Q3 2019 Earnings Call
Greetings and welcome to the catalyst Pharmaceuticals, CP Rx third quarter 2019 results conference call.
At this time, all participants are in listen only mode.
Question and answer session will follow the formal presentation.
Anyone require operator assistance during the conference. Please press Star Zero on your telephone keypad. Please note. This conference is being recorded.
I'll now turn the conference over to your House Ali Grande <unk>, Chief Financial Officer. Please go ahead.
Good morning, everyone. Thanks for joining police conference call.
Joining me on Sunday School are members of the catalyst management team, including Pat Mcenany, Chairman and Chief Executive Officer, Dr., Stephen Miller, Chief Operating Officer, and Chief Scientific Officer, and Dan Brown, Our Chief commercial officer before we begin I would like to remind you that in the following comments and you any session will.
Make statements about expected future results, which maybe forward looking statements for purposes of Israel Securities will.
The statements relate to a current expectations estimates and projections and are not guarantees of future before they involve risks uncertainties assumptions that are difficult to predict which may be not to be yesterday actually souls. Neither.
His forward looking statements should because they're only in conjunction with a detailed information contained in our as you see filings, including the risk factors described in our internally on form 10 [laughter] at this time I'll turn the call over to that.
Thank you Alley, and good morning, everyone and thank you for joining us today.
Well, it's been an exciting third quarter and not in March of 2016 for catalyst and we have a lot of progress update you on across our various work streams.
Let me start by making some comments about our commercial entre firdapse.
We remain quite enthused about the strong progress over a launch during the third quarter 2009 cheap.
We continue to see encouraging trends across a variety of metrics as well as very positive reaction from treating physicians payors and most importantly patients.
As we discussed in the early days around launch the breadth and depth prescribing have continued to exceed our expectations underscoring the significant previously unmet need for Firdapse and this largely underserved patient population.
What three four quarters are performed much now completed we grow increasingly confident in the long term potential firdapse.
Patient starch and Discontinuations are trending positively and Dan will go into the key performance metrics that we measure daily in greater detail.
Overall, we're off to a great start and our optimism is growing for potential for Firdapse [laughter] GL patients with not only Liberty mice, then extend your more lynch, but other ultra rare neuromuscular conditions.
At this stage ended the launch we're now comfortable with providing for the first time revenue guidance of approximately $100 million for the four year of 2019 and arrange your revenue guidance of 135 billion to $155 million for calendar.
A year or 2020.
As we continue to gain more experience for next year, we've looked at Titan, Iran range of forecast for 2020.
As we budget for next year as anticipated growth will be making further investments to add commercial resources to achieve our stated goal for 2020.
So that end, we expect our higher up to an additional 10 regional account managers to complement our current Chen regional account managers and we expect to add a team of seven to Chen inside contract sales representatives, there will be targeting the roughly 9000 <unk>.
Allergy and neuromuscular health care providers that might be trading at a dog LEMS patients they could benefit from firdapse.
Yes, the number of patients being treated with Firdapse grows I'm pleased to announce that in 2020, we will be expanding our contributions to independent qualified fiber when she three charitable foundations that provide support to LEMS patients.
We are increasing disposed <unk> dollar amount of contributions and end the number of charitable foundations are we support going from three to four.
Well, we do everything we can to support the adult Lynch patients enrolled in our catalyst pathways programs.
These contributions are intended to address needs and patients who cannot support to rule, we cannot support directly. It is one of the many things, though we work to support the Lynch community.
Last month, we attended the and exhibited at the annual.
American Association of neuromuscular and electro diagnostic medicine meeting in Austin, Texas.
Which has always been important venue for us to engage with physicians.
Scientific and efficacy communities.
And so this was our first your 10 years or commercial stage company. It was most important to get our very positive messages out to no neuromuscular physicians about the clinical benefits for Firdapse for adult LEMS patients catalyst pathways for patient assistance programs and our various educational.
Programs for physicians and neuromuscular fellows.
At this meeting we hosted a lunch and suppose him. It was attended by more than 170 positions I might add that was standing room only.
Dr. Perry Shea noted neuromuscular specialist reviews filet presented a program titled.
Why limbs and adult warrants are closer clinical insights.
[noise] and Carmen misdiagnosis.
It was turns a symposium that we introduced our new free limbs anybody testing program for patient suspected to have lunch.
This program will allow physicians to order limbs anybody testing without concern about insurance covering the cost as catalyst will ensure that no patient is out of pocket for this test.
We hope that this will help to shorten the otherwise might be journey to an accurate diagnosis for lunch patients and quickly eliminate lambs as a possible diagnosis for others.
As you know, we recently announced the topline results from our CMS 001 clinical study and we are disappointed that we did not achieve statistical significance in the primary or secondary endpoints in the small 16 patient study.
We did observed however, several patients showed noticeable signs of improvement.
Congenital myasthenic syndromes or CMS has had very complicated ultra rare neuromuscular disease afflicting, an estimated 1000 to 1500 patients in the U.S.
