Catalyst Pharmaceuticals at Barclays Conference: Strategic Growth Focus

On Tuesday, 11 March 2025, Catalyst Pharmaceuticals (NASDAQ: CPRX) presented at the Barclays 27th Annual Global Healthcare Conference. The company highlighted its strategic focus on organic growth and business development, with a particular interest in the cancer-associated LEMS market. While Catalyst aims to expand its portfolio, it also faces challenges such as anticipated generic competition for Fycampa.

Key Takeaways

• Catalyst Pharmaceuticals plans to expand in the cancer-associated LEMS market, addressing a significant unmet need.
• The company anticipates generic competition for Fycampa in May 2025, affecting future sales.
• Catalyst maintains a strong cash position of over $500 million for strategic acquisitions.
• The SUMMIT trial for Agamree in DMD aims to improve patient care and safety.
• Litigation continues with Lupin and Hetero, while a settlement with Teva is in place.

Financial Results

• Firdapse:

- Achieved 14 consecutive quarters of 15% or more growth.

- Current market penetration is 30%, with $300 million in sales last year.

- The LEMS market potential exceeds $1 billion.

• Fycampa:

- Sales in 2024 totaled $137 million.

- Projected sales for the remainder of 2025 are between $35 million and $36 million.

- Expected revenue for 2025 is $90 million to $95 million.

• Cash Position:

- Catalyst Pharmaceuticals holds over $500 million in cash.

Operational Updates

• LEMS Market Expansion:

- Focus on cancer-associated LEMS, with less than 10% patient diagnosis.

- Nearing an agreement with a national lab for testing.

• Agamree and SUMMIT Trial:

- Open-label study for DMD patients to demonstrate safety advantages.

- Data will be compared against natural history data.

• Fycampa Generic Entry:

- Expected in late May 2025, with plans to retain significant market share.

• Business Development:

- Seeking orphan drug opportunities with immediate or near-term accretive potential.

- Focus on central nervous system and movement disorders.

Future Outlook

• LEMS Growth:

- Significant upside potential in the LEMS market.

• Agamree Potential:

- Aims to address unmet needs in the DMD market and become a foundational therapy.

• Portfolio Diversification:

- Expanding beyond commercial stage assets to include Phase 3 or earlier-stage assets.

Q&A Highlights

• Teva Settlement:

- Teva will enter the market no earlier than February.

• Remaining Litigation:

- Ongoing cases with Lupin and Hetero, with efforts to resolve swiftly.

• Business Development Philosophy:

- Focus on differentiated orphan drugs with immediate accretive potential.

For a detailed understanding, refer to the full transcript below.

Full transcript - Barclays 27th Annual Global Healthcare Conference:

Balaji, Interviewer, Barclays: Good afternoon, everyone. Thank you for joining us at the Barclays Health Care Conference. And continuing our Specialty Pharma track for the day, I’m delighted to have the management team Capital. We have Richard Dailey, the CEO and Steve Miller, the Chief Scientific Officer. Steve and Richard, thank you so much for joining us today.

Steve Miller, Chief Scientific Officer, Catalyst Pharmaceuticals: Thank you.

Richard Dailey, CEO, Catalyst Pharmaceuticals: Thanks for having us.

Balaji, Interviewer, Barclays: And to take a full disclosure, we do not cover the stock and so not have rating. But that said, Steve, Richard, would love to invite you to some opening comments and maybe help provide some details around the business model, the type of drug that you’re working in the neuromuscular space and orient the audience to

Richard Dailey, CEO, Catalyst Pharmaceuticals: the company. Sure. Love the opportunity. Balaji, thank you for having us. We really appreciate the opportunity to speak with the audience and join you here at the conference.

Catalyst Pharmaceuticals is a buy and build orphan focused company. We have three products on the market. We have Firdapse, which is our lead product for levered eating myasthenic syndrome, launched in 2019, incredibly successful. We have 14 quarters in a row of 15% or more growth. We’re really excited about the product.

