Maybe to start, could you guys provide a little bit of background on how Catalyst Pharmaceuticals has been able to become a successful commercial pharmaceutical organization? Maybe in broad scope, what should we be expecting for the years to come?
Sure. We are a buy-and-build company, so we look for assets in the field that are significantly de-risked. We don't do any R, we do minimal D, and we look to partner with companies that don't have the infrastructure but want to bring their products to market. We focus on orphan and rare diseases. Our infrastructure is very tight, and we have external support from a specialty pharmacy, a patient hub, and a 3PL. We're able to really operate effectively and efficiently and deliver new medicines, and we believe better medicines for patients in need.
I think we should probably start with FIRDAPSE, given it's currently your biggest seller with just about $85 million in second-quarter sales. Can you just give a quick overview of the LEMS indication, including the idiopathic and cancer-associated disease segments, and how FIRDAPSE mechanistically benefits these patients?
Sure. So a Lambert-Eaton Myasthenic Syndrome is an ultra-orphan condition, about 3,000 to 5,000 patients in the space. The idiopathic or non-cancer LEMS is separated from the cancer LEMS, and it's about 50/50. We've done really, really well on the idiopathic side, growing the business almost 15 quarters in a row, 15% each quarter. Obviously, building on a bigger base, that milestone becomes a little bit more challenging. We foresee that we will continue to grow at that rate because of our movement onto the oncology side. The idiopathic side is more of a prospecting business where you have to find one patient. The average physician neurologist actually sees one LEMS patient in their entire career. It's very challenging to support that model. On the oncology side, small cell lung cancer is a major challenge for oncologists, and about 3% of those patients each year have cancer-associated LEMS.
That means there's about 900 patients who are diagnosed. The interesting thing about this market is that those patients with small cell lung cancer and LEMS live twice as long as a patient with just small cell lung cancer, and nobody knows why. We're working very diligently. First, we have what we call frictionless testing, where we contracted with Quest Diagnostics to do the testing in the office, and the patient gets that test back. Secondly, we work to change NCCN guidelines, which is the standard for oncology, and we just had that update, which includes FIRDAPSE, includes testing. FIRDAPSE is the only evidence-based medicine that actually works in LEMS. Now we're working with the GPOs, who control 80% of all oncology practices, to actually drive the care pathways and change those care pathways based on NCCN guidelines.
We see this opportunity as a really interesting one for us because it's a very concentrated market, obviously, the oncology office. These are very large practices, and when they change their care pathways, it really moves through, and it takes great effect. We believe this is a major growth driver for us.
Great. You said there's, I believe you said there's around a U.S. prevalence of 3,600 patients on a rotating basis, sort of. Can you talk about how that breaks down between idiopathic and cancer-associated disease? I think you've also said that could expand by another 50%. Is it safe to say that's mostly from the cancer side, or talk us through that.
That's a great question. The market is split about 50/50, and our most conservative estimates have about 1,700 patients in each arm. The data are really, really sparse on idiopathic. We know that it's split 50/50, and we're using the oncology side, where we know it's 3% of small cell lung cancer patients. Those patients, as I said, are 900 each year as a potential market and about 1,700 if you apply a Kaplan Meier curve to those patients. Since it's split about 50/50, the assumption is on the idiopathic side, where the data is light, it's probably about the same.
However, as we see with most orphan conditions, and I've been involved in the orphan side of the business since the 1990s, especially with those conditions that present either not necessarily upfront with a classic symptomology, but also that might be hidden behind a cancer diagnosis, you start looking for patients, you start finding patients. Initially, the forecast was there were about 1,000 patients in the market. We know that that's not true based on the number of patients we've treated to date. We're really excited that this can actually grow the business and continue to grow the business at a 15% better clip quarter on quarter.
On the oncology side, impressive recent progress with the easier testing paradigm and the fairly recent update to the NCCN guidelines to improve language around diagnosis and utilization in patients with cancer-associated disease.
Can you talk about the impact to physician awareness from the improvements in testing and the NCCN guidance so far?
