Greetings, and welcome to the Catalyst Pharmaceuticals fourth quarter and full year 2021 results call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Alicia Grande, Chief Financial Officer for Catalyst Pharmaceuticals. Thank you. You may begin.
Good morning, everyone, and thank you for joining our conference call to discuss Catalyst fourth quarter and full year 2021 financial results and corporate highlights. Leading the call today we have Patrick McEnany, Chairman and Chief Executive Officer. We are also joined by Dr. Steven R. Miller, Chief Operating Officer and Chief Scientific Officer, and Jeffrey Del Carmen, Chief Commercial Officer. For the Q&A session, we'll also have Dr. Gary Ingenito, 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 effects of COVID-19. Actual results may vary from the expectations contained in our forward-looking statements. These forward-looking statements should be considered only in conjunction with the detailed information contained in our SEC filings, including the risk factors described in our 2021 annual report and Form 10-K. At this time, I'll turn the call over to Pat.
Thanks, Ali. Good morning, everyone, and thank you for joining us today for Catalyst fourth quarter and full year 2021 financial results and update call. 2021 was an extraordinary year for Catalyst as we attained several significant milestones and achieved strong financial performance, creating a substantial foundation to sustain our growth plans as we diligently pursue opportunities to diversify our commercial and development portfolio. To date, in 2022, we have continued to execute our business plan and operate to budget. Let's start with our commercial performance in the fourth quarter of 2021, where we achieved Firdapse net product revenues of $38 million, a 24% revenue increase versus the fourth quarter of 2020. Growth during the fourth quarter was driven by continued strong Firdapse performance, despite not yet being back to optimal pre-pandemic conditions.
Our full year 2021 total revenues were $141 million, representing an 18% increase year-over-year compared to $119 million in total revenue for 2020. Net income before income taxes for Q4 of 2021 was $12.8 million, a 47% increase compared to $8.7 million for Q4 of 2020. We reported GAAP net income of $9 million for Q4 of 2021, or $0.09 per basic and diluted share. We ended the year 2021 with $191 million in cash and short-term investments. We continue to judiciously repurchase shares of our common stock from the open market. During 2021, we repurchased 2.2 million shares at an average price of $5.47 per share for a total purchase price of $12.1 million.
We have guided full year 2022 total revenues to be between $195 million and $205 million, representing a 38%-45% increase in total revenues compared to 2021. We also anticipate our cash OpEx to be between $65 million and $70 million for the full year. Ali will provide you with more details during her financial report. Our 2022 guidance assumptions reflect the positive outcome from the U.S. courts reaffirming the orphan drug exclusivity for Firdapse for the treatment of adult patients with Lambert-Eaton myasthenic syndrome. As we reported last month, the U.S. District Court ruled that the U.S. approval of Ruzurgi for the treatment of pediatric LEMS patients violated the U.S. orphan drug exclusivity for Firdapse. As a result, the U.S. approval previously granted for Ruzurgi for pediatric patients has now been rescinded by the FDA.
The reaffirmation of Firdapse market exclusivity is a significant milestone, enabling us to advance treatment within the LEMS community, where Firdapse has already been prescribed by 647 unique physicians to approximately 25% of the estimated 3,000 LEMS patients. Importantly, this outcome represents a pivotal point for additional new patient enrollment growth as those patients on Ruzurgi seek to transition to Firdapse. We estimate the number of patients recently on Ruzurgi to be about 125 patients, a significant majority of whom are adult LEMS patients, and we've already seen many of those patients transition to Firdapse during this quarter, which aligns with our revenue forecast for the year. The transition of Ruzurgi patients to Firdapse is proceeding seamlessly thanks to our patient-first approach and our established Catalyst Pathways access programs, which are there to assist all patients seeking access to Firdapse for LEMS treatment.
Similarly, we announced last week a victory in the Federal Court of Canada in the lawsuit by Catalyst and KYE Pharmaceuticals to require Health Canada to enforce the data protection for Firdapse as an innovative drug. In that case, the judge agreed with our positions on the applicability of the data protection provisions and that Health Canada's approval of Ruzurgi did not comply with them. Ruzurgi has been removed from the market in Canada, and the matter remanded to the Minister of Health for redetermination consistent with the judge's decision. Our other significant litigation is our pending patent suit against Jacobus and PANTHERx Rare, a specialty pharmacy for Ruzurgi. This suit is now in discovery, and we'll continue to keep you advised as this case progresses.
