Give me those questions.
Good afternoon, everyone. Thank you for taking the time to join us here. For our next presentation, we're excited to have Catalyst Pharmaceuticals, and joining me from the company to my left is Rich Daly, who's the Chief Executive Officer of the company. For those of you who don't know me, I'm Glen Santangelo. I'm one of the life sciences analysts at Barclays. I cover specialty pharma and animal health. We do not cover Catalyst Pharmaceuticals, but it's been interesting to learn a lot about it in the past several weeks, so really looking forward to the presentation. Thank you Rich for joining us. Very glad to have you here.
Thanks, Glen.
You know, maybe a good place for us to start for those who don't know the company, maybe we should just spend a minute or two talking about your three primary commercial products that are at different stages of their life cycle. Maybe just sort of give a high-level overview of the company for a minute or two.
Sure.
We can sort of dive right in.
No problem. Catalyst Pharmaceuticals is a company focused on rare diseases, and in our rare disease portfolio, it's actually ultra rare. We have a muscle activating drug called Firdapse, which works in Lambert-Eaton myasthenic syndrome. We also have a drug for Duchenne muscular dystrophy. It's a steroid, we believe a differentiated steroid called Agamree. Firdapse has been on the market for about 8 years. It has consistently grown 15%-20% every year, so it's actually defying the law of decreasing increases over time, which is just a tremendous story. In March of 2024, we launched Agamree for Duchenne muscular dystrophy. I'd love the opportunity to talk about this in a little bit, but which looks like it's a differentiated steroid and has a really interesting clinical profile.
Some data just came out at MDA this week in Orlando that further supports that out of Europe, so we're really excited about it. Finally, we have Fycompa, which is a drug for epilepsy. We bought that drug from Eisai a couple of years back, and the drug has performed really well, but we experienced a generic incursion in about mid-year, but the drug has continued to perform really, really well, although it is declining in revenue, as expected.
Okay, excellent. All right. Maybe why don't we start with some recent results, given that we just kind of came off fourth quarter earnings.
Sure.
I mean, you know, 2025, you wrapped up a great year, you know, 20% revenue growth. I think you're sort of forecasting even faster growth in 2026, and we'll get to that.
Sure.
We'll dissect the pieces of that in a minute, but maybe you just want to give us a quick overview, 2025 and the momentum you had into Q4. Maybe was there anything, looking back on 2025, that maybe surprised you maybe either positively or negatively relative to maybe what you would have thought as the year sort of progressed?
Sure. We entered the year with a lot of expectation for continued success for the company and for the brands, and we saw that. It was a really interesting year. As I said, Firdapse continues to grow 15%-20%. It's a very solid performer, so we're really excited about that. We implemented a couple of things, Glenn, in the year on the specialty pharmacy side. As you know, in the rare disease space, we use specialty pharmacies, which actually helps patients get on the drug sooner, get on the right dose, titrate as appropriate, and then remain on it. We did that in June, two things in June and September. We're seeing the results of that.
Patients' desire or leaving the brand has declined, so the performance of the brand has propped up on that. That's on the Firdapse side. We also initiated a number of programs for cancer-associated LEMS. LEMS is LEMS, but some of it's not associated with cancer and some of it is. The non-cancer associated is called idiopathic, and then there's cancer-associated LEMS. We worked with the national lab to get testing up on a panel. There's a very simple test called the VGCC test, the voltage-gated calcium channel test, and that's now on national labs. We also worked with the NCCN, National Comprehensive Cancer Network, to actually get Firdapse into the guidelines for cancer-associated LEMS. Now we're working with the GPOs.
The GPOs control. There are three GPOs that control about 80%-90% of all community-based oncology practices, and they follow pretty strictly the NCCN guidelines. We're really excited about that. On the Agamree side, Agamree has launched really well, and it's sourcing patients from both the generic prednisone that's on the market and Emflaza or generic Emflaza. About 45, 10, the remaining 10% come from naive patients. The one thing that occurred, and the brand weathered this really, really well last year, was some of the challenges, the safety challenges on Elevidys.
