Earnings call transcript: Catalyst Pharmaceuticals Q1 2025 earnings beat fails to impress market

Catalyst Pharmaceuticals reported a robust start to 2025 with earnings per share (EPS) of $0.68, doubling the forecast of $0.34. Revenue reached $141.4 million, surpassing expectations of $131.54 million. Despite these strong financials, the stock fell 7.97% to $21.59 in after-hours trading, reflecting investor concerns over future challenges. According to InvestingPro analysis, the company maintains an "Excellent" financial health score of 3.97 out of 5, and current valuations suggest the stock may be undervalued based on Fair Value calculations.

Key Takeaways

• Catalyst Pharmaceuticals significantly beat EPS and revenue forecasts for Q1 2025.
• Stock price fell by nearly 8% post-earnings, despite strong financial performance.
• Revenue grew by 43.6% year-over-year, driven by product innovations.
• Market concerns linger over Fycompa’s future amid generic competition.
• Conservative revenue guidance for 2025 may have tempered investor enthusiasm.

Company Performance

Catalyst Pharmaceuticals showcased strong performance in Q1 2025, with a 43.6% increase in total revenues compared to the same period last year. The company’s strategic focus on rare disease therapies continues to pay off, with significant contributions from products like Firdapse and Agamry. However, the market’s reaction suggests caution, possibly due to anticipated challenges in maintaining this growth trajectory.

Financial Highlights

• Revenue: $141.4 million, up 43.6% YoY
• Net income: $56.7 million, up 144% YoY
• EPS: $0.68, significantly above the forecast of $0.34
• Cash and cash equivalents: $580.7 million
• Effective tax rate: 20.4%

Earnings vs. Forecast

Catalyst Pharmaceuticals reported an EPS of $0.68 against a forecast of $0.34, marking a 100% earnings surprise. Revenue also exceeded expectations by $9.86 million, indicating strong operational execution and market demand for its products.

Market Reaction

Despite the earnings beat, Catalyst Pharmaceuticals’ stock declined by 7.97% in after-hours trading. This drop brings the stock closer to its 52-week low of $14.47, suggesting investor apprehension. The decline may seem at odds with the company’s strong performance, which includes a 59.38% return over the past year according to InvestingPro data. The stock’s beta of 0.7 indicates lower volatility compared to the broader market, though current concerns about Fycompa’s market position may be weighing on investor sentiment.

Outlook & Guidance

Catalyst Pharmaceuticals provided revenue guidance for 2025 in the range of $545-$565 million. Firdapse is expected to contribute $355-$360 million, while Agamry and Fycompa are projected to bring in $100-$110 million and $90-$95 million, respectively. The company remains focused on expanding its market penetration, particularly among cancer-associated LEMS patients.

Executive Commentary

CEO Richard Daley stated, "Catalyst delivered an outstanding start to 2025," highlighting the company’s strategic priorities. Chief Commercial Officer Jeff Del Carmen emphasized the goal of increasing the percentage of cancer-associated LEMS patients, noting that 90% of small cell lung cancer patients with LEMS remain undiagnosed.

Risks and Challenges

• The entry of generic competitors for Fycompa could impact future revenue.
• Market saturation in the LEMS segment poses a risk to sustained growth.
• Conservative revenue guidance may reflect cautious optimism amid market uncertainties.
• Potential regulatory changes could affect product approvals and market strategies.
• Economic pressures could influence healthcare spending and reimbursement rates.

Q&A

During the earnings call, analysts inquired about LEMS patient screening strategies and the business development approach. Executives also addressed the Fycompa formulation mix and clarified the rationale behind conservative revenue guidance.

Full transcript - Catalyst Pharmaceuticals Inc (CPRX) Q1 2025:

Conference Operator: Good day, everyone, and welcome to today’s Catalyst Pharmaceuticals First Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. Later, you will have an Please note this call is being It is now my pleasure to turn today’s program over to Mike Kalb, CFO. Please begin.

Mike Kalb, CFO, Catalyst Pharmaceuticals: Good morning, everyone, and thank you for joining our conference call to discuss Catalyst’s first quarter twenty twenty five financial results and business highlights. Leading the call today is Richard Daley, Catalyst’s President and Chief Executive Officer. We are also joined by Jeff Del Carmen, our Chief Commercial Officer. Further for the Q and A session, Doctor. Steve Miller, our Chief Operating Officer and Chief Scientific Officer, will be available for questions.

Before we begin, I would like to remind you that in our remarks this morning and in the Q and A session, we will make statements about expected future results, which may be forward looking statements for purposes of federal 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 and may not prove to be accurate. Actual results may vary from the expectations contained in our forward looking statements. These forward looking statements should be considered only in conjunction with the detailed information contained in our SEC filings, including the risk factors described in our recent 2024 Annual Report on Form 10 ks filed with the SEC on 02/26/2025, and our first quarter twenty twenty five quarterly report on Form 10 Q, which was filed yesterday, 05/07/2025 with the SEC.

At this time, I’ll turn the call over to Rich. Rich?

