Good afternoon. Good afternoon, everyone. Thank you for joining us for the session with Catalyst Pharmaceuticals. My name is Balaji Prasad. I'm the senior analyst for the Spec Pharma sector for Barclays. I'm pleased to have with us today the management team from Catalyst, Richard Daly, CEO, and Steve Miller, Chief Scientific Officer. Rich, Steve, thank you for joining us today.
Thank you.
Yeah. Maybe just to level set, I would invite you to just give a brief overview of the company, your outlook for 2024, and your key priorities-
Sure.
What we need to look forward to for the year as things progress and dig deeper into it.
Absolutely. So, Catalyst is an orphan company focused right now in the CNS space and epilepsy space. Our key priorities for 2024, really commercial execution, really focused on patient care and access, number one. Business development, really, we are a buy and build company. That's where we really focus our efforts, so we're looking for portfolio expansion. And then third, we're looking for lifecycle management opportunities of the products we have, as well as the opportunity to do geographic expansion. Geographic expansion is done through partnerships. We don't have footprints outside of the U.S., nor do we intend to have footprints, so we look for opportunities to partner. And then last, our fourth priority is really to maintain the financial discipline that we have had for our entire existence.
We are a well-disciplined company, and we continue to want to do that. So we really, those are the key things that we look to do, and we look to build on the excellence that we've had in the past.
Fantastic. So maybe starting with your flagship product, Firdapse. So, it's been a few years since you launched this, and help us understand what the competitive dynamics for the product looks like?
Sure.
the outlook for it and the milestones we need to look forward to in the year.
Yeah. So the product has grown significantly year-over-year, and we continue to look for relatively aggressive growth for the product in the neighborhood of 15%-20% this year, and in the coming years. We have a portfolio of patients, if you will, a pipeline of about 500 patients that are diagnosed, but not treated. This is a prospecting business where our sales representatives go out and talk to doctors and will build on the portfolio or the pipeline of patients. We believe there are between 3,600 and 5,600 patients in the US with LEMS or Lambert-Eaton Myasthenic Syndrome, and we have to date treated only 1,100 of those patients.
So there's an opportunity to continue to grow, and with the pipeline of patients of 500 patients that are in our portfolio, we can continue to deliver on this relatively aggressive growth of 15%-20% this year, and we believe into the midterm, well into the midterm. So we're really excited about that. We're also looking for the opportunity to grow the business in a couple of different ways, and I'll speak to the first one, and Steve will speak to the second one. About 3% of patients who have small cell lung cancer also develop Lambert-Eaton myasthenic syndrome. 80% of those patients don't get any opportunity to have any treatment, so we're focused on the oncology arena.
They are making the oncologist aware so that they refer those patients to the neurologist, where they can get the treatment, so we see an opportunity there. The last opportunity for us domestically, and then we'll go to international, Steve will handle that as well, is in our supplemental NDA we have for our 100 mg. So, Steve, if you want to talk about that.
Sure. We have a supplement pending to increase the maximum daily dosage from 80 mg to 100 mg per day.
Mm-hmm.
80% of our patients are already on 80 mg per day, and we believe a portion of those will benefit from a higher dose. The physician believes that, and so there appears to be demand for that. And so, in addition to that, we had data from a variety of sources that supports increasing it to 100 mg per day, so we're very optimistic about this supplement getting approved by the FDA. Ultimately, when it's approved, we believe the average daily dose, which currently for our population is 61 mg per day for a patient, will increase by about 5%-10%.
The PDUFA coming up for June, right?
Yeah, June fourth.
PDUFA.
Oh, I'm sorry. The PDUFA date is June fourth. That's correct.
Got it. And, post the PDUFA, what is the timeline to, in terms of expanding this launch? Is it almost imminent, or would you acquire time for it?
It will not be immediate. It will take several quarters for that increase in the average daily dose across the population, because they have to go in and see their doctors and titrate up to a dose that they feel is optimal for them.
Got it.
You know, as a physician, and neurologists generally tend to go low and slow.
Of course.
So we've got... You know, the physicians will be, I think, ultimately pretty cautious, so they'll start up, and we see that, as we said, over a couple of quarters.
Of course. So Rich, I just want to get back to your comment on the patient population and the 500 diagnosed, but not treated, which forms a pipeline for you. And how would you go about the other undiagnosed patient population within the, for the LEMS space, nearly 2,900-3,000 patients?
Just to clarify, how do we go about finding those patients?
Yeah, getting them converted into future pipeline.