We knew when Elevidys got its label expanded in the middle of the year that there would be some challenges, because patients needed immunosuppressive dose, and so that created sort of a line where there was a delay in patients getting converted from prednisone or Emflaza to Agamree. The brand weathered that really, really well and came out of the year in a very strong position. As I said, Fycompa experienced generic incursion, but because of some of the work that our Chief Commercial Officer, Jeffrey Del Carmen did in keeping promotion on the brand all the way through the end of the year, the brand continues to perform well, although it is declining as expected.
All right. Why don't we dig into each of these products individually? Why don't we start with Firdapse? Very strong guidance for 2026. You know, your $435 million-$450 million in revenues implies 21%-26% growth.
Right.
Obviously, a big number. You know, you started to touch on some of those key drivers, but maybe, you know, could you help us think about sort of the idiopathic LEMS versus maybe the market share?
Sure.
Any gains you hope to assess on the cancer side, which you were just sort of speaking about?
On the idiopathic side, the number one misdiagnosis is generalized myasthenia gravis. One of the things we're really excited about for the patients is that all of this effort on DTC for generalized myasthenia gravis, we believe, will benefit us down the line. As these patients come in, they'll be diagnosed with gMG. A really interesting fact here is that the average physician sees one LEMS patient in their entire career.
Huh.
It's that rare. When they see a LEMS patient, they automatically think muscle weakness in the extremities and all that, must be gMG. They'll put them on a gMG therapy. With all this awareness going on, we think it's going to drive more patients in to be diagnosed. Most of them will be misdiagnosed with gMG, but then those therapies likely won't work. They'll be looking for the next things. This could actually accelerate their coming to Firdapse. The average diagnostic journey for a LEMS patient is between four and six years.
Wow.
You can accelerate that, you can get the patient on. These patients on the idiopathic side live a normal lifespan. They're diagnosed typically in their forties, fifties, but then they'll live a normal lifespan. On the oncology side, the patients are generally, LEMS is generally associated with small cell lung cancer, and we know that there's no good outcome there. The average patient without LEMS lives about nine months if they have small cell lung cancer. However, the average patient with LEMS appears to live about twice as long. It has nothing to do with the product per se, but LEMS is an early indicator of small cell lung cancer. A patient that gets LEMS generally gets diagnosed earlier in the disease process, and thus they live longer.
The way this works out, in any typical year, there are about 150 idiopathic patients that could be diagnosed, and there are 900 that could be diagnosed on the cancer side. Working with the large GPOs creates a really great opportunity to help serve those patients. Here's the takeaway. As successful as the brand has been, our penetration on the idiopathic side is about 30%, and the penetration on the cancer-associated LEMS for Firdapse is less than 10%.
Hmm.
There's tremendous upside in this for the patients and obviously for the company as well.
You made the case that the new NCCN, the National Comprehensive Cancer Network guidelines may have an impact.
Mm-hmm.
In terms of how these patients are diagnosed and treated.
Right.
Do you think that will ultimately, you know, increase sort of or lessen the impact from the increased diagnoses, if you will?
Yeah, we do think that. On the idiopathic side, and we have to keep pointing to these. We think of this as one molecule, but two brands or two distinct markets because they're treated in different areas.
Yeah, for sure.
When we think about the opportunity, oncology care, I spent 15 years in oncology. Oncology care has become very, very complex. NCCN guidelines become very important because of the complexity, and so there are care pathways in each of these GPO organizations that say they want to follow the NCCN guidelines. That's always such a focus for us. We think that can drive behavior among the oncologists. Yeah.
Are you changing sort of your, you know, your firm's commercial behavior in terms of education and promotion and doing different things to sort of drive these guidelines home and increase the diagnosis rate?
The idiopathic side is very much a prospecting market.
Yeah.
Whereas there's high concentration in the oncology side.
Yeah.
We work with the GPOs. They have education programs. They have other, opportunities to help the physicians really get in line with the guidelines because these are the preeminent guidelines that are out there, and they want to follow them. Yeah, we've changed it. We actually have dedicated a very limited dedicated force in the field to work with the GPOs at the very highest levels of the GPOs and really drive that education, drive that adoption of the care pathways.
