Good day, ladies and gentlemen and welcome to the Catalyst Pharmaceuticals Incorporated Third Quarter 2022 Financial Results Conference Call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Ali Grande, Chief Financial Officer. Ma’am, the floor is yours.

Good morning, everyone and thank you for joining our conference call to discuss Catalyst’s third quarter 2022 financial results and corporate highlights. Leading the call today is Patrick McEnany, Chairman and Chief Executive Officer. We’re also joined by Dr. Steven Miller, our Chief Operating Officer and Chief Scientific Officer and Jeffrey Del Carmen, our Chief Commercial Officer. Further for the Q&A session, we will also have Dr. Gary Ingenito, our Chief Medical and Regulatory 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 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 may prove not to be accurate, especially in light of the continued effects of COVID-19. Actual results may vary from the expectations contain in our forward-looking statements. The forward-looking statements should be considered only in conjunction with a detailed information contained in our SEC filings, including the risk factors described in our 2021 annual report on Form 10-K. At this time, I will turn over the call to Pat.

Thanks, Ali. Good morning, everyone and thank you for joining us today on our third quarter 2022 financial results and corporate update call. We are incredibly proud to report our outstanding third quarter financial results, which marks another consecutive quarter of Firdapse’ revenue growth and an all-time high recorded quarterly net product revenue of $57.2 million, representing a 59.3% increase over the third quarter of 2021. We reported GAAP net income of $22.7 million for the third quarter of 2022 or $0.22 per basic share, and $0.20 per share – per diluted share, which also reflects a $4.6 million charge in the third quarter related to the accounting treatment for the write-down of the Ruzurgi inventory, and the amortization expense related to the acquisition of certain assets from Jacobus Pharmaceutical Company. Our non-GAAP net income for the third quarter was $28.6 million or $0.28 per basic share, and $0.26 per diluted share. Non-GAAP net income removes from our GAAP net income. Our non-cash stock-based compensation and depreciation and amortization and our income tax provision. Ali will have much more to say about the accounting treatment and the impact on our P&L as a result of the acquisition of certain Jacobus assets during her presentation. We entered the fourth quarter with further confidence that we are on the right path to achieving our 2022 objectives and goals. In the month of October, we matched our best month for new enrollments in Catalyst Pathways. And as a result, we’re revising upward, our full year 2022 Firdapse revenue guidance to $205 million to $210 million. Our 2022 financial guidance for cash OpEx of $65 million to $70 million remains intact and will exclude the impact of any strategic acquisitions. Our cash position continues to grow as we entered the third quarter of 2022…

Thanks, Pat and good morning, everyone. We are pleased with the tremendous results delivered in Q3, building upon the momentum from the first half of the year. Q3 Firdapse’ net sales were $57.2 million, which represents 8% growth quarter-over-quarter, and 59.3% growth quarter versus the same quarter last year. I’m proud of the ongoing flawless execution demonstrated by the entire commercial organization. Q3 results reflect continued strong organic growth. New enrollments exceeded forecasts, resulting in 85% more net new patients in Q3 than Q2. Additionally, the discontinuation rate of reimbursed patients in Q3 was 35% lower than Q2. Operational excellence maintain favorable access to greater than 90% across all payers, government or private commercial ensures continued high compliance of greater than 90% and contributed to an annual discontinuation rate of less than 15%. Patients enrolled in Catalyst Pathways, including those who are covered by Medicare and accessing foundation assistance, had an average co-pay of less than $2 per month. As Pat mentioned, we have raised our total revenue guidance to between $205 million and $210 million. We are confident that we will continue to sustain organic growth moving forward, primarily driven from new patient enrollments of already diagnosed LEMS patients not yet on Firdapse, as well as the significant number of patients that are unfortunately misdiagnosed or undiagnosed. Leading indicators thus far in Q4 are very positive. October naive new patient enrollments matched our highest total post launch, while discontinuations were lower than forecast. Our targeted marketing strategies enable us to maintain close to 500 leads that are diagnosed LEMS patients not yet on Firdapse, as well as educate healthcare providers, patients and caregivers about LEMS and Firdapse. Focus on these leads results in approximately 50% of new enrollments each month, and accelerates the opportunity for these LEMS patients to…

