Thanks everybody for joining us here on day one of Piper Sandler's annual healthcare conference. I'm Joe Catanzaro. I'm one of Piper's biotech analysts. It's my pleasure to welcome Catalyst Pharmaceuticals for this session here. Joining us is their CEO and President, Rich Daly, as well as their CSO and COO, Steve Miller. Rich and Steve, thanks so much for joining us. Maybe before we kick off into Q&A, Rich, I could give you a minute or two and you could just sort of give an introduction to the company, what you guys have been up to, and what we have to look forward to, and then we'll jump into some questions.
Thanks, Joe. It's great to be here. Thanks for the opportunity. We really appreciate it. Catalyst is a orphan drug company. We've been in the space since 2019. We launched FIRDAPSE for Lambert-Eaton myasthenic syndrome. And I'm proud to say we've had 13 quarters in a row of 15% growth or more. We're really excited about that opportunity. We entered the epilepsy space with FYCOMPA, with the purchase from Eisai, doing very, very well with that product as well. And then most recently launched AGAMREE for Duchenne muscular dystrophy, and the product launched earlier this year and is off to an incredible start. We're really excited about our opportunities in that market as well. Our model really, as you know, Joe, is a buy-and-build company.
We look for products in the marketplace, and then, we execute supremely well against those products and, for the benefit of patients, and so we're really excited to be here and talk about the business, so thank you.
Yeah. So maybe on that front, on the buy-and-build topic, I know that we like to sort of read into your tone and how you guys are thinking about potential business development. So maybe at this moment in time, you could sort of take us through your thinking, where you guys are, what's potentially looking attractive to you, and your just overall appetite for potential BD.
Right. So we have a very specific model. We look at orphan opportunities. We are agnostic to the therapeutic space. We believe that the infrastructure we have behind the sales representative and behind the customer-facing opportunity is really what that is part of the company that creates a tremendous amount of value. So the patient support, getting the patient on therapy, keeping the patient on therapy, through our proprietary pharmacy and the patient support vehicles that we have back of the house, as I said. So we really like that. So we're looking at across the spectrum. We are potentially in CNS and muscle disorder right now, but we are looking very, very broadly, and we continue to look.
I would say if there's an opportunity out there, or when there's an opportunity out there, we're at the table, in those areas where the peak therapeutic sales are less than around $500 million. We're at the table all the time. We're really excited to be in those discussions and looking for the opportunity to continue to build the company.
So one thing I'm maybe just sticking with this for a second. One thing you've sort of said is, as of recent, is the level of inbound sort of inquiries has picked up. I know you've sort of spoken to maybe why that might be. I guess I'm more curious of whether that's sort of expanded your slate of potential opportunities that you're looking at.
Yeah. So it has. We launched, as I said, FIRDAPSE in 2019, and the opportunity, I think, as I said, 13 quarters of 15% growth. That speaks to the execution of the company and the continued execution of the company. I think there was a question about whether or not we could continue that growth of FIRDAPSE and launch a product like AGAMREE . And with the successful launch of AGAMREE and the continued execution, I think a lot of companies are looking at us saying, "Hey, this is a company that can do more than one thing and can launch products and sustain their core growth." So with three products now and continuing that growth and launching products, we're getting a broader view at the marketplace, which, again, is really exciting for us.
And then maybe last question on this in terms of, like, deal capacity and financing a transaction, how you guys think about what you're willing to sort of do and maybe what you're not willing to do to finance a transaction.
So I had the opportunity to be on the board of Catalyst for nine years. And with one asset, when we first went commercial, we obviously, when you have one asset, you're very cautious. So, we were reticent to do any deals that involved debt. We had no debt. We still have no debt as a company. Today, we have a very different view because of the diversity of income of the organization. So we have three products that are delivering income. We have about $420 million on the balance sheet. We have a very strong position as far as delivering continued cash quarter over quarter. And so, the board and management have a very different view today. So we're willing to take on debt for the right opportunity. And we look at those opportunities as immediately accretive or nearly immediately accretive.