Right. So when we talk to the physicians, so we have 1,100 patients who have been treated. The average physician who is treating a LEMS patient has written a prescription for one patient. So this is a prospecting business. We have to go out there and find it. Typically, I've worked in the rare space in the past, and what we've seen is there's the rule-what we call the rule of four. So if you think there are 100 patients in a given market, you launch the product, you find out there are 400, because there-it's sometimes difficult to-
Mm.
Identify patients. And the LEMS market is a classic example of the rule of four. Their patients are hard to find, so it takes a fair amount of work, and our team has done a great job. So we do a lot of education with the neurologists. We help them understand, you know, how to diagnose, and sometimes there's a great deal of confusion, sometimes with myasthenia gravis and other disease conditions as well. And so then, Steve can talk to you about the VGCC test. There's a definitive test now for these patients, which is a tremendous advancement, and we're working hard to get them on a standard panel. So Steve, I don't know if you wanna talk about the VGCC test.
Sure. There was a test that was approved in December of 2013. That is a direct antibody test for LEMS, and it's now available as just a standard test through Quest or LabCorp or any of the other large testing companies. And so part of our sales and marketing effort is to educate the physicians that if they suspect LEMS, here's how you test for it. And we give them the test number, so they can just order the test. And in addition to that, we even order the test for free if there's any uninsured patients or patients who have insurance that won't cover it.
Okay. Got it. And in terms of the patient opportunity on the... in the small cell lung cancer side, how do you think about the relative opportunity in, in both the LEMS space and the SCLC space? There's around 1,500 patients, as I said, 3% of small cell lung cancer. How do you think about the relative opportunities between these two?
So we think it's... We think there's a significant opportunity there. The challenge is the oncologist wants to treat the cancer, which we understand.
Right.
and is preeminent. The opportunity then, with the muscle weakness that the LEMS patient experiences, it's a quality of life issue, and we want that patient to then be referred. So it's a real coordination of care opportunity between the oncologist and the neurologist. So again, it's about educating the oncologist that when they see this patient who has the weakness, and the weakness that they experience due to the LEMS, is really sometimes the first sign that they have, that they actually have small cell lung cancer. So when they experience the weakness, we want that coordination of care to occur, and then be referred on. And so, actually, once the cancer is divulged, there's sometimes a belief that the LEMS will resolve.
But again, Steve, I think, as a scientist, can speak to the fact that this actually doesn't happen. LEMS persists, so.
Yes. What happens is once your immune system has an autoimmune error and produces antibodies that attack tissues in your body, including your nervous system, as long as there's any antigens present that activate those B cells to produce antibodies, they'll continue to do so. So even if the cancer gets cured, the B cells producing the pathological antibodies will continue. So LEMS persists beyond curing the cancer.
Got it. And so as you speak to the oncologists, I'd imagine that oncologists are considerably aware that there's a fairly high burden symptom for LEMS in patients with SCLC.
Mm-hmm.
So in terms of maybe converting this into future pipeline, what are the milestones or at least a timeline that you think of, that you can target this opportunity?
So we recently worked with the NCCN to have LEMS added to the diagnostic continuum of small cell lung cancer, and we continue to work with NCCN on the education. So, you know, we're looking to have the physician move that patient to the neurologist as quickly as possible. We've experienced a fair amount of success there. Obviously, we think for the benefit of the patient, we would want that to happen as quickly as possible. And we'll continue to work on the education there.
Got it. And shifting gears towards the IP side, clearly, the Orphan Drug exclusivity expires next year, and you commented that you expect IP, that other IP that you have, to take it up to 2037. How solid is this IP defense for the product?
Great, great question. So Steve's our expert on IP, so I'll turn to him.
Thank you, Rich. Yeah, we feel that the patents are very solid patents. They actually span two different invention classes.
Mm-hmm.
There's a total of six patents listed in the Orange Book and three additional patents that can be enforced, as needed. And so, currently, there are a number of ANDA filers who have filed Paragraph IV applications. They were sued in March 2023. And, I really can't comment on the specifics of the litigation because it's just bad practice to do so. I can tell you generally what goes on in the business with regard to patent cases like this. Typically, 80% of all patent suits are settled within 12-18 months.
Sure.
Of the 20% that are not settled, they go to court, and ultimately, the brand wins half the time, and the generic wins the other half of the time. So what that means is that the brand will have a very favorable outcome 90% of the time, where they get to keep most of all of their exclusivity conferred by the patents, and 80% of the time, there will be a settlement that occurs in 12-18 months.
Got it. Probably hypothetical, but I would imagine that it would expect to have a similar kind of outcome on this, but there's a settlement.
Well, what-
Yeah.
Interestingly, you know, these patent suits are very cookie cutter, the way they go on. There's so many of them in the industry. And so as a result of that, it's a fairly tight distribution. And so statistically, most of the people have settlements in the range that I just described.