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Thanks, Mike. Good morning, everyone, and thanks for joining us. Catalyst delivered an outstanding start to 2025 with continued excellent execution, strong demand for our rare disease therapies and continued progress on key strategic priorities. These results highlight our sustained momentum and growing impact in the patient communities we serve. Total net revenues grew 43.6% year over year to $141,400,000 with meaningful contributions from each of our products.

These results highlight the strength of our portfolio and the effectiveness of our commercial execution. With a strong cash position of $580,700,000 and disciplined operational management, we are well positioned to drive long term growth while advancing our strategic priorities. Let’s turn to the specifics of our commercial performance beginning with Firdapse. Firdapse continues to demonstrate outstanding performance maintaining its position as the only evidence based approved product in The U. S.

For the Leberth Eaton Myasthenic Syndrome or LEMS. In the first quarter of twenty twenty five, the brand delivered another strong quarter of organic growth generating revenue of $83,700,000 an increase of 25.3 year over year. Performance was driven by continued adoption among newly diagnosed patients and a modest tailwind from normalized prescription activity following temporary disruptions related to the Change cybersecurity incident in quarter one twenty twenty four, the effect of which we expect to level out in Q2 twenty twenty five. Mike will discuss the impact of

Change Health cybersecurity incident in more detail in his remarks. In addition, since the one hundred milligram label expansion for Firdapse approved in May 2024, we’ve seen an increase in the average daily dose of Firdapse. The 100 enhancement offers providers greater flexibility to individualized therapy based on patient needs. We expect the average daily dose to increase in the near term.

As we have stated in the past, approximately half of all LEMS diagnoses are associated with cancer, in particular small cell lung cancer. We continue to work with the National Comprehensive Cancer Network to improve the understanding of the relationship between LEMS and cancer. The role of EGCC testing and the benefits of treating LEMS associated cancer patients with Firdapse. These initiatives reflect our strategic approach to extending Firdapse’s market leadership and positioning the brand for durable long term growth. This continued performance reinforces our confidence in delivering Firdapse’s twenty twenty five net product revenue forecast of between $355,000,000 and $360,000,000 Now turning to Agamry.

Agamry delivered a solid performance in Q1 twenty twenty five, marking its first full year of commercial availability following a 03/13/2024 U. S. Launch. Net product revenues totaled $22,000,000 compared with $1,200,000 in Q1 twenty twenty four, reflecting the impact of a full quarter of sales compared to the prior year, sustained organic uptake and increased confidence in the GammaRay’s potential as a differentiated corticosteroid treatment for Duchenne’s muscular dystrophy or DMD. Gamri continues to source patients from branded and generic competitors in a balanced manner as it has since launched and the patient retention rate remains robust.

We believe these are indications of the market sensing a GammaRay’s potential benefits. Prescriber engagement continues to build supported by the full deployment of our dedicated Gamri field team in April 2025. These early commercial indicators position Gamri for broader market reach as foundational complementary corticosteroid therapy within the evolving DMD treatment landscape. This momentum continues to support our full year 2025 net revenue forecast for GammaRia between $100,000,000 and $110,000,000 On the clinical front, we’re advancing the SUMMIT study, our five year real world evidence based study evaluating long term outcomes in DMD patients treated with a gamma ray. During the first quarter of twenty twenty five, the SUMMIT study advanced with the activation of additional sites and continued progress in patient enrollment.

We hope that the results of the SUMMIT study will provide long term real world evidence of the benefits of the treatment of a gamma ray. And finally, Fycompa. Fycompa delivered solid results in this quarter, driven by steady demand and disciplined execution to maximize near term value ahead of the anticipated generic entry on or after 05/23/2025. Net product revenue for the period was $35,600,000 representing a year over year growth of 17.1%, driven by sustained performance, strong patient preference and the product’s well established clinical role in seizure control. As we approach the end of exclusivity, we remain focused on ensuring continuity of care and managing the brand’s value through well planned transition.

As discussed previously, we expect a measured revenue decline post patent expiry. Our teams are fully prepared and executing against a defined strategy to manage this evolution effectively. We believe that Fycompa remains on track to deliver on our 2025 full year net product revenue forecast of between 90,000,000 and $95,000,000 as we continue to maximize near term value. In parallel, we remain committed to expanding access to our rare disease therapies in markets outside The U. S.

In January, our sub licensee, Daidopharma, successfully launched Firdapse in Japan, making it the first approved treatment for LEMS. This important milestone expands access for an estimated twelve hundred LEMS patients and addresses an important unmet need in the Japanese rare disease patient community. In Canada, our sub licensee, Kai Pharmaceuticals, which also markets Firdapse in Canada is advancing regulatory plans for Agamry. In April of twenty twenty five, Health Canada accepted the new drug submission under priority review with potential of approval by year end. If approved, Agamry would be the first authorized treatment for DMD in Canada, addressing a patient population of more than 800 individuals and making a meaningful advancement in care of this underserved DMD community.