So they have to be like our Santhera deal was. The NDA was filed, or things that might be very at the end of Phase I and coming to market quickly, and there are opportunities out there like this at the end of Phase II, products that might be skipping Phase III and going right to market. So things that would be delivering cash in the near term. But taking on debt for those would be something we do. And we look at the deal size, you know, in the $700, $800, $900 million. And if it's a robust on-market opportunity, we might even be able to go higher than that, depending on the ability to repay the loan very quickly.
Great. So maybe with that, we could dive into some product-specific questions.
Sure.
I want to start with AGAMREE . You noted you launched it earlier this year. The drug's gotten off to a very strong start. Maybe just to start, you could sort of speak to it a little bit to the product itself, but more so what you attribute some of the strong launch metrics to.
Sure. Steve, do you want to take the profile of the drug?
Sure. AGAMREE is a unique corticosteroid that has some pharmacological characteristics that appear to make it potentially much more safe than the alternative, corticosteroids that are available to patients right now. There is published data that shows that it does not have the problems with aggression, and anxiety that are caused typically by corticosteroids. There is some additional evidence that shows that it could result in better bone density, better growth of the patient, and better stature, and potentially perhaps even, an improvement in the cardiac safety of the drug, which is a problem from the very long-term use of corticosteroids.
Great. Richard, maybe if you want to take over some of the sort of early commercial experience.
Sure.
Some of the metrics you've seen there and what's really resonated.
Absolutely. So the profile that Steve talked about, especially the aggression, has really resonated well with not only the healthcare practitioners, but also the parents. So the Duchenne muscular dystrophy market is obviously it's boys, young men, and their caregivers are their parents, typically the mom, and so this is an X-linked chromosome factor. So you've got a situation where the parents are taking care of these young men. And the aggression is an issue not only at home, but also in school. And so getting the aggression to a reasonable place is a very big factor. There are 100 Centers of Excellence in the US, about 250 physicians, right, about 80% of the prescriptions in the marketplace.
And so getting this aggression, which you see almost immediately upon the ingestion of the drug, within, I should say, within days, getting this under control is a really big factor here. And so we're seeing this, and we've got about 70% of the Centers of Excellence. AGAMREE is written in 70% of these centers. We're getting good penetration with the physician. So we've gone very broad, and now we're going very deep. And we've got really good metrics. We're getting utilization and conversion from the two biggest players in the market, which are prednisone, a generic, and Emflaza, which is a branded. We're getting about 45% from generic prednisone and about 45% from Emflaza, and then about 10% from naive patients. So we're very excited about playing in the entire space of the marketplace.
I think you've noted that maybe about 70% of DMD patients are on corticosteroids. What are some reasons a patient wouldn't be on it? Is there any sort of headway you can make, with the profile of the drug to get that 30% onto a corticosteroid?
Sure. Steve, do you want to talk about that? Sure. Well, I mentioned before the potential safety improvements of AGAMREE . We believe that the AGAMREE therapy will enable physicians to consider putting patients on earlier, perhaps using a higher, more therapeutically effective dose, and then keeping them on the medication longer. Quite often, patients are discontinued from therapy for a whole variety of reasons, and if the drug were safer, then perhaps the doctors and the caregivers would be willing to leave them on the drug longer.
Yeah. So we echo what Steve said. We see the 90, 11-13 thousand boys and young men in the market, 95% have been on a steroid, only 70% currently on a steroid. They start too late, they're on too low a dose, and they stop too soon because of adverse events. So we see growth opportunity in the marketplace. So right now, it's a cannibalization market, Joe, right? So we're cannibalizing from these other players. But if we can get the patient on longer or on sooner, that's a growth opportunity. Keep them on longer, that's a growth opportunity. And then go from this 70% up to 75%, 80%, 85%, we can actually grow the market because we believe we over time will prove we have a superior drug.
I don't know if it's maybe too early, but do you have any data points on sort of new to market share, so new to corticosteroid share? So a patient who's just starting a corticosteroid.
Right.
What % of that are you guys capturing and?
We don't have that yet. Yeah. That's a great point, though. We were talking about that earlier today. But yeah, we're trying to capture that data right now.
