Greetings and welcome to the Catalyst Pharmaceuticals first quarter 2023 financial results conference call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Ali Grande, Chief Financial Officer. Thank you Ali, you may begin.

Good morning everyone. Thank you for joining our conference call to discuss Catalyst’s first quarter 2023 financial results and corporate highlights. Leading the call today is Patrick McEnany, Chairman and Chief Executive Officer. We are also joined by Dr. Steven Miller, our Chief Operating Officer and Chief Scientific Officer, and Jeffrey Del Carmen, our Chief Commercial Officer. Further, for the Q&A session, we will have Dr. Gary Ingenito, our Chief Medical and Regulatory Officer. Before we begin, I would like to remind you that in our remarks this morning 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. Actual results may vary from the expectations contained in our forward-looking statements. The 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 2022 annual report on Form 10-K. At this time, I’ll turn the call over to Pat.

Thanks Ali, and welcome everyone to our first quarter 2023 results conference call. We started 2023 strong as we made meaningful progress across all our functional areas. I’m very pleased to report on our record-breaking first quarter 2023 financial performance as shared in yesterday’s press release, and I will now highlight several key points. We achieved total revenues of $85.4 million during the quarter, representing 98% growth year-over-year. The exceptional performance reflects Firdapse product net revenues of $57.5 million, achieving a net revenue increase of 34% year-over-year. Total revenues were bolstered by Fycompa net product revenues of $27.8 million for the approximately two months that we owned the U.S. rights to the product during the 2023 first quarter. Non-GAAP income for the first quarter was $46.8 million or $0.44 per basic share and $0.41 per diluted share. This excludes from GAAP net income non-cash stock-based compensation, depreciation, amortization of intangible assets, and our income tax provision. GAAP net income for the first quarter was $29.6 million or $0.28 per basic share and $0.26 per diluted share, which reflects among other expenses the expenses related to the amortization of the intangible assets associated with the acquisition of Fycompa and Ruzurgi, which were approximately $6.5 million, the expenses related to the transition services agreement with Eisai for Fycompa were approximately $7 million for the two-month period, and $2.9 million in non-cash stock-based compensation. We ended the quarter with a cash position of about $148 million. The outstanding first quarter performance reinforces the belief in our strategy and we reaffirm 2023 total revenue guidance of between $375 million to $385 million, representing a 75% to 80% increase in total revenue compared to 2022. We expect operating expenses of $160 million to $170 million for the full year 2023, which includes amortization expenses of…

Thanks Pat, and good morning everyone. As Pat mentioned, Catalyst had an excellent start to 2023 driven by the combination of strong Firdapse net revenues and compelling revenues from Fycompa. The record Q1 total net revenues of $85.4 million positions Catalyst well to achieve our combined 2023 revenue guidance of $375 million to $385 million. First, let me start with Firdapse performance. Q1 net sales of $57.5 million represents a 34% increase order over the same quarter last year, a direct result of a sustained cadence of new patient starts, high compliance, and consistent low discontinuation rates. Prescription approval rates were greater than 90% across all payors, government or private commercial insurers. Patients enrolled in Catalyst pathways, including those who are covered by Medicare and accessing foundation assistance, had an average co-pay of less than $2 per month. Our strategic growth initiatives will continue to drive organic growth moving forward. LEMS education programs targeting healthcare providers have already resulted in a significant increase in voltage gated calcium channel antibody tests, which will shorten the diagnostic journey for LEMS patients and lead to more patients being eligible for treatment with Firdapse. Additionally, the recently hired oncology thought leader liaison will focus on the top 30 thoracic oncology centers to accelerate diagnosis of small cell lung cancer LEMs patients. Currently greater than 80% of small lung cancer LEMS patients are undiagnosed. We continue to maintain a pipeline of approximately 450 diagnosed LEMS patients that are not yet on Firdapse which contributes around 50% of new patient enrollments each quarter. Now let me provide an update on Fycompa. We have established a new commercial Fycompa franchise business that is highly synergistic with our Firdapse business. The integration has gone exceptionally well, a credit to the entire organization and our commercial capability to execute…