There are four steps to our approach. One was to get the frictionless testing. Two was to update the NCCN guidelines. Then it's the education opportunity, paired with the change in care pathways. I've spent 15 years in oncology. Oncology is so complex today that NCCN really does drive what the physician does. It's really a protection mechanism for the patient and for the practice. We'll work with oncology practices at a GPO level, but also at a local level. For instance, Florida Oncology is one of the biggest, if not the biggest, oncology practice in the United States. We'll work with somebody like Florida Oncology, Texas Oncology, Tennessee Oncology, and the hundreds of oncologists that they have in their practice to drive that care pathway.
Each of these GPOs has an education arm where you can purchase education, or you can purchase opportunities to remind a physician, once the patient is diagnosed, they'll get it with small cell lung cancer, they'll get an email that says, you should test for LEMS. Obviously, we'll be in that clinic working with those doctors. Again, great growth driver for the business.
Great. When you talk about building out those partnerships, could you talk about the time horizon and when you expect those things to come into play?
The NCCN guidelines came about two months earlier than we thought, Luke. We're really excited because it was supposed to come in September, came in late July. We actually took what we believe is an appropriate risk. In May, we hired oncology specialists, just two. They've operated at the top of the house. In other words, they operated at the GPO level decision maker. Since May, we've been calling on the GPOs, saying, this is coming, this is happening. We're excited that it came two months earlier. To work with them to, again, get the education programs going. The time horizon for us is probably this is a 2026 and beyond growth driver because we need the time to get the NCCN guidelines into the care pathways, begin educating the physicians. For instance, the small cell lung cancer specialists were unaware that the LEMS patient lives twice as long.
In the roundtables we've done with those physicians, they tell us, knowing that, I will be much more aggressive in looking for supportive care opportunities for the patient. It's 2026 and beyond.
OK. With 90% of those patients remaining undiagnosed, do you see a scenario where you can maybe get to a 50% diagnosis threshold or potentially greater? What do you see as the ultimate potential?
When we talk about the potential for the market, the dollar value of this market at today's prices, let's just assume for the sake of argument that we take no price increases in the future. It's a $1.2 billion opportunity. We're essentially the only ones here, probably for around the next 10 years. We've settled some of our IP, which I'm sure you'll ask about, with some of the litigants to February of 2035. Given that time horizon, is it possible to get beyond the 50% mark? There are other very small targeted indications in oncology that once they got testing, once they got NCCN guidelines, were able to drive above a 50% share. We're working on that. That would be a really important goal for us. Yes, we do think it's possible.
OK. To touch on the idiopathic side, could you compare and contrast that growth opportunity and what differential efforts might be needed?
Yeah, so that's more of a prospecting market. You've got to find the patient. We use data and AI to find those patients because myasthenia gravis is the most frequently misdiagnosed diagnosis for a LEMS patient. We use data in the marketplace. When we see a physician using therapy for myasthenia gravis, obviously, we do this in a compliant fashion. We don't know the name of the patient, and we work with the practice to be sure that we're speaking appropriately. We go into that practice, and our field representatives go in and start talking about what is LEMS, what does it look like, and then what's the differential diagnosis for this because it's quite different than myasthenia gravis.
With the recent moves on the commercial side, with a number of myasthenia gravis therapies coming out and the DTC advertising that they do, we believe this is a tremendous opportunity for us and for the patients. Many more patients will get diagnosed with myasthenia gravis and have successful treatment, which is great. That also means many more patients will be misdiagnosed, won't respond to those therapies, and the physicians will look for the next viable option. That's what we call the best money we never spent because it really benefits us. We're really excited about that. We keep a pool of about 500 patients that we're tracking at any point in time in their therapeutic journey. It takes about four years for a patient to go from diagnosis to actually getting on FIRDAPSE because of the education component.
We hyper-prioritize about 100 of those patients, and every quarter, quarter on quarter, 50% of the patients that we get on therapy come from this hyper-focused pool. We keep track of it, and we refresh the pool, and we refresh the focus. We are always looking and always prospecting for those patients. They're very different markets, and that patient actually lives an average lifetime as well. They're going to live for a long time. The diagnosis is much lower, but the patient lives much longer.