Thanks, Jeff. Our clinical and regulatory strategy for Firdapse continues to focus on expanding access to all patients for the treatment of LEMS and enhancing the Firdapse patent estate to maximize its commercial life. I will begin by discussing the recent approval of our supplemental new drug application for Firdapse seeking to treat pediatric LEMs patients. During the first quarter of 2022, we filed this supplemental NDA and I am pleased to report that it was approved by the FDA on September 29th of this year. With the approval of the supplemental NDA, all pediatric patients aged six and above and all adults will now have access to Firdapse as an FDA approved product to treat their LEMS in the US. However, as Pat mentioned, the pediatric LEMS patient population is a very small patient group with the total US population estimated to be less than 30 in the United States. Next, in July of this year, we acquired two new patents from Jacobus Pharmaceutical that further bolster our intellectual property portfolio for Firdapse, potentially extending our IP out to 2037. One of those patents has been listed in the FDA’s Orange Book with an expiration date of February 25th, 2037, which brings the total number of Orange Book listed patents to six. The other patent is enforceable, but not eligible for listing. As part of our acquisition of assets from Jacobus, we settled our patent litigation against Jacobus. In our review, the settlement demonstrates the robustness of our Firdapse intellectual property estate reinforces its exclusivity and gives us further confidence in the commercial durability of Firdapse. Additionally, as part of our ongoing IP portfolio management initiatives, we worked with the US Patent and Trademark Office to amend the expiration date of one of Catalyst’s Orange Book listed patents from…

Thanks, Steve. We are very pleased with our financial results for the third quarter of 2022. Total revenue for the third quarter of 2022 principally from Firdapse product revenue net was $57.2 million, a 59.2% increase when compared to total revenue of $36 million for the third quarter of 2021. Net income before income taxes for the third quarter of 2022 was $26 million, an 84.8% increase year-over-year compared to net income before income taxes for the third quarter of 2021 were $14.1 million. We reported GAAP third quarter 2022 net income of $22.7 million or $0.22 per basic and $0.20 per diluted share, a 120.2% increase year-over-year compared to the third quarter 2021 GAAP net income of $10.3 million or $0.10 per basic and diluted share. Our effective tax rate for the third quarter of 2022 on an annualized basis was 19.7% compared to 24.3% for the third quarter of 2021. The decrease in effective tax rate for the third quarter of 2022 is due to an increase in stock option exercises in the third quarter of 2022, due to a sharp increase in our stock price. We anticipate variability in our tax rate on a quarterly basis. However, we expect a more normalized effective tax rate for the year in the range of 22% to 23%. Non-GAAP net income for the third quarter of 2022 was $28.6 million or $0.28 per basic and $0.26 per diluted share, which excludes from GAAP net income of $22.7 million stock-based compensation expense of $2.1 million, depreciation of $35,000, amortization of $518,000 related toward Q3 ‘22 license and asset acquisition from Jacobus Pharmaceuticals and an income tax provision of $3.3 million. This compares to non-GAAP net income for the third quarter of 2021 of $15.6 million or $0.15 per basic and $0.14…

Thanks, Ali. In closing our prepared remarks, I’d like to say that the Catalyst team delivered a tremendous third quarter performance, once again, attaining many operational and financial milestones, reflecting our business’s strength and the successful execution of our strategy. I’m proud of how Catalyst’s teams are performing and the positive impact that we’re having on patients’ lives, which is fueled by our dedicated employees who have a shared commitment to the patient community that we serve. With our strong year-to-date performance and our positive outlook for the fourth quarter, we are well positioned to achieve our near-term and long-term goals and deliver value to our stakeholders. Operator, we’d now like to open the call for questions.

Thank you. The floor is now open for questions. [Operator Instructions] And our first question comes from Joon Lee from Truist. Go ahead, June.

Yes, good morning. This is Les on for Joon. Thank you for taking my questions and congrats on the progress. I had just a few questions from me here. So first, on the what – can you comment on how many patients are currently offered Firdapse to-date? And how many of those are small cell lung cancer patients?

Good morning, Les. Thanks for the question. I’ll turn that over to Jeff Del Carmen.

Yeah, thanks for the question. We’d haven’t provided patient numbers you know historically. What I can tell you is that in recent month like I mentioned about 30% of our new enrollments are small cell lung cancer LEMS patients. And that number will continue to grow as we implement some of the small cell lung cancer LEMS strategies that I mentioned.

Okay, got it. Well to build up on that, can you kind of, I guess, expand on how you are targeting this population and appreciate the comments you made earlier, but starting next year and throughout as we progress throughout the year, how many of these 1,500 small cell lung cancer patients could you potentially target and get on drug over the course of the year?