We are scheduled to meet with the FDA before the end of this year to discuss our findings from this study as well as our next steps.
We have been commended by a number of neuromuscular specialists for even attempt tenant study in this very small complicated patient population, while attempting to provide enough da approved therapy to treat CMS patients.
Our must skim Jewish study continues to enroll and we anticipate completing enrollment by the end of this year and reporting topline results from this trial in the first half of 2020.
Over the past quarter, we've initiated several new sites for this trial into European countries.
Also we are on target to complete and now its topline results of this role proof of concept study for spinal muscular atrophy tied three in the first half of 2020, Steve will provide you with more information shortly regarding these programs.
One of our straight strategic priorities as you pretty as previously stated to start is to expand.
Our commercial footprint globally.
Within the past few weeks, we have filed our new drugs submission or NDS with health, Canada and had been granted a priority review.
Assuming our submission is accepted this means six month review of our application.
We're also in the process of evaluating our commercial plan for Canada with options to partner with the Canadian from our launch with an effective and efficient catalyst team.
Additionally over the past several months, we've met with the Japanese regulatory authorities, including the Ministry of Health Labor and welfare as well as the pharmaceuticals, and medical device agency or P.M.D.A. to discuss our existing data and understand what additional data may be required.
Sure submit a new drug application for Firdapse in Japan.
We've also recently applied for orphan drug designation, which has granted would give us a nine month priority review 10 years of market exclusivity against generics and certain tax credits.
We anticipate meeting with PMT eight in the first quarter next year, so hopefully finalize a plan to register.
Firdapse in Japan.
We've been conducting market research there and as the second largest economy in the free World. We believe that Japan can be very strategic for us and offers a very promising opportunity to expand our global footprint.
We have begun that process for assessing and evaluating external drug development programs that are late stage as well as potential drug acquisitions that we believe may have a clear path to value creation through their impact on unmet medical needs for patients suffering from.
Rare relative weighting disease.
As reported yesterday, we ended the third quarter with approximately $81.6 million in cash and investments and no funded debt.
Our cash continues to build quarterly and near term, we see no need for a sale of our common stock.
Further we believe that if we have access to alternative forms of non dilutive financing such as a term loan from conventional bank lenders in the event that we source, a promising acquisition or product opportunity.
Lastly, a few words about our lawsuit against the FDA.
We filed that suit in June .
And it it challenges cfds decision to approve or surgery for pediatric LEMS patients, what four different grounds, which I will stage here in great detail.
The showed is progressing as we expected and the current briefing schedule calls for all quiet links to be made by late January .
As you can understand we're eager to get this case before the judge and get a decision but at this time. This is the best timetable that I can provide you and is as <unk>.
More than likely always has a chance of additional delays, we'll keep you posted on this front.
This has been another very solid quarter in nine months of execution and performance from the catalyst team. We're extremely pleased by the number of nine patients that we continue to enroll and catalysts pathways, which again further illustrates the need for catalyst to have made the necessary investments required to bring in.
FDA approved evidence based medicine sort of the limbs community.
I'll now turn the call over to Dan broadening our Chief commercial officer to provide you with further specifics on our launch for Firdapse.
Thanks, Pat and good morning, everyone.
We remain very excited about lots of Firdapse here in the United States for adults suffering from levels. All metrics continued to depict the strong successful execution of an ultra orphan drug launch we've now completed three quarters with commercial availability having started on January 15.
And whether the metric is total number of patients per cent of diagnosed patients treated with firdapse.
Physician and patient satisfaction insurance coverage or patient affordability. This is a product launch that and successfully helping many patients in a very rare very debilitating disease condition.
In the first nine months of launch nearly 30% of the diagnosed adult patient population has now received firdapse prescription, which is a very high hurdle in a rare result from new medication.
This is also great indication that the broad availability of Firdapse is improving the standard of care for treatment in London, and that physicians patients and payers recognize it as such.
If we continue with this level of yes, and adoption to help patients. We will continue to rise to the ranks as one of the more successful orphan drug launches.
Some key highlights I'd like to share.
Through the end of Q3 over 490 patients have now been prescribed firdapse since launch over 50 of home initiated therapy in Q3 alone.
Over 170 of these patients had never before been treated with before DAP and we are what we call naive to therapy.
When you consider patients who initially transitioned over from the catalyst expanded access program. There are now more than 250 patients on Firdapse well never would have had access to three four DAP. If it were not for catalyst pharmaceuticals and our efforts.
Over 275 unique writers have prescribed firdapse.
And over 370 patients were on insurer reimbursed therapy at the end of Q3.
We understand that there may be some concerns about the recent unforeseen added entry into the one market space and many have been asking about potential use of another ammo property in product the certainty with adult patients.
I'd like to point out a few key differentiated points to consider.
First reserve is not indicated or approved for use in adult patients second reserves you requires refrigeration in the supply chain to prevent spoilage and firdapse doesn't require any refrigeration.
Patient support programs for reserves are limited by comparison with Firdapse.
