Q3 2021 Catalyst Pharmaceuticals Inc Earnings Call
[music].
Hello, and welcome to the catalysts Pharmaceuticals third quarter 2021 earnings call and webcast. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
If anyone should require operator assistance. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.
Now my pleasure to turn the call over to Ali Grande CFO. Please go ahead.
Good morning, everyone and thank you for joining our conference call to discuss catalysts third quarter 2021 financial results and corporate highlights.
The company, we have Patrick Mcenany, Chairman and Chief Executive Officer.
We are also enjoying basis, even Missouri.
So, but anyhow, you scientific officers and yet you're still climbing.
Marcia.
For the Q&A session. We'll also have Gary Ingenito, Chief medical unveiled yesterday.
Before we begin I would like to remind you that in the following comments and in the Q&A session.
It's about expected future results, which may be for your statements.
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 mindful not to be accurate.
Especially in light of the effects of COVID-19.
Actual results may vary.
These statements should be considered only in conjunction with the detailed information contained in our SEC filings, including the risk factors described 20 planes and let me move on.
At this time I would like to turn the call always attack.
Thanks Shelly.
Good morning, everyone and thank you for joining us today for catalysts third quarter results and update call.
I'm very pleased to report that we delivered record revenue results for third quarter ending September 30th.
We generated net revenues of $35 $9 million.
The increase of 23% versus the third quarter of 2020.
<unk> revenues for the nine months period were $99 7 million as compared to $87 9 million for the nine months last year, which represents a 13% increase year over year.
At this time I anticipate continued organic growth through the end of this year and fragrance foreseeable future.
Net income before income taxes for Q3 2021.
Was $14 $1 million, a 20% increase when compared to $11 7 million for the third quarter of last year.
We reported GAAP net income of $10 $3 million from the third quarter of this year or <unk> 10 per basic and diluted share.
We ended the quarter with $174 $8 million in cash and short term investments further supporting our long term growth strategy to diversify through reinvestments in our business or external growth opportunities.
These results also highlight the strength of our commercial capabilities and resilience as we continue to execute throughout the current environment.
All I will have more to provide during her financial presentation.
Our share repurchase program continues with 949740 <unk> shares purchased in the open market during the third quarter and since inception in March of this year through the end of the third quarter, we repurchased $1 million 749000.
746 shares at an average price of $5 <unk> per share.
Notwithstanding our success in treating many limitations.
As of now we have only reached about 25% of the estimated 3000 U S legislations.
We remain confident of the progress of our commercial team is making and evolving the market for the <unk> brand.
We continue to make substantial investments in programs focusing on expanding reach to targeted health care specialist most recently to oncologists and general neurologists.
Yeah.
Providing resources to help shorten the diagnostic journey for <unk> patients and support through patient and healthcare provider education programs.
Our focus on commercial execution excellence remains a top priority to us as well as to the patients we serve.
Jeff will provide additional information on our commercial progress shortly.
Importantly, we have made substantial advancements related to Fedex exclusivity and commercial potential in the U S.
Most notable was the receipt of a positive decision from the 11th second quarter Appeals supporting new European drug exclusivity for programs.
10 milligram for treating <unk> patients in the U S.
We are currently extremely pleased with the court's decision. While there is a 45 day period for which an inbound hearing request.
And me.
Submitted to the court.
Relating to the court's decision, we remain confident in our position and I look forward until we can fully recognize our exclusively.
Our priority has always been and will continue to be on addressing patient needs first.
We are well prepared to do everything we can to ensure that all <unk> patients have uninterrupted access to and I'd say I'm pretty poor trading their condition.
We also continue to make important progress in bolstering our <unk>.
Intellectual property from programs.
Currently two patents have been issued and extend the life of our intellectual property portfolio to $20 34.
Both of which are listed in the Orange book.
We have additional patents pending to further strengthen the IP portfolio, adding to our commitment to protect the innovation and the products commercial potential.
As we continue to execute our commercial related initiatives, we're taking a very targeted approach towards our clinical development programs.
We are working on expanding the label for <unk> as we plan to see U S approval to include pediatric <unk> patients, which we believe numbers are 10 to 15 children.
This program further underscores our continued commitment to providing an important treatment option for <unk> patients of all ages.
We're also continuing our efforts to expand the global footprint for programs.