While these license agreements are not expected to contribute materially to revenue, they are aligned with our broader mission to advance health equity by expanding access to our therapies for underserved patient populations. Strategic action to safeguard the long term value of Firdapse of the Firdapse franchise. In January, we reached a favorable settlement with Teva restricting U. Generic entry until 02/25/2035, subject to certain conditions. Litigation with the two remaining first filers remains ongoing and we remain confident in our strength in the strength of our intellectual property portfolio.

However, there could be no assurances that we will prevail in this litigation. Business development continues to be a core growth lever for Catalyst. We remain disciplined in our approach, prioritizing opportunities with strategic synergy, clinical differentiation and the potential to drive long term value. With a robust pipeline of evaluations underway, we believe that we are well positioned to execute transactions that further enhance our leadership in rare disease. As we advance through 2025, we remain firmly focused on executing our strategic priorities and sustaining operational excellence with a strong foundation, high performing team and a clear path to value creation.

We believe that we are well positioned to deliver durable growth while continuing to elevate care for patients living with rare diseases. We are reaffirming our full year total product revenue guidance of between $545,000,000 to $565,000,000 We believe Catalyst is well positioned to create a meaningful value for patients, healthcare providers and our stakeholders. With that, I’ll now turn the call over to Jeff Del Carmen, our Chief Commercial Officer.

Jeff Del Carmen, Chief Commercial Officer, Catalyst Pharmaceuticals: Thanks, Rich. Good morning, everyone. Q1 marked another record quarter for our commercial organization, reflecting strong execution across the portfolio and continued demand for our innovative therapies. As Rich mentioned, Catalyst had an excellent start to 2025 driven by the combination of sustained organic growth of Firdapse, stable revenues from Fycompa and the steady adoption of a gamma ray. Q1 total net revenues of $141,400,000 positions Catalyst well to achieve our combined 2025 total revenue guidance of $545,000,000 and $565,000,000 Also, I am pleased to report that we successfully completed the commercial field team restructuring, establishing dedicated sales teams for a Gamri and Firdapse.

This realignment strengthens our focus within each therapeutic area and sets a strong foundation for future growth. Let me walk through key performance highlights by product. First, I’ll start with Firdapse performance. Q1 Firdapse net product revenue of $83,700,000 represents a 25.3% increase quarter over the same quarter last year, a direct result of strong new patient starts and a low annual discontinuation rate of approximately 15%. Prescription approval rates were greater than 90% across all payers, government or private commercial insurers.

We continue to see strong leading indicators in April, furthering our confidence in achieving Firdapse full year net product revenue guidance of $355,000,000 and $360,000,000 in 2025. As we look ahead, our strategic growth initiatives remain a key driver for organic growth. We continue to maintain a pipeline of greater than 500 potential LEMS patients in various stages of their diagnostic journey who have not yet started treatment with Firdapse, representing roughly fifty percent of our new patient enrollments each quarter. Furthermore,

Richard Daley, President and CEO, Catalyst Pharmaceuticals: we

Jeff Del Carmen, Chief Commercial Officer, Catalyst Pharmaceuticals: are particularly excited about the opportunity in cancer associated LEMS, where we are expanding our focus to the community oncology channel, which manages the majority of cancer care in The U. S. We are confident that potential BGCC antibody screening arrangements with GPOs in the second half of twenty twenty five will help accelerate LEMS diagnosis rates in the approximately ninety percent of small cell lung cancer LEMS patients who are currently undiagnosed. Next, I would like to discuss Agamry. We are proud of the continued early market momentum of Agamry and its growing presence in the market as a breakthrough treatment for DMD as evidenced by Q1 net product revenue of $22,000,000 Since the commercial launch of Agamry in March 2024, ’90 ’3 percent of the top 45 DMD centers of excellence and two twenty four unique healthcare providers have submitted an enrollment form for a Gamri.

We continue to see transitions to a Gamri from both corticosteroid segments, forty four percent from prednisone and forty four percent from Emflaza. Approximately eighty five percent of shipments are successfully reimbursed, which is aligned with our forecast. In addition, our dedicated GammaRee sales force is actively executing targeted educational initiatives to reinforce GammaRee’s potential for differentiated value, driving durable patient uptake and strengthening our competitive position. Gamry’s net product revenue for 2025 is expected to be between $100,000,000 and 110,000,000 reflecting its continued market adoption and commercial momentum. Lastly, I would like to provide a brief overview of Fycompa.

Fycompa delivered solid Q1 net product revenues of 35,600,000.0 further fortifying our revenue diversification. Looking ahead, we are closely managing the upcoming Ficompa loss of exclusivity. While we anticipate revenue impact in the second half, we have mitigation plans in place to appropriately minimize brand erosion. We remain confident in our full year 2025 net product revenue forecast for Ficampa of between $90,000,000 and $95,000,000 To summarize, our commercial organization continues to execute with precision supported by a strong field force and focused strategies across our portfolio. Following a strong first quarter and sustained momentum across the business, we are confident in reaffirming our full year 2025 total revenue guidance.

