Q2 2021 Catalyst Pharmaceuticals Inc Earnings Call

[music].

Greetings and welcome to a catalyst pharmaceuticals incorporated second quarter 2021results.

At this time all participants on a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance from the conference. Please press star zero on your telephone keypad.

As a reminder, this conference is being recorded I would now like to turn the conference over to your host today Ali Grande CFO. Thank you you may begin.

Good morning, everyone and thank you for joining our conference call to discuss catalyst second quarter, and 2021 and finish Elisa Linton.

Right.

Maybe on the call today, we have Patrick Mcenany share.

And then chief executive on PC.

And so I joined.

Just you and me and I'm, Chief operating Officer, and Chief Scientific Officer, and yes, email Carman Chief commercial officer.

For the Q&A session, we'll also have Gary Ingenito, Chief medical and regulatory officer.

Before we begin I would like to remind you and in the following comments and in the Q&A session. Let me statements about expenses.

With me before and just your statement.

Purchases and sales Securities law.

Statements related to our current expectation and.

And projections and are not guarantees of future performance reinforced risks uncertainties and assumptions and it's difficult to predict and may choose not to.

Especially in light of the effects from COVID-19.

And so he tells me Barry.

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 on 2020 and we'll report on form 10-K and.

At this time I'll turn the call over to that.

Thank you Allie.

And thanks, everyone for joining us this morning for our second quarter 2021 results.

Corporate update call.

Hope that everyone is doing well and staying safe and healthy during these unusual times.

We are very proud of the results we achieved during this past quarter.

Total net revenues were $36.4 million up 23%.

Same quarter last year.

During the second quarter, and we completed the agreement with Idaho pharma for the rights to develop and commercialize products in Japan, which contributed $2.7 million and value.

Further net product revenues for 2021 second quarter from $33.6 million up 14% from net product revenues of $29.6 million for the second quarter of 2020.

GAAP net income before income taxes for the past quarter was $15.9 million.

Compared to $10.4 million from the same quarter last year.

GAAP net income after taxes was $12.2 million or <unk> 12 per share or London and per share fully diluted.

<unk> to $9.8 million for <unk>.

Basic and diluted share and the site.

And from quarter of 2020.

Additionally, we ended the second quarter of this year with $155.3 million and cash and short term investments.

We reported cash and short term investments this quarter was impacted by $3.7 million invested in our open market share repurchase program.

As you May recall very late in the first quarter of this year.

Our board of directors approved a share repurchase program of up from $40 million and catalyst shares from the open market and as of today. The company is repurchase any open market approximately 1 million shares of common stock and an average purchase price of $5 <unk> per share per ads.

Total of $5.1 million.

We continue to believe and rational purchases from our shares and the open market is prudent and increasing shareholder value.

And at the same time, we are increasing the cash on the balance sheet to be utilized for strategic growth opportunities.

Ali will be providing more details shortly and hurtful financial report.

Although we are pleased with these results and market dynamics remain a challenge as we and many of our peers continued to be impacted price.

Physicians practices that are not yet fully functional and are not open to new patients or unwilling to prescribe new medications for their patients without several in person visits.

Some regions of the country are more greatly impacted by the COVID-19 virus and are slower to open and remain a challenge per undiagnosed patients or newly diagnosed patients trying to get treatment.

Having said that we were optimistic and as a country and continues to recover from this pandemic, we anticipate that our <unk> revenue trajectory will ramp further upward and then the second half of this year and beyond.

Jeff will have more information on this topic when he presents shortly on our commercial operations.

On the human resource from we've made great progress on filling key positions to our senior management team as well as with our board of directors.

We recently announced the hiring and appointment of Dr. <unk> as Chief product Development officer, Dr and sundry French to catalyst a wealth of experience and sourcing developing and managing drug product portfolios through all phases of development per year.

His experience and evaluating and developing new medications 17, genzyme and other large from recoveries brings a valuable resource to our team.

We anticipate that <unk> will be the principal participant and future investor calls.

We also recently announced the appointment of Maui Harper to our board of Directors Molly is a seasoned pharmaceutical executive with more than 20 years of senior leadership and several large pharma companies, including Sanofi Genzyme.

Ali brings a valuable experience to our board and her areas of global and marketing her experience and global marketing and strategic planning and operations.

Lastly, regarding human resources, we've hired a vice president head of Investor Relations that will be announced next week.

This is also and critical position to be filled at a time, when we anticipated and transformation of our business. So the next phase of growth, which we expect will likely include the acquisition of 1 or more companies.

