Greetings, and welcome to the Catalyst Pharmaceuticals’ First Quarter 2021 Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Alicia Grande, Vice President, Chief Financial Officer and Treasurer. Thank you. You may begin.

Good morning, everyone, and thank you for joining our conference call to discuss Catalyst’s first quarter 2021 financial results and corporate highlights. Leading the call today, we have Patrick McEnany, Chairman and Chief Executive Officer. We are joined by Dr. Steven Miller, Chief Operating Officer and Chief Scientific Officer; and Jeffrey Del Carmen, Chief Commercial Officer. For the question – 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. 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 2020 Annual Report on the Form 10-K. At this time, I will turn the call over to Pat.

Thank you, Ali, and thanks everyone for joining us this morning for our first quarter 2021 results and business update call. I hope that everyone is staying safe and healthy during these challenging times. Although we continue to see physician practices beginning to reopen in many parts of the country, data still supports the fact that certain parts of the country are much slower to open than others and some patients remain reluctant to have physical visits to physicians' offices or to lab. We continue to see signs that these dynamics are gradually improving and we remain optimistic that we will see a significant uptake in revenues during 2021. We are pleased to report first quarter revenues of $30.2 million versus $29.1 million for the first quarter of last year. This first quarter of 2021 will most likely be the most challenging comparison year-over-year because first quarter of last year was only modestly impacted by COVID where the Q1 of this year we were still recovering as we begin to move into the post-pandemic period. Despite being in recovery mode, we had a good quarter. Revenues increased almost 4% over the same quarter last year. However, there were several charges that affect that operating income and net income for the quarter. And Ali will explain those details in a few minutes. GAAP net income was $7.7 million and non-GAAP net income was $11.6 million. This year's first quarter net operating income was reduced substantially by timing difference relating to a charge of approximately $2 million committed in the first quarter of 2021 for patient assistance and foundation support programs that we were required to expense in the first quarter rather than expensing it over four quarters of 2021. Ali will be providing more detail regarding the differences for this quarter…

Thanks, Pat, and good morning everyone. We are very pleased with Q1 net sales of $30.2 million, which represents a 4% growth quarter versus the same quarter last year, despite the pandemics ongoing negative impact on diagnostic visits and subsequent new to brand prescriptions. As Pat mentioned, this quarter of 2021 will most likely be the most challenging comparison year-over-year because the first quarter of last year was only modestly impacted by COVID. Strong net revenue in Q1 was driven primarily by new patient enrolments that outpaced Q4 2020 continued favourable reimbursement dynamics and a significant decrease in discontinuations. Q1 is the third consecutive quarter with growth in new patient enrolments. In fact, new naive to 3, 4-DAP patient enrolments were higher in Q1 than any other quarter since Q3 2019, a 15% increase over Q4 2020. Our strong patient persistency resulted in continued low 90-day discontinuation rates of less than 10% and 40% less than Q1 of 2020. As I've mentioned on the last earnings call, we expect continued growth in 2021 versus same quarters last year as we build upon the momentum generated in Q4. Through Q1, IQVIA COVID-19 market impact data suggest that diagnostic visits in the overall pharmaceutical market were approximately 12% lower than a hypothetical non-COVID-19 scenario. As vaccination rates continue to increase, we are confident that the diagnostic visit backlog will translate into stronger new patient enrolment trends in the upcoming quarters. Based on early observations in Q2, we are very optimistic about the growth potential for Firdapse versus same quarter last year as well as versus Q1 of 2021. In April, new patient enrolments remain strong and compliance and persistence rates continue to be stable. Catalyst pathways are free personalized patient services program that offers patients and family’s one-on-one support throughout their treatment…

Thanks for the commercial update, Jeff. I'll provide an update on our clinical pipeline to develop Firdapse for additional indications. Catalyst has now submitted our plans for a new clinical trial for the symptomatic treatment of MuSK myasthenia gravis or MuSK-MG to the FDA for the review and comment. We anticipate the agency's response to our plans within the next 90 days. Specifically, our briefing materials to the FDA discuss the differences in the design of the new trial relative to the design of the completed trials. As previously announced, our evaluation of the feasibility of conducting this new trial is underway. Upon receipt of the agency's comments and completion of our feasibility analysis we will update the investment community on our further plans for the symptomatic treatment of MuSK-MG with Firdapse. As previously announced, our multicenter Phase 3 trial for the treatment of MuSK-MG with Firdapse did not achieve statistical significance for the primary and secondary endpoints. We concluded that the trial did not meet its endpoint due to higher than expected day-to-day disease stage variability, and a large placebo effect. Also previously reported, there was a marked clinical improvement upon initiation of therapy, which leads us to believe that Firdapse may provide clinical benefit for some patients. Finally, significant clinical improvement was also seen in the previous proof of concept trial. We believe our proposed new clinical trial design will address the limitation of the previous Phase 3 clinical trial. And we hope the new trial design may better demonstrate the efficacy of Firdapse for the symptomatic treatment of MuSK-MG. Catalyst will be initiating a proof of concept study to evaluate the treatment of Hereditary Neuropathy with Liability to Pressure Palsies or HNPP with Firdapse during the third quarter of 2021, a protocol for this clinical study is…