We believe that we are well positioned to seize the growth opportunities ahead and we remain focused on driving operational excellence, enhancing patient access and scaling our commercial impact across our entire product portfolio. I will now turn the call back over to Mike.

Mike Kalb, CFO, Catalyst Pharmaceuticals: Thanks, Jeff. Our performance during the first quarter of twenty twenty five has set us on pace for another strong year driven by our solid financial performance, financial discipline and strong execution. With the continued success from the launch of Agamiri in mid March of twenty twenty four, along with the continued performance of Firdapse and Fycompa, we have set the groundwork for what promises to be yet another strong year in 2025 and we reaffirm our 2025 full year total revenue guidance that we provided in February. We remain steadfast in our commitment to driving growth, leveraging strategic arrangements and expanding our portfolio to capitalize on emerging opportunities throughout the year. Our total revenues for the first quarter of twenty twenty five were $141,400,000 a 43.6% increase when compared to total revenues of $98,500,000 for the first quarter of twenty twenty four.

Product revenue net for our lead product Firdapse was $83,700,000 a 25.3% increase year over year compared to $66,800,000 in Q1 twenty twenty four, primarily driven by an increase in sales volumes, a portion of which is attributed to a delay in patient claims to certain non Medicare payers in certain states resulting from the Change Healthcare cybersecurity incident that occurred in the first quarter of twenty twenty four and was resolved in the second quarter of twenty twenty four. The first quarter of twenty twenty five also reflects a small amount of revenue for shipments to sub licensees outside of The U. S. Product revenue net for the first quarter of twenty twenty five for GammaRee was $22,000,000 compared to $1,200,000 in the first quarter of twenty twenty four. As mentioned earlier, GammaRee was made commercially available in mid March twenty twenty four.

The results underscore continued growth and increasing prescriber engagement. Product revenue net for the first quarter of twenty twenty five for Fycompa was $35,600,000 compared to $30,400,000 in the first quarter of twenty twenty four, which included a reduction in variable consideration or gross to net, resulting from a decrease in wholesaler distribution fees in 2025. We expect that product revenue net for Ficompo will likely decrease once the patent protection expires, which occurs on 05/23/2025 for the tablets and on 12/15/2025 for the oral suspension. Net income before income taxes for the first quarter of twenty twenty five was $71,300,000 a 145% increase year over year compared to $29,100,000 for the first quarter of twenty twenty four. We reported GAAP net income for the first quarter of twenty twenty five of $56,700,000 or $0.47 per basic and $0.45 per diluted share, an increase of 144% year over year compared to GAAP net income for the first quarter of twenty twenty four of $23,300,000 or $0.20 per basic and $0.19 per diluted share.

As a reminder, in the first quarter of the calendar year, like many companies in our industry, we are impacted by the reset of patient insurance deductibles. Cost of sales expense was approximately $17,900,000 in the first quarter of twenty twenty five compared to $12,500,000 in the first quarter of twenty twenty four and consisted principally of royalties. The GammaRi royalties paid to the product licensor increased by 2% when GammaRi’s net product revenue exceeds $100,000,000 in any calendar year. The company is also required to make a $12,500,000 milestone payment once GammaRee’s net product revenue reaches $100,000,000 which will be capitalized once achieved and amortized as part of cost of goods sold over the remaining estimated useful life of the intangible asset. Non GAAP net income for the first quarter of twenty twenty five was $86,600,000 or $0.71 per basic and $0.68 per diluted share, which excludes from GAAP net income amortization of intangible assets related to our acquisitions of Ficompa, Agamry and Resurgi of $9,300,000 stock based compensation expense of $5,900,000 the income tax provision of $14,500,000 and depreciation of $115,000 This compares to non GAAP net income in the first quarter of twenty twenty four of $46,800,000 or $0.40 per basic and $0.38 per diluted share, which excludes from GAAP net income amortization of intangible assets related to our acquisitions of Ficompa, Gamri and Resurgi of $9,300,000 stock based compensation expense of $8,200,000 the income tax provision of $5,800,000 and depreciation of $86,000 Our effective tax rate for the first quarter of twenty twenty five was 20.4% compared to 20% for the first quarter of twenty twenty four.

We expect the 2025 annualized effective tax rate to be relatively consistent with the 2024 annual rate of 24.2%. For the first quarter of twenty twenty five, the difference to the statutory federal income tax rate of 21% was primarily driven by state income taxes, fluctuations in the value of investments and anticipated annual permanent differences. The effective tax rate is affected by many factors, including the number of stock options exercised in any given period and is likely to fluctuate in future periods. Further, we are required to pay royalties based on net product revenue to the product licensor for Fycompa following the loss of exclusivity, which will occur later this month for tablets and in December 2025 for the oral suspension. The royalty rates are higher if there is no generic entry following loss of patent exclusivity than they are once generics enter the market.