Thanks Jeff. Our clinical development and regulatory strategy for Firdapse continues to focus on expanding access to all LEMs patients, enhancing the Firdapse patented state to maximize its commercial potential and integrating the newly acquired Fycompa product into Catalyst’s organization. First, I would like to discuss our development efforts to increase the indicated maximum dose of Firdapse from 80 milligrams per day to 100 milligrams. As announced earlier this week, the agency has responded that they accept our approach to the filing of a supplemental NDA that we expect the SNDA submission to be submitted early in the third quarter of this year. Currently, there are a number of LEMS patients who are already being treated at a 100 milligram daily dosage of Firdapse after their physician worked with the pharmacy and insurance providers to justify the higher dose. Other patients on the current indicated maximum dose of 80 milligrams per day and their physicians have expressed a need to increase the patient’s daily dosage to 100 milligrams to optimize therapy, and this planned supplement, if approved, will help those patients. We believe that our data set constitutes an acceptable basis for seeking a 100 milligram maximum indicate daily dosage for Firdapse. Regarding our global expansion, our sub-licensee partner, DyDo Pharma in Japan, has completed enrollment in their Firdapse Phase III clinical trial which is required to seek approval for the Japanese market, and the safety follow-up phase of that study is ongoing. We continue to anticipate completion of that trial by the end of the year and filing of a Japanese NDA submission in the second quarter of 2024. It is estimated that there are about 1,200 to 1,300 LEMS patients in Japan. Under our license agreement, the filing of the NDA in Japan is an important milestone for…

Thanks Steve. Results from Catalyst’s first quarter 2023 have set us on pace for another year of exceptional financial performance and strong execution. On the business development front, we were very busy as we closed the previously announced acquisition of the U.S. rights to Fycompa for $160 million in cash, and integration efforts are underway. I remind you that Fycompa operations, including the results for the first quarter of 2023, include only a little over two months of activity since we acquired the product in late January. Our total revenues for the first quarter of 2023 were $85.4 million, a 98% increase when compared to total revenues of $43.1 million for the first quarter of 2022. Product revenue net for the first quarter of 2023 for the Fycompa product acquired in late January 2023 was $27.8 million. Product revenue net for the first quarter of 2023 for our lead product, Firdapse, was $67.5 million, a 34% increase year-over-year compared to $43 million for the first quarter of 2022. Net income before income taxes for the first quarter of 2023 was $37.3 million, a 114% increase year-over-year compared to $17.5 million for the first quarter of 2022. We reported GAAP net income for the first quarter of 2023 of $29.6 million, or $0.28 per basic and $0.26 per diluted share, an increase of 123% year-over-year compared to GAAP net income for the first quarter of 2022 of $13.2 million, or $0.13 per basic and $0.12 per diluted share. As a reminder, in the first quarter of the calendar year, like many companies in our industry, we are impacted by the reset of patient deductibles. Further, in the first quarter we reported expenses related to our annual commitment to make charitable donations to our [indiscernible] foundation that fund LEMS patient support programs…

Thanks Ali. In closing our prepared remarks, we are very optimistic about our path forward as we continue to strengthen our position as a leader within the neuroscience space. We are well positioned to drive sustainable growth with our sights set on further expansion that aligns with our core mission to deliver value to patients, healthcare providers and shareholders. I am proud of our team’s accomplishments and I thank all of our employees for their dedication and ongoing commitment to the patient communities we serve. At this time, I’d like to turn the call over to the Operator to open the line for questions.

Thank you. We will now be conducting a question and answer session. [Operator instructions] Thank you. Our first question is from Joon Lee with Truist Securities. Please proceed with your question.

Good morning, this is Les on for Joon. Thank you for taking my questions. First, I’ll start on Firdapse. Can you talk about any seasonal trends that you might have seen and any other impacts that drove the quarter-over-quarter slide in the Firdapse sales?

Did you say slide in the Firdapse sales?

Quarter over quarter sequentially, yes.

Yes. Jeff, do you want to take that question?