Can we talk about the intellectual property on this product?
Sure.
I think you had some sort of settlement recently with Teva that locked in 2035?
February 2035.
With that agreement with them. I still think there's another litigant out there, Hetero.
There are three first filers.
Okay.
We settled with two of the first three. We settled with Lupin, and we settled with Teva. Teva was the first one to settle, and we see Teva, as many people do, as probably among the most sophisticated, generic producers in the world, and so, we feel really good about that settlement. We have still one remaining, Hetero. Our trial was scheduled for, March 23rd to start. We thought it would be about a 5-day, trial. However, the basic understanding we have of constitutional law is that criminal trials will supersede any other trial. It appears the judge may have a conflict. I want to really emphasize that. May have a conflict with our trial dates because he has a criminal case he has to hear as well.
However, you know, criminal cases can have an opportunity to settle, obviously, if there's some sort of arrangement with the defendant and the state. There may be an opportunity to stay on track. We're still tracking that. It's actually in our public docket that there may be.
I'm sorry, when was the Teva settlement, and when are the scheduled court dates for Hetero?
The Teva settlement was in January of last year.
January, okay.
Lupin settled about mid-year. We're still obviously open to conversations with our colleagues at Hetero. But if we have to go to trial, we certainly will go and defend our intellectual property. We're very confident, and I think the settlements support that confidence.
Okay. Maybe can we shift gears to Agamree?
Sure.
68% growth in the fourth quarter.
Right.
I think you've been pretty impressed with kind of what you've been able to accomplish to date. When you look at the guidance, $140 million-$150 million, that obviously implies a more modest 20%-28% growth. Maybe not surprised given the law of large numbers, but maybe could you talk about some of the underlying drivers of that growth in the back half of the year and help us assess the durability of those elevated trends in 2026?
This is a great question, Glenn. When we think about the LEMS market and the lack of concentration, the DMD market, the Duchenne market, is the polar opposite. There are about 100 centers that treat 90%+ of the DMD patients. You can imagine early diagnosis, it's very clear what the patient has. 45 of those centers actually have 80% of the treatment.
Mm.
The use of steroids. If you use a steroid, a patient who uses a steroid early in diagnosis, their average ability to walk increases by 2 years-2.5 years. Steroid is foundation therapy, so it's the thing you're gonna start before you start anything else, and then you're gonna keep that drug on board because of the extension of the ambulation. The drivers of this are, again, commercial team under Jeffrey Del Carmen has done a great job of really penetrating those centers of excellence. We have 100% of the top 45 and about 90% or so of the top 100 have used the drug. Now we've gone wide, now we need to go deep.
We're using some of the opportunity to talk about the differentiation with the potential differentiation. Again, it's not in our label, but what we saw this week at Muscular Dystrophy Association, we saw the critical issues for a steroid are behavior. Patients on steroids have behavioral issues. They have stunted growth if they're on long-term. Their bones are generally weaker. They have higher fractures. They have cataracts, and they have cardiovascular disease. Eventually, DMD patients succumb to cardiovascular disease in general. The data that came out this week is very interesting. It was a study, a GUARDIAN study versus standard steroids, standard of care steroids, and it showed that there are potentially some benefits to Agamree that-
Using it as a first-line treatment instead of the corticosteroids.
Well, it is a corticosteroid, just to be really clear. Using it as how does it compare on fractures? How does it compare on height, and how does it compare on cataracts? Very interesting data, and I encourage you to take a look at it. It shows the data are really compelling.
You said 80% of the diagnosed cases are in these 100 centers of excellence?
About 80%-90% are in the 100 centers and about 90%. No, 80% is in the 45% and about 90% is in the 100. Yes, that's correct.
How do your salespeople sort of cover those? I mean, let's make it a little bit easier.
It does. It makes it a lot easier. We have only 12 sales representatives, 12 regional account managers, and they're responsible for those 100 centers. Because of the concentration of the business, we can actually cover those 100 centers and actually go up to about 130 centers.
Yeah.
with just 12 individuals.
Just to be clear, I mean, the growth that we're seeing, is that from people that were on maybe those first-line steroids that are switching over or people starting with Agamree as sort of the first-line treatment?
