Q3 2022 Catalyst Pharmaceuticals Inc Earnings Call
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Darling shortly thank you.
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Okay.
Good day, ladies and gentlemen, and welcome to the catalyst Pharmaceuticals incorporated third quarter 2022 financial results Conference call.
Lines have been placed on a listen only mode and the floor will be opened for questions and comments following the presentation.
If you should require assistance throughout the conference. Please press star zero on your telephone keypad to reach a live operator.
At this time it is my pleasure to turn the floor over to your host Ali Grande Chief Financial Officer, Ma'am the floor is yours.
Good morning, everyone and thank you for joining our conference call to discuss capital.
Third quarter 2022 financial results.
Great Highland leading the call today is Patrick Mcenany, Chairman and Chief Executive Officer.
We are also joined by Mr. Steven Miller, Chief operating Officer, and Chief Scientific Officer, and Jeffrey they'll Carman, our chief commercial officer further for the Q&A session. We will also have Gary Ingenito, chief medical and regulatory efficacy.
Before we begin I would like to remind you that in the following comments and in the Q&A session. We will make statements about expected future results, which may be forward looking statements for purposes of federal Securities law.
Women's relate to our current expectations estimates and projections and are not guarantees of future performance.
Involve risks uncertainties and assumptions that are difficult to predict and may prove not to be accurate, especially in light of the continued effects of COVID-19.
Actual results may vary from it from the expectations contained forward looking statements.
Forward looking statements should be should be considered only in conjunction with the detailed information contained in our SEC filings, including the risk factors described in our 2021 and we'll report on Form 10-K.
This time I will turn over the call to Pat.
Thanks Sally.
Good morning, everyone and thank you for joining us today on our third quarter 2022 financial results and corporate update call.
We are incredibly proud to report our outstanding third quarter financial results, which marks another consecutive quarter of heard us revenue growth.
And an all time high recorded quarterly net product revenue of.
At $57 2 million, representing a 59, 3% increase over the third quarter of 2021.
We reported GAAP net income of $22 $7 million for the third quarter of 2022.
R 22 cents per basic share and <unk> 20 per share per diluted share, which also reflects a $4 6 million charge in the third quarter related to the accounting treatment for the write down of the reserves inventory in the amortization expense related to the ACA.
<unk> on certain assets from Jacobus pharmaceutical company.
Our non-GAAP net income for the third quarter was $28 $6 million or 28 cents per basic share and 26 cents per diluted share.
non-GAAP net income removes from our GAAP net income are noncash stock based compensation and depreciation and amortization and our income tax provision.
L. A we will have much more to say about the accounting treatment and the impact on our P&L as a result of the acquisition of certain Jacobus assets during her presentation.
Good morning.
We entered the fourth quarter with further confidence that we're on the right path to achieving our 2022 objectives and goals.
In the month of October we matched our best months for new enrollments and catalyst pathways and as a result, we are revising upward our full year 2022 for ADEPS revenue guidance to $205 million to $210 million.
Our 2022 financial guidance for cash Opex of $65 million to $70 million remains intact and will exclude the impact of any strategic acquisitions.
Yeah.
Our cash position continues to grow as we ended the third quarter of 2022 with $256 million in cash and short term investments.
This is a $35 3 million increase in 2022 third quarter over the prior quarter amount and represents the largest quarterly increase in cash and short term investments to date.
Which further demonstrates our continued fiscal discipline.
Please keep in mind that this is after paying the $10 million initial payment the jacobus for acquiring the rights to certain of their assets early in the third quarter.
Also our share repurchase program is currently on hold as we were conserving cash for expected business development activities.
As you know approximately 50% of patients with lambs suffer with a comorbidity of small cell lung cancer with.
We have commenced a soft rollout of our new marketing initiative to reach engage thoracic oncologists and others in the physician community to treat small cell lung cancer about limbs.
These programs represent a large untapped opportunity for us to help oncologists identify Williams early and desk get their patients on drug sooner for hopefully a better quality of life.
Our new oncologists targeted programs will hit the ground full speed at the beginning of next year, Jeff will have more to say about these programs in a few minutes.
Early in the third quarter.
We achieved a global settlement of all U S litigation involving Jacobus pharmaceuticals, as part of the acquisition of certain Jacobus assets.