As a reminder, royalties for Firdapse increased by 3% when net product sales exceed $100,000,000 in any calendar year. As a result, we expect cost of sales to trend higher as the year progresses. Additionally, I would like to note that Agamry also carries the royalty in the range of low double digit to mid-twenty percent depending on sales achievements within a calendar year. Further details on our royalty obligations for Agamry are disclosed in our Q1 twenty twenty five Form 10 Q and are expanded upon within the MD and A section. Research and development expense was $3,900,000 in the first quarter of twenty twenty five, up from $2,600,000 in the first quarter of twenty twenty four.

During the three months ended 03/31/2025, research and development expenses consisted of costs for company sponsored research and development activities, support for selected investigator sponsored research and support for our commercial activities. The company anticipates full year 2025 research and development expenses to range between $15,000,000 and $20,000,000 excluding the impact of any additional acquisitions, reflecting investments in the SUMMIT study and the start of initiatives to investigate the potential for a gamma ray’s label to be expanded in the future. SG

Richard Daley, President and CEO, Catalyst Pharmaceuticals: and

Mike Kalb, CFO, Catalyst Pharmaceuticals: A expenses for the first quarter of twenty twenty five totaled $46,900,000 flat as compared to $46,900,000 in Q1 twenty twenty four. However, at this point, SG and A expenses are expected to increase modestly over the remainder of the year, reflecting personnel additions during 2024 and the strategic alignment of dedicated commercial teams supporting Firdapse and a GammaRy, which became effective in the start of the twenty twenty five second quarter. As reported, we ended the first quarter of twenty twenty five with cash and cash equivalents of $580,700,000 compared to $517,600,000 at 12/31/2024. The increase in cash of $63,100,000 was largely driven by $60,000,000 in cash generated from operations of our business. We believe our current funds continue to allow us the financial flexibility to fund our existing R and D programs, meet our potential contractual obligations and support our strategic initiatives, business development and portfolio expansion efforts, leading to long term growth and value creation.

More detailed information and analysis of our first quarter twenty twenty five financial performance may be found in our quarterly report on Form 10 Q, which was filed with the Securities and Exchange Commission yesterday, May 7, and can be found in our Investor Relations page on our website at www.catalystpharma.com. And with that, I will turn the call back over to Rich. Rich?

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Thanks, Mike. As you heard throughout today’s call, Catalyst enters the remainder of 2025 with strong momentum, strategic focus and a clear commitment to delivering value across the rare disease portfolio. We’re executing with discipline, advancing initiatives that support near term performance, taking steps to create long term value and growth. The quarter’s results reflect the strength of our execution, the resilience of our model and the depth of the talent across the organization. I want to thank our employees, partners and stakeholders for their continued dedication.

As we look ahead, I’m confident in our abilities to drive meaningful impact and sustain value. Thank you for joining us today. I’ll now turn the call back over to the operator for questions. Thank you.

Conference Operator: Thank you. And our first question will come from Joon Lee with Truist Securities. Please go ahead.

Asumrano, Analyst, Truist Securities: Congrats on the quarter and the beat. This is Asumrano on for Joon. Thanks for taking the question. Just a couple from us. So Firdapse saw a 25% growth from last year.

How much of that would you say strengthened this quarter versus weakness in last year’s 1Q due to the change healthcare impact? And then as a follow-up, can remind us what proportion of VYCONPA patients are on the tab formulation versus the oral suspension formulation? Thank you.

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Asaf, thanks for the question. As we alluded to, there was some shift in the business due to the change healthcare. I’m going turn it to Jeff to address the question and then Jeff will also address the FICAMPa question as well.

Jeff Del Carmen, Chief Commercial Officer, Catalyst Pharmaceuticals: Sure. Asu, regarding the strength of the business, always say 15% to 20% growth is what we aim for Firdapse and that’s the range that we fell in Q1. So it’s about 15% to 20. We saw strong enrollments though discontinuation rates and we continue to see great leading indicators Yes.

Richard Daley, President and CEO, Catalyst Pharmaceuticals: So just to really put a bow on that, if you were to back out the effect of Change Healthcare, you’d still be in that 15% to 20% range. Is that right, Jeff? Absolutely. Yes. Asma, is that clear?

Charles Duncan, Analyst, Cantor Fitzgerald: Very clear.

Asumrano, Analyst, Truist Securities: Thank you. And then just on the proportion of Baikalpa patients that are on the tablets, the oral suspension formulation?

Mike Kalb, CFO, Catalyst Pharmaceuticals: Percent of tablet versus suspension.

Richard Daley, President and CEO, Catalyst Pharmaceuticals: It’s probably about I’m sorry. It’s about fifty percent. I’m sorry. It’s about ninety eight percent tablet.

Asumrano, Analyst, Truist Securities: Okay. Thank you. Very helpful.

Felix, Analyst Representative, Stephens: You’re welcome.

Conference Operator: Thank you. Our next question will come from Samantha Seminatko with Citi. Please go ahead.

Benjamin Paluch, Analyst, Citi: Hello. This is Benjamin Paluch on for Sam. Thanks for taking the questions. How is the uptake of Firdapse among small cell lung cancer patients trending? Are you seeing an impact from your patient screening efforts in this population?