We entered 2022 with significant momentum and with a continued focus on sustained product growth as well as to the rare disease community we serve. We have enhanced our efforts to drive awareness and education to both patients and providers with an expanded focus on paraneoplastic patients. Extending out to thoracic oncologists provides an important potential for reaching new LEMS patients, as approximately 50% of LEMS patients have some form of cancer, most typically small cell lung cancer. We also expect to see continued growth with newly diagnosed LEMS patients who are not yet on Firdapse, as well as acceleration of the process for a definitive LEMS diagnosis. We have also made important advances in strengthening our intellectual property portfolio for Firdapse.
With the recent issuance of three new U.S. patents, these patents are directed to the treatment of patients suffering from LEMS and cover all amifampridine metabolizer types within the LEMS patient population. This milestone further fortifies our intellectual property estate, and we believe this provides us with lasting commercial durability for Firdapse, which has U.S. patent protection until 2034. All of these newly issued patents will be listed in the FDA's Orange Book within the next few weeks, which will bring the total number of patents listed to five. We will continue to execute our key initiatives to further strengthen and protect the long-term durability of Firdapse. Steve will provide more details later in this call. We're also pleased with the progress being made by our sub-licensee partner, Daito Pharma.
In December 2021, Daito initiated a small phase III registration study in Japan to evaluate the efficacy and safety of Firdapse for the treatment of LEMS. The initiation of this trial marked an important milestone towards expanding our global footprint. Currently, there are no approved treatments for LEMS in Japan, and we believe Firdapse can provide a meaningful new therapy option to those living with this disease. Assuming the trial is successful, we expect Firdapse to be granted 10 years of market exclusivity upon approval in that market. Our goal to expand our portfolio and pipeline with differentiated products to treat rare diseases, which currently are without any approved therapy, remains a strategic priority for this year. We have a robust and enhanced process in place in identifying potential assets to pursue and have made considerable progress on this front.
Our teams are actively engaged in extensive due diligence, and we are encouraged about projects currently under review. We remain confident in our ability to advance on these initiatives this year. As part of our ongoing effort to help raise awareness and amplify the voices of patients with rare disease in need of approved therapies, we recently teamed up with the leading patient advocacy groups and our partners at Nasdaq to participate in the opening bell ceremony on February 28, 2022 to honor Global Rare Disease Day 2022. We thank all of our partners for coming together and allowing us to show our support for the rare disease community. As a result of the many accomplishments, Catalyst is named on Forbes 2022 America's Best Small Companies published list, ranking 65 out of more than 1,000 companies screened.
It is an honor to be recognized by Forbes as one of the country's best small companies, as well as the acknowledgement of the value we are creating.
In saying that, we are excited about the path ahead of us. We continue to execute across all near and long-term priorities to drive substantial growth. We believe that we are well-positioned to build upon our success and are optimistic about the future. Now I will turn the call over to Jeffrey Del Carmen, our Chief Commercial Officer, who will provide further highlights on our commercial execution.
Thanks, Pat, and good morning, everyone. The Catalyst commercial team performed extremely well over the course of 2021. We are very pleased with the full-year Firdapse net sales of $138 million, representing a 16% growth year-over-year. In Q4 2021, net Firdapse sales were $38.3 million, a 7% growth versus Q3 2021, despite challenges presented by the continued resurgence of the pandemic. I wanna take this opportunity to thank the entire Catalyst team for their flawless execution in 2021, a true testament to our ability to remain agile while maintaining our commitment to the LEMS community. The foundation of the Firdapse business continues to be solid. Operational excellence drove new patient starts, maintained favorable access, continued high compliance, and lower discontinuations.
Net new enrollments in 2021 were 15% greater year-over-year, while discontinuations were 20% less year-over-year. Q4 discontinuations were only 5%, which is the lowest discontinuation rate since the commercial launch in 2019, and 37% fewer than Q4 2020. We expect considerable growth in 2022 and beyond. The current Firdapse market penetration is approximately 25% of the total adult LEMS population. Organically, growth will be driven from new patient enrollments of already diagnosed adult LEMS patients not yet on Firdapse, as well as a significant number of LEMS patients who are unfortunately misdiagnosed or undiagnosed. Additionally, we expect our non-personal promotion in other educational efforts to small cell lung cancer treaters about LEMS and Firdapse will yield more adult patients with a proper diagnosis of LEMS and accelerate the opportunity to receive treatment for this disease.