You know, it’s hard to say as far as you know, what we expect, but we expect to you know move up that number from 30% that we’re seeing currently to about 35% to 40% in 2023. So that’s the type of growth that we’re expecting next year. As far as the programs that we’re putting in place, the thought leader liaisons that we’re budgeting for, think of those individuals as working with some of the high volume cancer institutions around the country. And the key with those, that partnership will be to create programs that allow for small cell lung cancer patients to be tested with a fluid VGCC test, and really to be identified and diagnosed sooner, hopefully to help these patients out. So that’s our approach there. And once these patients are diagnosed, then they typically will be referred either to a neuromuscular or neurology – neuromuscular specialist or a neurologist or we also, there are some oncologist, thoracic oncologists that will diagnose and treat on their own. So that’s the whole strategy with the thought leader liaisons. And that’s to supplement our efforts that we already have out there, that we’re educating these physicians through multiple channels to – about LEMS, the disease state, as well as the available treatment which is Firdapse.

Great, that is helpful. And on looking at your midpoint of your guidance, I guess would imply 4Q would be flat or a little bit down versus 3Q. Is it to do with seasonality or something else that tries this?

No, Les. This is Pat. We just you know – we’ve always been conservative, we’re going to remain conservative. We, you know, we, for the first time as you know this year, we get guidance. So we’re working our way through this and we’re comfortable with providing a range. I – sitting here today based on the start for this quarter, I would not say to you that we’re going to have a down quarter.

Got it, that is helpful. I’ll jump back in the queue. Thank you.

Thank you.

Thank you. Our next question comes from Charles Duncan from Cantor Fitzgerald. Go ahead, Charles.

Hi, good morning. It’s [inaudible] on the line for Charles, thanks for taking our questions. And congratulations on the quarter. So I have a couple on the commercial end and then I have a follow-up. So I guess I was wondering if you could start by characterizing whether the patient growth was from breadth or depth in the prescriber base? And then I was also hoping you could discuss the user reviews as well as if you’ve seen a distinction between treatment naïve patients versus the switches from Ruzurgi. And if there’s been a difference in persistence between those two groups? Thanks.

Good. Thanks for the question then. Jeff?

Sure. So the – as far as the breadth or the depth you know significant part of our prescriber base are one-time riders, but 75% of our riders are, again, only have one patient and that’s truly indicative of a therapeutic area that they – there’s not a center of excellence that treats LEMS, you know when other therapeutic areas or orphan diseases, there may be a handful of these centers throughout the country and that but that’s not the case for LEMS. So we’re seeing a broader and wider base of prescribers. And that is a potential in the future is that, you know when we look at it, about 40% of our enrollments in Q3 were from neuromuscular specialists, neuromuscular specialists will see you know a volume – a higher volume potential LEMS patients. So we think in the future there’s opportunity as physicians gain experience with prescribing Firdapse and seeing LEMS patients and know what to look for, that hopefully they will you know look within their practice to identify additional LEMS patients that are appropriate for Firdapse too. As far as the difference between the Ruzurgi patients that transitioned over to Firdapse, we’re not seeing any difference in persistence. These patients, the product works, the transition in these patients did not lapse in therapy when they were transitioned over and we’re not seeing any higher discontinuation rate for that subset of patients versus the patients that were always just on Firdapse. That answer your questions?

Yeah, absolutely. Thank you. And I have a quick follow-up. So I heard – I think I caught during the comments that there are non-LEMs patients with neuromuscular disorders who are still on Ruzurgi. So I was wondering if you could characterize you know the disease states of those patients, and if that may be a pool from which you would choose to pursue – for other indications from what you choose to pursue clinical development? And if you would, would you choose to go that route with Ruzurgi or Firdapse? Thanks.

Yes, great. Great question. I’ll ask Dr. Miller to answer that.

Thank you, Paul. That’s actually a compound question. So remind me if I don’t hit all the questions. The disease that I meant – mentioned in the part of our – earlier part of our discussion, and most of these patients have, is congenital myasthenic syndromes. And it’s about 100 patients that are currently being treated with Ruzurgi under investigator INDs. The disease is actually not a single monolithic disease, but consists of a collection of over 50 different genetic disorders. We have studied it in the past, we have had discussions with the FDA about clinical trial design for this disease and the reality is that, the agency wants to see clinical trials that are stratified by genetic subtype. And so that makes clinical trial design quite difficult. And we are currently evaluating, if we have enough patience to go after to pursue an indication for congenital myasthenic syndromes at this time. But right now we don’t have any specific plans to pursue the indication for congenital myasthenic syndromes. And we will continue to provide the patients with Ruzurgi, because that’s what they’re used to. And we have manufacturing initiatives underway in order to try to provide those patients with the drug for a longer-term.