Sure. What we saw in Q1, we’re very pleased with the net revenue results in Q1. The typical seasonal factors impacting the quarter, such as--what patients try to do in December to ensure that they have medication over the holidays, they try to pull forward their prescriptions or their shipment into December, so that impacts January a little bit, as well as some of these patients want to get their drug before some of their benefits are reset, like co-pays and deductibles in January, so that always impacts us. It’s not just for Firdapse, but it’s for the industry in general, that’s what happens in Q1. Also for growth to net, the accrual percentage is always higher, so you accrue the Medicare manufacturing rebates for all Medicare patients into Q1 and then gross to net will follow a little bit throughout the rest of the year, so that’s why you see inflated gross to net in the first quarter. I already also talked about the re-authorization process, but during that re-authorization process that for the most part happens in January, we provide bridge shipments for these patients so that they don’t have an interruption in any of their medication, so those are the seasonal factors that we have as well as, again like I mentioned, all the other products in the industry get impacted with for the most part in the first quarter.

Les, that’s typical, especially in the specialty pharmaceutical area where you’re dealing with one specialty distributor, and as Jeff pointed out, we gave away--because on bridge shipments, we can’t charge for that - that’s free of charge to patients that are waiting for re-authorizations, and that’s pretty typical in the business. That delay can be anywhere from a week to three weeks, getting that re-authorization, in which you’re not only giving away free product but you’re giving away the revenue, if you will. I think if you look back at us historically, with few exceptions, you will see the Q4 versus Q1 is sort of flat. There are exceptions, like in Q1 of last year we on-boarded a number of Ruzurgi patients, so that was skewed; but otherwise, that’s pretty typical.

I’ll leave it with this, is once again, like we’ve said throughout the call today, we confirm our forecast and guidance for Firdapse, as well as Fycompa for 2023 given the strong performance with Firdapse revenues in the Q.

That’s very helpful. I understand the impacts industry wide, and I just wanted to get a sense if it’s the same for you or if there was something else, so thank you for the explanation and detail. Regarding, I guess you touched on the guidance, has there been a shift in the mix of the guidance or is that still the same as you provided last quarter for the separate product lines?

Yes, right now there’s no change in the mix. The proportion is the same as we talked about last time, Les.

Got it, okay. Then if we normalize Fycompa sales for the full three months run rate, that would imply a very strong quarter, probably more so than what everyone on the street expected, let’s say. Can you provide any color that you think drove that upside, and can we expect the remaining quarters to be similarly strong? If we do a normalized run rate, something around $40 million per quarter, does that seem reasonable or is that a high number?

That’s a great question. I’ll let Jeff take that as well.

Sure. One quick thing is with any integration, you have to allow for a transition period. What we’re doing is we feel like we’re going to be much more efficient with our sales force. We’re taking about 40% from a size perspective our number of field personnel versus what was previously used for Fycompa and larger territories, but with that, we want to allow for that transition period to take hold, and that’s why we’re very confident in the flat 2023 versus 2022.

Let me add to that, Les, as Jeff pointed out in your earlier question, this is more of a retail product and as a result, your rebates and your re-authorizations and things like that also are affected in the month of January, and so I don’t think you can merely take those two months and extrapolate for the full year. I think that would be a mistake, and I think right now for the moment, and if that changes we’ll certainly provide an update on the guidance, but I think we’re still very comfortable sitting with that 130 for this year.

Correct, and we are very confident that we can demonstrate growth in 2024 with Fycompa.

Guys, thank you for the color. Good luck on the progress. Thank you.

Thank you.

Thank you. Our next question is from Joe Catanzaro with Piper Sandler. Please proceed with your question.

Hey everybody, thanks so much for taking my questions. Maybe first one from me, just wondering if you can comment on the cadence of new patient enrollments in the quarter and the split you’re seeing between non-tumor LEMS and tumor LEMs and whether that dynamic is changing in any way with some of your efforts in oncology. Then with regards to your comments on further global expansion opportunities, wondering if we should think about that in the same way you’ve sort of struck a collaboration with DyDo in Japan, and then maybe related to DyDo, are there any milestones associated with the completion of their Phase III and subsequent NDA filing? Thanks.

Sure. Jeff, do you want to take the first question?