With the acquisition of the reserve G assets completed our team is actively assessing the path forward for the product.
In the meantime, we continue to provide the existing reserve inventory to patients receiving treatment for neuromuscular conditions other than limbs.
Previously receiving the drug under existing investigators sponsored IND.
The long term prospects for <unk> are being evaluated which involve many complex issues related to manufacturing regulatory cost and financial feasibility.
As part of the acquisition, we added two more patents to our intellectual property portfolio with an additional patent listed in the Orange book with an expiration date of February 2037, bringing the total number of U S patents listed in the Orange book to six.
We also announced the receipt in the third quarter in the U S approval of the supplemental new drug application preferred apps.
Branding, we indicated age range to include pediatric patients six years of age and older for the treatment of limbs. While this patient population is estimated to be less than 30 pediatric patients in the U S. Yes.
This milestone demonstrates our continued commitment to the <unk> patient community that we serve.
During the third quarter, we made significant strides in our efforts to identify acquisition opportunities towards building a diversified patient centric portfolio aligned with our overarching growth strategy.
Our key priority on this strategy and business development front continues to remain our intention to broaden and diversify our product portfolio.
Through collaborative partnerships acquisition of commercial stage assets or companies.
Currently we are in advanced stages of due diligence to acquire commercial stage products and oil companies and while no agreements have been reached to date. We are hopeful that we will be in a position to announce a transaction later this year.
We recently advanced our environmental social and governance or ESG initiatives with the launch of the comprehensive assessment of key S. ESG topics to identify appreciable targets for our sustainability activities.
These efforts will serve as the foundation for our initial sustainability report, which we anticipate will be published in the first half of 2023.
Just this week, we announced the catalyst was named company of the year by Bio Florida.
This recognition was for the achievement of significant milestones and so the growth of Florida's life science industry.
We are honored to have been recognized for our many accomplishments, which is a testament to the entire catalyst team for their dedication and hard work.
In addition, we were recently ranked number 39 in Fortune magazine's 2022 top 100 fastest growing companies. This ranking is based on the company's growth in revenues profits and stock returns over the three year period through June 32002.
<unk> thousand two for which we achieved a 176% growth during that period.
On September 15th we were added to the S&P Smallcap 600 index.
S&P Smallcap 600 index as the stock market index established by standard and Poor's.
It covers roughly the small cap range of U S listed stocks.
Okay.
Using a capitalization weighted index to be included in the index of stock most as a total market cap ranges from $850 million to $3 7 billion.
As we entered the fourth quarter with sustained momentum we are well positioned to continue to execute our strategic priorities to strengthen the business with opportunities that translate into added long term value and growth.
For our stakeholders, we are excited by the direction, which we are headed and expect to close out the year on a high note I'd like to thank all of our valued catalyst team members as well as the lens patients and physician community that we serve.
I'll now turn the call over to Jeff Tarr Carman, our Chief commercial officer, who will further highlight our commercial performance.
Thanks, Pat and good morning, everyone. We.
We are pleased with the tremendous results delivered in Q3 building upon the momentum from the first half of the year.
Q3, <unk> net sales were $57 2 million, which represents 8% growth quarter over quarter, and 59, 3% growth quarter versus same quarter last year.
I'm proud of the ongoing flawless execution demonstrated by the entire commercial organization.
Q3 results reflect continued strong organic growth new enrollments exceeded forecast, resulting in 85% more net new patients in Q3 than Q2.
Additionally, the discontinuation rate of reimbursed patients in Q3 was 35% lower than Q2.
Operational excellence maintained favorable access to greater than 90% across all payers government or private commercial insurers continued high compliance to greater than 90% and contributed to an annual discontinuation rate of less than 15%.
Patients enrolled in catalyst pathways, including those who are covered by Medicare and accessing foundation assistance had an average co pay of less than $2 per month.
As Pat mentioned, we have raised our total revenue guidance to between $205 million and $210 million. We are confident that we will continue to sustain organic growth moving forward, primarily driven from new patient enrollments are already diagnosed <unk> patients not yet on <unk>.
Well as a significant number of patients that are unfortunately, misdiagnosed or underdiagnosed.
Leading indicators, thus far in Q4 are very positive.