Thanks, Steve. Yesterday we filed our 2021 Form 10-Q with the SEC and reporter first quarter financial results and a press release. At a high level our financial results for the first quarter are in line with our internal expectations. Let me highlight a few of those results now. As we reported, we ended the quarter with cash and investments of $143.3 million and no funded debt, which we believe would enable to us to advance or R&D programs and support our strategic initiatives of acquiring earlier stage opportunities and innovative technologies to enable growth and value creation. Net revenues for the first quarter of 2021 was $30.2 million, compared to $29.1 million with Q1 2020. As expected our first quarter sales continue to be impacted by COVID-19 pandemic. In addition, in the first quarter of the calendar year like many companies in our industry. We are impacted by the reset of the patient deductibles, including the [indiscernible] effect. Despite these challenges, our revenues were almost 4% higher in the first quarter of 2021 as compared to the first quarter of 2020. As Steven just mentioned, we are optimistic about our revenue growth in 2021 as the impact of the COVID-19 pandemic subsides. We reported GAAP net income of $7.7 million with Q1 2021 or $0.07 per basic and diluted share compared to GAAP net income of $10.4 million or $0.10 for basic and diluted share for Q1 2020. Before I continue, let me take a moment to provide more color on our first quarter tax. Our effective tax rate in the first quarter of 2021 was 22.5% as compared to 5.4% in the first quarter of 2020. At the same time, we benefited in Q2 2020 from the use of our differed tax assets, which is a noncash item.…

Thanks, Ali. I'd like to close on our prepared remarks by emphasizing the effort and performance of all of our employees as a team during these challenging times to continue their diligent efforts, to assist all LEMS patients, their caregivers, and their healthcare providers. I'll now turn the call over to the operator so that we may take your questions.

Thank you. [Operator Instructions] Our first question is coming from Charles Duncan of Cantor Fitzgerald. Please go ahead.

Thank you. Morning, Pat and team, congratulations on a good quarter and progress. Had a couple of questions for you, in particular for Jeff perhaps like all the color on how the quarter's going or how the quarter went. Can you just confirm that you saw quarterly growth in terms of new patient ads of roughly 15% Q4 to Q1? Is that the case and perhaps provide a little bit more color on – if you will, the breadth and depth of prescribers. So are you broadening prescriber base or are you deepening within a prescribers practice?

Thanks, Charles for the question. And yes, I will confirm there was a 15% growth in new patient enrollments seen or experienced in Q1 versus Q4 last year, so that I do confirm that. The second part is when we take a look at who our new enrollers are, and the new physicians, the significant or the vast majority, I'd say about 85% to 90% of our new enrollments are coming from physicians that are first-time prescribers. So – and that goes to show, that's why we target such a broad base of neurologist and neuromuscular specialists with both RAMs as well as our three ways: RAMs, our field force, inside sales as well as non-person promotion. So to answer your question, 90% of our new enrollments are coming from new writers.

Okay. And then I guess as a follow-on, when these prescribers get feedback from their patients do you – have you seen any prescribers say that they have additional perspective patients within their progress or their practice and have any of them followed up with say deepening their prescription practice within their practice, so to other patients, identify new patients and deepening it?

Yes. And remembering that this is an ultra orphan disease and there we think there are about 8,000 patients out there. But to answer your question, there are positions out there that are repeat writers. And more specifically, those that are neuromuscular specialists that may see more patients that have these types of symptoms as LEMS. So there are many repeat writers. Now from a general neurologist standpoint, there are physicians that have multiple patients because they see a lot of myasthenia gravis patients, and they look at their practice from previous years and some of these patients that maybe they had misdiagnosed or probably zero negative in myasthenia gravis patients, that now they're starting to think maybe I should test this patient for VGCC antibodies to see if they are potentially adult LEMS patients. So we are seeing physicians that prescribe it once and then look across their patient base and say, maybe this other patient could be a LEMS patient. So we're seeing that in both ways, yes.

Okay. Very good. That's helpful. I appreciate that added color. I did want to ask Steve a question about the pipeline. I'm not sure you're going to be able to be all that disclosive, Steve. But I'm wondering if you could provide any color on call it, the elements of difference between the past MuSK-MG study and any particular element that you could highlight that may reduce the variability or reduce the potential compounding effect that you saw in MuSK-MG as you've proposed to the agency?