On the U S, Canada, and Japan stable, we'll have more to add shortly regarding activities outside the U S.
In addition, having objectively and thoroughly evaluated the clinical development timeline.
Dilatory path and commercial viability for Musk Mg, we have elected to the program and concentrate our R&D efforts in other areas.
We believe having a more focused approach towards our development programs will drive the greatest value for the company and enable us to better utilize our resources to pursue value creating opportunities.
To expand our focus beyond <unk>.
During the quarter, we made considerable progress on our efforts to build a more diversified portfolio that aligns our gross strategy and priorities, including the potential to expand the breadth and depth of our pipeline.
With a robust process in place during the third quarter of 2021, we engage in extensive due diligence activities on a potential acquisition that fit our strategic objectives.
However, after a thorough and extensive assessment of the acquisition candidate we elected not been further pursue this opportunity.
Coupled with our strong balance sheet, we earned an excellent position to take advantage of opportunities that meet our specified criteria and commitment to pursue rare disease opportunities and are very encouraged about projects that are currently under review.
Our quarterly achievements demonstrate continued performance excellence <unk>.
Supported by several key strategic decisions that a position catalysts firmly for the future.
In saying that we are excited about the Panther had as we continue to execute across all priorities to drive sustainable growth over the long term.
Finally, there are a couple of other points worth noting first we achieved these results during a period when catalysts and most of our peers were affected to some degree by the Delta variant of COVID-19.
As this variant is abating, we're beginning to see a more normalized pattern and practices with health care providers and patients.
Lastly, while addressing the COVID-19 effects I want to reiterate that as we have previously stated our supply chain is rock solid with qualified redundancies throughout our supply chain.
Now I will turn the call over to Jeff John Carman, Our Chief Commercial officer, who will provide further highlight some of our commercial execution for the quarter.
Thanks, Pat and good morning, everyone. As Pat mentioned Q3, net sales were $35 9 million, which represents 23, 1% growth quarter versus the same quarter last year.
Six 7% growth versus Q2 2021, we are extremely proud of the continued strong performance by the entire catalysts organization.
Strong net revenue in Q3 was driven primarily by steady new patient enrollments continued favorable reimbursement dynamics and stable discontinuation rates.
While we continue to see some sporadic COVID-19 related slowdowns in new patient starts due to delays at the point of care between diagnostic testing and initiation of treatment.
Q3, new patient enrollments were still 26% higher this quarter versus same quarter last year and slightly higher in Q2 2021.
Our strong patient persistency resulted in continued low 90 day discontinuation rates of less than 15%.
In October net new patients were the highest monthly total in 2021.
<unk> consistent naive deferred apps new enrollments.
<unk> patients restarting bird apps and low discontinuation rates.
We are proud that around 800 adult <unk> patients have received a <unk> prescription since launch <unk>.
However, catalysts is focused on the significant remaining opportunity to help all adult <unk> patients. We are confident that our continued heavy investment in patient resources will shorten the diagnostic journey for lens patients and enable catalysts.
The significant number of remaining lens patients sooner.
Thus far approximately 3000 unique undiagnosed potential patients have opted in to receive useful information regarding lens and increase of nearly 1000 since our last earnings call.
Furthermore, we continue to meet key milestones in the development and execution.
Our oncology land strategy.
Approximately 50% of <unk> patients are thought to be tumor lens patients with the vast majority having small cell lung cancer.
Therefore, we believe that oncology is a key element of our future growth.
After completing a thorough assessment of the market conducting AD boards with oncology thought leaders and ongoing market research. We are excited to launch our non personal promotion and thoracic oncologists in Q4 engagement with this segment of the market has resulted in early positive indicators that the strategy.
And emotion will yield more patients with a proper diagnosis of lens and accelerate the opportunity to receive treatment for this disease.
We continue to partner with key professional societies like AA any M, which provide continuing education for all levels of neuromuscular healthcare providers.
We had the opportunity at the recent annual meeting to engage with their constituency and educate clinicians about lens and new and innovative ways, helping to identify atypical lens adult patients.
Through health care provider education, we expect more patients will benefit from a corrected timely lamps diagnosis.
Our lens or I'm, sorry, our catalyst pathways patient services team remains dedicated to supporting the needs of adult <unk> patients caregivers and health care professionals as well as providing educational resources regarding lens and perhaps in addition catalyst pathways has numerous types of financial leases.