October naive new patient enrollments matched our highest total post launch while discontinuation were lower than forecast.
Our targeted marketing strategies enable us to maintain close to 500 leads that are diagnosed <unk> patients not yet on bird apps as.
As well as educate healthcare providers patients and caregivers about lens and furnaces.
Focus on these leads result in approximately 50% of new enrollment each month and accelerates the opportunity for these <unk> patients to be treated with <unk> when appropriate.
Additionally analysis of data from National laboratories indicates at least a 50% increase in voltage gated calcium channel antibody tests in 2022.
Versus 2021, which further validate our efforts to shorten the diagnostic journey for <unk> patients is working.
Another opportunity for organic growth is the approximately 50% of cases of lemons that are associated with an underlying cancer typically small cell lung cancer.
Significant resources have been allocated this year to educate the wrath of oncologists about lens and <unk> through non personal promotion and conference engagement.
We estimate that there are approximately 1500 small cell lung cancer lung patients in the United States. However, data suggests that more than 80% of small cell lung cancer patients with lens are undiagnosed, representing a significant opportunity.
Currently we estimate in small cell lung cancer lung patients account for almost 30% of new enrollments each month.
In 2023, we will increase our share of voice that the Razek oncologists through the addition of oncology thought leader liaisons, along with greater lung cancer conference participation in.
In addition, we continue to strengthen our relationships with lung cancer advocacy to both educate clinicians and patients about lens and we are looking to partner with institutions to help more small cell lung cancer patients.
Screened and diagnose.
Recently catalysts was nominated for P. M 360 Pharma choice award for patient engagement.
This award nomination recognizes the great educational resources and programs at catalyst offers lens patients from one on one support of the patient access liaisons.
Virtual and live patient programs to the patient Forum held earlier. This year that was believed to be the largest gathering of <unk> patients in the U S. We are pleased to have been recognized for this industry nomination, which underscores our continued efforts to providing patients with valuable resources to help.
Our system in advance treatment journey.
In closing we are pleased with our performance in Q3 and remain very optimistic about the organic growth potential preferred apps moving forward I want to thank the entire team at catalyst for their unwavering commitment to the lender community.
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.
Thanks, Jeff.
Clinical and regulatory strategy for <unk> continues to focus on expanding access to all patients for the treatment of alarms and enhancing the <unk> patent estate to maximize its commercial life.
I will begin by discussing the recent approval of our supplemental new drug application for <unk> seeking to treat pediatric <unk> patients. During the first quarter of 2022, we filed a supplemental NDA and I am pleased to report that it was approved by the FDA on September 29 of this year would.
With the approval of the supplemental MBA, all pediatric patients age six and above and all adults will now have access to <unk> as an FDA approved product to treat their labs in the U S. However, as Pat mentioned the pediatric <unk> patient population. This is a very small patient group with a total U S population are estimated to be less than 30 at midnight.
It states.
Next in July of this year, we acquired two new patents from Jacobus pharmaceutical to further bolster our intellectual property portfolio of preferred ups potentially extending our IP out to 2037 and one of those patents has been listed in the Fda's Orange book with an expiration date of February 25, 2037, which brings with it.
Total number of Orange book listed patents to.
The other patent is enforceable open not eligible for listing.
As part of our acquisition of assets from Jacobus, We settled our patent litigation against your cargoes then I'll review the settlement demonstrates the robustness of our <unk> intellectual property estate reinforces its exclusivity and gives us further confidence in the commercial durability of photos.
Additionally, as part of our ongoing IP portfolio management initiatives, we worked with the U S patent and trademark office to amend the exploration date of one of catalyst Orange book listed patents from April 7th 2034 to May 26, 2034 for an additional six weeks of exclusivity.
As part of our acquisition of assets from Jacobus, We acquired a license for resort in the United States and Mexico. This acquisition aligns with our strategic goal to serve all <unk> patients.
We are continuing to supply them, a fabry and tablets to existing <unk> holders that had access to <unk> tablets at the time of the settlement.
And the holders are trading about 100 patients with neuromuscular conditions other than lumps predominantly congenital myasthenic syndromes or CMS for which <unk> is not currently approved at this time, we intend to continue to supply <unk> tablets to those patients that are that were receiving treatment under these <unk> at the time of settlement.