Early indicators thus far in Q1 show that we are building upon the momentum from 2021. Q1 growth in patients on therapy is on pace to exceed the entire year of 2021. Reimbursed patient discontinuation rates are also tracking to match the Q4 discontinuation rate of 5%. We continue to collaborate with advocacy groups such as NORD, Global Genes, Muscular Dystrophy Association, Myasthenia Gravis Foundation of America, Conquer MG and Myasthenia Gravis Association. It's part of the ongoing efforts of the biopharma industry and patient advocacy groups to call attention to the need for collaboration to encourage research and development of orphan drugs and bring new treatments to market for rare diseases that affect small patient populations.
In addition to ringing the opening bell at Nasdaq to celebrate Rare Disease Day, Catalyst has launched a LEMS Aware podcast to increase awareness of and connections in the LEMS community. Furthermore, we partner with key professional societies like the American Association of Neuromuscular & Electrodiagnostic Medicine and the American Academy of Neurology to educate their members about LEMS and Firdapse at their respective conferences. Our Catalyst Pathways patient services team did a tremendous job in 2021, supporting the needs of adult LEMS patients, caregivers, and healthcare professionals. Catalyst Pathways has numerous types of financial assistance programs to help patients with their out-of-pocket costs. Patients enrolled in Catalyst Pathways, including those who are covered by Medicare and accessing foundation assistance, have an average copay of less than $2 per month. Prescription approval rates remain over 90% across all payers, government or private commercial insurers.
The Catalyst Pathways patient services team also connects patients to community and advocacy resources, such as patient support groups. All of these resources are crucial as we effectively and compassionately transition patients from Ruzurgi. In closing, we are very optimistic about the growth potential for Firdapse. We will continue to generate new patient enrollments through precise commercial execution and the seamless transition of Ruzurgi patients. Catalyst is committed to serving the LEMS community and is passionate about ensuring access for all LEMS patients. I'll now turn the call over to Dr. Steven Miller, our Chief Operating Officer and Chief Scientific Officer, for an update on R&D activities.
Thanks for the commercial update, Jeff. I'll now provide an update on the important progress we are making on our clinical and product development efforts. Catalyst continues to work on improvements to Firdapse's franchise to address the needs of all patients.
Our medical affairs department continues to make valuable progress in increasing healthcare provider awareness of LEMS through our medical affairs programs. An accredited continuing medical education, or CME course about LEMS is available through Medscape. To date, over 5,000, mostly healthcare provider workers, have viewed the course, and as of February 17, 1,700 licensed healthcare providers have obtained CME credit. We have also provided a grant to Physicians' Education Resource to host a LEMS session at a live tumor board of oncologists to expand our support for CME programs. This live program will be recorded and provided as an enduring adult LEMS CME course intended primarily for oncologists for one year. Physicians' Education Resource will make this program available to all oncologists in their database, along with posting ads for it in several neurology and oncology publications.
CME courses provide a non-biased educational opportunity for doctors that support gaining knowledge and clinical updates in a particular therapeutic area, and Catalyst-sponsored CME courses have been a very successful method of educating physicians about LEMS. In alignment with our commitment to provide treatment for all LEMS patients, we are now completing a supplementary NDA submission package for the treatment of pediatric LEMS with Firdapse. We anticipate filing this supplement with the FDA this quarter. Catalyst has all the required data, including all necessary safety data, to file a complete submission for this label expansion. The preparation of this supplement is a high priority for Catalyst as we remain committed to advancing our efforts to expand the use of Firdapse so that we may be able to provide all LEMS patients with an approved treatment option.
We have made significant progress on developing an intellectual property estate to extend the market exclusivity of Firdapse. We recently announced that three new patents covering additional patient amifampridine metabolizer types had been allowed, and I am pleased to report that they have now been issued by the U.S. Patent and Trademark Office. One of the three patents was issued on March eighth, and the other two patents were issued two days ago, bringing the total number of issued patents protecting the Firdapse franchise to five. The claims in these new patents, combined with our previously issued patents, claim the treatment of all relevant amifampridine metabolizer types within the LEMS patient population.
One of the three new patents is already listed in the FDA's Orange Book, and the last two will be listed by the end of the quarter, bringing the total number of patents listed in the FDA's Orange Book to five patents. As a reminder, the first two patents were listed in the Orange Book shortly after their issuance in 2021 and 2020, respectively. This is an important milestone as our patent portfolio now provides broad, comprehensive protection for the Firdapse franchise, regardless of the NAT2 metabolizer type. We are pleased with the progress we are making on the intellectual property front, and we will continue to execute our key initiatives to strengthen and protect the long-term durability of Firdapse, which currently has patent exclusivity protection in the U.S. until mid-2034.