Got it. Maybe shifting gear towards the other lever that you mentioned of international expansion into Japan and Canada, speak to us a bit more about how the expansion will play out and the impact on medium-term growth?
Sure. So, we're... Actually, Firdapse is approved in Canada, so we work with our partner there, KYE, and we're selling actively there. And we have a submission, which has been accepted for review in Japan for Firdapse with our partner, DyDo. And so Steve is working with that organization, with that company to accelerate... not accelerate, but to facilitate that approval. So, Steve?
Yes, they actually filed an NDA in December of last year. The priority review cycle time in Japan for an orphan drug application is nine months. So in late fall of this year, we expect that to be approved, and we expect launch in Japan in very late 2024 or the beginning of 2025.
... And so the thing that's really interesting about the acceptance of that filing for us is the acceptance expands our rights in LATAM and APAC.
Mm-hmm.
We have the opportunity to expand our business through partnerships in China, South Korea, Asia, Colombia, et cetera. So we're beginning those discussions as well.
Fantastic. Well, look forward to updates on that. Shifting to Agamree, can you speak to us a bit more about the product, the entire dynamics with the DMD market and the competitive landscape there?
Sure, absolutely. So this is a very exciting opportunity. So, steroids are the backbone of therapy for patients with Duchenne muscular dystrophy, and we are really excited about this, this opportunity. As everybody knows, this is not a prospecting market. These patients, 11,000-13,000 patients, 95% of whom are diagnosed. 90% had been on a steroid at some point in time. 70% are currently on a steroid. The market breaks down that of those 70%, 60% are on a generic prednisone, and 40% are on Emflaza. So we have a great opportunity here with the, the target product profile that we have for this product, to really come in and I think make a difference in this community, and we're excited to be launching this product.
We will be launching this product this month. We're excited to bring that to market. The patient community is highly aware of this.
Mm-hmm.
The caregiver community, the parents are highly aware, and the healthcare practitioner community is aware as well. So, it's a great opportunity for patients. It's a great opportunity for the company, and the caregivers as well.
Got it. And, while there clearly is a CNS overlap between both of these products, again, very different market dynamics between prospecting and going after, a larger group of patients. So help us understand the commercial overlap and-
Sure.
and the advantage or otherwise that you would have with selling this product.
So there's actually a 40% overlap. The thing that's really interesting about the DMD community is you can look at 100 centers where DMD patients get their meds, and 250 physicians represent 95% of all prescriptions in this market. Highly concentrated. So we actually use the same organization, the same sales organization of 16 sales representatives that sell Firdapse to sell Agamree. So we can be a highly efficient, highly effective organization. So, we're really excited here to be bringing this to market.
Got it. And I think I have a similar question on the IP landscape. While the orphan drug exclusivity goes up to 2032 or 2031?
2030.
Yeah. So speak to us about the IP beyond, beyond 2030 on this.
Sure. Agamree has six patents listed in the Orange Book, and there are other patents that are under development. The current patents listed in the Orange Book are three patents for the primary indication, the treatment of DMD, one patent for cardiac safety, and two patents for the polymorph, API polymorph. Those patents currently span from 2029 until 2040. However, I want to point out that the 2029 patents are eligible for five years of extension under the Patent Term Restoration Act, and we've applied for that, and so they one of them will be extended to 2034.
Got it. Great. So it looks like there's a fairly long commercial life for the product.
Correct.
So as I think about the near-term launch, in terms of key commercial milestones, how do you think the ramp of this launch curve is going to look like?
I think the ramp will probably... I think a good surrogate for this would be Emflaza. I think that's a good ramp.
Mm-hmm.
So I think if you think about how this will, the uptake of the product, I think that's a good starting point. And we're very focused on the successful launch of the product, but we're also, you know, simultaneously, while the commercial team is looking at that, at that and focused on that, a broader team is looking at what are the lifecycle management opportunities for the product? How can we make this product a broader use product for the orphan community? How can we make this product the, the steroid of choice in orphan disease? Is that possible? And we're investigating that now. So-
Mm-hmm.
You know, we're looking at that. So hopefully taking that curve and actually lifting that curve over time.
Got it. Shifting from Agamree, want to focus on your epilepsy franchise, the third pillar-
Mm-hmm.
that you have. So I think, again, much larger market. I mean, we're really scaling up from-
Sure.
Indication, 3 million+ patients. So how would the market opportunity and the competitive dynamics differ here, and what do you see for the ramp again?