We have verified that these R&D applications are current and patient engagement with these physicians is ongoing.
We're also working on manufacturing initiatives in order to service. These investigational new drug application ammo fabric and tablet request for the longer term.
Finally, we are planning to seek through a supplementary NDA to increase the indicated maximum dose offered ups from 80 milligrams per day to 100 milligrams per day.
<unk> patients are already being treated at this dose after their physician worked with the pharmacy and insurance providers to justify the higher dose.
Other patients on the current indicated maximum dose of 80 milligrams per day and their physicians have expressed a need to increase the indicated daily dosage.
<unk> 100 milligrams and this plan supplement if approved will help to optimize the treatment of those patients.
The previously described the acquisition of the reserve your rights gives us access to safety and efficacy data that we believe may bolster any future filings seeking to increase the indicated <unk> maximum doses to 100 milligrams per day as a reminder, reserved was previously approved at a maximum dosage of 100 milligrams per day for children.
Our sub licensee partner <unk> pharma in Japan has just completed an enrollment in their <unk> phase III clinical trial, which is required to seek approval for the Japanese market collection of the follow up safety data is ongoing and translation of catalyst U S. MBA documents to Japanese is underway in order to assemble and file an NDA for <unk>.
<unk> and early 2024.
Finally on the long term strategy front, we have been accelerating our efforts with our business development initiatives.
We are in advanced stages of due diligence and we are making substantial progress in evaluating strategic opportunities are key element in the evaluation of these opportunities is the Camden and opportunities should provide a significant therapeutic benefit to patients. While we haven't yet reached agreement on any of these opportunities we remain confident in identifying the right opportunities.
<unk>, our capabilities and resources.
We have uniquely strong teams that are highly aligned as we continue to execute on initiatives across our business development and operations enterprises to achieve our goals. Our recent achievements demonstrate that our ongoing ability to manage our initiatives successfully and achieve important milestones that have us in an excellent position to further.
Thats, our long term growth strategies at this time I would like to turn the call over to Ali Ali Grande our CFO .
Thanks, Steve.
We are very pleased with our financial results for the third quarter of 2022.
Total revenue for the third quarter of 2022, please see belief I'm sorry, that's credit revenue net.
$7 2 million or 59, 2% increase when compared to total revenue $36 million for the third quarter of 2021.
Net income before income taxes for the third quarter of 2022 was $26 million.
And 84.88% increase year over year compared to net income before income taxes for the third quarter of 2021.
$18 1 million.
We reported GAAP third quarter 2022, net income was $22 7 million by 'twenty, two cents per basic and <unk> for diluted share.
A 122% increase year over year compared to the third quarter in 2021, GAAP net income of $10 3 million 10 cents per basic and diluted share.
Our effective tax rate for the third quarter of 2022 on an annualized basis was 19, 7% compared to 24, 3% for the third quarter of 2021.
Decrease in effective tax rate for the third quarter of 2022 is due to an increase in stock option exercises in the third quarter of 2022 due to a sharp increase in our <unk>.
Stock price.
We anticipate variability in our tax rate on a quarterly basis. However, we expect a more normalized effective tax rate for the year in the range of 22% to 23%.
non-GAAP net income for the third quarter of 2022 arms with $28 6 million 28 cents per basic and <unk> 26 cents per diluted share, which excluded from GAAP net income of $22 7 million.
Compensation expense <unk> one.
Depreciation of 35000 amortization of 518000 related to a Q3 'twenty two license and asset acquisition from Jacqueline Pharmaceuticals, and an income tax provision of $3 3 million.
This compares to non-GAAP net income for the third quarter of 2021.
The $15 6 million or <unk> 15 per basic and <unk> <unk> per diluted share, which excludes from GAAP net income of $10 3 million stock based compensation expense of $1 5 million depreciation of Sir you want the Olson and an income tax provision of $3 7 million.
Evolve representing approximately 83, 3% year over year increase of non-GAAP net income.
Cost of sales of $9 7 million for the third quarter of 2022 increased when compared to five.
$5 3 million for the third quarter of 2021.
It represents 31% of total operating costs for Q3 22 up from $24 two of total operating costs for Q3 'twenty one.
For the third quarters of 2021 2021 cost of sales was approximately 17% and 15% of product revenue respectively.