It continues to grow, continues to perform. Second product is Fycampa, which we purchased from Eisai. It’s an epilepsy product and product continues to deliver and we are very excited about that product as well. Third product is the product we launched last year in March, a Gamry for Duchenne muscular dystrophy. It’s a steroid.

It appears to be a differentiated steroid and is doing very, very well in the marketplace. And so we continue to look to add to our portfolio and grow the company, both organically and through business development. And we feel we’re an excellent partner for companies looking to gain foothold in The U. S. And we’re really excited about our opportunities here.

Great.

Balaji, Interviewer, Barclays: So with all these launches, what does it mean to for your outlook for 2025? And what are the key priorities for you as you look to execute this year too? And what we need to look

Richard Dailey, CEO, Catalyst Pharmaceuticals: out for? Great. So the key priorities for this year really as we look at Lamartine Myasthenic Syndrome, this is a market that’s split fifty-fifty between cancer associated Lamartine Myasthenic Syndrome or LEMS and non cancer associated LEMS. And really we’re pivoting, keeping our focus on the non cancer associated LEMS where we’ve really grown and done a very good job, but also looking to pivot to the cancer associated LEMS side of the business. This is a really interesting side of the business.

It’s a highly concentrated part of the market. Obviously, you see these patients in the cancer, the oncology practices in community. And these patients very interesting part of this market is that it’s highly associated with small cell lung cancer. These patients with small cell lung cancer typically live about seven to ten months because they are diagnosed so late. But a patient with cancer associated with LEMS lives about seventeen months.

Nobody knows why, but there is a really interesting opportunity to improve the quality of life for these patients, these patients who live a lot longer than their peers with just small cell lung cancer. So pivoting here, we think we have a great opportunity. Less than ten percent of these patients with cancer associated LEMS have been diagnosed with LEMS. So we’re very excited about this opportunity. We feel like we can grow this business.

The LEMS part of our business has a market potential of over $1,000,000,000 and we’re really excited. Last year, we sold about $300,000,000 So our market penetration is just 30%. And as a player with about ten years left of our market life, we see a great opportunity for upside in this market.

Balaji, Interviewer, Barclays: Got it. Great. So in your opening remarks, you spoke about the launch and the growth that you have seen over consecutive quarters. So what’s going to allow you to continue to maintain that very impressive trajectory on into 2025? And then maybe taking a step further on, you spoke about this broad market opportunity, the $1,000,000,000 market opportunity.

So how would you be able to realize that?

Richard Dailey, CEO, Catalyst Pharmaceuticals: So it’s two factors. The first factor is we track in a compliant way. We track about 500 patients on the non cancer associated LEMS part of our business. And we watch them as they are diagnosed. The number one misdiagnosis for LEMS is myasthenia gravis.

And we track these patients through certain market surrogates again in a compliant way and we watch them as they go through their diagnostic journey and therapeutic journey. We work with the physicians on helping the physician understand what it means to have LEMS and what that looks like because it is so frequently misdiagnosed. Fifty percent of our patients come from this pool of patients that we observe in the marketplace. And so we can predict with great certainty how we’re going to grow over the course of time. So that’s number one.

And then the second part of this is really looking at the opportunity for cancer associated LEMS. So we’re very close to signing an agreement with a national lab on testing for LEMS, for cancer associated LEMS, and then working with these oncology practices to test these patients who are so deeply in need of improved care. And we’ve worked very closely with the oncology community to look at this opportunity to help improve care and the oncology community is again very excited about this. Got it. Maybe a quick comment around the recent settlement with Teva on

Balaji, Interviewer, Barclays: the product and what should be around the longer term potential here?

Richard Dailey, CEO, Catalyst Pharmaceuticals: Sure. So Steve is our resident expert on patents. So I’m glad he’s here to join us. Thank you.