And how should we think about growth from small cell lung cancer versus idiopathic patients over the next several quarters?

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Thanks for the question Benjamin. I’m going turn it

Jeff Del Carmen, Chief Commercial Officer, Catalyst Pharmaceuticals: over to Jeff. So our current mix for all our LEMS patients currently on Firdapse about twenty percent to twenty five percent are cancer associated LEMS patients. Our goal for this year is to really focus on our VGCC antibody screening arrangements with GPOs and community oncologists. So with that, again, we want to focus on screening and helping these patients that about ninety percent of small cell lung cancer patients with LEMS are currently undiagnosed. So our goal is to help them get diagnosed.

And in 2026 is that’s when we’ll be able to help patients transition onto therapy. So that’s our goal. In the long term we expect that twenty percent to twenty five percent to grow to potentially thirty percent, thirty five percent.

Conference Operator: Thank you. You.

Asumrano, Analyst, Truist Securities: Is that

Felix, Analyst Representative, Stephens: helpful, David?

Benjamin Paluch, Analyst, Citi: Okay, great.

Conference Operator: Our next question will come from Joel Beatty with Baird. Please go ahead.

Benjamin Paluch, Analyst, Citi: Hi, congrats on the quarter and thanks for taking the questions. The first one is on business development activities. In the past, you’ve put a lot of focus on that. I guess, we’re currently in what a lot of people are describing as a rapidly changing macro environment. And so what are your current thoughts on business development?

Are there any recent impacts on that?

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Thanks for the question Joel. So we remain focused on our strategy which is looking at immediately accretive or nearly immediately accretive opportunities. So the dynamics in market are many fold as point out. We see this as really beneficial opportunity for us. We continue to see inbounds at about 80%.

So the opportunities that come to us or the opportunities we’re assessing, 80% of them are coming to us, de novo. So we like that. The capital markets, while they’re in turmoil, we think present an opportunity for us, which we like as well. And then because of our strategy looking at opportunities that are near the finish line and going commercial, we think this remains relatively unaffected by the regulatory environment and changes in the regulatory environment. So we see this again as beneficial for us in the strategy that we have.

So while it’s unsettling, think in general, for our strategy, I think it reinforces our strategy. So we feel good about where we stand as a company and the strategy that we have.

Benjamin Paluch, Analyst, Citi: Great. That’s helpful to hear. And then as a follow-up on Firdapse, for cancer associated LEMS, any anecdotes or things that you’ve seen working at a smaller scale perhaps that helps give you confidence and the strategy that you’re taking to increase the diagnosis rates with the antibody and see that lead to treatment?

Richard Daley, President and CEO, Catalyst Pharmaceuticals: So when you say smaller scale, can clarify?

Benjamin Paluch, Analyst, Citi: Is this something that you’ve maybe been able to kind of test in certain locations or trying to get into the antibody tests? Are we still kind of early in these efforts? But just anything, right? This is a, or maybe another way to ask is that you’ve had a lot of success in non cancer associated LUMPS marketing, but this is a different approach. So what kind of gives you confidence that you can be successful in this setting as well?

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Great. Okay. So I think let me start and then I’ll turn it over to Jeff. So I think what you’re asking is, have we in our dialogue with the oncology community, have we seen interest in this? And the answer is a definite yes.

We’re talking to these larger groups and there’s been a consolidation of these oncology practices in larger groups and our dialogue with these oncology groups we’re seeing, a definite interest in this because they realize that as Jeff has alluded to in previous discussions, ninety percent of the patients with small cell lung cancer associated LEMS are not getting treated. And so they see the dynamic, they see the unmet clinical and medical need. And so when we talk to them about it and the ability to diagnose and then thus treat with a definitive treatment, there is a definite interest. But Jeff, you’re closer to the subject. Do you

Jeff Del Carmen, Chief Commercial Officer, Catalyst Pharmaceuticals: want to address it? Absolutely. There have been significant ad boards that have been done with these thought leaders over the last year or two years. So like Rich mentioned, significant interest among these key opinion leaders. And also, our goal is to help provide frictionless testing for these patients so that these ninety percent of patients that are undiagnosed can get tested and hopefully diagnosed.

And in those discussions, these physicians, again, they see the unmet need for these small cell lung cancer patients. So there’s significant interest out there in the oncology community. Joel, is

Jason Gerberry, Analyst, Bank of America: that Yes,

Richard Daley, President and CEO, Catalyst Pharmaceuticals: it was. I just want to correct one thing. I believe I misspoke before when the question came up about split between oral and solid tablets. It’s actually eighty five percent. So I apologize.

So it’s eighty five percent are tablets and fifteen percent is oral solution on Fycompa. So my apologies to the group.

Conference Operator: Thank you. Our next question will come from Charles Duncan with Cantor Fitzgerald. Please go ahead.