<unk> programs.
Patients with their out of pocket costs.
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 a month.
Prescription approval rates remain over 90% across all payers government or private commercial insurers.
Catalyst pathways patient services team also connects patients the community and advocacy resources, such as patient support groups.
In closing we are pleased with our performance in Q3 and are excited about the significant opportunity ahead to help all adult <unk> patients. We are confident that the strategies and tactics. We have put in place will deliver sustained growth in Q4 and beyond.
I want to thank the entire team in catalysts for their unwavering commitment to the lender community.
I will 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 Enbridge on I'll now provide an update on our clinical pipeline and product development efforts, we continue to make important progress with our development programs preferred ups, including advancing our plans for developing a long acting formulation of <unk> and phosphate in order to provide an improved dosing experienced revenues a more convenient option for.
Patients and provides enhanced consistency in its therapeutic effect.
Plans are underway to initiate it.
Additional pharmacokinetic study in the first quarter of 2022, starting the drug release from absorbing the characteristics of the most recent long acting formulations. Our design efforts have been guided by an input for patient and physician panels regarding the desired performance characteristics of a long acting version of <unk>, We believe the target character.
Districts are our long acting formulation of I'm a fabric in phosphates will address the moods of 11 patient community as we continue to execute on our plans to advance this development program.
In alignment with our continued commitment to provide treatment for all <unk> patients. We are now preparing a supplementary NDA submission package for the treatment of pediatric loans with FERC, we anticipate filing the supplement would be after your area in the first quarter of 2022 catalysts has all the required data.
Building all the necessary safety data to file a complete submission for this label expansion the.
Appropriation of the supplement there is a high priority for catalysts as we remain committed to advancing our efforts to expand the use of <unk>. So that we may be able to provide all ms patients with an approved treatment option.
Now I would like to provide an update on the euro.
S. K Amgen program as previously announced catalysts submitted plans, including a protocol for a new clinical trial for the symptomatic treatment of M. U S. K.
C media drivers or any of us carry on June two the agency for their review and carbon having received the agency's covenants. We can bring that advisory board meetings during the third quarter, consisting of key opinion leaders and experts for import options for the <unk> development program, which included some physicians that have experience using <unk>.
<unk> to treat <unk> and our most recent trial.
After an in depth evaluation of the feasibility immeasurable with your study of <unk> for this indication as well as the input from the agency and advisors that was received we have concluded that the universal use referred us as a first line therapy for Mus KPMG is unlikely and therefore, we have decided to put all further development plans for <unk>.
However for those patients currently receive furnaces to treat their <unk> symptoms, we will continue to support them through investigator initiated programs in accordance with agency regulations.
We continue to make valuable products and increasing health care provider awareness of labs through our medical affairs programs at accredited continuing medical education or CME course of <unk> is now available through <unk> to date over four to 600, mostly health care provider borders of June of course, and as of this October 13.
<unk> of 38 licensed health care providers have taken the <unk>.
Our medical Science liaison has also recently completed hosting several neuromuscular motion fellows from various academic medical centers for our mother catalysts sponsored hands on training session on loans driven by neuromuscular experts earlier. This month previous sessions like this one have received strong positive feedback on our ability to raise it.
Work with someone fellows of a diagnostic challenges with lumps.
Now I would like to provide an update on our ongoing global expansion initiatives.
Previously announced in June we partnered with Viropharma for the development and commercialization of furnaces for the treatment of Lambert Eaton Myasthenic syndrome in Japan.
I don't have made great strides initiating development activities, including consulting with the Japanese pharmaceuticals, and medical devices agency.
To confirm clinical study parameters or requirements to obtain regulatory approval.
As a result of their efforts Dieter was preparing their clinical trial notification and anticipate the small scale phase III clinical trial will be initiated in 2022 catalysts continues to support the Idaho and preparing for the clinical activities are supplying clinical trial materials as well as collaborating with data and its efforts to obtain required.
<unk> documentation for the Japanese regulatory authorities.
We have made significant progress on developing an intellectual property estate to extend our market exclusivity for firms as of the third quarter 2021, we have two patents listed in the forefront of ups in the Fda's Orange book, which extends to our IP portfolio to 2034, we have several other pending patents related to the use of <unk> filed with the U S.