Finally, as a company, we believe that any upfront and a rare disease category and especially in this LEMS market needs to be thoughtful and fully committed to education and patient support for a product like this where there are important safety and dose education considerations.
Insurers and position should be careful about having patient use of drop off label and we believe that ensures and physicians are generally not inclined to do so.
That is why we are taking good care with insurers and physician to ensure they understand firdapse and its proper and thank you.
That said, we have seen some patience mainly once we believe we're running Jacobus compassionate use study what firdapse to try the jacobus commercially available product.
In August and early September we saw small group of commercially insured patients leave.
And then another small group of Medicare insured patients much over in September and October .
However, it is important to note we have seen those slow down quite a bit in the last three weeks.
We believe that most patients and physicians are fully satisfied with the support they have been receiving here catalyst firdapse as I mentioned earlier, we continue to see high levels of patient satisfaction now with over 280 customer satisfaction survey is completed and our average rating remains at 4.8 out of fives.
Our insurance approval rate and Eric I'm, sorry insurance approval rate for commercial and government insured patients is over 95% with most prior authorization being approved within seven to 14 days.
In addition, the average copay across all patients in September stood at a $1.66 per month per patient.
For all these reasons. We believe this is why only up relatively small group of the over 494 deaths patients have left to try the pediatric lemons approved product.
I should also point out that there are other discontinuations for normal than expected reasons like the lack of response.
Experiencing side effects.
Some patients who wouldn't unfortunately succumbed to cancer, but discontinuation rates for these reasons remained in line with what we saw in the clinical studies about 20% to 25% pace.
Having better on initial launch goal by the end of Q3, which included bringing on over 200 adult LEMS patients from the Jacobus before DAP study also transitioning patients from our expanded access program and receiving enrollments from all naive patients who had been waiting the approval of.
Firdapse, while doing this with a high level satisfaction. We are now turning to the next phase of our commercial launch by executing and initiating several new commercial strategies and activities to sustain our momentum, including it continued focus on raising awareness the availability extensive patient supply.
And patient affordability of Firdapse for adult patients, which includes raising awareness to general neurologists beyond the neuromuscular expert population.
We have held very productive discussions at recent medical meetings, including the EMEA, leaving the fall a confidence the American autonomic society meeting and various other regional and local meetings of non muscular experts and general neurology physicians.
In addition, as Pat mentioned, we launched our no cost Mems antibody test program for positions, we suspect that their patient may have won so that there was no need to hesitate or submit and wait for insurance approval to perform this diagnostic test.
We are readying a find a physician web tool, where we can help patients who are looking for physicians that have experienced treating.
Identifying those positions located near them.
This includes an increase in our levels of non personal promotion and advertising, mainly digital communications to physicians and patients.
We are also preparing to working in earnest to help patients to the upcoming insurance, we optimization process that comes at the end and turn of each calendar year.
Lastly, our largest and most complex. Marshall addition includes expanding and re targeting our salesforce an inside sales contract group on over 9000, neurologists that we know treatments on balance like symptoms and this is up from our current target list of about 2500 neurologists.
We believe that all of these efforts will continue the success in identifying and treating new adult patients with a high level of patient and physician satisfaction.
To conclude I'm happy to say that just a few weeks ago, we crossed that important milestone of 500 patients prescribed firdapse, which has an impressive 33% of the diagnosed adult population.
I'm very excited about the idea of helping got next 500 adult patients.
I'm also excited about what lies ahead for our company as we get ready for the prospect of helping adult patients in Canada in Japan.
And potentially helping additional patients with musk antibody positive my feeling gravity.
CMS and SMB type three and the years to calm.
And with that I'll hand, the call over to our Chief Scientific Officer, Steve Miller, who will report on the progress in our clinical activities Steve.
Thanks for the commercial real estate debt.
I'll provide an update on our clinical pipeline to develop firdapse for additional neuromuscular indications first I would like to touch on the news regarding our phase three trial for congenital Myasthenic syndrome.
This phase three trial.
So one.
Our first ever double blind placebo controlled clinical trial for the symptomatic treatment of genetically confirmed.
There are currently estimated to be about a files into 1500.
Patients representing a spectrum of over 50 different possible genetic defects.
This wide range of genetic defects producers are broad spectrum of clinical presentations.
And variations in response to therapy retreated 16 patients in this period treatment crossover phase three trial, given the sample size to trial did not achieve overall statistical significance for the primary endpoint of subject.
For the secondary endpoint muscle function.
Because this trial was or cross over design.
Subject receivables suitable and I'm afraid.
Each patient was thrown control and able with individual response to treatment to be assessed and some of the patients showed a positive response to treatment in the trial.
This clinical trial took almost four years to recruit for a variety of reasons first CMS is a very rare disease with only a few hundred patients diagnosed at this time in order to aid with diagnosis over the past four years catalyst has provided.
Strict free of charge.
That needed to within our <unk> clinical trial network.
And despite the outcome of this trial Carlos.
Provide to service the patients for the foreseeable future.