Right. OK. Just to step back for a moment on FIRDAPSE, you've set your full-year 2025 guidance between $355 million and $360 million, and you see this $1 billion market potential. Can you talk about just how you're thinking about the relative contribution from the idiopathic and the cancer-associated side?
Right now, and one of the reasons why cancer is such a focus for us, right now, about 80% of the patients are idiopathic and only 20%. Our penetration in these markets is about 30% to 35% on the idiopathic and less than 10% on the oncology side. This oncology practice, more concentrated care pathways are going to become the driver of use. You can see this opportunity to continue to grow the patient population and to grow the business.
Great. I think we should move on to AGAMREE, the corticosteroid for Duchenne Muscular Dystrophy. Can you just give an overview of the ongoing role of corticosteroids in managing this disease? Obviously, there's been a lot of progress with other modalities and the share of drama around that as well. Why do you think AGAMREE is the optimal option in thinking about steroids for these patients?
Sure. Steven, do you want to take that one?
Sure. AGAMREE has, first, let me just speak about the corticosteroids. Corticosteroids are the basis of therapy for DMD. It's the drug that is added to, not the drug that gets added to other therapies. There are a number of very promising therapies that are being developed for the patients. We're happy for all the patients out there. The bottom line is that during most, if not all, of their disease progression, they're going to need corticosteroids. AGAMREE is a better option for those patients, and we believe it to be because it appears to have a much better safety profile than all the other corticosteroid options that are out there right now. All the literature data and the data that's available in the public domain, as well as data that we've developed, seems to show that it has much better bone health, bone density, bone growth.
The patients develop better stature. They end up taller. The patients don't show any of the aggression and anxiety that you see commonly with corticosteroid use. It also, we believe, will have a much lower, if not eliminated, risk for cataract formation. Finally, it has a unique mechanism of action relative to all the other corticosteroids that we believe will contribute to better cardiovascular safety. The top cause of passing away for DMD patients is heart failure.
With this substantially reduced side effect burden, what are you doing to drive share? How can you make this story clear to physicians and the patient community?
A lot of the data that Steve just talked about is in the European label for AGAMREE, but it's not in the U.S. label. Our business model is one where we typically get engaged very late in the process of buying something or getting access to something that's immediately accretive or nearly immediately accretive. There's likely work that has to be done, and this is part of the work that we're doing. We're actually reaching out to the 100 centers, centers of excellence, and diving deep. We've got prescriptions from at least 90, if not more, of those centers of excellence. The goal is we've gone broad, now we go deep. We also need to get the data out there about why this is a differentiated product. It's equally efficacious as the other steroids, and as Steve said, patients should be on this.
This is the first drug that patients go on, and it's the foundation of therapy. We're doing a study we call the Summit Study. Steve, do you want to talk about that?
Sure. We have a study that will be enrolling over the next five years. It is a study enrolling patients who are on commercial AGAMREE. We will be, upon enrollment in the study, looking at the progression of their disease. This study was designed to follow FDA guidances related to how a study can be done to compare to natural history of disease progression, which will enable us to collect safety data over a long period of time and then amend our NDA to improve the label to have on the label all those safety advantages that I previously mentioned.
OK. I believe on the Summit Study, I believe it's taking place in about 25 centers of excellence. I think you've said 19 are already enrolling. Can you talk about the pacing of data and your general idea of when we could see these things added to the label?
Yeah. You know, with the exception of the aggression that you can see almost right away, most of the disease progression or the side effects are relatively slow in their progression. In order for us to do the analysis that I mentioned against the natural history of the disease, we have to have a large enough N, which means we have to continue to recruit the study. We have to observe the patients for a period of time. We're probably looking at maybe a year and a half to two years before we have what I'll call controlled data compared to the natural history. You have to be very judicious about when you do this analysis because you have to spend alpha, which means it gets a little harder to achieve statistical significance each time you do the analysis.
The good news is it is an open-label study, so we can do descriptive statistics on what we're actually observing and get it out to the physician community so that they can see what the advantages are of AGAMREE relative to other corticosteroid options. We'll be publishing that data or presenting it at professional meetings from time to time.