Yeah. So the epilepsy market is a retail market, and the purchase of FYCOMPA was one that was done when the company was really looking at FIRDAPSE as its only commercial asset. And so we gained access to a couple of things with the purchase of Fycompa. Number 1, we broadened our inputs or our opportunities in the CNS landscape, which we thought was really good. Number 2, we got access to an incredible talent pool-
Mm-hmm.
of marketers and salespeople. So highly competitive market, highly complex market. It doesn't get any tougher than being in the epilepsy market. We all know how competitive this market is. Incredibly competitive. But also, we were looking for diversity and stability of income. And here's a product that's 10 years old and delivers consistently, and we're looking to build our balance sheet, you know, for future acquisitions. I said at the beginning, we are a buy and build company, and relying solely on one asset, Firdapse, for stability of income, it's not gonna... You just can't do that. You need to be building out. And we feel like we've delivered on that promise with the delivery, with the acquisition of Fycompa, but also the acquisition of Agamree. So we're looking to continue to build out those kinds of opportunities again.
We believe not only was it a good transaction from a talent viewpoint, but from a financial viewpoint as well.
... Got it. And so, as I think about building this franchise further into adjacent areas, can you maybe speak a bit more about your plans to expand into the rare rare disease side of epilepsy?
Sure.
Or adjacencies that you see?
Sure. So we are an orphan company first and foremost, that's in the CNS space. And we look at the epilepsy opportunity. If there's opportunity there, we will pursue it. We will pursue CNS as well. But one of the things a company in our position has to do is we have to take a broad stance, and we have taken a very broad stance in the orphan space. And when we increase the aperture, we see lots of opportunity that we can go for. So we're looking at CNS, we're looking at epilepsy, but we're looking at orphan. We believe our infrastructure is what makes us a successful company. We have the ability to get patients on therapy and help them stay on therapy. That structure is really important to our success, and that's applicable across the universe of orphan conditions.
And so we can work just as effectively in orphan metabolic, orphan cardio, orphan... You name it. We can have a highly effective and efficient sales force out there, and support, back office support as well. So we're looking at orphan CNS and orphan adjacent as well. So we see ourselves in that manner.
Got it. Finally, I have a similar question again. Do you have two, you have another LOE coming up on May 2025 for this product. I'm sure you do get lots of questions around life beyond this. So how, again, IP durability, moat around this, this product, how do you position this?
Sure. Basically, that's correct. The composition of matter patent expires in May of 2025. In addition to that, we have a polymorph patent that expires in July of 2026. We are evaluating whether or not to sue the ANDA applicants who filed many years ago.
Mm-hmm.
Determining whether or not it actually makes sense to do that. There is the potential to increase the exclusivity beyond May 2025, but at this point, it's only a potential, and it's under evaluation. Did you want to speak to the tail, or should I?
No, you can speak to the tail.
In addition to that, I wanted to point out something about epilepsy drugs in general.
Mm.
They have a tendency to have very good patient loyalty for medical reasons.
Right.
When generics actually come on the market, patients are usually reluctant to switch, because generic drugs are allowed to be generics if their pharmacokinetics is anywhere from 80%-125%. And as a result of that, a patient who's well controlled with no side effects on Fycompa could potentially take a product that has 80% bioavailability and suddenly have seizures, or could take a generic that suddenly has side effects when they had no side effects before. And so, as a result of that, in the long history of epilepsy drugs and this specific problem I just described being a problem in the past for other drugs, patients have a and physicians have a tremendous reticence to switch patients, even off of a branded pharmaceutical to a generic.
As a result of that, the genericization of epilepsy medications is a fairly gentle tail. They lose their market exclusivity relatively slowly, relevant to other products that go generic.
Yeah. We believe we'll lose share, clearly, but it won't be a traditional retail share loss. It's a more gentle slope. It's, there's a stickiness to it, if you will.
Got it. Understood. I mean, in the interest of time, the last question, probably, again, something that you alluded to a couple of times in terms of building the portfolio further. And today, you're sitting on a cash position of around $140 million. Help us understand your BD prospects-
Sure.
- both partnerships or licensing.
Sure. We finished the year with $137 million on the balance sheet, and we did a capital raise at the beginning of the year of $140.1 million. Then every quarter, we add about $40 million in profit to the balance sheet. We do this solely for the purpose of obviously buying more products, so we can help more patients. That's what we do. We did the capital raise because business development is episodic, and we wanted to make sure that we were ready, we had dry powder, and this is what we're doing. So we have a slate of opportunities we constantly look at, and we are evaluating, because we believe that we have a great structure that can add more value as we take on more products.
We are constantly looking, and we are doing so now.
Great. So Richard, Steve, thank you so much for your time.
Thank you.
Pleasure hosting you here.
Thanks for having us.
Also wish you a very productive conference.
Thank you.
Thank you for joining us again.
Thanks for the opportunity. Appreciate it.
Thanks.
Yeah.