Market and products clinical programs and newer technology platforms.

Our R&D regulatory and medical affairs teams diligently continued to record too.

And to expand the label for the <unk> brand.

As we move forward, we anticipate a greater emphasis should be placed on other potential development programs and external projects.

Steve will provide you with greater details on the status of Musk Mg.

The long acting perhaps program.

And the medical affairs activities.

We continue to be quite active with business development and we're currently evaluating and conducting due diligence on what we believe are several very exciting opportunities to expand our portfolio of marketed products and our product pipeline of early and later stage programs.

And while we have and entered into binding commitments to this point.

We are hoping to complete and learn more company or product acquisitions before the end of this year.

We were very pleased to announce last quarter that we had signed a licensing agreement for exclusive.

And each rights preferred apps with <unk> pharma, a wholly owned subsidiary of <unk> Group Holdings we.

We are gratified to continue the expansion of our global footprint preferred apps and to assist the <unk> community worldwide.

Access to safe and effective therapy.

Also we were pleased that many adult Canadian limitations and now have affordable access to <unk> through our exclusive partnership with <unk> Pharmaceuticals.

Although we continue to Russell with regulatory and litigation issues against Health, Canada with regard to the exclusivity that we believe that we are entitled to.

<unk> continues to make progress within the <unk> community and Canada.

Turning to other ongoing litigation and has been over 4 months since our oral argument was held and our appeal.

FDA case, so the decision of the 11th Circuit Court of Appeals panel could come at any time.

We await that decision, but we cannot be sure of when it might be issued or what the outcome might be.

With respect to our patent litigation against Jacobus Pharmaceuticals, and Panther Rx <unk> progress to report.

Last week, and judge denies independents motion to dismiss by indicating that there were factual issues requiring on trial.

And the discovery process continues and it will for some time and it will need to progress further before we get an idea of women and trial might occur.

I can also report there were preparing to amend our complaint to include the patent income was recently issued by the U S. PTO and this was part of our ongoing plan to vigorously defend our intellectual property from the punishment.

At this point I'd like to try on the call over to Jeff <unk>, Our Chief commercial officer to provide you with further details on our commercial activities and operations.

Thanks, Pat and good morning, everyone. We are very pleased with Q2 net for net sales of $33.6 million, which.

Which represents 14% growth for the quarter versus the same quarter last year, and 11% growth versus Q1 and 2021.

I wanted to take this opportunity to thank the entire catalyst organization.

And their resilience and continued focus on helping all adult men stations'.

Strong net revenue in Q2 was driven primarily by steady new patient enrollments continued favorable reimbursement dynamics and stable discontinuation rates Q.

Q2, new patient enrollments were 111% higher for the quarter versus the same quarter last year and.

And the first half of 2021, new naive to 3.4 GAAP patient enrollments.

42% higher and the first half of 2020.

Our strong patient persistency resulted in continued low 90 day discontinuation rates of less than 15%.

Through the first half of 2021 is continuations or 25% lower and the first half of 2020.

We continue to see a gradual recovery from the impacts of the COVID-19, pandemic and Q2 when compared to Q1.2021.

Patient visits and lab test procedure trends continued to improve on.

It remained below pre COVID-19 levels through June Ikea, COVID-19 market impact data suggests that diagnostic visits and specific to neurology or 15% less and pre pandemic levels. However, we have a robust pipeline.

On a patient leads that are already diagnosed with lens.

Not yet on therapy. Many of these patients are waiting to visit with their physician.

I am extremely pleased with our Q2 execution given the sustained impact of COVID-19 on our business commercial field activity remains strong combined efforts between our commercial field force non personal promotion and inside sales enable efficient coverage of approximately <unk> <unk>.

<unk> thousand and health care providers.

And in person interactions accounted for 50% of activity, which represents a 2 fold increase quarter over quarter.

We will continue to closely monitor the course of the pandemic and its impact on patient and physician behavior. During the second half of the year to ensure our field team is well prepared to effectively engage with all stakeholders accommodating their preferences and abiding by local guidelines.

We continue to invest heavily and valuable patient resources that we believe will shorten the diagnostic journey of adult <unk> patients.

These educational and branded resources has generated over 1900 unique patient or caregiver opt is online to receive useful information regarding lens and.

Engaging with these patients and caregivers will enable catalyst to shorten their diagnostic journey and better serve the significant number of remaining patients sooner.

In addition, our catalyst pathways patient services team continues to be dedicated to supporting the needs of adult <unk> patients caregivers and health care professionals.