Many of the patients are children and many parents are reluctant to allow their child to participate in the clinical trial with a possibility exists or child maybe treated.
Third due to the pediatric nature of the disease this complexity patients and their doctors from understandably reluctant.
We refer to a physician at one of the existing clinical trial sites.
They are more doctors treating CMS, we're not willing to be clinical trial sites for their patients could be included in this.
Trial.
The clinical trials require a commitment of time that many families kinda give an existing burden of already caring for patients.
Carlos Thanks, all the families from.
Charles participate in this trial.
Well, we were disappointed in the clinical trials has to go outcome. We remain encouraged by the response or some individual patients treatment.
We're continuing to conduct analyses of the full data set and are scheduled to me.
<unk>.
To discuss the results.
Sponsors to treatment and potential next steps will provide updates as we become available.
Well the outcome trial was complex we believe a data provides valuable clinical information for this patient population and their physician.
We're also conducting an ongoing phase three multi select international trial on M.U.S.J., which is being conducted under special protocol assessment.
Core spot.
This phase three trial continues following our successful proof of concept trial for the shooters.
We expect to report topline results from this trial in the first half of 2020.
That's described previously the CMS trial had a lot of variability due to.
Genetic defects involved to resulting in a very out urging this patient population.
Response to treatment however.
KMG clubs is caused by a single antibodies to a single protein.
Resulting in a more.
This patient population, which should exhibit consistency of response to treatment between patients sites across multiple trials due in no small part to the success or previous proof of concept trial, we remain cautiously optimistic about the outcome.
This ongoing phase three trial forever.
Sure.
I mean, it was KMG isn't autoimmune disease for which there is currently no approved treatment and we believe there are about 3000 to 4800 U.S. patients.
Yes.
Assuming this trial is successful we look forward to one day potentially being able to provide.
Approved treatment option for these patients.
Lastly, we have a proof of concept study ongoing spinal muscular atrophy or estimate three this trial is ongoing in Italy, Eastern Europe , and evaluating safety tolerability of potential efficacy over I'm afraid.
Ambulatory patients diagnosed with us.
We plan to enroll approximately 12 patients of the study.
<unk> announced topline results from this study in the first half from 20 to 20 as somebody who is caused by related genetic defects truly some M protein and motor neurons should result in a relatively homogeneous disease deferring mainly insperity.
Moving on to market expansion plans for Firdapse Congress has now submitted.
New drug submission or NDS, Canada seeking approval for Firdapse for the symptomatic treatment of loans catalyst has also been granted priority review for this idea, which should reduce the review cycle time to six months.
With a priority review cycle time, plus the required acceptance for your time 45 days catalyst expects to receive in response to health, Canada is review over RMBS and about seven months provided the Mds is accepted for filing and review. This month Carlos has not yet started to commercialization activities in Canada and when those activities commenced.
Right and update regarding our commercial plans.
Catalyst also recently announced an extension to the marketing territories to include Japan.
Recently, we have begun discussions with the Japanese Ministry of health Labor and welfare.
Regarding the regulatory pathway to seek approval.
Approximately two years ago Japanese government designated the approval Firdapse as a priority drugs for the omni channel Toby.
Actively soliciting companies developing filing and for this drug.
An update on the regulatory pathway for Farley in India.
Roger once catalyst.
Come to an agreement.
What will be required to file that idea in Japan.
Catalyst continues to provide access to firdapse for CMS patients in our expanded access program.
We also provide assistance to patients and physicians is needed to obtain genetic testing in order to obtain an accurate diagnosis. This accurate diagnosis angiomedic subtype confirmation.
Tailored to treatment strategy to optimize the treatment of each CMS patients.
We also plan assuming a successful outcome.
Gee phase three clinical trial to begin including the symptomatic treatment of M.U.S.K. Mg.
I will work diligently with <unk> bees involved.
To add this new treatment protocol.
Patients have requested a long acting version for Firdapse in order to eliminate the need to plan their daily activities around multiple doses for firdapse.
We are now actively developing this new product and provide updates in the future where the product characteristics.
At this stage of development program attributed formulations are being developed and their drug release properties or being studied in order for.
The long acting symptomatic treatment arms.
Overall, we were excited about the opportunities to expand the current firdapse label into additional indications as well as an additional countries that developing better product for all these patients we will provide any updates on these clinical and regulatory pass actually become available I will now I'll turn the call over to always Randy our chief financial.
Officer to review our financial results.
Thanks, Steve Yesterday November 12, we filed our quarterly report on Form 10-Q .
Quarter, ending September 32019, which reported net income of 30.6 million 13 cents per basic and diluted share with third quarter 2018. This compares to a net loss of 7.8 million or eight cents per basic and diluted share for the third quarter of 2018.
For the quarter ended September 32 dozen an 18 net product revenue from the launch afford US 30.9 million related cost of sales for the same cooler.
Employment.
Research and development expenses.
6 million for the third quarter 2019, compared with 4.5 million in the third quarter of 2018 research and development expenses for the third quarter 2018, primarily consisted of expenses for medical military affairs and quality assurance programs as well as expenses from our ongoing clinical trials.