So then, Rich, you mentioned, I mean, I guess with prednisone, maybe to some extent Emflaza, maybe patients stopping too early because of adverse events. So maybe you could speak to historically sort of persistence on corticosteroids for DMD patients and what your expectations are for AGAMREE and how long patients should be expected to stay on it.
Typically, a patient will stop a corticosteroid when they lose ambulation. They lose the ability to walk. So physicians will say, "Oh, the side effect profile versus the benefit is not no longer worth the risk." So they stop. And our position is if we can show that there is less risk and better benefit, you think about the young man who's lost ambulation, 12, 13, 14, 15. Their view of the world is from their chair. Can they control their chair? So the ability to use their arms and the muscles in their arms, and they see the world through their mouse, through their computer screen. So the more dexterity they have, the better the quality of life. So keeping them on a steroid can dramatically improve the quality of life as long as the adverse events are not detrimental.
So I don't know, Steve, if you want to make some comments, but we're seeing this play out because physicians want the patient to have that dexterity, but they're thinking it's about ambulation, and it's our opportunity to help them think about the entire body, not just the legs.
Yeah. Maybe Steve, I could ask you about this sticking with sort of persistence and discontinuations. I think you guys spoke to a 10% annualized discontinuation.
It's about 20%. And we've done some proprietary work, where other orphan drugs, this is significantly lower than other orphan drugs in the, not in the DMD space, but in the general space, about 20%.
So, maybe on that, I think you've spoken to the idea that maybe something that some of these discontinuations are temporary, and that you would expect some proportion of those patients to come on back on drugs. So maybe you could just sort of speak to that dynamic, what's been going on there, and how do that maybe play out over time?
Sure. One of the issues that we mentioned earlier, in our talk here is that, corticosteroids in general cause problems with anxiety and aggression. And so you run into issues where parents may discontinue the patients on the medication during the week so that they can perform better in school and then treat them on weekends, which is a very difficult situation for the parents having to deal with those children on the weekends. In addition to that, there are cases of patients and their caregivers taking drug holidays and things like that. And again, it's related to the side effects of the corticosteroids. Our hope is that AGAMREE has a better safety profile that will enable parents and doctors to keep the patients on the drugs continuously.
Maybe, maybe last one on this front, as we think about the evolution of the DMD market and availability of gene therapies, the impact, potential impact of that to AGAMREE and maybe overall corticosteroid use for DMD patients.
Sure. So, steroids are the foundation of therapy across the board. And a better steroid, if AGAMREE works out to be the better steroid, I think will have a profound impact on the marketplace. The opportunity to be on a steroid, post-gene therapy, I think, speaks to the benefits that AGAMREE will deliver. So if the benefit is there, those patients who actually are on a steroid longer actually have greater ambulation long-term. So the hope is that gene therapy coupled with long-term right dose, longer term, will give that young man the ability to walk longer. So have, again, having that better side effect profile will be there. The opportunity right now is that there is a drug holiday right now for AGAMREE if the patient is going on to gene therapy, but it's short.
It's 90 days, and they're going on back onto AGAMREE post-gene therapy. So there's an opportunity for us to improve the outlook for AGAMREE as well.
So, as we look to maybe 2025 and AGAMREE and its continued launch, maybe what are some things that you expect to continue and sort of help continue the growth trajectory on? What are some maybe new things you're thinking about to continue that growth trajectory? Just help us sort of maybe contextualize how to think about 2025.
We talked about the young man who has lost ambulation. There are not a lot of patient services for these young men who are moving out of pediatric care. Moving from 18 to 19, they lose their continuity of care. We're working with these groups of young men and looking to improve this continuity of care as they move into adulthood. They lose all continuity of care. It just stops. We are working with them because we believe that we have a better drug, and we believe that they should be on the drug for longer. That's one. Social is there. This is a very strong patient and caregiver community working with that caregiver community.
I think looking for this opportunity to work with all of these new drugs that have come out. This is a phenomenal time to be in the space working with the DMD community. Again, steroids are the foundation of therapy. We work with all of these drugs. If we are the best drug and we can prove that over time, we benefit from working with all of these drugs. So we're continuing to work and show the benefit of AGAMREE with every drug that's coming out.