This is evidenced by pre prescription approval rates, which remain over 90% across all payers government or private commercial insurers patients enrolled in catalyst pathways, including those who are covered by Medicare and accessing foundation assistance have an average co pay of less than 2 <unk>.

Per month.

In closing we are excited about the significant opportunity ahead and help all adult <unk> patients. We are confident that the strategies and tactics. We have put in place will appropriately minimized as continuations and generate new patient enrollments and shorten the diagnostic journey for adult.

And on this patients once again I want to thank the entire team and catalyst for their unwavering commitment to the lumps community I'll.

I'll now turn the call over to Dr. Steven Miller, our Chief operating Officer, and Chief Scientific Officer for an update on R&D activities.

Thanks for the commercial update.

Although provide and update on our clinical pipeline and our development efforts from FERC.

As you know we are developing a long acting formulation of MF effort and cost in order to provide patients with a more convenient dosing regimen and a more consistent therapeutic and <unk>.

Our alternative formulations have been prepared and 3 of the most promising and formulations were evaluated on a pharmacokinetic or PK study and completed a fourth quarter of 2020, but.

The results on this first futures are being geared to inform the design and refinement of additional product formulations now under development and and additional future studies will be conducted later this year.

We have also completed a number of advisory panel meetings with both patients and physicians in order to establish the optimum target characteristics on the long acting formulation of Arbitron and fostering better desired by the <unk> patient community and treating physicians.

As previously announced total of some of our plans, including the protocol for a new clinical trial from a symptomatic treatment of Mus carry marsh and media growth or Mus 2.

<unk> FDA for their review and comment the FDA and provided written comments and questions suitability of both the revised study design and the ability of free initially on U S carrier RMG pilot studies to support and therefore, we can't rule out the possibility that a single study somewhere and designed <unk> 2 will not be sufficient.

For potential approval of <unk> and penetration.

Based on the positive reports from physicians and patients who participated in our previous studies, we are planning to Covid and the expert panel to discuss the options and review our likelihood of success for <unk> and indication for further.

Upon completion of this expert review Carlos will update the investment community on our.

Determination as to whether to continue to develop a FERC sports and nutrition.

Next we previously announced that we plan to conduct and proof of concept study and evaluating further and treatment for hereditary neuropathy with liability and the pressure pulse and storage and contribute a rare neuromuscular genetic disorder affecting about 6000 patients. The FDA review of our proposed protocol for this study and a request to research and evaluate and developing new.

Patient centric and 4 the simplification prior to embarking on their proof of concept study.

Therefore, considering the undeveloped and exploratory nature of the endpoint, we have decided not to proceed with a company sponsored study of <unk> for this indication at this time, but we are in discussions with the proposed investigator who may wish to do the study as an investigator sponsored study on the syndication with our support.

Catalyst continues to raise health care provider awareness of loans through our medical affairs programs, and our credit and continuing medical education, or CME course, outbound, which is now available from us to.

<unk> 4 trials on most of the health care provider partners have looked at the core and a 1300 have taken the ceiling test this fall and catalyst for hosted loans learning program for neuromuscular fellows from various academic medical centers, including hands on training sessions from former muscular budgets.

Catalyst has continued to make progress on developing and intellectual property and expect to protect preferred X franchise last October we reported the issuance from U S. Patent number terms of earnings and free methods of administering Shreveport diver appeared and expiring April 7.2034 catalyst began and protecting preferred apps franchise.

And by filing suit last year and total accordingly.

And accordingly, and borrowers for infringement of ish.

Recently <unk> motion to dismiss per case was denied and the cases and the discovery trends many of the documents related to this case appropriately available for anyone interested and multimillion dollar projects. Additionally on April the U S. PTO allowed patent number 11 O 600, or 20 day for <unk> and this patent issued on July <unk>.

And 2021, the patent is directed to the use of suitable doses are on <unk> to treat patients suffering from loans that are slow metabolisms and them forever.

And then from product containing a revamp of Inc. With a label for the treatment of words that space with patented dosing regiments, and and doses and the dosing and administration section of the protocol layers with free possibly and for instance.

Catalyst and turns to amend our current infringement suit with Dupont and <unk> order.

This new collection growth.

Carlos also has 3 other pending patents related to the use of programs. All of these patents are being prosecuted on contract status and the U S patent and trademark office and we remain hopeful that most if not all of them issue from 2021.

Assuming issuance of fees and additional catalyst plant and take appropriate legal action to protect and impact of intellectual property.