Is that principally royalties due to airfreight thats the licenses.
As we mentioned last quarter royalty store afraid of licensed stores increased by 3% when net product sales.
Exits.
<unk> hundred million in any calendar year since we exceeded $100 million in net product sales early in the third quarter of 2022, and we expect the cost of sales will trend higher for the last two quarters of 2020.
Research and development expenses were $8 3 million in the third quarter of 2022 completed.
<unk> 5 million in the third quarter of 2021, R&D expenses increased as a percentage of total operating expenses to 25, 9%.
For Q3 22 from 24%.
For Q3 dollars 21.
It's principally due to a recording in the third quarter of 2020 to $4 1 million inventory write offs.
Randy for inventory acquired in connection with <unk> acquisition.
SG&A expenses for the third quarter of 2022 totaled.
$14 2 million compared to $12 2 million for the third quarter of 2021, SG&A expenses to decrease as a percentage of total operating expenses to 44, 1% with <unk> 22, compared to 55, 4% for Q3 21.
As a reminder, in early July 2022, we entered into a license and purchase agreement with Douglas Pharmaceuticals for the rights.
Michelle as resurgence in the U S and Mexico.
In connection with this license, we acquired $4 1 million in inventory manufactured by Jakob.
License and acquiring tangible smith value totaling $33 6 million.
This agreement was accounted for as an asset acquisition as previously noted.
Inventory was six to RMB during the third quarter of 2022, the related license and acquired intangibles.
Asset will be amortized in Australia basis over the next 14 five years, resulting in amortization going forward of approximately 580000 per quarter.
During July 2022, we'd be Douglas 10 million at closing in connection with the lights have been asset acquisition and will be $10 million on the second and third anniversary of the closing.
In addition, we will be a small single digit royalty on them, it's operating product sales in the U S.
Signing the agreement with certain annual minimums until the related patent expired, which maybe we reduced or eliminated under certain circumstances.
More detailed information and analysis of our Q3 'twenty June financial performance May be found in our quarterly report on Form 10-Q, which was filed with the Securities and Exchange Commission yesterday November nine and can be found on the Investor Relations page of our website at www.
The catalyst.
As we reported we ended the quarter with cash and investments up to $156 1 million, which.
Which we believe will enable us to advance our R&D programs that support our strategic growth initiatives.
Okay.
Felipe.
And with that I will turn the call over to Pat.
Thanks Sally.
In closing our prepared remarks, I'd like to say that the catalyst team delivered a tremendous third quarter performance. Once again, obtaining many operational and financial milestones, reflecting our businesses strength and the successful execution of our strategy.
I am proud of how catalyst teams are performing and the positive impact we're having on patients' lives, which is fueled by our dedicated employees, who have a shared commitment to the patient community that we serve.
With our strong year to date performance and our positive outlook for the fourth quarter, we are well positioned to achieve our near and long term goals and deliver value to our stakeholders.
Operator, we'd now like to open the call for questions.
Thank you the floor is now open for questions. If you do have a question. Please press star one on your telephone keypad at this time.
Question has been answered you could remove yourself from the queue by pressing one again, ladies and gentlemen that star one and our first question comes from John Lee from <unk> go ahead Sir.
Okay.
Yes. Good morning. This is last time for June and thank you for taking my questions and congrats on the progress.
Just a few questions from me here so first on the.
Could you comment on how many patients are currently on fed up to date and how many of those are small cell lung cancer patients.
Good morning, Les Thanks for the question I'll turn that over to Jeff Shaw.
Yes. Thanks for the question, we haven't provided patient numbers historically.
What I can tell you is that recent months like I mentioned about 30% of our new enrollments are small cell lung cancer patients.
Patients.
And that number will continue to grow as we implement some of the small cell lung cancer lab strategies that I mentioned.
Okay got it well to build up on that can you kind of expand on how you are targeting this population and I. Appreciate the comments you made earlier, but.
Starting next year and then throughout as we progress throughout the year.
How many of these 1500.
<unk> cell lung cancer patients could you potentially target and get on drug over the course of the year.
It's hard to say as far as what we expected, but we expect to.
Move up that number from 30% that we're seeing currently to about 35% to 40% in 2023. So that's the type of growth that we're expecting next year as far as the programs that we're putting in place.