From the launch.
A combination of both?
Actually, it's a little bit of both. From the launch, we sourced. We initially thought we were gonna source patients from Emflaza. It's hard to tell because there's no publicly reported data on this market. We thought it was about 35% share. When the product launched and from the day the product launched to today, it's been pretty consistent. We source about 45% of the patients from prednisone, 45% from Emflaza, and 10% state that they're naive to therapy. We're sourcing from the entire market instead of just 35%. We are really thrilled.
Mm.
to be participating in 100% of the market.
What was the name of that study that you were just referencing?
Guardian.
Oh, Guardian.
The GUARDIAN study.
Got it.
That just added some additional information. It was announced, maybe about a month or two ago, and the data just came out at the end of this week.
What about the SUMMIT study? Because I thought the SUMMIT study was also doing something similar, sort of evaluating the efficacy benefits over the traditional standard of care.
That's exactly right. We're gonna put about 250 patients, and these are patients, not subjects, into the clinical trial. This is an open label trial. It's versus standard of care. We're looking at the opportunity to look at behavior, bone health, stature, fractures, cataracts, and cardiovascular. When we started the study, obviously, we didn't have the data from the GUARDIAN study, but now that we see the data from the GUARDIAN study, our confidence in the SUMMIT study actually has increased, and we're really thrilled about it.
How does that influence your negotiations with managed care and potentially payer coverage and reimbursement?
This is a really, really salient point. We see coverage for both Firdapse and Agamree at about 90% approval.
Mm.
We're really thrilled with the opportunity to work with the caregivers and the providers to actually get the patients on, but we're not seeing very much pushback from payers.
Okay. Can we shift gears again to Fycompa?
Sure.
We don't need to spend much time there.
No.
Just sort of given where we are, you know, post the LOE.
Right.
We see the decelerating sales. You guided to, I think, $40 million-$45 million.
Right.
That's down from $115 million, right?
Yeah.
Which is maybe not all that surprising. Is there any potential opportunity for upside relative to that? Are you doing anything on the commercial side to try to extend the life in any way or?
No. We typically all know that when what we call a retail product, Fycompa is not a rare disease. Epilepsy is not a rare disease, so it generally goes through the retail pharmacy. We see about 90% of prescriptions on the brand go away in three months, maybe even less time. Epilepsy is different, it's sticky. Patients wanna stay on it longer, and we're seeing that, we're experiencing that. This $40 million-$45 million is right in line with the performance since the generic incursion about mid-year, and it continues, and we're really confident. Upside, we've taken all promotion off, and so it's really mostly website and social media. That's what we're doing.
Okay. Can we talk about business development and capital allocation for a few minutes? You know, the company has over $700 million in cash.
That's correct.
I think on a recent call, you said you're now willing to look at clinical stage assets, you know, in addition to sort of proof of concept or, you know, different stages of.
Right.
of development and versus just commercial ready assets.
Right.
I guess is the point I'm trying to make. Maybe just update us on your latest thinking there. What type of opportunities you're seeing?
Sure.
In the market? Should we expect you to start to use a good chunk of that $700 million in cash in 2026?
We would love to put the money to work. We think that's the best use of cash in the acquisition of products. Our target, typical target is a product in the rare space. Again, we're agnostic to therapeutic area because we believe the infrastructure we have to support the patient, get the patient on, keep the patient on, if it's appropriate, is robust and is, if not industry standard, among industry standard. We're looking at opportunities that peak out at about $500 million, and we think that keeps us below a certain level where we're competing in a pool where we can win. That's what we're looking at. We're seeing a lot of opportunities out there, and the major filters we go through is, number one, it has to be differentiated product.
Number 2, we have to be able to make money because we want things that are closer to the market, even if they are in Phase 3. We have to align with management if it's licensing on the vision for the product. Those are the main filters we go through, and then as we get into the data, we see, you know, there's lots of opportunity out there.
You recently enacted a share repurchase authorization.
Correct.
$200 million. I think you guys were active in 4Q.
Yes.
That authorization runs through-
December.
December of 2026.
Correct.