Luke, I also want to add too that behavior is the first thing you see, and sometimes you can see it within weeks. At least that's the feedback we get from patients, the caregivers, generally the parent. They say that this makes such a huge difference in not only the patient's life, but the family as well. These are all boys and young men, and they're in school. If you can imagine, if a child is less aggressive in an educational environment, not only is the child benefiting, not only are the parents benefiting, but everybody who shares that classroom benefits. This is the feedback we're getting from the field right now. The product's been on the market about a year and a half, and they're saying, wow, we're seeing a difference in these patients. Again, not in the label, but this is the feedback we get.
We're looking for case studies to publish in the interim on the benefits of the drug as it comes forward.
Great. You've made some solid progress in the launch thus far. I believe you've outlined sort of there's a top 45 centers of excellence.
Yes.
You've reached about 90% of those.
Your guidance for 2025 is $100 to $110 million in sales. You've also said you see a billion-dollar market here as well. Can you talk about the keys to unlock this growth?
Sure.
I know you've mentioned the potential addition of those safety aspects to the label. Do you think that the additional physician experience from your outreach efforts, as well as the fact that the study is ongoing and there is some word of mouth, how do you see this moving forward?
The market, there's 11,000 to 13,000 boys and young men in the Duchenne Muscular Dystrophy (DMD) space right now. 95% of them have been on a steroid. Only 70% are currently on a steroid. Anybody who takes a steroid long term with Duchenne Muscular Dystrophy, the data are pretty clear. If you take a steroid long term, you walk for 2.5, 2 to 2.5 years more than if you don't take a steroid. Foundation therapy. As we look at this, the opportunity is $1.2 billion, and that's a conservative number. The opportunity is to grow from 70% currently under therapy up to the 95% potential. We also share the market. Unlike the FIRDAPSE market, we share the market with three other players: generic prednisone, branded deflazacort, and generic deflazacort. All else being equal, you get your fair share.
If you're just as efficacious, you don't have a better side effect profile. We haven't given long-term guidance for the product. If we believe the product is better and we can get that data out there, we should get an unfair share of the market. When you think about this, generic brands generally don't have voice. PTC has been very successful, the makers of deflazacort. They've been very successful in this market, and they have other opportunities. As they exit the market, the opportunity for us is we become the voice, the sole voice in this market. We think we can drive that with the data, with the effort, and then the experience of the early adopters talking to their peers in the centers of excellence, especially the late early adopters, and eventually bring on the late adopters.
Our plan is to keep managing that share of voice and continue to grow there.
Great. You've mentioned some lifecycle management efforts on AGAMREE. Where do you expect an update? I think you've said you expect an update in late 2025, early 2026. Can you talk about any insight that you could provide, or is it a little too early to talk in depth here?
It's still a little too early. We're looking at the immunosuppressive dose in a phase one study and also the translational dose from prednisone or generic prednisone because that's not in the label. We believe that represents an opportunity for patients to get better care if we can provide better direction. We're still looking at it. We're still waiting for the data.
OK. Could you just provide a little more color on where you're at with the IP for FIRDAPSE?
Steve's our man on IP.
Yep. With regard to FYCOMPA, there was a total of four Paragraph IV filers. Three of them were first filers. We settled with the non-first filer, as well as two of the three first filers. The entry date that we've settled for with them is February of 2035. There's one remaining litigant, which is the Hetero. It's ongoing litigation. There's really not a lot I can say about it. I can give you just a little bit of history, which is that typically when some have settled, usually the rest follow behind. That's historically what has happened. In addition to that, we have a Markman hearing coming up on October 7. The only remaining litigant now is paying all the bills as far as being an offender.
OK. One consistent question you guys have gotten, I'm sure it's very frequent, is you've mentioned being very busy with regard to the evaluation of new assets. You've commented that you think it's a very favorable environment for doing so. 80% of those opportunities have come in as inbounds that you're evaluating. I know this is another sensitive topic like the IP. Are there any additional thoughts you can provide on your strategy that could maybe be exemplified by the success you're having with your products that you have right now?