Patent and trademark office and anticipate that they may issue later this year or early 2022.
<unk> to the U S. <unk> currently has data exclusivity in Canada out to 2028 and in Japan. We expect further <unk> will be granted 10 years of market exclusivity upon approval in that market. We will continue to seek opportunities to enhance the portfolio with states to further protect the market exclusivity furniture and to expand.
Ups market geographically.
During this quarter, we advanced our objectives to expand our portfolio of rare disease treatments beyond programs as Pat mentioned, we continue to actively evaluate new products or other kinds of transactions to expand both catalysts product offerings <unk>, our research and development pipeline.
Our teams are actively vigorously engaging in the process as we look for worthwhile prospects, where we can utilize our expertise resources and knowhow to expand our programs and drive growth.
With a very efficient approach in place we are enthusiastic about the paas and confident in our ability to identify the right opportunities to maximize our capabilities and resources I will now turn the call over to Ali Grande Chief Financial Officer to review our financial results.
Yes.
We are very pleased with our financial results for the third quarter as we bought it we ended the quarter with cash and investments of $174 8 million and no funded debt.
This allows us reflect the financial flexibility to advance our R&D programs and support our strategic initiatives.
While early stage opportunity and innovative technologies.
<unk> growth and value creation.
Total net revenues for the third quarter of 2021.
$36 million or 22, six increase when compared to total revenues of $29 3 million for Q3 'twenty.
Despite the continued challenges of COVID-19, total fair enough spread revenue net was $35 9 million for the third quarter of 2021, and 22% increase over the net credit revenue of $29 2 million for the same quarter in 2020.
Net income before income taxes with Q3 2021 at this point the million and approximately 20% increase when compared to $11 7 million for Q3 2020.
We reported GAAP net income of $10 3 million for Q3, 2021, or 10 cents per basic and diluted share for.
For Q3, 2020, we reported GAAP net income of $43 3 million.
Hopefully two cents per basic and 41 cents per diluted share. It. However.
However, these figures are not comparing the third quarter of 2020 benefited from the reporting of a one time noncash deferred tax asset of approximately $81 6 million reversal of the related valuation allowance.
Alright, its X rate through the third quarter of 2021.
Nice basis was 20.
3%.
As compared to two 8% in the third quarter of 2020.
Well in 2020, we benefited from the use of our federal net operating losses in 2021 and future periods. We expect that we will benefit from the use of I E.
As it.
Relating to state Nols and the orphan drug tax credit, although those are subject to certain limitations, resulting in a more normalized tax rate.
Because of the significant effect of the one time recording of deferred tax asset in the third quarter of 2020.
Through the third quarter of 2021, we believe that the non-GAAP measures. We presented in Yesterdays press release provide a more useful comparison of our results of operations for the third quarter of 2021 versus the third quarter of 2000 Twenty's.
Non-GAAP net income for Q3 21.
$15 6 million or 15 cents per basic and <unk> <unk> per diluted share, which excludes thin.
From GAAP net income.
Compensation expense of $1 5 million depreciation of 31000 and the.
The income tax variation <unk> 7 million.
This compares to non-GAAP net income for Q3 2020 of $13 2 million.
<unk> 12 cents per share, which excluded from GAAP net income based compensation of $1 5 million depreciation of 30000, and an income tax benefit of $81 6 million. <unk> also represents an 18% increase of the non-GAAP Inc.
Year over year from the standpoint.
Research and development expenses were $4 5 million.
The third quarter of 2021.
$3 7 million for the quarter of 2020.
R&D expenses remained consistent at 20% and 21% of total operating costs.
Clearly in 2021.
<unk> 2022, 2020, I'm, sorry, you expected.
We expect that research and development expenses will continue to be substantial in 2021 and beyond as we advance the development of our lineup implementation further input fair enough and continue our expanded access programs.
In addition, we expect R&D will also increase in teacher.
We successfully executed on our strategic initiatives to acquire or in license innovative technology platforms.
And earlier stage programs in other areas.
Outside <unk>.
SG&A expenses for the third quarter of 2020 lines totaled $12 2 million compared to $10 million in the third quarter of 2020.
SG&A expenses decreased slightly as a percentage of total operating expenses.
<unk> for the sake of putting 2021 compared to 57%.
Third quarter of 2020.
We expect that SG&A expenses will continue to be substantial in 2021.
