the new IP. I'm a little surprised about that because I don't think we've ever really talked about that perhaps I've overlooked it in our diligence in the past but I'm kind of wondering what are the key claims or anything in particular that you could highlight about that and do you feel that this particular patent has if you will some resiliency in terms of any challenges and does it change your perspective on investing in the Firdapse franchise?

So Charles, right now we can't speculate on how it may affect any particular company or program other than we believe that our patent is strong and will be very enforceable against any potential generic competition. With regard to the claims maybe Steve can give you a high level look that notice of allowance in the patent claims are listed by the way. So Steve?

Well, as we said in our press release the claims are centered around the method of use of the drug to treat that sensitive disease in patients that are slow acetylators that have certain defects to the allele that codes for the acetyltransferase Type 2 gene. At this point, I can't comment on any strategies or how we might actually implement the defense of those claims but we feel that overall it's a useful patent and we do intend to ensure that to the degree that it makes sense to defend our intellectual property.

Thanks for taking all my questions. Congrats on the quarter.

Thank you Charles.

Thank you our next question today is coming from Joe Catanzaro from Piper Sandler. Your line is now live.

Hi, this is Charles on for Joe. Thanks for taking our questions. My first question is just around guidance and whether, if or when you would plan on reissuing 2020 guidance?

Yes. That's a great question, Joe. Thanks for the question. When I think that when we get more comfortable with what the rest of this year is going to look like, hopefully this pandemic will be for the most part behind us by the end of next year or early Q1 or Q2 of next year but it's still too early for us at this point to provide guidance or actually be able to state when we will be able to provide guidance again just based on the fluid nature of this disease and the pandemic. So at this point we're not prepared to say when we will be able to provide guidance.

Okay. Got it. And just looking for some quantitative Firdapse metrics. Would you be able to say the total existing reimburse patients on therapy at the end of the quarter?

Will we be able to say that?

Yes. Are you able to able to provide the number of total reimbursed patients on Firdapse at the end of 2Q?

Yes. We've, just some of these metrics that we've provided early on were very important as we launched the drug and we in the past two quarters we have pulled back on providing all of the metrics that we previously provided and feel that the variance from quarter-to-quarter can be too much emphasis on a particular metric. So we're more comfortable with giving guidance that the number of enrolled in patients on drug, reimbursed drug is growing and that's about the extent of the guidance that we're prepared to provide or the metrics that we're prepared to provide at this point.

Okay. I understand and to the extent that you're able to talk about the MuSK MG data in any detail at this point? I'm just wondering where exactly the trial failed in the randomized portion? Was it more that the placebo scores didn't change or that the Firdapse scores in MG-ADL didn't hold steady and then what could a potential path forward look like?

Joe, it's a little too early for us to give any details about how the specific response came out in the two treatment arms of the study. We're still analyzing all the data and we will have more to say about it in the future after we completed the analysis.

Okay. Thanks and just a last question on the patent. Could you explain in some greater detail, how exactly a patent covering the slow acetylating phenotype for NAT2 translates to broad patent exclusivity for using 3,4-DAP in those patients, I guess in LEMS and potentially indications beyond LEMS?

Joe, you are asking a question about the legalities of enforcing the patent and I just can't comment on it.

Okay. Thanks for taking my questions.

Thank you Joe.

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

Hi, good morning. Thanks for taking my questions and good to see the execution during the challenging quarter. Pat, I have question on just as you have the discontinuation rates, we understand this correctly when you mention 15% or so with the 90 day discontinuation rates, does that include patients who are switching off to Ruzurgi or is it simply patients who have discontinued 3,4-DAP therapy and with regard to switches to Ruzurgi are those patients primarily patients who had been on Ruzurgi and then went on Firdapse going back or is it also a mix of new patients who haven't been treated going on Firdapse but then for whatever reason opting to go on Ruzurgi and I have a follow-up. Thank you.

Sure. Jeff do you want to take that question?

Sure. The 90-day discontinuation rate of 15% does include Ruzurgi. Any patients that discontinue to go to Ruzurgi.

Okay.

And Leland your other question, could you repeat that second part of it?

Yes. So we have sort of a handle on switches from Firdapse and want to understand if the patients who are switching from Firdapse. are those patients who have previously been on Ruzurgi and or for different reason going back on or is it new patients coming on to therapy for the first time, who may want perhaps dosing flexibility that Ruzurgi provides just so we understand what the components of switches are going forward as more patients, as the mix shifts to more patients who had not previously been on any 3,4-DAP formulation. Thanks.

Sure. So the new enrollments that we are getting right now none of those patients I mean in the first quarter we saw a couple of patients that had, that were all previously on a 3,4-DAP but since the first quarter we really haven't seen any patients new enrollments that were on 3,4-DAP, so what we call naive patients. So naive to 3,4-DAP those are the patients that we've seen that are newly enrolled.

Okay. Thank you. And then questions just on the Japanese opportunity. Would you be able to help us understand what the potential patient population with LEMSD that's treatable with Firdapse would be and any timelines you could share on when you might be able to be approved there. Thank you.

Sure. With regard to the patient population, Japan is about 40% of the U.S. population and there is advanced industrial economy and so the patients have access to medical care just like Western Europe and the United States. So I would anticipate that you can just use about 40% of the U.S. numbers to model Japan. With regard to timelines it's too early for us to say we haven't disclosed anything publicly about overall timelines at this point.

I might add that we do expect orphan designation and that would come with a priority review. So there is an interest by MHLW to get this drug approved as quickly as possible for the Japanese population.

All right. Great. Well, thanks very much for taking the questions and congratulations.

Thank you, Leland.

Thank you. We've reached out of our question-and-answer session. I'd like to turn the floor back over to management for any further closing comments.

Thank you very much for joining us today. We look forward to future calls. Have a great day. Thank you.

Thank you. That does include chase teleconference webcast. You may just connect your line at this time and have a wonderful day. We thank you for your participation today.