We love the 80% number of being inbound because I think the commercial success of the organization demonstrates our capabilities. People look at that and they say, hey, this is a really good company. They can execute if we partner with them or license to them. We look at, as I said before, immediately accretive or nearly immediately accretive. We're willing to take regulatory risk, certainly willing to take commercial risk. You see that with the AGAMREE license. We actually licensed that product before it was approved. We feel our capability on diligence is quite good. At a very high level, we look at it in three elements. We look for differentiated products, clearly. We want to be able to make money because we think that's really important because it funds the future. We want to keep doing that. We look for the social aspect.
This, to me, I've had the opportunity in my career to run two major integrations, massive integrations, thousands of people in the companies. What I've seen and experienced is the assumption is, oh, our cultures are very similar. It'll be easy. It never is. One of the standard jokes I always say about any alliance, and I've managed 10 of them, is the first day is the best day, and it's downhill from there. It just gets tougher and tougher. The social element is really important. Do you get along with the management team? Does the management team have the same vision you do for the product? Or can they help you have an improved vision for the product? You look at the differentiation, capability to make money, and social. That's the highest level.
We've walked away from opportunities where the social wasn't good because that's a drain on management's time. We want to be sure we can be effective and continue to execute like we have executed. We think that's really important. We're looking at those immediately accretive products or nearly immediately accretive, orphan, and we're agnostic to the therapeutic space because we believe the back of the house, we have, as I mentioned, a hub, a 3PL, and a pharmacy, specialty pharmacy. The essence of that is to get the patient on the drug, keep the patient on, and optimize their dose. Those are services that become really important. Many companies coming to the orphan market don't understand. They see 10 or 12 reps, and they think, oh, this is going to be a low SG&A. Actually, it's a lot higher than you think. It's still very favorable.
It's not primary care with sales forces of 500 in each leave. You have a lot of intimacy with the patient communities. That takes a lot of effort. I think that's another area where we really excel. When we look at the opportunity, we try and cap it out at about $500 million in peak sales because that's attractive to us, but it's not attractive to bigger players. We can't compete against those bigger players. We have a very, very strong balance sheet, $652 million in cash. We have no debt, or as Mike likes to say, $652.8 million in cash and no debt. We can lever up for the right opportunity or opportunities. We think we're in a really strong position.
The capital markets, being what they are, I think some of the companies are going to find they'll have a great asset, but they'll find they can't have enough cash to get to market, but maybe not enough cash to sustain. We think we're in a great position to help those companies and help the patients they intend to serve.
That was a very comprehensive answer. That was great. You also have FYCOMPA, which is facing generic pressure, but maybe not as straightforward a curve as is typical. Could you talk about the dynamics there?
Yeah. FYCOMPA is an epilepsy product, not an orphan product. We did this as a financial transaction a couple of years ago to strengthen our balance sheet, increase the diversity of income. When you have one product, we had FIRDAPSE at the time. You live and die by one product. Obviously, you want diversity of income. We did that. The product lost exclusivity at the end of May. We expected two first filers to come in. Only one came in, and they came in about a month late. They came in at a great price. They went market minus about 17.6%, which is phenomenal. The second first filer, we haven't seen. There's still a little risk playing there. Epilepsy degradation curves are different than typical retail products. Typical retail products, within eight weeks, you've lost 90% of your share. It's much smoother with epilepsy products. We're experiencing that right now.
We're seeing really good share retention. We're not really fighting a price war, which is good. Everybody should pray for smart competitors. We think the one competitor is there. It's very smart, and we like that. We're going to lose share. We're going to lose dollars. We expect two more entrants to come in in the middle of February or middle of November. While our curve on prescriptions looks good, it's actually going the other way. It looks good and is above what we thought. There's only so many patients on FYCOMPA, and when the ex-factory sales happen toward the end of the year, we expect to lose ex-factory sales even while the share remains solid. We did $70 million in the first six months on a guidance of 90% to 95%. We've got a lot of questions about that. We're going to continue to lose share.
That's just the nature of the beast. We're going to lose that ex-factory dollars, and we can't eat share at the end. We eat the dollars. We need that opportunity to be as strong as possible. That's why we think we're remaining really prudent on the guidance and not updating because we still have a little bit of risk in that profile. It looks great so far.
Wonderful. That's all I had. Is there anything else you wanted to comment on?
No, thank you.
Really appreciate the opportunity. Thanks.
All right.
Thank you.