In addition to the U.S., Firdapse currently has data exclusivity in Canada until July of 2028, and in Japan, we expect Firdapse will be granted ten years of market exclusivity upon approval in that market. As previously reported, Catalyst has been developing a long-acting version of Firdapse, and our development efforts were progressing well. Over the course of the past several quarters, we conducted an in-depth evaluation of how the new formulation would be used by doctors and patients. In doing so, it was determined that transitioning patients to the long-acting dosing regimens would be a much more involved process than anticipated for doctors to accommodate and manage due to the wide variability in metabolism of amifampridine by N-acetyltransferase type two or NAT2 in patients, and also due to the great differences in drug release characteristics between the two formulations.
Additionally, it was determined that titration and dosing of the new formulation would differ substantially from the current version of Firdapse, and such differences could lead to complexities on how best to treat and titrate patients and could even be a risk for medication dosing errors. Therefore, adding Firdapse LA to the available treatment options would not be the most beneficial path for treatment delivery and for achieving optimum patient care compared to using only the currently approved Firdapse formulation. In alignment with our commitment to our patient-first approach and to do what we believe is best for patients and healthcare providers, we have decided to suspend further development of the long-acting version of Firdapse. We will continue to be open to further development opportunities in the future whenever such development is in the best interest of patients.
Now I would like to provide an update on our ongoing global expansion initiative. As we previously announced in June, we partnered with Daito Pharmaceutical for the development and commercialization of Firdapse for the treatment of Lambert-Eaton myasthenic syndrome in Japan. Currently, there are no approved therapies for LEMS in Japan, and we believe Firdapse has the potential to be a novel therapy to address this important unmet need. Daito Pharmaceutical has made great strides in initiating development activities, including consulting with the Pharmaceuticals and Medical Devices Agency to confirm the clinical study parameters and requirements to obtain regulatory approval. As a result of their efforts, Daito Pharmaceutical initiated the required clinical study in December of last year and anticipates that this to be a small-scale phase III clinical trial.
Catalyst continues to support Daito in the execution of the clinical trial by supplying clinical trial materials, as well as collaborating with Daito in its efforts to obtain the required documentation for the Japanese regulatory authorities. We will continue to execute on our key initiatives to enhance the market exclusivity of Firdapse and expand the Firdapse market geographically. During this quarter, we also advanced our objectives to expand our portfolio of rare disease treatments beyond Firdapse. As Pat mentioned, we continue to actively evaluate new products or other kinds of transactions to expand both Catalyst product offerings and/or our research and development pipeline. Our teams, including the product development team, are actively and vigorously engaging in the process as we look for worthwhile prospects where we can utilize our expertise, resources, and know-how to expand our programs and drive growth.
We have an improved process enabling a very efficient approach to identifying and assessing opportunities and are very pleased with the progress we are making as we remain committed to advancing our initiatives to expand our portfolio of rare disease treatments. We remain enthusiastic about the path ahead and confident in our ability to identify the right opportunities to maximize our capabilities and resources. I will now turn the call over to Alicia Grande, our Chief Financial Officer, to review our financial results.
Thank you, Steve. We are very pleased with our financial results for the fourth quarter and full year 2021. As reported, we ended the year with cash and investments of slightly more than $191 million and no funded debt. We believe this allows us the financial flexibility to advance our existing R&D programs and to support our strategic initiatives of acquiring earlier-stage opportunities and innovative technologies, leading to future growth and value creation. Our total net revenues for 2021 were $141 million, an 18% increase when compared to total revenues of a hundred and $119 million for 2020. Further, despite the continued challenges of COVID-19, total Firdapse product revenue net was $138 million for 2021, a 16% increase over the net product revenue of $119 million for 2020.
Net income before income taxes for 2021 was $53 million, an almost 26% increase over net income before income taxes for 2020 of $42 million. We reported GAAP net income for 2021 of $39 million, or $0.38 per basic and $0.37 per diluted share. For the year 2020, we reported GAAP net income of $75 million or $0.72 per basic and $0.71 per diluted share. It is important to remember that these figures are not comparative, as 2020 benefited from approximately $33 million of income tax benefits, principally from the recording of a one-time non-cash deferred tax asset of almost $32 million upon the reversal of our valuation allowance in the third quarter of 2020.
Our effective tax rate for 2021 on an annualized basis was 25%, while in 2020, we benefited from the use of our federal net operating losses and the release of valuation allowance. In 2021 and future periods, we expect that we will benefit from the use of our deferred tax assets, primarily relating to Florida State net operating losses on the orphan drug credit, although those are subject to certain limitations resulting in a more normalized tax rate. Because of the significant effect of the one-time recording of our deferred tax asset in 2020, we believe that the non-GAAP measures we presented in yesterday's press release provide a more useful comparison of our results of operations for 2021 versus 2020.