The thought leader liaisons that that we are budgeting for.
Think of those individuals' as working with some of the high volume.
Volume cancer institutions around the country and the key with those that partnership will be to create programs that will allow for small cell lung cancer patients to be tested.
With after with BGC test.
And really to be identified and diagnosed sooner hopefully to help these patients out so thats our approach there and once these patients are diagnosed and they typically will be referred either too in neuromuscular and neurology and neuromuscular specialists or a neurologist or we also there are some oncologists thoracic.
Just that will diagnose and treat on their own. So that's the whole strategy with the thought leader liaisons and Thats to supplement our efforts that we already have out there that we're educating.
These physicians through multiple channels.
About <unk> of the disease state as well as the available treatment, which is <unk>.
Great that is helpful and on.
Looking at your midpoint of your guidance I guess would imply <unk> would be flat or a little bit down versus three Q is it to do with seasonality or something else that <unk> does.
No less.
Is that.
We just.
We've always been conservative.
We're going to remain conservative.
We.
For the first time as you know this year, we gave guidance. So we're working our way through this and we're comfortable with providing a range.
Sure.
Sitting here today based on the start for this quarter.
Would not say to you that we're going to have a down quarter.
Got it Thats helpful.
Back in the queue. Thank you.
Thank you. Thank you.
Our next question comes from Charles Duncan from Cantor Fitzgerald go ahead Charles.
Hi, Good morning, it's all been online for Charles Thank you for taking our questions and congratulations on the quarter. So I have a couple on the commercial line and then I have a follow up so I guess I was wondering if you could start by characterizing whether the pacing growth was from breadth or depth in the prescriber base.
And then I was also.
So hoping you could discuss the user reviews as well as <unk>.
Seen a distinction between treatment naive patients versus the switchers from reserves E&S there has been a difference in.
Persistence between those two groups.
Great. Thanks for the question Jeff.
Sure so.
As far as the breadth or depth.
Significant part of our prescriber base, our onetime riders.
About 75% of our writers are again only have one patient in that that's truly.
Indicative of a therapeutic area that they there is not a center of excellence that treats loans.
Other therapeutic areas are orphan diseases, there may be a handful of the centers throughout the country and that but that's not the case for four lands. So we are seeing.
Broader and wider.
Base of prescribers and that is a potential in the future is that.
When we look at it about 40% of our enrollments in Q3 were from neuromuscular specialist neuromuscular specialists, we'll see.
Volume higher volume potential limitation, so we think in the future there is opportunity as physicians gain experience.
With prescribing <unk> and seeing limitations and know what to look for that hopefully they will look within their practice to identify additional patients.
Patients that are appropriate preferred apps too.
As far as the difference between the <unk> patients that transitioned over to <unk>, we're not seeing any difference in persistence.
These patients the product works the transition these patients did not lapse in therapy when they were transitioned over.
And we're not seeing any.
Higher discontinuation rate for that subset of patients versus the patients that were always just on <unk>.
Does that answer your questions.
Yeah, absolutely. Thank you and I have a quick follow up.
I heard it sounds like part during the comments that there are non <unk> patients with neuromuscular disorders, who are who are still on <unk> sorry.
Was wondering if you could characterize that.
These dates of those patients and.
If that may be a pool from which you would choose to pursue.
Indications from what you choose to pursue clinical development.
You would once you choose to go that route with <unk> or further thanks.
Yes, Greg Great question.
I'll ask Dr Miller to answer that.
Thank you Paul but it's actually a compound question. So remind me if I don't hit all the questions.
Disease that I mentioned.
I mentioned during the.
Part of our earlier part of our discussion most of these patients have is congenital myasthenic syndromes.
And it's about 100 patients that are currently being treated with.
Reserved under investigator iron boost.
<unk> disease is actually not a single monolithic disease with consists of a collection of over 50 different genetic disorders.
Have started it in the past we have had discussions with the FDA about clinical trial design for this disease.
The reality is that the agency wants to see clinical trials that are stratified by genetic subtypes and so that makes critical trial designed quite difficult and we're currently evaluating.
If we have enough patients to.
Go after to pursue an indication for congenital myasthenic centers at this time.