You mentioned a little bit earlier the split you're seeing in terms of patients coming off prednisone onto AGAMREE and those coming off Emflaza onto AGAMREE . I guess expectations moving forward on that. And I guess I'm more interested whether there are specific patient populations that are on prednisone versus those that are on Emflaza and whether there's some distinction that needs to be made in terms of, you know, maybe their ability to stay on AGAMREE longer, their persistence, anything like that.
We don't see any difference right now in those patient populations. We saw a 45, 45 split, patients coming from prednisone and Emflaza and 10% naive. At the start, we had an early patient start, and we were actually quite surprised. We thought most of it would come from Emflaza. So, before we launched, we had an early enrollment program to get patients up queued up for insurance. And that split with a 1% or 2% change month over month, that split has stayed consistent month over month since launch. So we're really, really pleased with this, but we're not seeing any real difference in where those patients are sourced.
Maybe kind of again thinking about sort of opportunities to grow the franchise in terms of, like, you talked about depth, right, getting prescribers to write more. As you look at academic centers, how much opportunity that have written a script? How much opportunity is there to get them to write more scripts?
Yeah. This is a great question. So right now we're seeing physicians test out the theoretical benefit, which is right now it's a theoretical benefit. Is there better behavior? Is there better stature? Are the patients actually growing? Is there better bone health? And the benefit of behavior is going to be seen almost immediately. Stature and bone health takes time, but they're trying it out on a few patients. And as they see better behavior, then they're starting to go deeper. So there is an opportunity for us to continue to do that. And we see the SUMMIT study with the 250 patients that we're going to be enrolling over time coming out with more and more data about behavior, bone health, stature. But we already have published data on behavior compared to Emflaza and prednisone.
There is what I would call some light science on stature and bone health that's already been published in poster form that says directionally we believe there's an opportunity to show a difference between these products.
Great. So maybe with that, we could switch over to FIRDAPSE , which you touched on at the top. Now, five years into the launch, sixth year, what's going to allow you to continue on that pretty impressive trajectory that it's been on into 2025? What work do you need to do? What do you need to maintain to allow it to continue on?
So I think there's a couple of factors. And this is an impressive product. 15% growth every quarter for 13 quarters in a row. That's impressive. So a couple of things. One is this 100-milligram approval. So we see the 5%-10% growth based on the Ruzurgi dosing. And that was what I would call a natural float. There was no promotion for Ruzurgi. There was nobody talking to the doctors. And the doctors, Ruzurgi had a 100-milligram approval. We recently got the 100-milligram approval at the end of May. And we're based on that approval for Ruzurgi and our approval, we're saying, "Oh, there's a 5%-10% opportunity." But if we're out talking to docs about improving care, we believe that there's at least a 5%-10% upside in dosing and maybe more. That's number one.
Number two is the 5 to 500-plus patients that we have in our pipeline that have been diagnosed with some form of muscle weakness but not yet truly diagnosed with LEMS that probably are diagnosed with myasthenia gravis and misdiagnosed, and then moving them along the continuum of care so that they truly get diagnosed. And we refresh that all the time. And 50% of our patients come from this 500-patient pipeline. And then the last thing is this opportunity in cancer-associated LEMS. We believe this is a real, a real significant opportunity. We focus to date our efforts in cancer-associated LEMS with institutions when, in fact, 70% of all cancer-associated LEMS can be found in community. So we're pivoting now to community, and we think there's an upside there as well. So I would say those three things will drive it.
Yeah. So maybe you can elaborate on the 500 patients pool. One, my understanding was always that those were patients who were diagnosed, right? You get the VGCC testing, but not yet on LEMS. It sounds like it's kind of maybe a mix of the type of patients. And then, two, the sources of sort of the leads that you're getting to feed that pool.
So that's, I think your characterization is probably a good characterization. So there's a mix in there of patients, some are diagnosed and not yet treated because they're getting treated with something IVIG, right, or some other thing. They're getting treated with Mestinon, which is not an approved treatment, but some docs could see it. The real crux of the issue is that the average physician in their entire career will see one LEMS patient. So they're not really typically used to it. So when we see these surrogates in the marketplace, like a Mestinon prescription, and we match it up to a myasthenia gravis diagnosis, we send a sales representative in there. Now, we are blinded. We don't know the patient. We just know that these two events have happened.