Charles Duncan, Analyst, Cantor Fitzgerald: Hey, good morning, Rich and team. First of all, congratulations on the first quarter performance. Secondly, thanks for taking our question. I had a question on Firdapse. And in the guidance that you’ve given, it’s uncommonly tight.

And I guess I’m wondering, you’ve been tracking like 500 patients for several years and about half of them or I guess the new to brand or new patient starts come from that pool. I’m wondering if you could give us some color on how you’re setting that guidance. If I look at, call it a 15% growth thus far this year, that’s closing in on $390,000,000 not $360,000,000 So I’m wondering what is the source of your conservatism with regard to Firdapse guide?

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Source of our conservatism Charles?

Charles Duncan, Analyst, Cantor Fitzgerald: Yes. I mean in terms of new patient adds or persistence or growth in average daily dosing, Where do you stand on what the most important trigger there is?

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Jeff, do want to take that?

Jeff Del Carmen, Chief Commercial Officer, Catalyst Pharmaceuticals: Yes. Hey, Charles. Good morning. As far as what I can talk about are the leading indicators for us in our core business. And we’ve seen it over the last fifteen quarters now that 15% growth.

And like you mentioned the 500 patients or so that are pipeline patients that are somewhere in their diagnostic journey for LEMS, We have significant resources or sources to find continue to backfill the patients after they get on therapy to find new leads so that we always have about 500. Our discontinuation rates remain low at fifteen percent. Over time we see what our trend is for our net new patients each month, any given quarter. So that’s what helps inform us about where our growth is and our confidence. So this is our sixth year out.

So we kind of understand where the trend is and where we’re headed. So that’s what gives us the confidence. Hopefully that helps Charles. I don’t know if there’s any a follow-up question that you can ask that can point me in the direction that you want me to go.

Charles Duncan, Analyst, Cantor Fitzgerald: No, I think that that’s good. I understand the confidence, but I definitely think it’s conservative my perspective. Maybe we’ll move on to Ficompa and that is you mentioned measured revenue decline and that makes sense for an epilepsy indication. You said that this year you have measures in place. Could those measures also apply to next year?

I know you’re not guiding to next year, but is it inherent in the use of Fycompa that use may continue for those patients into next year?

Jeff Del Carmen, Chief Commercial Officer, Catalyst Pharmaceuticals: Charles, tends to be a stickiness for lack of better terms for anti seizure medications. So there is an opportunity there for patients to or to minimize brand erosion over time. We haven’t given that guidance as you mentioned for next year. But yes, I mean there is an opportunity to minimize brand erosion continuing into next year.

Richard Daley, President and CEO, Catalyst Pharmaceuticals: I think the challenge with that Charles is that the six month exclusivity period ends at the end of this year and then probably don’t know it we would expect additional generics to enter the market. And at that point, while we haven’t, as Jeff has alluded to, we haven’t given guidance for 2026. We all know the way that prices inversely proportional to the number of players in the generic market. So, I think it just becomes tougher to control.

Charles Duncan, Analyst, Cantor Fitzgerald: Last question on biz dev, helpful color so far. But in terms of the market and the environment, it does seem like it favors your approach and your cash position. I’m wondering if you have specific goals for this year to get a transaction done? Or is that something you don’t want to commit to at this point?

Richard Daley, President and CEO, Catalyst Pharmaceuticals: I wouldn’t say we have a specific goal to get a transaction done. We have a specific goal to get the right transaction done or right transactions done. I think we’ve been very, very good as a company in bringing in the appropriate assets and we want to continue that trend. We want to make sure we bring in the right assets. We’ve looked at a lot of opportunities and for a number of reasons they don’t fit us and they don’t make sense for us.

It would be unfortunate for us to bring in an opportunity that didn’t fit us culturally, financially, structurally. And so all of those things have to fit. And we are, I think, a very discriminating buyer of assets and acquirer of assets. And we want to continue that because we think that’s beneficial for shareholders and beneficial for us as a company. And so I’m not trying to parse words, but we have a goal to do the right deal.

Charles Duncan, Analyst, Cantor Fitzgerald: Okay. Thanks for taking all my questions.

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Thanks for your support too as well.

Conference Operator: Thank you. Our next question will come from Rohan Matur with Oppenheimer. Please go ahead.

Rohan Matur, Analyst, Oppenheimer: Hey, this is Rohan on for Leland Gershell. Thanks for taking the question and congrats on another really strong quarter. Just one for me on the GammaRy. As you see the STUMET study progress, what aspects of the GammaRy’s profile do you think will resonate most with prescribers, especially those who have yet to incorporate it into their own practice? Thank you.

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Thanks, Rohan. Gary, we have Gary Ingenito, our Chief Medical Officer on line. Gary, do you want to take that question?

Mike Kalb, CFO, Catalyst Pharmaceuticals0: Thank you, Rich. Yes, Rohan. I think that the demonstration of bone health, bone density and the effects on cardiac will be some of the key findings that confirm the differentiation of the GammaRy, which we see based upon our preliminary data and we’ll do it again in the long term with the real world evidence.