Steve Miller, Chief Scientific Officer, Catalyst Pharmaceuticals: Rich. The settlement you’re referring to is the settlement with Teva Pharmaceuticals. And that was a good settlement for both of us as in terms of having certainty on the future for the product. There are two remaining companies in which the litigation is continuing, Lupin and Hetero. But with Teva out of the game, so to speak, we believe that we should reach settlement with the others potentially in the future.

But what I want to emphasize is that we think we have very good patents. And if we are forced to go to the finish line, so to speak, I think that we’d be in a very good position as well. But we’re working diligently to bring the litigation to a conclusion in as favorable manner as possible.

Balaji, Interviewer, Barclays: Great. I mean, covered the generics industry too from a long time, what we have seen typically is that one settlement with a major generic company precedes other settlements too. Is that a reasonable assumption in this case? It is. It is.

Okay, great. And so can you just remind us of the quick terms of the Taiwan settlement?

Steve Miller, Chief Scientific Officer, Catalyst Pharmaceuticals: Basically, Teva will be entering the market no earlier than February.

Richard Dailey, CEO, Catalyst Pharmaceuticals: Got

Balaji, Interviewer, Barclays: it. And when would we expect to hear about the other two companies at any point?

Steve Miller, Chief Scientific Officer, Catalyst Pharmaceuticals: Well, unfortunately, it’s not about litigation. So there’s not a lot of details I can give you. But again, as I said, we’re looking to bring these cases to a conclusion as quickly as

Balaji, Interviewer, Barclays: possible. And maybe shifting to Agambri and Duchenne’s, could you talk about how Agambri fits into the treatment paradigm for DMD patients currently? Sure.

Richard Dailey, CEO, Catalyst Pharmaceuticals: Yes. So when you think about a gamma ray and steroids, so

Balaji, Interviewer, Barclays: this is

Richard Dailey, CEO, Catalyst Pharmaceuticals: kind of the polar opposite of the lebri myosthenic market. In the Lamartine myosinib market, almost none of the patients are diagnosed and their treatment journey their diagnostic journey is very long. On the DMD side of the Duchenne’s market, the diagnostic journey is quite rapid. So ninety five percent of all patients with Duchenne’s are diagnosed and ninety percent of all these patients have at some point in their journey been on a steroid. And you want to think of steroids as foundational therapy.

The easiest way to think about it is steroids are the drugs that drugs get added to, not the drug that gets added. Regardless of what’s been happening in the marketplace, this is what all drugs get added to. So all of these great advancements that have been happening in the Duchenne’s market, which is phenomenal for patients. It’s great. This is a great time for patients.

Steroids are base therapy. It’s outstanding. So this is where it fits in. The challenge for this marketplace has been that while ninety percent of patients have been on a steroid at some point in their life, only seventy percent of patients are currently on a steroid. This gap speaks to the need in the marketplace.

These patients need something that’s better. And the hope and the promise of a drug like a gamma ray is that it can potentially address this gap. And there are problems with steroids, long term steroid treatment and adverse events. There is poor behavior, aggression, patients on long term steroids don’t have the same stature, they don’t grow like their peers who are not on long term steroids. They have poor bone health, poor cardiovascular health.

The number one reason for death of Duchenne’s patient is in fact cardiovascular disease. Cataracts are another issue too. And so this is one of the reasons why we are doing the SUMMIT trial. We’re looking at the use of a gamma ray versus natural history control. And so we’re looking at the opportunity to see if a gamma ray can improve the standard of care that’s out there versus natural history.

So we’re really interested in seeing this. And so we believe that there’s an opportunity to improve the care for patients out in the marketplace.

Balaji, Interviewer, Barclays: Understood. So as you target trying to get this thirty percent of patients on to a corticosteroid, what are the key steps and milestones that we can look forward to over the course of this aim or goal? What are the key steps we can look forward to?

Richard Dailey, CEO, Catalyst Pharmaceuticals: So I think Steve can speak to the SUMMIT study. And I think we’re going to look for data to come out of the SUMMIT study that will look at the opportunity to improve the care. So Steve, I don’t know if you want to speak to some of the steps we’re going to take with SUMMIT.