Charles, I can't give any specific details about the new design. Obviously, the FDA may actually ask for changes, so it would be premature to give you a whole lot of specific details. Generally, I can tell you, as you'll recall from the earlier part of the presentation that the primary causes of the previous failure to achieve statistical significance was primarily related to a high amount of variability in the disease state. And then the other observation that we had was patients generally showed a significant improvement in their condition upon initiation of therapy. So without giving any specific details about the trial, I can tell you that we actually included design elements in the new trial design that will take advantage of both of those observations. In the case of noise, you simply collect more data. And in the case of initiation of therapy, you change the design to take advantage of the fact that initiation of therapy seems to show an improvement.

Okay, very good, that's helpful. We'll await those details. My last question is perhaps for Pat. Regarding business development activities, you've conducted some diligence or I think that you stated that you haven't gotten any firm commitments in terms of how to move forward. But are there any particular call it drug classes or areas of focus that you can highlight that would, in particular, leverage your existing successful approach to marketing Firdapse because it would seem to me that not only is the drug itself an asset, but your back-office and abilities with Firdapse in the LEMS patient population could be leveraged across other orphan disorders.

Yes. Good question, Charles. Thank you. Obviously, we'd love to leverage our existing sales force with another neuromuscular product. Those are very difficult to find. And when they are available, they're extremely costly. And so about a year ago, we decided to expand our therapeutic look into general neurology. And at the end of last year, we decided that we would be interested in products in any therapeutic area outside of oncology. Oncology is just too complicated. So we do want to stay in the rare disease space, ideally neuromuscular or neuro, but we're looking at other therapeutic areas. And we believe with rare disease drugs like Firdapse to treat LEMS, we do believe that we can replicate our sales and marketing team and put together a really strong effort in another therapeutic areas such as endocrinology or immunology. So, I think, we're well positioned and I think we're looking at a broad spectrum of therapeutic categories right now, again anything outside of oncology.

Okay, that's helpful. Thank you for taking my questions. Congrats on the quarter.

Thank you, Charles.

Thank you. [Operator Instructions] Our next question is coming from Joon Lee of Truist. Please go ahead.

Good morning. This is Les on for Joon. Thank you for taking my questions. So I just wanted to get back to the revenue line. And you've mentioned on the last call, you also saw a significant increase in new patient starts, perhaps you can quantify what that percentage increase was. You did mention it was 15% in the early stages of this quarter. Essentially what I am looking for is what impacted the sequential decline? I thought it was slight at 2% or so from 4Q. If you could just provide a little bit more color on that. Thank you and I have a follow up.

Yes. We're not going to be debt specific. I can tell you the new patient enrollments from Q3, Q4 of last year and Q1 of this year sequentially have been increased and we continue to see increases and we believe that the same should hold true for the rest of the year, right. We're not prepared to be that specific as to percentages or number of the new enrollments.

Okay. And we go to the litigation side, I believe, end of March we received some news from the Federal Court in Canada regarding the dismissal of the application against Ruzurgi. Can you comment on that? And then there appears that there was no appeal made. So I just wanted to know what that means for your decision when – for your partnership with key and your expected commercialization efforts in Canada.

Yes, it's a good question and I'll turn that over to Brian Elsbernd, our Chief Legal and Compliance Officer.

Yes. Thanks for the question, but I'm not exactly sure where it's coming from. We have not received any such notification of a loss of our ongoing action. We're actually waiting on a decision from the Federal Court of Canada. We've actually been in contact with our lawyers in the last couple of days. There has been no decision yet from the hearing that was held back in December.

Okay. Well then I guess my mistaken, but perhaps can you just kind of update us on any news that we can potentially see in the near-term and any sort of timelines that you would expect.

With regard to our lawsuit against Health Canada?

Yes.

Brian, do you want to opine on that?

We're expecting a decision any day now, literally any day now. So I'll be honest, I check the docket in Canada on a daily basis to see if there is a decision. So when we hear something, I'm sure it will be public and you'll hear the answer.

Excellent. Okay. Thank you. Okay. Last one for me and I'll jump back in the queue. Just regarding the share repurchases, I guess, great choice given where the stock is, but can you just kind of perhaps remind us what the expiration date is on the $40 million repurchase program, and have you established any kind of accelerated buybacks where that trigger a certain price in the stock?

Yes, we haven't put any timelines on the $40 million purchase. I think that we were thinking internally and our discussions at the board level would be – that would likely be a one-year program. So, again, we want to be strategic and thoughtful about these purchases and we want to do it on a rational basis. And so there really is no accelerating program. It's just from time to time dipping into the market when we think it's appropriate to repurchase additional shares.

Great. Thank you for the clarity. Thank you.

Thank you. At this time, I would like to turn the floor back over to management for any additional or closing comments.

Thank you for joining us today and I look forward to future calls. Have a great day. Thank you,

Ladies and gentlemen, thank you for your participation. You may disconnect your lines or log off the webcast at this time and have a wonderful rest of your day.