Relative to the $700 million, you think there's an opportunity here to buy back stock and do business development at the same time and maintain some level of flexibility.
Right.
Throughout the year.
We have no debt, no funded debt, and we are generating cash every quarter. When you think about a program that has about $200 million in potential spend for share repurchase, we don't think this affects our ability to do business development at all. We think we can move forward using the cash or if we need to take on debt.
Okay, we got a couple of minutes. I wanna ask a couple financial questions. You know, when we think about the guidance, $615-$645, that's 4.5%-9.5% revenue growth. Obviously, it's a smaller number than last year.
Right.
that's explained by Fycompa, obviously.
Absolutely, yeah. That's right.
Yeah. I mean, could you maybe unpack that guidance a little bit for people and just talk about Firdapse and Agamree, the growth expectations offset by Fycompa? Anything else to sort of read into that number?
We think that on Agamree, we'll start with that. We think the choppiness of the Agamree situation because of what happened on gene therapy in 2025 is we're getting past that now. We think there's opportunity to grow there. We love this Guardian data. Obviously, we can't promote it, but you know, this is a very tight community.
Yeah.
The parents are generally the caregivers. The patients are very active in their therapy, and it is a concentrated market. On the Firdapse side, again, we look at the opportunity to accelerate the growth of the brand because of the idiopathic side, the GMG promotion that's out there that surrounds us, and also the opportunity to work with these oncology practices to improve patient care. When you have penetration of only 10%, something's missing, and the opportunity is to utilize a very simple blood test to actually get the patient identified and then treated appropriately.
Below the revenue line, could you talk about your spend guidance, right? Because I, yeah, I'm sure you're trying to balance profitability.
Right.
here with investing in these growth assets, but doesn't seem like you have a need to generate more near-term cash, just given how much dry powder and capacity you have.
Sure.
from your balance sheet. How do you think about that spend guidance and profitability expectations?
Sure.
for 2026?
We haven't given specific spend guidance on like SG&A, but relatively flat. I mean, we don't have to do much more. We're pretty excited about that. This will be the first full year, though. You see Fycompa going away. This will be the first full year for cancer-associated LEMS focus in our budget. You know, there's sort of a trade out there. We obviously look at that, and we think that's positive because of the growth that'll generate. On the R&D side, we gave a range, mostly, because we wanna look at SUMMIT and lifecycle management opportunities, specifically for Agamree. One of the things I love to say when we're talking to investors is the drug works. It's a great steroid, and it could be applicable to other opportunities in rare where you have consistent use of steroids.
We're gonna explore that lifecycle management. There's probably a slight tick-up there.
Okay. We're just about out of time, so I wanna figure out a way to sort of bring this all together and give you an opportunity to deliver the last word. You know, when I sorta look at the stock, it's had a tremendous sort of five-year run.
Right.
With maybe the last 12 months, it's been a little bit more range-bound. When you sorta take a step back, like, what do you think sort of explains maybe the stock being range-bound more so over the last 12 months versus the 4 years sort of prior to that? You know, when you have, you know, investors here, is there anything you think that, I don't wanna say people are missing or maybe should think about differently or you think could be a greater area of focus for them? Like, is there anything else that you wanna any other message you wanna deliver to the investors now when you, when you think about bringing it all together?
Sure. A great question. In the last two years, we've outperformed the Nasdaq, which we're pretty proud of. I mean, nice job. In the last five years, significant.
Yeah.
outperformance. Great. I think the thing that we really wanna focus on when we talk to investors is the lifecycle management opportunities and how to grow Agamree beyond. Firdapse, it's like the mailman. It just delivers.
Mm.
It's great. You know, it's a wonderful product, and it will continue to grow, and we think there's opportunity in there as well. Really focusing on the balance between idiopathic and cancer LEMS, but then talking about maximizing and optimizing our opportunities in DMD, but also looking beyond DMD for general use of a steroid, perhaps an improved steroid, across the board in rare diseases.
Good. Okay. All right. Well, we'll leave it there. We're already out of time.
Thanks, Rich.
Richard Daly, thank you very much.
Thank you. Thanks so much.
CEO of Catalyst Pharmaceuticals.