Studies on our expanded access program.
Research and development expenses in the comparable period in 2018, primarily consisted of consulting expenses would be very submitter NVH referred upswing. If it meant Dublin is one of expenses are sort of vehicle Trauson studies of our expanded access program.
The company expects that the cost related to research and development activities will continue to be substantial to me up 2018 into 2000 and planning as we continue our ongoing clinical trials Buddy.
The lifting and G.
Next we and our expanded access programs lets say, yes.
Selling general and administrative expenses for this important because in a 19 totaled 8.1 million, that's compared to 3.6 million in the third quarter 2018.
The increase when compared to the same period in 2018 is primarily due to increased selling expenses, including cost of commercial system implementation.
Our sales force and sporting personnel.
<unk> expenses market access and my recent research expenses and professional fees associated with our losses again, yes, yes.
The company, but selling general and administrative expenses.
So it's a nice anything less than 20.
We continue to be perception commercialization programs in support of fair enough sales activity.
Soon our lawsuit against the FDA.
On September 32019 catalyst that cash on investment of 81.6 million I know funded debt.
Although there can be no assurance basin for and available information you really that these resources will be sufficient to support our plant operations, where at least the next 12 months.
Detailed financial information and analysis, maybe found in the company's quarterly report on Form 10-Q , which was filed with the Securities and Exchange Commission on Tuesday November 12, 2019, and can be found on the Investor Relations page website at www dot catalyst by month Dotcom.
I'll now turn the call back to that.
Thank you Alex.
As always I'd like to extend our thanks to everyone who has made this excess berlin's community possible, including our patients physicians employees and other catalyst stakeholders.
Our mission remains to better the lives of people with neuromuscular disease, and we look forward to providing you updates on each of our clinical and commercial programs in the near future.
This ends our formal presentation I'll now turn the call over to the operator for questions.
Thank you.
This time, we will be conducting a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad.
Confirmation John will indicate your line is in the question Q. You May proceed start to if you would like to remove your question from the Q2 participants using speaker equipment, and maybe necessary to pick up your hands that before pressing the star keys.
No min please wildly poll for questions.
The first question is from Charles Duncan of Cantor Fitzgerald. Please go ahead.
Good morning patent team.
Congrats on the on the progress in the corridor and the performance and I really appreciate all the granularity on on the launch metrics. That's helpful to understand this man.
Okay I had a couple of questions that are kind of commercial oriented and then one that is.
Related to the pipeline and sell I'll I'll really start with the commercial question and that is that when you can reach.
Considering the guidance.
What what really are some of the drivers or or key inputs part of the guidance and then if he could touch on the lens market dynamics you you said.
A few things in your prepared remarks, but I'm wondering if he can provide a little bit more color on maybe the competitive upfront and new patient identification.
Thank you Charles for your question, Dan do you want to address the commercial metrics and our guidance with Charles.
Yeah, I mean as far as the guidance for for the remainder of this year for next year and General Charles where were you gone.
Yes, really its next year, because that's the nice surprise to see I on the little bit surprised say, you're able to provide that at this time.
Yeah, I think I mean that that the key elements and you know there's there's a couple of elements going on one as we had a fantastic launch and really transition patients over I think we've been describing this in Q1 in Q2 calls that when you have set so.
Good lots of new enrollments it becomes harder to get into that next phase and so we do see that the new enrollments are going to be in the more moderate 15 level and I think with these with these additional programs that we're putting in place with our expansion in the sales force and in a new target list of additional positions that we can call.
Along with inside sales and end up folks in the field that it'll probably be into 15 to 20 patients per month.
And then the thing that we kind of got a little spoiled about in the first and second quarter is when you have a rapid lots of all these transitioning patient none of them discontinue.
And that's not until you start getting the patients that are naive to treatment that you start seeing things like I mentioned about there's some patients not all patients respond some patients and intolerable our experience intolerable side effects and so you get somewhere in the neighborhood of 20% to 25% Discontinuations.
And then as you as I mentioned, a small trickle of patients that are going over to the pediatric loans.
Approved product Oh, you have to subtract out all patients that have.
Those discontinuations, so you get into a more moderate growth rate versus what you see in quarters, one two and three.
I hope that helps.
Yeah, so that Charles you're right.
Your your other question about a little more color around the competition I think Dan address that.
Head on.
We we anticipated that we would lose some small amount of patients.
Which we've seen and typically they've done when youre commercial insurance Kid can or when they were able to get Medicare coverage and there were two what I'll call small boluses for each of those and.
Those patients for the most part we believe that converted.
And they launched their product in July I suspect anybody who wanted to go back.
So the product that they were taking under the Jacobus compassionate use program.
For the most part made that transition already.
And so where we're feeling more comfortable as we move ahead, and we think there what our broad offerings of patient support and services.
It's.
We were wearing a better position to going forward to retain these patients.