Hi Joe, thanks for the question. The cadence of new patient enrollments in Q1 exceeded forecasts, so we had a strong new patient enrollment there in Q1 and we continue to see that strong cadence here thus far in Q2. As far as the mix goes, we saw, we estimate, about a 25% of our new enrollments in Q1 are tumors LEMS patients. Keep in mind that some patients come in with that tumor LEMS ICD-10 code, but there are some patients that come in that are LEMS patients and then over--so we have to make an assumption, so over the next two years as they get their scans, they will be diagnosed with it. Based on all those factors, we’re estimating that we’re about 25% mix of our total enrollments are tumor LEMS.

And Joe, with regard to our global efforts, yes, the DyDo Pharma transaction for Japan serves as a really good model for other territories in Asia and South and Central America. With regard to milestones, there is an undisclosed milestone based on filing and acceptance by PMBA.

Okay, got it. That’s all helpful. Thanks for taking my questions.

Sure, thanks Joe.

Thank you. Our next question is from Charles Duncan with Cantor Fitzgerald. Please proceed with your questions.

Hi, this is Pete Stavropoulos on for Charles. Hi Pat and team. Congratulations on all the progress for the quarter. First question is there’s greater than 800 LEMS diagnosed patients that are being treated with Firdapse, but wondering what you can say or what that number suggests in terms of penetration into the total LEMS opportunity, and are there any specifics you can give into penetration as a result of the oncology outreach efforts?

I’ll turn that to Jeff, Pete.

Hey Pete. What we’re seeing right now is about a 25% penetration of current patients that are still living and diagnosed with LEMS, so that’s what we’re seeing - it’s about a 25% penetration. As far as--what was your other question, Pete, about that with the tumor LEMS patients, what we think we can get as far as penetration?

Yes, actually I was asking what do you think the oncology efforts, outreach efforts has been impacting--?

Okay, excellent. What I can say there is the unfortunate news for small cell lung cancer LEMS patients is that greater than 80% of these patients are undiagnosed, and so it’s up to us to help these patients get diagnosed so that they can get benefit from the treatment with Firdapse. We’ve seen an uptick recently, just a slight uptick in 25% or so into the percent of our new enrollments that are small cell lung cancer LEMS patients, but we’re hopeful that we can get to about 30% of the mix will be the tumor LEMS patients. That’s what our all-out efforts are geared towards.

Okay, and of the patients on Firdapse, can you provide any--you know, the proportion of or any color about patients who would like to go from 80 milligrams in the up dose to 100 milligrams?

Yes, right now there are 40% of our current patients are on 80 milligrams or higher. We know that LEMs is a progressive disease, and also hearing from patients and physicians and from former Ruzurgi patients that were higher--that patients will benefit from a higher dose, some of these patients felt. We feel like there will be--that’s a huge benefit again to these LEMS patients. Also, we do see some physicians that--and patients that don’t want to go to the max dose, so when you have a cap of 80, those patients that are at 60 or even 70 milligrams don’t want to go to 80 milligrams because that’s the max dose, so now having 100, that allows for some of these patients to also benefit from a higher dose if that’s what is necessary to help treat their disease.

All right, thank you. One question, I guess, on Fycompa. What’s the potential for developing Fycompa in the rare epilepsy indications, and if I heard you correctly, you mentioned earlier in the call that epilepsy is evolving into a precision medicine approach. Are there any specific epilepsies you believe Fycompa can be utilized in?

There have already been seven different rare epilepsies that were identified in a recently published paper, that we did a press release on not too long ago. With regard to other rare epilepsies that may develop, the current label for Fycompa actually contains a fairly broad description of clinical characteristics of epilepsies that can be treated with the drug. If a specific rare epilepsy presents with those clinical characteristics, a physician would be able to prescribe Fycompa on label for that rare epilepsy and determine whether or not the patient responds well to that. But as I said, there’s already seven that have been identified. Because of the relative maturity of this product, we do not anticipate doing any formal clinical trials to update the label to specifically call out specific rate epilepsies, but our team of MSLs will continue to provide any information that is relevant for the treatment of rare epilepsies to the physician community with Fycompa.

Okay, thank you for taking our questions, and congratulations on the quarter once again.

Thank you Pete.

Thank you. There are no further questions at this time. I would like to hand the floor back over to Patrick McEnany for any closing comments.

I’d like to thank everybody for joining us today and we look forward to our next earnings call. Have a great day.

This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.