Steve Miller, Chief Scientific Officer, Catalyst Pharmaceuticals: Sure. We’ve got SUMMIT study, which is an open label study where we are examining a number of safety outcomes of patients to determine some additional safety characteristics of a gamma ray relative so that we can show some of the safety advantages of a gamma ray relative to the known safety characteristics of the other products on the market. Because it’s open label, we are aware of what the progression is of the patients. And in addition to that, it it has the ability to analyze the data against control, which in this case is natural history and the FDA has guidance for that. So this is a submission quality study.

We will be analyzing the data just doing descriptive statistics on a number of the endpoints to make it publicly available at various times because the endpoints progress at different speeds. On a periodic but relatively less frequent basis, we will analyze the data against the natural history data as controlled study outcomes and take a look at that data and determine whether or not to submit it to the FDA or continue to gather data. And but we’ll limit the number of those analyses because you sacrifice alpha every time you do a controlled comparison. Sure.

Balaji, Interviewer, Barclays: Got it. Maybe just to add another layer of questioning around this segment with neurotherapies, be it SRNA or gene therapies being developed for DMD. How do you see the longer term view for how the treatment paradigm for DMD will the whole landscape is going to evolve? How do you anticipate this to progress?

Richard Dailey, CEO, Catalyst Pharmaceuticals: So again, I think this is a really exciting time for patients with Duchenne. We see a recent filing for cardiovascular potentially improvement in cardiovascular health. We see opportunities where some recent data has come out for a new gene therapy that’s not yet on the market that may even be better. It’s just an incredible time. For us, the real value is looking at the long term potential of a better steroid that’s going to underlie all of these therapies and continue to be there.

So regardless of what comes out, we’re really excited. We think this is a really golden age for Duchenne’s and we look forward to all of these improved therapies coming out and for the better care for patients. It’s just it’s like no other time for Duchenne. It’s really exciting.

Balaji, Interviewer, Barclays: Got it. Yes. Shifting from this from Agambri to Fikompa. So speak about 2025 and how we should think about the product and potential generic entry? And I know you also spoken about the erosion trajectory in the setting.

So what kind of details do we need to look for that can help us gauge the product out?

Richard Dailey, CEO, Catalyst Pharmaceuticals: I’m sorry. What details can

Balaji, Interviewer, Barclays: we look forward to gauge the product? So

Richard Dailey, CEO, Catalyst Pharmaceuticals: we gave guidance in our call a couple of weeks ago. So one of the things we like about Fycampa is that what I say all the time is that Fycampa is like the mailman, it just delivers, it just continually delivers. And so last year, we had 137,000,000 in sales. And we expect generic entry in late May of this year. So we expect to be able to deliver consistent with last year’s plan, last year’s sales up through the end of late May.

And then the remainder of the year, we expect probably according to our guidance, probably about $35,000,000 30 6 million dollars or so. And as you see with all products that experience generic competition, you’re going to see a loss of volume and of price. But epilepsy products are different because unlike cardiovascular drugs or diabetes drugs, when you have a problem with an epilepsy product, the ramifications are so significant. You have a seizure, you lose the ability to drive for three months or six months in a given state, it’s significant. So patients are more likely to stay on a branded molecule for longer, not for forever, but for just longer.

And so we expect to have a little bit more legs on the products for at least the balance of the year. So we think that we can hold on. If you were to look at a generic incursion, as I said in diabetes or cardiovascular, you would lose 90% of your share in eight weeks. But we expect to hold on to a significant amount of share and our guidance was that we would go from $137,000,000 in 2024 to about $90,000,000 to $95,000,000 in 2025. So that speaks to being able to hold on to significant share and pretty good price in the second half of twenty twenty five.

Balaji, Interviewer, Barclays: Shifting towards other parts of the business. So you have around 500 plus million cash NAND on the balance sheet. Speak to us about your business development plans for the next couple of years and what are your key target areas and assets that you are pursuing?