As previously announced catalyst and tends to expand our portfolio of rare disease treatments beyond the therapeutic promise and further.

With the recent ambition and Dr prefix Sundar on our new Chief product development all of you.

Formalized our offers to expense growth catalyst product offerings, and our research and development pipeline from focused on external opportunity searches and evaluations prefect will provide guidance and oversight for new research programs that will hopefully bring much needed new therapies to rare disease patients as well and provide leadership on the overall optimization and integration with catalyst.

Product offerings and R&D programs I will now turn the call over to Ali Grande Chief Financial Officer to review our financial results.

Thanks, Steve and yesterday, we filed our 2021 form 10-Q with the SEC Inc. Second.

Second quarter Financial Inc.

Yes.

We have babies and financing.

And I E.

And volume.

Pilot FTE and seasonal snap on people.

We ended the volume and cash and investments of 155.

And no funded debt, which we really would enable us to let assets R&D programs and supplier and strategic initiatives and the claim earlier stage opportunities and.

Innovative technologies to enable growth and value creation.

Total net revenues from the second quarter of 2021.

36 million and 22% increase when compared to total revenues of $29.6 million total.

And second quarter of 2020.

2021 and total revenues included 2 points and $9 million and upcoming.

And <unk>.

This agreement with guidance by Japanese development, and can we say station and events.

Our second quarter sales continued to impact the pandemic, although as Jeff mentioned, we continue to see recovery.

Despite these challenges.

Revenue net.

$33.6 million from the second quarter, 2020.1.

42% higher than net guidance value.

$29.6 and the second important in 2020.

And then just mentioned.

Domestic.

Revenue growth.

Any 1 or 2.

Hopefully in September 2019 from Danny per site.

We reported GAAP net income and wealth.

And 2 million.

Q2, 2021 and close then.

And then and then net share 24% increase when comparing to GAAP net income of $9.8 million 9.

And that is an issue.

Q2.2020.

And if you think of analog products, and our second quarter and Sac.

And if that is made in the second Florida and 2021 on an annualized basis, just wanted to feel free.

And 5.7% from the second polyethylene plant.

And thats facing Q.

2020 benefited from the <unk>.

Thanks Evan.

And then on cash guidance.

While we expect to you that I think.

<unk> net operating losses and 2021.

And that we will continue on to that and in Egypt, and and the use of free.

These great assets.

And the state net operating losses and the <unk>.

Great.

On the second.

And limitations, resulting in a more normalized tax rate once we bring on Nols.

Non-GAAP net income.

Q2, 'twenty, 1 was $17.4 million on.

<unk> 17 cents per.

Good day and.

Vince per day, Michigan, which exclude from GAAP net income the base compensation expense of $1.5 million depreciation of 31000.

On the income tax provision of $7 million.

This compares to non-GAAP net income.

<unk> to 'twenty.

Well like 2 million or 12% from DC.

And 11 and then.

<unk>, which excludes from GAAP net income and please compensation of $1.8 million depreciation and 29.

And the income tax provision of approximately 600000.

And thank you.

Thanks, Patrick.

And the planned 2020 and phasing.

And the second point in 2020, 1 we indeed that is the non-GAAP EPS.

And then overall understanding of our new silicon and operations and the second quarter of 2021, when compare from the standpoint of 2020.

Comes from sales of approximate equipment 6 million for Q2.2021 with the Lions share.

Slightly $1 million.

For the second quarter of 2020.

In line with the increase of net product revenue 14% of revenues.

Ladies and gentlemen.

And display footprint $5 million.

Our Q2, 2020.1.

And $40 million Q2, 'twenty and claims.

And then.

And that 2% increase and this included.

R&D expenses.

And 2% from 22% total operating cost.

Alright, and the second quarter of 'twenty, and 'twenty, 1 and the second quarter 2020.

Okay.

Ladies and gentlemen that on and expenses stayed relatively consistent and competitive.

SK and declining.

Anthony.

On the study and then.

Duane plenty of continued.

Hello.

And many of the clinical sites in 2021.

On <unk> implementation and development on our expanded access programs.

We expect net research and development expenses will continue to be substantially and 21 and beyond and to unit and development of our Walnut and formulation program from affirmative and.

And your expanded access program.

And treatment for others and the third.

Steve.

In addition, we expect R&D will assuming piece and future.

And we successfully executed on our strategic initiatives to apply innovative day.

And on <unk>.

Earlier stage opportunities.

And then.