Non-GAAP net income for 2021 was $59 million or $0.57 per basic and $0.55 per diluted share, which excludes from GAAP net income stock-based compensation expense of $6 million, depreciation of $192,000, and an income tax provision of $32 million. This compares to non-GAAP net income for 2020 of $48 million or $0.47 per basic and $0.45 per diluted share, which excludes from GAAP net income stock-based compensation of $6 million, depreciation of $92,000, and an income tax benefit of $33 million. The above represents an approximately 22% increase of non-GAAP income year-over-year. Cost of sales expenses were approximately $22 million in 2021, compared to $17 million in 2020. This represents 25% of total operating costs in 2021, compared to 22% for 2020.
Cost of sales consists principally of royalties, which increase by 3% when net sales exceed $100 million in any calendar year as defined in the applicable license agreement. We expect higher overall royalties as a percentage of product sales as their income increases over $100 million per year each year as per our forecast. Research and development expenses in 2020 and 2021 were comparable at $17 million for 2021 and $16 million for 2020, and the expenses decreased slightly as a percentage of total operating expenses to 19% for 2021, compared to 21% for 2020. SG&A expenses for 2021 totaled $50 million, compared to $44 million in 2020. SG&A expenses decreased slightly as a percentage of total operating expenses to 56% for 2021 compared to 57% for 2020.
However, the overall increase in SG&A expenses in 2021 was principally due to increased legal costs and increased contributions to 560 organizations. More detailed information and analysis of our 2021 financial performance may be found in our annual report on Form 10-K, which was filed with the Securities and Exchange Commission yesterday, March 16, and can be found on the investor relations page of our website at www.catalystpharma.com. With that, I will turn the call back over to Pat.
Thanks, Allie. We believe that we are well-positioned to build upon our success and are optimistic about the company's future as we diligently pursue opportunities to diversify our commercial and development portfolio that aligns with our core mission to deliver value to patients, healthcare providers, and shareholders. Finally, I'd like to thank all of our employees for their continued dedication and commitment to positively impacting patients' lives. Operator, we would now like to open the call for questions.
Thank you. At this time, we'll be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Joseph Catanzaro with Piper Sandler. Please proceed with your question.
Hey, guys. Thanks for taking my question and congrats on all the progress here. Pat, I think you mentioned that a significant amount of Ruzurgi patients have already transitioned to Firdapse. I'm just wondering if you'd be able to maybe more specifically say how many of the estimated 125 have done so. You know, is it fair to say that the growth observed in Q1 that I think Jeff mentioned is being driven by this transition? Thanks, and I have a follow-up for you too.
Sure. Joe, we really don't wanna be specific, but I can tell you that many of those patients have already transitioned, and we expect the transition to be completed by the end of April. We're very pleased with how seamless this process has been. I think we owe a lot to our specialty pharmacy at OVO Rx, who has really done a great job and was ready and willing and able to take on this task. As far as growth going forward, Jeff, do you wanna take that?
Sure. I can just tell you the transitions did account for a significant part of that growth. I will also say that in March, we've observed the truly naive patients, so those patients that have never been on Firdapse or Ruzurgi that have been enrolled and been prescribed, that number is tracking to be our best month ever. That's what we've seen in March. We are excited about our organic growth as well.
Okay. Got it. That's really helpful. Maybe as a follow-up, I'm wondering what data points inform your estimated number of patients that were on Ruzurgi and how you've gone about identifying them, and whether it's possible that maybe there's more patients than you've estimated.
Yeah. Joe, you might be right. We don't know for a fact. We know the number of patients that were on Firdapse that went to Ruzurgi once it was approved based on, you know, some of the docs who had been involved with the company for quite some time. We know what we lost, and we assume that there was some growth on the Ruzurgi side over the last couple of years. We've got some pretty good data points that I think supports 125 ± 10%, but I think that's as specific as we can be on that subject.
Okay. Got it. Maybe if I could just squeeze one last one in. I'm wondering if there would be a point where in the absence of any business development, you would consider alternative ways to return capital to shareholders, like potentially a special dividend. Thanks.
Yeah. Good question. I don't think that's on the plate, a special dividend. You know, we've continued to buy our shares back judiciously as we can be. We spent $12 million last year buying shares back. We continue the program. That's our way of, I guess, returning money to shareholders without paying a special dividend. I do believe strongly that we will have a transaction completed sometime this year.