Continuing efforts to increase revenues from fragrance and take steps to further expand our business.
More detailed information and analysis may be found in the company's quarterly report on Form 10-Q, which was filed with Securities and Exchange Commission yesterday November nine.
Can be found on the Investor Relations page of our website.
UW Lillian the catalysts assignment.
And with that I'll turn the call over to Pat.
Thanks Ali.
Catalysts continue to demonstrate resilience and strong execution in the third quarter of the year providing.
Providing a very strong foundation for the company as we make progress on our business development activities and look to build a portfolio of rare disease marketed products and our other clinical programs.
Finally, I'd like to thank all of our employees of each demonstrated a dedication to making a positive impact on patients lives. This would not happen without their passion and commitment to serving the <unk> community.
<unk> our prepared remarks, we will now open the call for questions.
Thank you, we'll now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad.
Confirmation tone will indicate your line is in the question queue. You May press star two if he'd like to remove your question from the queue for participants using speaker equipment may be necessary to pick up your handset before pressing star one one moment. Please when we poll for questions.
Our first question today is coming from Charles Duncan from Cantor Fitzgerald. Your line is now live.
Yeah, Hey, good morning, Pat and team congratulations on a nice quarter of performance. Thanks for taking our questions I had one on commercial loan pipeline and one on strategy.
Perhaps I'll start with the commercial regarding <unk> growth drivers in 'twenty, two not really asking for guidance here.
It might be nice to know whether or not you'd be comfortable providing guidance in 'twenty. Two later in a few weeks, maybe with startup trying to but more importantly, when you think about the growth drivers for 'twenty two what.
Is the key factor that you are focused on is it increasing awareness or is it increasing breadth or depth of prescribers.
Yeah. So your first question Charles as.
As far as giving guidance.
As we go through the process of developing our budget for next year in our forecast.
And.
And hopefully looking at this pandemic from the rare rear view mirror.
I think perhaps.
Early in Q1, we might feel comfortable in giving guidance I think.
So that's our hope and desire is that we can give some revenue guidance.
At the beginning of the year the new year.
With regard to the key growth factors I'll, let Jeff address that thanks, Charles for the question.
We see significant opportunity in 2022 to grow.
Specifically when we look at.
The diagnosed patients that are out there already for loans that are not yet for that we have a robust pipeline of these leads and many of these physicians are telling us at this point that they're just waiting for these patients that come in and visit.
Therefore, they prescribed so we have that that's one.
Other things, we take a look at the oncology and the tumor lens patients were <unk>.
<unk> significant resources, there to educate HCP as well as patients on tumor lens the disease and potential treatments. So we already are seeing growth right now and I'll give you a quick specific here.
In 2021, our new enrollments, 22%.
The new enrollments are tumor lens patients.
That's a growth of 10% from 2019 in 2019, some 12%. So we're seeing growth with the limited resources that we have applied there thus far and we know all the work that we've done to date this year, well generate new patient opportunities oncology, our timberlands patients next year.
Other part is you take a look at the other 3000 patients that are out there.
A significant portion of these patients are either undiagnosed or misdiagnosed. So we've applied resources there to help educate patients caregivers and physicians about lens and treatments that are available.
And we will shorten that patient journey and that will open up the opportunities for these patients to be services. So that's where we see the significant growth come into 2022.
Very good appreciate that.
Good color Jeff regarding the.
Pipeline question that I had.
Actually intrigued with several of the pipeline initiatives.
But I wanted to focus on the pediatric <unk>.
Filling that you've mentioned.
It seems to make a lot of sense. Although you said, it's a very very very low incidence of.
Or incidence and prevalence for pediatric patients with lens I guess I'm wondering if you anticipate being able to provide some PK data or other supportive evidence for that filing and then is it possible that pediatric labs is actually underdiagnosed somewhere.
Would this source of pediatric launch speed from could it be for small cell lung cancer patients that are pediatric which I'm sure is very few or what is the source of pediatric lens.
Genetic.
Charles I'll, let Steve Miller answer that question.
Thanks for the question Charles first let me speak to the origin of pediatric launch it is autoimmune like the lunch for adults, where there is essentially the same disease.
As you probably know all autoimmune conditions.
Typically occur later in life, although they can occur in pediatric patients burgers.