Okay that seems like it should be the case and then with regard to adding the sales reps I wasn't clear, where you're adding 10 and then what is the seven to 10 additional folks that you're adding what can you just give us a sense of the expansion.
Yeah, let Eric.
I like Dan take that question Charles.
So we're we've we've we've purchased some additional prescribing data on physicians that use medications that are often used with levels.
Patients or patients that are experiencing and displaying Latin symptoms and by doing that we've been able to find 9000, neurologists, which is much higher than this existing list of 2500 that we've seen that had seen a diagnosed LEMS patients. So they are using medication that is.
Often used when they when I'm disposition. The thing these types of patients. So we are going to you and that's and reach into with our sales force field field face to face interactions with patients to go all the way up to about 2500 to 3000 to them with the field Force and then work.
Turning to supplement that with an inside sales group that we train.
And they make phone calls to these offices to understand hey, as one of these types of patients come by the office and once we get a in essence a lead a confirmed we from the inside sales. They will then handover to the regional account manager, who will go out and visit that area. It's just a more effective.
Well efficient way of covering more ground.
Including these patients who will go to some of these lower desktop physicians more and frequently but they still go there and this is the type of what you need to deal and you end up an orphan them, especially in ultra orphan disease area to catch that's the right timing of when that patient than for example, a general under.
I'll just office in Peoria, Illinois, when you don't have a lot of regional account manager right near there.
Okay. That's helpful a lot of groundwork.
On that to be done seeds.
But then perhaps if I could transition to the pipeline question that I had for Steve.
Appreciate all the commentary on mosque empty relative to CMS in terms of.
Patient heterogeneity as well as symptom presentation.
Wondering if you could provide actual information regarding number or kind of general trends in terms of enrollment in that mosque Mg and then in the second half of next year. If the data are positive how did the mosque empty study would.
Do you anticipate an S. San Diego or would you anticipate perhaps the second phase three would be kicked off by year end next year.
Okay, Charles with regard to your first question how much they provide any specific guidance on the number of patients currently enrolled in the trial I will say that the enrollment is going well that were scheduled to complete enrollment.
With regard to plans upon successful completion of the current ongoing trials keep in mind that this is for all practical purposes or second trial.
And in their prior meeting with the agency they have indicated that.
Two trials the proof of concept crawl combined with a successful phase three trial would be sufficient to fall in us and the for the indication and therefore, we anticipate assembling and filing innocent.
After the successful completion of this clinical trial to seek approval for that.
The cash.
Okay, and just remind me maybe of the number of patients targeted to be enrolled in that trial and whether they all have to pass an antibody test.
Patients do have to pass an antibody test to be eligible for enrollment and we are targeting 60 M.U.S.K. Mg patients also as a reminder, this patient is a enrolling.
10 to 20 acetylcholine receptor patients as well, but there is no hypothesis testing for that group. The FDIC simply requested that we enroll some us holding receptor mg patients and tabulate for data so that they can determine whether or not there is on any effect on those patients as well.
Okay. That's helpful. Thanks for the added color congrats on the progress in the quarter.
Thank you Charles.
The next question is from Joe Catlin Zero of Piper Jaffray. Please go ahead.
Hey, guys. Thanks for taking the questions as a couple of quick ones for me, maybe the first around guidance more so the 2019 guidance. They look at that it suggests that that Fourq you had gone to be a down quarter, what's driving that is that simply patients transitioning off of Firdapse to reserve Jade and what gives you comp.
And that that trend is going to reverse heading into 2020.
Well I'll, let Dan get into a little bit of the details on that Joe but.
Really we we put the guidance at approximately $100 million to be a conservative guidance.
And without giving a range and maybe we should have given a range for where this there or whatever.
That's great. If there were not sort of certain that that assumption is correct that are are.
Revenues for the quarter going to be down, but Dan maybe you want to address that as well.
Yes, no I think if it's partially just again that's that that great rapid success, we had in the first three quarters.
No may may get into and start settling into a more.
Stable once we get the enrollments up past this transition a plus the Discontinuations I mean, you you mentioned that you also have to subtract out that need discontinuations for normal reasons as well as.
We still do see at a trickle of continued.
Discontinuations going to the pediatric levels approved product and so when you have.
A quick ramp in the small market, there's going to be a period of adjustment in the early launch period and this is what we're seeing so what's going to flatten out and and quite honestly. The better success you have in that initial ramp the more severe the flattening as and so that's what we see in Q4 and and we do think that some of the discontinuations that we.
We had with the early naive patients we studied to try to understand what was happening and it was initially much higher and we've got it now with with understanding better messaging and setting by their expectations with physicians and patients.
In providing very good guidance on the initial dosing period.
What was originally a 40% discontinuation is now gotten down to lower than 30%, which is more in line with what we saw in in our studies. So that's continuing and we believe that by next year, we'll have that Holland, where both on the discontinuation and that will be into a normal cadence and then.
On the enrollments with all the with all those programs that we mentioned on the expansion, we see that stabilizing and growing.
The last point I'll, just say that and Pat mentioned that Theres still has a range around that hundred million number.