Okay, great. Thanks for taking my question.
Great. Thank you.
Thank you. Our next question comes from line of Charles Duncan with Cantor Fitzgerald. Please proceed with your question.
Yeah, good morning, Pat and team. Let me add my congratulations on the commercial progress this last year. Had a few questions for you. Wanted to ask you or Jeff a little bit more about the market dynamics. I guess I'm wondering, as you think about the switch patients versus new patient adds, where would you think, you know, the bulk of the growth could come from this year? Then also, if you go beyond, I think it was 647 prescribers, what is your goal in terms of the number of prescribers by year-end? Just kind of roughly, would you grow that by 5%, 10%? What do you think about that?
Charles, I think the number of prescribers is difficult to predict. You know, if you look at the numbers, it's easy to see that, you know, a lot of those prescribers have only one patient or maybe two or three patients. We do believe that our educational programs are very important in helping get to a proper diagnosis and a prescription for a LEMS patient. You know, we have a strong effort to increase that number. To use that's not really an internal metric or a goal that we look at. We really look at patient counts and things like that.
It's a good question, but we don't have an answer to that, and I can't give you a number that, you know, is a target for this year for prescribers. That number is growing nicely, and it seems to correlate to our spend for education to HCPs. As you know, we've got a CME program that educates docs, and we've had, I think 1,500 docs avail themselves of that program and actually earn their credit, and over 5,000 folks that have actually been to the program and studied the program itself. I think there's a correlation there between our education and the number of docs that we will see as prescribers for Firdapse.
Okay. Just also-
Charles.
I'm sorry.
Charles, just to address your other question there about patients organic versus transition. You know, we've demonstrated the ability to grow organically about 10%-15% every year, organically. We expect to do the same this year. I also will say that we do see some tailwinds that will be helping with hopefully the opening of the country back up again because of the pandemic. Like we've seen in March, we're seeing some good new enrollments of these truly naive patients. We expect to see strong enrollments of these patients for the rest of the year. We do anticipate significant growth from those patients too.
Okay, that's helpful. Quick question on asset acquisitions that could occur perhaps this year. I guess I'm wondering if you can provide some additional color on how you think that would leverage your existing infrastructure, either sales or back office, and if you can provide some color on, you know, really the focus areas, maybe therapeutic focus areas for those asset acquisitions that you can anticipate being able to complete this year. Then I had one follow-up for Ali.
So, you know, we would initially be looking and hoping to leverage our sales force with finding a product that would fit into the bag of our neuromuscular sales call point, previously. That was just too narrow a focus, Charles. Again, I think we've repeated this previously, but we made a couple of offers over the last 18 months, and which were fair offers. The counteroffers at that time were really egregious. We looked around and really couldn't find anything else in neuro or neuromuscular that made sense. We decided to expand our focus to a much broader therapeutic spectrum, you know, including any therapeutic class outside of oncology. That continues to be our focus.
We are looking for projects that are obviously rare disease that are beyond proof of concept and, frankly, hopefully, an approved product or a marketed product that we could acquire. I'm not sure that on the sales, the commercial side, from the reps' point of view, there's a lot of leverage there. I think from the back office point of view, market access, patient access, advocacy, I think that we're in good shape to take on other projects, which can be levered. There are operational levers as well, including our, you know, our finance and accounting and as well as our MSLs and medical affairs. I think that there are synergies that would be available to us on most acquisitions.
Okay, that's helpful. One last question for Ali. I guess I'm kind of wondering how you're thinking. First of all, thank you for the guidance on revenue and OpEx. I'm wondering how you're thinking about OpEx this year, especially given some of the reduced legal costs. If you can provide a little bit of color, especially as that drops to the bottom line, how do you feel about last year? It was a slight miss, I think a couple of pennies. Then going into this year, what would you project for bottom line?
Charles, I'll take that, and Ali can certainly chime in. For last year, we had a couple of areas where there were a few issues. OpEx was up slightly over budget, and a lot of that had to do with higher litigation costs related to our actions against the FDA, Health Canada, as well as our patent litigation with Jacobus. That litigation was very costly, far more than we had budgeted. Part of that were a few appeals in there that we didn't count on. We think those over budget is a good ROI based on the outcome. We're pleased with that spend, though it was certainly not budgeted.