Richard Dailey, CEO, Catalyst Pharmaceuticals: Sure. So while we can’t talk about specifics and business development, we can talk about our general philosophy about business development. So with $500,000,000 on the balance sheet and when we look at forward operating profits, we think about what we can afford. And our philosophy is we want things that are orphaned. We want because that’s our business model supports that.

We want opportunities that are differentiated and we want things that are immediately accretive or nearly immediately accretive because our commercial model is very robust. We like the opportunity to be out there. We like the opportunity to make a difference for patients. And so this really fits into our model. So we are focused in central nervous system disorders.

But when we look at central nervous system disorders today, the growth in the long term is coming from movement disorders. And when we look at movement disorders, we see a lot of bigger players at the table and we don’t want to compete with bigger players. So our focus is really looking at a broader spectrum of opportunities. And because our infrastructure is so robust, helping the patients find the right therapy, helping the patient get on the right therapy and helping the patients stay on the therapy, essentially the back of the house that almost nobody can see, patient support and patient advocacy, we believe that applies to almost any therapeutic opportunity we can find. And so we’re agnostic to therapeutic opportunity as long as it’s in the orphan space.

And so we keep our eyes are on those opportunities that are out there. So we believe we have lots of opportunity. When we look at the size of the deal, again, we don’t want to be competing with bigger players and we think we can look at opportunities that are in the $250,000,000 to $500,000,000 peak year sales. And because that doesn’t move the needle for bigger companies, we think that that is an opportunity for us that those companies won’t be at the table for. So we like that kind

Balaji, Interviewer, Barclays: of approach. Understood. And do you see enough opportunities to pursue? Yes. And maybe some comments around the valuation that you’re saying, what kind of valuation you’re saying, is it reasonable?

Richard Dailey, CEO, Catalyst Pharmaceuticals: I think that most valuations are reasonable. And the key issues are social issues and fit. You need to be sure that the fit is a good fit, because having worked in business development and partnerships for the better part of thirty years, when you sign a deal, you’re getting into a deal for the long term with a partner that you’re going to be with. And it has to work. And that means senior management and every part of your management team is going to be working together.

So fit becomes one of the primary issues. It’s not just about making money and helping patients. How are you going to spend your time as a senior management team and as a management team across your company? So valuations are reasonable. There are some who are unreasonable.

There’s no doubt about that. But there are reasonable opportunities out there, but then it’s about fit and making sure that you can work together for the long term.

Balaji, Interviewer, Barclays: Understood. Maybe a final question around your plans to invest in portfolio diversification. And what does this mean? What does this entail and any focus there? So,

Richard Dailey, CEO, Catalyst Pharmaceuticals: we would like to begin to build beyond just C and Fs, but we would also like to have the opportunity to work our way back in the portfolio as well in the pipeline. So right now, we are looking at a set of immediately accretive or nearly immediately accretive. But over time, one of the things that was really important to us is to look at opportunities that go into Phase three or further back into the pipeline, because we think that’s where the real value inflection comes from. Not right now, but eventually work our way back, because we see peers that are out there that look like us, but have higher valuations. And the main difference between us and those peers is really portfolio.

You asked a question, which I think is a really good one, Balaji, which is, tell us about BD and I really can’t answer that question. But if we had a pipeline, we could have a discussion and disagree over the PTS, the probability of have a really robust discussion about that. We can’t do that around BD. And so we really can’t talk about the future. So we need to be able to do that and have that discussion about the future and be forward leaning on the future.

So we would like to begin to work our way back into that in an appropriate way. And so we’re really focused on that, building that income statement, building that balance sheet and then working our way back into the portfolio into the pipeline to build a really robust picture of the future.

Balaji, Interviewer, Barclays: Got it. Great. So Richard and Steve, thank you so much for joining us today. And I do wish you a very productive conference. Appreciate you joining the conference.

Thank you.

Richard Dailey, CEO, Catalyst Pharmaceuticals: Thank you.

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