And so we send a patient in to talk to the doctor about LEMS. Do you know about LEMS? And this arc of activity happens over 10 or 15 months. And so we keep this patient pool refreshed, and we go back, and we keep going back to talk to the doctor. And then eventually, about, like I said, about half of our patients come from this pool of patients. So sometimes they are diagnosed. Sometimes they are not. And so it's kind of a mix. So you're correct.
Maybe last one on FIRDAPSE , and we could touch on FYCOMPA. The FIRDAPSE patent litigation, I know there's not much you can say about it. But I think as we've seen recently with some other biotechs resolving some loss of exclusivity events, is a major relief, removing overhang. So how are you guys thinking about that? Some timelines, what our expectation should be.
I think your expectation should be that we're going to resolve that as quickly as possible in as favorable a manner as possible. It is ongoing litigation, and you're right, unlimited in terms of what I can say. I'll point to a couple of recent events that I think will give you some guidance in terms of how we're looking at this. First, one of the generic filers we've settled with, and another one of the generic filers has actually converted to what's called a Paragraph III for one entire family of patents, which means they're no longer challenging those patents, and they're going to wait for them to expire. We're reasonable people. I mean, we're willing to listen to these defendants.
If they have something interesting to say, we're certainly willing to listen and try to find a solution if we can.
So you mentioned the one filer that you've settled with. Is there anything unique about that situation that made settlement a little bit more amenable for you and them?
It was certainly a little more amenable for them. First, their entry date is the expiration date of the last patent, with some acceleration terms in the settlement agreement. And the reason they probably were willing to do that is they were the fourth filer. They were not a first filer. And so they simply wanted to settle and sit on the sidelines and wait and watch to see what happens. But it certainly simplifies the whole case for everyone, including us.
Yeah. So just to be clear, we gave up nothing in that settlement. Absolutely nothing. Yeah. In the last minute or so, maybe let's touch on FYCOMPA, and maybe look towards 2025, how we should think about that product, generic entry. I know you guys have spoken about the erosion trajectory in the epileptic setting as maybe not as steep as, as one might expect. So maybe any additional sort of details there would be helpful.
Epilepsy is just different from most retail products. To be clear, we expect to lose share. All generic products, all products that experience a generic incursion, lose share. Patients who have epilepsy generally hold on to their products a lot longer. There's just a more gradual slope, if you will. There's a tail. It's a more gentle tail. The only time you see in epilepsy a hard, really hard drop-off is when one company is substituting one of their products for another product, and you see a really steep drop-off. But other than that, in the epilepsy market, you don't see these really hard drops. You see a drop. I just want to be really clear. There's no doubt about it. You will see a drop, but it's just a slope.
It's a gentle slope. And we only have two entrants coming in, potentially two entrants coming in for the balance of the year. We'll keep promoting up until the generic incursion occurs because we need that. It's a promotion-sensitive market. They'll come in, and then we'll stop promotion, and we'll let it ride.
Yeah. I want to maybe squeeze in one last question in terms of ex-US opportunities for the portfolio. I know you guys have worked with DyDo Pharma in Japan on FIRDAPSE , Kye Pharma up in Canada for both FIRDAPSE and AGAMREE . Anything specifically you want to sort of call out there that we should keep in mind?
We're doing it for two reasons. One, we want a plug-and-play opportunity around the world. As we bring products in, we want to have partners that are everywhere so we can work very quickly to move our products in. And we believe in health equity. You know, we like the opportunity to take these products into markets where there are no products. So in Japan, we believe there are about 1,100-1,200 patients with LEMS as an example. And there is no treatment in Japan. And now there is. We like that opportunity. I don't think anybody in the room or anybody who's watching this should think that there's a huge financial upside for us. But there's no downside either. And we think we're making a difference for these patients.
And as we get more products in our portfolio, we can work with our partners in Japan or Canada or wherever else we go. And we think we're doing, you know, good things for the company, for shareholders, and for patients.
Great. Well, with that, I want to thank Rich and Steve for their time and thoughts. Thanks, everybody, for joining. And, enjoy the rest of your day.