We saw higher charitable contributions, the 501(c)(3)s, foundations that assist Medicare out-of-pocket expenses related to all LEMS patients, not just Firdapse LEMS patients. That amounted to about $1.3 million over budget. We think, to the best of our knowledge, we were the only one with foundation assistance for LEMS patients, which meant that those donations went to all patients that had LEMS that might require assistance no matter which drug they were taking or which therapy that they needed. Again, about $1 million in higher litigation expense, about $1.3 million in higher charitable contributions.
On the other side, if you will, the cost of goods sold as a percentage was higher as a result of some inflationary pressure that we saw on the supply side, especially in the third and fourth quarter, which we hope are transitory, as well as some costs associated with some scale-up work that we did to increase the batch size for our commercial lots. That total was about $2 million. Remember, in our cost of goods sold, our royalties are in there. That royalty, up to $100 million in each year, is 14%. For sales over $100 million, there's an additional 3% royalty.
As a result of those three items that I just mentioned, that took our cost of goods up, was actually about 1.7% over 2020, 15.9% versus 14.2%. I think those combined total over $4 million, which account for the two- to three-cent miss on EPS for the year.
Very thorough.
So going-
Going forward.
This year, we've stated that cash OpEx, which is our operating expenses, less non-cash comp and depreciation, will be somewhere between $65 million and $70 million.
It sounds like some of those drivers to the expenses last year may abate this year. You know, of course, forgetting about the inflationary pressures, you can't really perhaps guide that, but the other drivers?
Yes. Yes. I think we will find out by the end of this year that those investments that we made last year that got us over budget had a great ROI for the year.
Okay. Very good. Thanks for the thorough answer and for taking our questions. Congrats on a good year of progress.
Thanks, Charles.
Thank you. Our next question comes from the line of Scott Henry with Roth Capital Partners. Please proceed with your question.
Thank you and good morning, and let me start with a Happy St. Patrick's Day. Pat, it sounds like you may be one that celebrates that holiday.
Thank you. Thank you, Scott.
Before I dig into the questions, let me just say I thought the on-hold music has certainly turned it up a notch. Moving forward now. A couple follow-up questions there. First, on the cost of goods sold percentage, that 15.9, how would you... When we think about 2022, should we be thinking of a number, you know, north somewhere between 16% and 17%? Is that kind of the way those trends should play out? Or maybe some of those one-time costs may offset that? Just trying to get a sense of because I know there are those step-ups in revenue numbers.
In the royalty, yeah. I'm sorry, Scott, I'm not sure that we wanna give any guidance on that. I think at that 15.9%, we're at the high end and, you know, from a conservative point of view, it's probably not a bad place to be.
Okay, fair enough. The other thing that sort of jumped out at me, when you look through the 10-K and it separates selling costs versus G&A, it looked like the selling costs were higher in Q4. Any driver to that? Should I think about that going forward?
Jeff, do you wanna take that? Yeah. You know, there were areas that we felt that we could make further investments in Q4, Scott, that some of the new programs that we've initiated. You wanna take that, Jeff?
Sure. To add to what Pat was saying, what we like to do is, you know, we look at ROI on some of the initiatives that we're doing. If there are some initiatives that just are not, you know, playing out the way we thought, then we'll reallocate. What we also did in Q4 was we initiated the non-personal promotion to oncologists, and that also ramped up some of the selling expenses there. In anticipation of the new year coming, we like to, you know, put some of these new resources in place so that we can get traction early in the year. That's why we saw the increase in selling expenses.
Okay, great. Thinking about 2022 in the kind of the quarterly progression throughout the year, should we sort of expect, you know, a bolus in the beginning of that step up in patients and then gradual growth thereafter, or will it be more steady growth quarter to quarter?
Well, you know, I think it's a fair question, and we're hoping that the pandemic is subsiding here and the country's opening up. What we're seeing is that we're seeing a strong March because of the country's opening up again. We do anticipate from there a steady new enrollments similar to what we're seeing in March.
Okay, great.
Scott, you may be referring to the bolus of patients that are transitioning to Firdapse. We've stated we expect that transition to be completed by the end of April. You know, you will see a step up, I think, in Q1. You'll continue to see what we refer to as organic growth. Those are, as Jeff had mentioned earlier, the naive patients that are, when I say naive, to any form of three,four-DAP, meaning they haven't been on Firdapse or Ruzurgi before. Remember, it takes a little time to get these folks that are transitioning onto reimbursed drug. I think that you'll see sequential growth quarter to quarter this year from our commercial team.
Okay, great. Final, bigger picture, more strategic question, Pat. You had mentioned as you look to acquire other technologies that perhaps some of the prices out there are not favorable for what you would wanna pay. You know, sometimes when prices are high, sometimes it's better to be a seller than a buyer. Is that something you think about in your equation, you know, perhaps being a seller as opposed to being an acquirer?