Wonderful – that’s very helpful. Thank you very much. And yeah, I think that’s all for me. Congratulations on the quarter.

Thank you.

Thank you.

Thank you. And our next question comes from Scott Henry from ROTH Capital. Go ahead, Scott.

Thank you, and congratulations, Pat and to the whole team on such tremendous success you’ve had with Firdapse. I did have a couple of questions. I guess for Ali. First, did you pull out the $4 million for that Ruzurgi payment? I don’t think you did? I – it looked a little bit like a one-time expense in the quarter?

Yes, it will be a one-time expense in this quarter. It’s related to the inventory that we expense related to our acquisition for – from Jacobus.

And Scott that was included in our GAAP net income.

Yes. In our R&D caption.

Yep.

And I believe it was included in the non-GAAP too, correct?

Correct. We did not exclude it from non-GAAP.

Perfect, thank you. And Ali since I caught you there, interest income is starting to become a meaningful number. You know approximately what rate do you get on that cash balance?

Scott, we, yeah, the rates have moved up nicely. And, of course, our investments are all very conservative, buying 90 days, for the most part 90-day t bills. And those rates earlier this year were 7 basis points. Today, we’re getting right around 3.5 to 4 you know depending on you know when you buy them. So significant increase in potential for larger investment income.

Yeah, it’s a good time to have a lot of cash. And then I guess, just in a bigger picture question. You know I asked this question a lot on the calls. But how do you view the organic growth currently, particularly with the non-small cell lung cancer boost you’re getting. Where would you kind of categorize that?

Scott I’ll turn that over to Jeff again.

Yeah. Hi, Scott. Our organic growth and we’ve demonstrated this over the last several years is about 15% to 20% annually. And we are very confident that we will continue to sustain that organic growth.

Okay. And then a final question. You’ve got a good – you’ve got a strong patent position in place, multiple Orange Book listed patents. Just with regards to expectations. Would you expect someone to challenge these, should we be surprised if someone challenges or I mean I typically think of that as just part of the business cycle? Any thoughts on that?

Yeah, Scott, you’re exactly right. You know with the drug that’s doing in excess of $200 million. Again, we would be remiss, if we didn’t expect at some point to be challenged, it’s just – it’s part of the business. So I can tell you that you know it’s anticipated and we will be prepared.

Okay, great. Thank you for taking the questions.

Yep.

And our next question comes from Joe Catanzaro from Piper Sandler. Go ahead.

Hi, everyone. This is [Albert] [ph] on for Joe. And first off, congratulations on a really nice quarter. I was interested in your comments on there was a 50% increase in the calcium channel antibody tests. I was just wondering if you could, maybe rather than more insight and maybe quantify how many of these tests were done?

What I can tell you is just the National Laboratories that we partnered with and that data is available. What we can say is, when we looked at the raw number, and I don’t have that raw number on me, but when we looked at it, the number was at least 50% greater in 2022 versus 2021. That data has been very hard to obtain, just because of the pandemic. And it’s you know six months delayed in getting that information. So what it signifies is that our efforts to get patients tested, understand what symptoms and how to test for LEMS, it’s working, and that patients are now that were unable to get into these hospitals for diagnostic tests are now able to get in there. So that should also get more positive VGCC tests and those patients will now be addressable. And we can now help these patients get on Firdapse sooner. So that’s what that number was really meant to signify.

Okay, great. Thanks. Maybe one more quick one I was just wondering is it a significant portion of patients that are kind of already pushing this maximum daily dosage of 80 milligrams a day?

When we look at our patients, about 40% of our patients are at 80 milligrams or higher. So yeah, that’s what we look at in our current patient base.

Okay, great. That’s very helpful. All right. Thank you.

Thank you.

And that appears to be the last question at this time. I would now like to turn it back to Pat McEnany for any closing remarks.

Thanks, everyone for joining our call. We look forward to our next corporate update. And have a great day. Thank you.

Thank you. This does conclude today’s conference. We thank you for your participation. You may disconnect your lines at this time and have a wonderful day.