Rohan Matur, Analyst, Oppenheimer: Got it. Just a follow-up, how do you sort of plan to quantify that in Summit?

Mike Kalb, CFO, Catalyst Pharmaceuticals0: So in Summit, we will be looking at fracture rates, bone age, bone density and development or prevention of cardiomyopathy.

Felix, Analyst Representative, Stephens: Thank you.

Conference Operator: Thank you.

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Thanks, Ron. Our next

Conference Operator: question will come from Jason Gerberry with Bank of America. Please go ahead.

Jason Gerberry, Analyst, Bank of America: Hey, guys. Sorry, I joined late and missed everything so far on the call. So apologies if this has been addressed. But just can you remind me with the strength of the Firdapse quarter, just wondering if there’s any pull forward at all. Just trying to think through the quarterly progression of sales.

And furthermore, if you can speak to, whether you’re starting to see strength in performance of the small cell lung adoption on the LEMS side there?

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Thanks. thanks. So Mike, we’ll turn that first part of the question over to Mike and then we’ll turn the second part of the question over to Jeff.

Mike Kalb, CFO, Catalyst Pharmaceuticals: Yes. Hey Jason, thanks for the questions. Thanks for the support. On Firdapse Q1 and we did note it, I would look at it as let’s start with we’ve said consistently 15% to 20% growth and we maintain that notwithstanding the strong growth in Q1. Some of the Q1 twenty twenty five compared to Q1 twenty twenty four is actually the Q1 twenty twenty four change healthcare cybersecurity incident and that impact timing into Q2.

Richard Daley, President and CEO, Catalyst Pharmaceuticals: So if you back that out, Jason, just to clarify, if you back out what happened in twenty twenty Q1 twenty twenty four we are still in the range of a growth of 15% to 20%. Is that helpful?

Jason Gerberry, Analyst, Bank of America: Yes, definitely.

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Great. And then, did you just ask the second question so we’re all clear on where we stand for your second question?

Jason Gerberry, Analyst, Bank of America: Yes. Just how 1Q may have been impacted at all like sort of the momentum you’re seeing on small cell lung LEMS pick up relative to I guess baseline or year on year comp?

Jeff Del Carmen, Chief Commercial Officer, Catalyst Pharmaceuticals: Sure. So Jason, let me get you baseline where we’re at. It’s about 2025% of our current Firdapse patients are cancer associated LEMS patients. Our main focus this year is to get BGCC antibody screening arrangements in place with community oncologists, GPOs and where we expect to see growth in the percentage of our patients to be cancer associated LEMS patients will be in 2026 and beyond. So that’s where we expect the opportunity to be realized more.

So again, this year we’re hopeful that we can help those ninety percent of patients that are currently undiagnosed, the small cell lung cancer LEMS patients that are undiagnosed. Want to help them get tested and diagnosed.

Jason Gerberry, Analyst, Bank of America: Got it. Okay. Thanks so much.

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Thanks, Jason.

Conference Operator: Thank you. Our last question will come from Sudan Logginton with Stephens. Please go ahead. Sudan, please make sure that you’re not muted.

Felix, Analyst Representative, Stephens: I’m sorry. Congrats on the call. This is Felix for Sudan, Loganathan. I have a quick question on Firdapse. Given the high percentage of the undiagnosed LEMS patients, can you please give us color in terms of the proportion of the penetration that you have so far on Firdapse?

And what will contribute the percent penetration to increase given that you have initiative to increase diagnosis?

Richard Daley, President and CEO, Catalyst Pharmaceuticals: So we’ve said recently at JPMorgan in our conference, we said we believe that size of the market is about $1,200,000,000 in today’s prices, so no price increases, etcetera. If you just look at our sales last year about $300 that would mean we have about a 25% market penetration across the board. So we believe there’s significant upside in this market for us. And this consistent growth that Jeff alluded to the 15% to 20% we’ve experienced for some time, we believe that we can sustain that. And given this cancer associated LEMS initiative and continuing to push on the idiopathic side or non cancer associated LEMS, we believe that there is significant opportunity to continue to grow this market and we’re really excited about it.

Jeff, any comments?

Jeff Del Carmen, Chief Commercial Officer, Catalyst Pharmaceuticals: So like Rich mentioned, I mean significant opportunity on both in both segments of the LEMS prevalence. We expect to see more opportunity to help the small cell lung cancer LEMS patients moving forward. Right now, the idiopathic LEMS, the penetration is strong. However, there’s still plenty of opportunity. The 500 or so pipeline patients, those patients that are somewhere in their diagnostic journey, the vast majority of those patients are idiopathic LEMS patients.

So we have plenty of opportunity to help them in the short term as well. So both segments significant opportunity remaining.

Richard Daley, President and CEO, Catalyst Pharmaceuticals: Thanks, Alex. Appreciate it. Any other questions? Thank you.

Felix, Analyst Representative, Stephens: No questions from my side. Thank you very much. Thank you. Thank you.

Conference Operator: Ladies and gentlemen, this does conclude today’s program and we appreciate your participation. You may disconnect at any time.

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