At this time, but right now we don't have any specific plans to pursue the indication for congenital myasthenic syndromes.
We will continue to provide the patients with reserves because that's what they're used to and we have manufacturing initiatives underway in order to try to.
Provide those patients with the drug for a longer term.
Yeah.
I Wonder if that's.
That's very helpful. Thank you very much and yes, I think thats all from me congratulations on the quarter.
Thank you. Thank you.
Thank you and our next question comes from Scott Henry from Roth Capital Go ahead Scott.
Thank you and congratulations Pat and his whole team on such a tremendous success <unk> had with fared apps.
I did have a couple of questions.
Yes for Ali first did you pull out the $4 million for that <unk> pay me I don't think you did.
It looked a little bit like a one time expense in the quarter.
Yes, it will be a onetime expense in this quarter.
It's related to the inventory.
Expense related to our acquisition, Florida from Jacqueline.
And Scott that was included in our in our GAAP.
Net income yes.
And the caption.
Option, yes.
And the non-GAAP to correct.
Correct, we did not exclude it from non-GAAP .
Perfect. Thank you.
In Arlington got you there.
Interest income is starting to become a meaningful number.
What what rate do you get on that cash balance.
Scott.
The rates of.
Have moved up nicely and of course our investments.
Are all very conservative buying 90 days for the most part 90 day T bills.
Those rates earlier this year were seven basis points.
They were getting.
Right around three five to four depending on.
When you buy them.
No.
The significant increase in potential for larger.
<unk> income.
Yeah, that's a good time to have a lot of cash.
And then I guess just on a bigger picture.
Question.
I asked this question a lot on the calls, but how do you view the organic growth currently particularly with <unk>.
Non small cell lung cancer.
<unk> Youre getting.
Or would you kind of categorize that.
Scott I'll turn that over to Jeff again, Yes, Hi, Scott.
Organic growth and we've demonstrated this over the last several years is about 15% to 20% annually.
And we are very confident that we will continue to sustain that organic growth.
Okay.
And then final question.
You've got a good you've got a strong.
Our patent position in place multiple Orange book listed patents.
Just with regards to expectation would you expect someone to challenge. These should should we be surprised if someone challenges or I mean, I typically think of that is.
As part of the business cycle.
Any thoughts on that.
Yeah, Scott you're exactly right.
With a drug that's doing in excess of $200 million.
Again, we would be remiss, if we didnt expect at some point to be challenge. It's just it's part of the business. So I can tell you that.
Anticipated and we will be prepared.
Okay, great. Thank you for taking the questions.
Yes.
And our next question comes from Joe Catanzaro from Piper Sandler go ahead.
Hi, everyone. This is Albert on for Joe first off congratulations on a really nice quarter.
I was interested in your comments on there was a 50% increase in the calcium channel antibody test I was just wondering if you could.
Maybe provide a little more insight and maybe.
And maybe quantify how many of these tests were done.
What I can tell you is just.
National laboratories that we partnered with and that that data is available.
What we can say is when we looked at the wrong number and I don't have that Ron number on me, but when we looked at it the number was.
50% greater.
In 2022 versus 2021.
That data has been very hard to obtain just because of the pandemic and its six six months delayed and getting that information. So what it signifies is that our efforts to get patients tested.
Understand.
Symptoms and how to test for lens, it's working and that patients are now that we're unable to get into these hospitals for diagnostic tests are now able to get in there so that should also.
Get more positive BGC tests and those patients will now be addressable and we can now help these patients get on perhaps sooner so.
Thats, what that number was really meant to signify.
Okay, great. Thanks.
Maybe one more quick one I was just wondering.
Is it a significant portion of patients that are kind of already pushing this maximum daily dosage of 80 milligrams a day.
Thank you.
When we look at our patients.
About 40% of our patients are at 80 milligrams or higher.
So yeah that's.
That's what we look at it our current patient base.
Okay, Great. That's very helpful. All right. Thank you.
Okay.
Thank you.
And that appears to be the last question at this time I would now like to turn it back to pack Pat Mcnamee for any closing remarks.
Thanks, everyone for joining our call and we look forward to our next corporate update.
And have a great day. Thank you.
Thank you. This does conclude today's conference. We thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.
[music].
Uh huh.
Yeah.