We want to make sure that we don't surprise anyone on the low side and now Q4 is always challenging there's less selling days with the holidays and such and and the weather actually is getting a bit colder and there's a bit of a seasonal effect with what patients in the symptoms of ones and so we dial all these things tend to try to.
Make sure that we're giving you the best guidance with no surprises on the low side.
Okay got it and.
And forgive me you May have had said this in your prepared remarks, but.
Previously you've provided numbers on patients on Firdapse at the ended the quarter I think it was 337 at the end of one two and four nine at the end to Twoq can you say what it was at the end of Threeq you.
Yes, so so at the end of the second quarter, we had 409 patients on active therapy and that that includes all patients getting free drug so.
Our patient assistance program, our bridge program and actually overall that had flattened out and at the end of the third quarter is it about the same rate them up 410, or so patients and so yes, we saw a growth and the number of our.
Patients getting reimbursed, which reflects I'm just really good work by our payer team and our team a catalyst pathways, helping patients that were previously getting kind of this bridge.
And waiting for insurance coverage transitioned over and onto paid therapy, but that also reflects the gotten the not only the addition, new enrollments, but the subtracting out of anyone that have discontinued.
Okay got it and then maybe just last one for me here. So you mentioned that small group of patients that transition to offer firdapse onta or is there Jay can you provide some some numbers around that and maybe in general.
What's the percentage you're seeing.
A patients doing that and do you expect that to continue slow down what's what's the driver that thanks.
But if it's really hard to know exactly how many patients.
Switched to reserve because they really don't call up and just say I'm going to switch to another drug, but because we have such good communication with many or most of these patients and their positions and we do try to capture that information.
And I understand the different reasons why patients discontinuing so.
We believe that at the end of Q3, there were about 20 patients.
That had.
Made this transition to the other drug and as we mentioned all right as I mentioned most of them seem to be the patients that were on the Jacobus KMR compassionate use study originally.
And then right now currently we see that about 30, but very few on the past two to three weeks.
And so we continue to work with these patients as best we can all patients throughout the journey and if there ever showing any signs of a bit content for any reason, we're addressing that and if they say that they're going to leave to another medication. We just make sure that they know that they can return to catalyst pathways and firdapse at any time and may well be able to pick up.
Were they left off and and we do expect that that some of these patients will come but what will come back when they realized that.
But it's no better actually worse without firdapse and catalyst working on their behalf.
Okay got it and so that's very helpful. Thanks for taking my questions.
Thanks, Joe.
The next question is from the then Gershell of Oppenheimer. Please go ahead.
Hey, good morning, Thanks for taking my questions.
And also congratulations on the great progress on for sharing all the all the detail.
Question on.
The commercial for Firdapse.
I do a previously defined Canada.
1500, who are diagnosed or somehow in the system versus another 1500, who who may not be.
When do you can you get the additional 10 lips cheaply, bringing on into the new year, we'll be focusing on that second 15, when you group and.
I want to visit the parts of that if you could characterize any patients you brought into forgot to we're in that second group.
The launch is proceeding so for me I've a follow up.
I'm I'm happy to take that again, Pat Yep Yep Dan.
So.
The additional.
Representatives that come onboard all representatives still have basically a couple of different areas of opportunity.
With with 500 patients are so now being prescribed firdapse. We do believe that there are still about 1000 patients that are already diagnosed with levels that are not yet treated in our talking with positions or they're not the physician hasn't yet fell the urgency to to ask those patients to come.
Again and to try Firdapse and so there's still there some work to be done, but that's how I'd love to get past 30, 33%.
The diagnosed market it it does become challenging.
But we do see that that's still is a target.
In addition, there are about what we believe is 1500 undiagnosed patients or miss diagnosed and and the additional headcount.
All the an inside sales are going to be asking questions of those offices do you see patients experiencing these types of symptoms have you considered lines here. We have this no cost antibody test.
Why not test to see if you're you know if this hunch is correct rather than in some cases positions are just thinking to themselves well, it's probably not lemons that so rare I'm sure. It's not lambs, we're trying to take some of those both barriers are both hesitations off the table, both with our field force.
Our programs like the antibody test as well as the inside salespeople, calling up the offices asking them. If they are seeing patients like this.
Okay. Thanks, that's helpful.
Also commercial question with regard to the dosing of Firdapse wondering if you can comment that you've seen.
In other than standard dose that that that's the drugs to be taking but if you've seen any variability or flexibility that's been used by patients.
Kind of on one off basis.
No to manage their symptoms as as effectively as possible with firdapse.
Yes, there's there's a.
There's there's quite a bit of variability overall, but the initial expectations of the average dose across all patients.
Being around 60 milligrams has held pretty firm and it's moved around a little bit I'm, where the initial patient. They came onboard we're on the higher end of that transitioning over from kind of longer term maintenance and as we brought in some of the new patients. The news naive patients they were at the lower dose obviously they started titration.
But but the drug itself as a narrow therapeutic window and I'm not quite sure that many of the patient you know.