Relatively low frequency and that is the origin of why the numbers are relatively small it is possible that there is some.
On guard most cases that are out there, but the reality is with the number of patients is relatively small at this point in time, we believe there may be perhaps type of 15, our pediatric <unk> patients that are known.
Currently.
There may be others out there as well and as we.
<unk>.
Remove our commercial efforts and to the pediatric lab space upon approval, we may be able to find those patients.
Hum.
The most important thing is that.
In spite of a factor that's just a few patients it's very important for us to ensure that we can make sure that every single lumps patients regardless of who they are what age. They are where they are is able to get unapproved therapy for their disease.
Okay. That's very helpful. I appreciate the focus on <unk>.
Delivering for patients last question is strategy I'm not sure if youre going to be able to answer this but I'll give it a shot anyway.
So you said that you've got you're happy with the 11th Court of Appeals.
<unk> designation terms farfan.
Hospital on Banc hearing, what's your sense of being able to say with the.
Definitive statement on the outcome of that.
And regarding legal interactions with Wanna be competitors, if you will how would clarity on the outcome, especially a win with that putting it to bed change your perspective on investment and <unk> marketing the pipeline of potential in licensing.
Okay.
So.
Charles as we previously stated.
The.
The FCA.
Jacobus.
And 45 days from the from the key opinion to sneak in and hearing our rehearing.
The opinion.
And that that stages.
Approximately November 15th.
And.
The.
The statistics bear out.
Less than 5% of your request.
And forget Reheard.
And so we don't.
We don't know what other strategies strategies may be incorporated by the other side if you will.
But.
That would be the first step and of course, the FDA as we understand it when required would require actually.
The approval of the Solicitor General's office to even make that request.
So we don't know when.
With the next steps will be we believe even if our request is submitted and it's likely based on the results of the three judge panel.
In the opinion, which was strongly worded.
Thank God, it's very unlikely that a rehearing would be granted.
And so of course, the other option.
As search and applying a request from the Supreme Court for rehearing.
And less than 2% of cases that are sent to the Supreme Court are actually.
Heard by the Supreme Court so.
We are from a commercial perspective.
And on patient advocacy perspective, we're already.
At any point for wood wood with the decision.
<unk> of the court may be ultra mentally and the.
The overturning if you will or the.
FDA approval for <unk>.
And.
With the results of that would be in terms of.
Transitioning a warm transition of patients to Amazon are pretty.
Okay.
Okay that answers my question, we'll look forward to some visibility on that and appreciate the focus on like I said surveying patients. Thanks for taking my questions.
Thank you Charles.
Thank you. Our next question today is coming from Scott Henry from Roth Capital. Your line is now live.
Yes.
Thank you and good morning, Pat.
That sort of a follow up to the appellate court question.
Obviously, we can look at the organic growth of deferred apps and chart that out over the next couple of years.
Sure.
But if resurges is pulled off the market.
Can you talk about how that would change the outlook you know sort of what could be the incremental upside to the revenue line if that event were to occur.
Thank you.
Scott that's a great question.
We're reluctant really too to talk much about that.
It's.
Really the concern would be.
First concern would be a smooth transition where no patient ever message that goes to their drug that's that's our biggest concern.
And I think that we're prepared for that.
I know we're prepared for that.
We previously have stated.
When asked how many patients.
Our unreserved sheet.
We of course don't have access to that information.
Based on the number of patients that we lost when researcher was approved.
And likely some growth we've seen.
Said that we believe that there is somewhere between 100 to 125 patients that are currently receiving resurging, we know a number of those patients are.
Great.
Higher doses than what our average dose patients, which is on average about 60 milligrams for an adult patient.
So.
<unk>.
I think those are the only metrics we can talk about at this point.
And.
Perhaps and giving guidance.
If we do so early next year, we can be a bit more specific than we can right now.
Okay. Thank you Pat and if you were to pick up those patient.
That'd be sort of a step increase there or would you expect them to come in gradually or kind of overnight just trying to think about that.
I think we're seeing some patient migration actually right now so to a lesser degree.
But I would expect that it would be a fairly large pool of silver.
30 to 60 day period of time.
Okay, great. Thank you for taking that question just a small follow up for Alley couple.
Yes.
Model questions first the tax rate.
With 27% in the third quarter, you know what what should we think about as the ongoing tax rate.
B, perhaps close to 22, 23%.