Scott, no, we don't think about that often. As a public company, obviously, if there was incoming interest on the buy side, we as a public company and a board of directors have to consider what would be a fair offer. It is not one of our initiatives for this year.
Okay, fair enough. Well, thank you again for taking all the questions.
Thank you, Scott.
Thank you. Our next question comes from the line of Joon Lee with Truist Securities. Please proceed with your question.
Hi. Thanks for taking our questions and congrats on the accolades from Forbes.
Thank you, Joon.
Sure. What has been the experience of Firdapse among small cell lung cancer patients so far? You know, it's an aggressive disease with survival of about two years or less from the time of diagnosis. Curious if your rate of patient identification is keeping up or able to exceed patient loss. Also, can paraneoplastic syndrome such as LEMS be part of small cell lung cancer or other cancer diagnostic group to facilitate diagnosis and reimbursement? Thanks. I have a quick follow-up after that.
I'll take the first question there. We are seeing significant uptake in, you know, the percent of our new enrollments that are tumor LEMS or paraneoplastic LEMS patients. You know, currently, we're about 20% of our new enrollments are tumor LEMS patients. So, you know, part of our goal is to increase that percentage. The other part of this is, as you mentioned, the survival rate of those patients, about, you know, two years or so. You know, we're hopeful that we can, you know, accelerate the diagnosis of LEMS in those patients, so we can help those patients sooner. So that's the other part of this, the education process that we're putting out there.
I just have one additional thing to add to what Jeff just said. By making efforts to help diagnose these patients sooner, hopefully their small cell lung cancer will be diagnosed earlier, giving these patients a better prognosis and a longer lifespan than the one-two years that you mentioned in your question.
Yeah. What about the chances of LEMS being part of the DRT or for small cell lung cancer? Is that something that's reasonable or am I not thinking about this correctly?
Yeah, I don't think that's on the radar at this point, Joon.
Great. We're really interested in the opportunity in Japan. I know that the Daito is running the trial, but assuming they're running a similar trial as what you did in the U.S., you know, are you able to disclose where they're looking at day 14 or day four? Because based on the two trials you ran successfully, the day four had a much more drastic effect size in terms of QMG. I'm just curious, you know, what if that's also their strategy. Can you tell us a little bit about, you know, Daito? We know that it's a big Japanese conglomerate with a bigger exposure in the consumer segment, but curious what the experience is in the pharma development. Thank you.
Well, let me answer the first part of your question with regard to the trial. It is a different design than we ran in the United States, but it's also a single arm design. It basically is really just to verify that Japanese patients will respond to therapy similar to what we've seen in the double blind controlled studies, response for patients that were studied in the U.S. As we have previously announced, it is a very small study, and Daito has confirmed with PMDA that the small study will be sufficient for that market, and they anticipate completing it relatively quickly.
Yeah.
With regard to Daito's experience, they have actually recently entered the pharmaceutical space and have built an entire pharmaceutical division. They have hired a large number of very experienced pharmaceutical executives across all areas of pharmaceuticals, including research and development, regulatory affairs, sales and marketing, manufacturing, and they have all the necessary experience and talent to successfully market the product in Japan. They are pursuing other products, although this is one product that they really were happy to get because they feel it will be very successful in Japan.
I might add that, being one of their first couple of products, it's a very important product to them.
No, I think I got that sense based on their website. Okay, that's great that the single arm will be sufficient. Sounds like a very surmountable bar. You recently announced the agreement with BioMarin to extend the agreement to most of Asia. I mean, does that include China or does that not include China? Because it sounds like the, especially given the small cell lung cancer population, there could be an opportunity, but can you elaborate on that?
Yes. Our agreement that we negotiated with BioMarin basically requires us to file an NDA in Japan before we are allowed to pursue marketing of the products in the remainder of the Asia Pacific region. Obviously, as we just spoke about, we are going as quickly as we can to get that NDA filed in Japan so that we can open the remainder of our market expansions. You are correct, the Chinese population is large, close to a billion people, and they're heavy smokers, and so there is a lot of small cell lung cancer in China. Then just simply because of the sheer number of people, there should be a large number of LEMS patients there as well.
It is one of the nations among the several nations of interest to us in the Asia-Pacific region.
Thank you.
Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. McEnany for any final comments.
Thank you. Thanks everyone for joining our call. We look forward to our next corporate update. Have a great day.
Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.