Previously on the Jacobus study or even Jacobus realized how how there is.
Capitalism difference between some patients that are fast metabolizes inflow metabolizes and some patients do very well at 30, 40, 50 milligrams a day, whereas others. The fast metabolize, there's will require at the high end of the range of 80 milligrams and that's where again you have to be very careful with with patients and and.
Some of the side effects and dose and you have to explain that the positions and such but.
Overall, the population of patients.
That have come over what the prescription for us would have stayed on.
The average dose across all is about 60 milligram slightly slightly.
Alright, great much appreciated for the extra color. Thank you.
Excellent.
The next question is from Scott Henry of Roth Capital. Please go ahead.
Thank you and good morning Hot snacks capital question.
Has the price environment pricing environment changed at all since reserve G made it to the market or are you seeing general stability and net pricing.
The pricing Hasnt changed at all Scott.
You know we price this and what we thought was of fair value.
And we get a lot of work as you know to decide on where it should be priced based on all the patient services, we provide and all the additional studies there were conducting for other indications and so.
He did pricing despite the entry of the other company.
Has been very stable for us.
Okay, great. Thank you for that color.
Got a another question with regards to reserve D.
I.
Do you have any tend to have what kind of market share that product is getting I know you. There was talk about 20 switches in Q3, but but how do you think it stealing among new patients. Just you may not know, but I thought I would see if you had to have any color on that.
Well I'll give you my thoughts and then Dan probably has some as well E. D. I think for the most part naive patients are those that are not.
Three four DAP experienced are are.
Really not aware of.
The the work that we're doing in physician offices in a patient education.
As well as physician education, so there's a lot of work going on.
And so I think with regard to naive patients, it's like damn pointed out.
There there.
A little more difficult to find there's more work that's required by the even field sales for sure. The regional account managers to find the docs, who are treating patients with rare neuromuscular disease to find out its in fact, they have any limbs patients.
So I.
I don't think that we can tell you.
The MTR impact is a.
Percentage your market share I think as Dan pointed out in we've talked about previously that the the number of patients is is not large and it's been somewhat of a trickle. If you will and again the product by the ended the year, we'll have been out there for about six months, so I think anybody.
There was already experienced on three four DAP and wanted to go back if they were in the compassionate use program would have done so by the ended the year. So I think maybe as we go forward, we'll be in a better positioned as we gain more experience to be able to talk in terms of market share but.
Good.
I think.
For the most part that's that's all I can provide at this point Dan do you have any color on that yeah. I mean, I think I think there's a couple of no. Other elements I mean, it's interesting we do hear from many of these patients that were on the Jacobus to before DAP that they actually say well I actually think the drug is working much better for me.
Firdapse and then vice versa, obviously, the people that they have left our thinking well I kind of remember that that my old you know my old three four DAP was was working a bit better and that's why I think that we'll see some of those patients come back ultimately because it seems to be all over the place.
And the reason why to bring that up is.
Is that the the physicians that are treating a new patients and we don't have data on this I mean, you kind of alluded to this it's hard for us to tell we don't have data, but these these positions that are treating the new patients. They they don't necessarily like writing something off label.
It makes it a little bit easier for them when they have a patient who is in their office, saying, but it was working for me for a year and a half and they're like okay, well this actually makes them. So.
But on new patients I don't I don't think that they're getting many new patients and I think that's appropriate and I think that that's in line with what would the payers.
End of physicians are most comfortable with which is prescribing a drug that's that's on label. That's been studied that been reviewed by the FDA and such.
Okay, great. Thank you for that color.
Another question just with regards to the CMS data do you expect to present that anytime in the near future or how would how can we get a closer look at that data.
Steve.
[noise] basically a we'll have to speak to the principal investigator a I would anticipate that we would present the data appropriate form at some time or we also plan on publishing the data and so we certainly wouldn't want to impact your ability to publish it.
Journal as well so all of those factors why after taking into account, but I would anticipate sometime next year that the data will be made.
Okay, great. Thank you see a final question just an accounting question I, Yeah. As you continue to be profitable on a quarterly basis at some point, you'll you'll fully tax on the number when when would you expect us to see a more fully tax that EPS number just for modeling purposes.
[noise] Scott.
You know we have hired a separate from to do an analysis of around EUR wells in the look at our tax credits and orphan credits.
And so.
Yeah. That's hard to is that's hard for us to say right now certainly it's not going to impact is this year.
Perhaps sometime next year.
And as we get our arms around the work that's being.
Conducted right now to analyze our general wells and our R&D expenditures.
As soon as we have that we'll we'll provide that.
To the street.
Okay, great. Thank you for the color there patent thank you for taking the questions.
Great. Thank you Scott.
We have reached the end of the question and answer session and I will now turn the call over to Patrick Mcanany, Chairman and CEO for closing remarks.
Thank you.
Again, thanks for joining us on todays call. We look forward to providing you with further updates as they occur. Thank you.
This concludes today's conference and you may disconnect. Your lines at this time. Thank you for your participation.
[noise].