And then even though R&D.
Expect it to be substantial ship should we expect that to trend down given some of the programs that are not getting resources currently.
So.
First ill address your tax question, we expect time.
Future remain to be more of a normalized range. So we expect it to the NFL.
The rate of 21%.
Approximately from two 2%.
On your R&D questions. While you are correct that some of our finance arm.
Winding down we do expect to have some R&D expenses.
Uh huh.
Future programs that we mine.
Pick up in the future based on our growth strategy.
<unk>.
I'll add to that thank you Ali.
For modeling purposes, I don't think youre going to see R&D expenses go down that will probably accelerate some as we bring in new projects and opportunities, which we expect in 'twenty two.
So.
I don't think that.
That number is going to decline yes. We also continued to high expenses from our expanded access program, including and we will have some expenses from our.
Continuing Oh do we expect to have expenses from Ireland and U S gain mg patients that will continue into the body.
Okay, great. Thank you for taking the questions.
And then just kind of.
Thank you. Our next question is coming from Joe Catanzaro from Piper Sandler Your line is now live.
Hey, guys. Thanks, so much for taking my question, maybe just one quick one for me I was just wondering maybe over the last year or so of your teams BD diligence. What have you found the most challenging has it been asset quality deal terms or something else and what specifically led you not to pursue that one asset that you alluded to.
Thanks.
Yeah. Good question, Joe Thank you.
Yeah.
The issue really came down to when we brought in subject matter experts.
And.
And our team was able to do a deeper dive.
The issue really.
It was about valuation where than anything.
The number that and looking at public disclosures.
When we dug in a little bit we just couldnt get comfortable.
With.
With the valuation of the transaction.
And we did spend a lot of time and effort and so.
And we were certainly quite an investment in the project.
And so I think it took a lot of discipline on our part to walk away.
It's unfortunate.
Got it.
The biggest challenge.
<unk> has been.
Until we.
Until we opened up to other therapeutic areas.
The biggest challenge was trying to find something in Europe, and as you know, we recently decided that we're going to look outside of neuro and.
Everything any therapeutic area outside of oncology.
And so that's opened up.
Quite a quite a.
<unk> opportunities for us and we're looking at.
So.
And I think that valuations as you look at products.
<unk> companies that might have some innovative technology those valuations have come down a bit as you guys know.
Since the beginning of this year and.
So I think it's it's.
At the time it was pretty much a seller's market I think it's a little more balanced at this point and I think that <unk>.
Companies are or who are in need for additional capital or looking around what their strategic options may be two to just doing another financing.
Okay got it that's very helpful. Thanks for taking my question.
Thanks, Joe.
Thank you. Our next question is coming from Joon Lee from choice. Your line is now live.
Yeah.
Good morning. This is left for Q&A and thank you for taking my questions I have two first on the on the small trial in Japan with your partner <unk> can we just kind of get an idea of what the study design looks like and timelines and then second what have been your challenges of getting D. The diagnosed patient population.
To fit ups. Thank you.
Okay.
Well thanks for the question Joon.
We're not going to go into any detail about the study design because of confidentiality reasons with Dino.
I can tell you that it's smaller than the studies that we ran in the United States.
As we have previously discussed publicly.
It should be a relatively short period of time to recruit and complete the study shorter than we spent on studies from the United States.
Could you repeat the second part of your question. Please.
Sure I just wanted to get an idea of what have been your challenges in reaching the diagnose.
Let us population and.
Putting them on Fedex.
Okay.
I'll I'll take that answer and it's really not the challenge of reaching these patients because we know that patients who are who is treating these patients who these.
<unk> and many times, it's just the logistics behind it.
<unk> backlog and patient visits.
The Delta Barry another reasons, so the physicians what theyre, telling our field force is that as soon as that patient comes back in.
They will then put that patient on first apps if appropriate so.
We feel like there is a backlog ends up demand that will happen. Once these patients can get back in there, but we are extremely proud of our growth.
That we've had and we see this as being incremental growth moving forward.
Does that address your question.
It does thank you.
Thank you we reached end of our question and answer session I would like to turn the floor back over to management for any further closing comments.
Thanks, everyone for joining our call today, we look forward to our next corporate update I have a great day.
Okay.
Thank you that does conclude today's teleconference and webcast you may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation today.
Okay.