Catalyst Pharmaceuticals Inc at Bank of America CNS Therapeutics Virtual Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : So maybe as a starting point, I think strategy BD is a good place to start. Since I've been following Catalyst, BD has always been kind of a critical component of the story. Assets that you've brought on board, you've been able to do it and do it in a way that hasn't put leverage on the company. I guess then the question becomes the ability to scale that model and to continue to bring in assets that could accelerate the growth profile, diversify the business, and all those things. For starters, why neurological disorders and neuromuscular disorders as a therapy area of focus? Is this an area you feel like hey, we've got the in-house expertise, and so we really want to leverage that. Is it just an attractive category for therapeutic opportunities, and you see just an opportunity to scale there? Maybe if you could just sort of level set on first your TA focus, and then we can go drill down into that.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Got it. Okay. Talk about the deal landscape right now. Do you feel like it's asset rich? Do you think that there's -- how's the temperature on seller willingness to part ways with assets? When we just did a recent M&A analysis and some of the trends seem to be that we're seeing more privates getting sold, maybe that's a function of a more challenging IPO market for some of those companies. So just kind of curious what you're seeing and if it's a healthy environment for somebody that's on the prowl for quality assets.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : And how important is it to do another deal in, say, the next 12 months or so?

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Okay. I guess for investors thinking about the business model, I know at different times, maybe it was past management regime talking about -- like Horizon Therapeutics as a company that maybe is a template to look at. Do you feel like deal activity is a source of synergies for you as a company or is it just more a mechanism for growth, feeding the pipeline than it is necessarily a synergy play? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 07, 2024 / 1:50PM, CPRX.OQ - Catalyst Pharmaceuticals Inc at Bank of America CNS Therapeutics Virtual Conference

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Okay. In terms of the next step in the evolution of the company and the ability to source in drugs with even larger peak sales potential, I don't know if you think that that may involve leverage. And thinking just about the company's dry powder and capacity, how would you frame that for investors?

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Okay. Maybe shifting gears to the AGAMREE launch, which is a big area of focus, I think, with investors. And anything you can share as it pertains to early launch observations, how it's gone relative to expectations? Is EMFLAZA still -- is a good launch comp you when think about patient accruals and just sort of our revenue trajectory. So I'll leave that with you guys.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : You used the term counter voice. So is PTC active still in sort of promoting EMFLAZA, even though there's a generic available? I know that there's some -- you hear some things about stickiness of the brand, and maybe that market's not genericizing that efficiently. So I'm just curious if there's something going on that's unique there or are you really the only brand and the only voice in the steroid space? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 07, 2024 / 1:50PM, CPRX.OQ - Catalyst Pharmaceuticals Inc at Bank of America CNS Therapeutics Virtual Conference

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Got it. And the current mix of patients, I think, with -- I guess it sounds like there's a pretty healthy mix of both, right? EMFLAZA and prednisone, if you can maybe speak to that dynamic and we'll go from there?

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Okay. And I know since we last spoke on 2Q update, it sounded like the payer landscape was largely [a single generic step edit]. Here we are in the fall when companies typically have a better line of sight into 2025. Is it still -- is the operating assumption that most plans will be more of a single generic step edit for AGAMREE?

Question: Jason Gerberry - BofA Securities Inc. - Analyst : And so the way that these policies -- I haven't looked at a specific policy, but it's more of a lifetime thing, right? Like you've been on prednisone two years ago, three years ago. That constitutes a step that was not in the calendar year such that like when everything resets, Gen 1 [TSF trial], a specific generic option. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 07, 2024 / 1:50PM, CPRX.OQ - Catalyst Pharmaceuticals Inc at Bank of America CNS Therapeutics Virtual Conference

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Got it. Okay. And I guess the recent broadening of the label for gene therapy, just curious at all. I mean, typically, when we talk to doctors, they say that the availability of gene therapy is not really going to impact how they use steroids at all. But figured I would just ask, given that you guys are out there, you're monitoring the space a lot more closely.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Okay. In terms of where we're at, year one of the launch story and how that evolves in time, is there additional data generation that's critical to the adoption story? Or do you feel like you have the information largely on hand to educate providers? And so really, it's just about familiarity, blocking and tackling, getting in front of doctors, making them aware of the AGAMREE value proposition at this point.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Yes, ultimately, how those data play into the launch, I imagine that there -- even if you look at the EMFLAZA launch, there are always going to be, I guess, legacy doctors who hold out and use prednisone for a really long times and maybe have prescribing tendencies that are more difficult to shake or change, if you will. So is this something that you feel helps with some of those doctors who are maybe a little bit more, quote, unquote, stuck in their ways? Or how would you think about the data potentially being leveraged? Steve Miller - Catalyst Pharmaceuticals Inc - Executive Vice President, Chief Operating Officer, & Chief Scientific Officer Well, I would think that the data would be very helpful for the more traditional doctors who decide they will use prednisone. That's what they have always used. Our medical science liaisons will be out there actively informing the doctors about what's [related]. One of the nice things that benefits these patients is that it's a very small community of physicians who treats these patients, and a number of them are participating in the clinical trial. And those doctors talk to other doctors, or there are institutions where there's other (inaudible) doctors, and they talk to each other about the treatment of patients. The bottom line is during the clinical trial and the safety follow-up phase, they followed it. Doctors actually have the opportunity to observe clearly the improvement in behavior because that shows up right away. But there was even some patients who were on the AGAMREE long enough for doctors to see a notable difference in [breadth] relative to what they normally see for corticosteroid treatment. So there's already a number of doctors that are enthused about using the product. (Multiple speakers)

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Yes. Within that 80%, because I know leading into your second-quarter update, I think you'd mentioned that a certain proportion had written at least one script. Can you share anything more as it pertains to the depth that you're seeing? Is it clustered in a smaller subset or is it pretty evenly REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 07, 2024 / 1:50PM, CPRX.OQ - Catalyst Pharmaceuticals Inc at Bank of America CNS Therapeutics Virtual Conference distributed and it's more about just sort of broadening the impact within that 80%? Or is there, like in any disease area, there tends to be a top 20% that really can drive a lot of the business.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Got it. Okay. What else? Can you discuss your peak sales outlook and some of the assumptions that are embedded in that for AGAMREE?

Question: Jason Gerberry - BofA Securities Inc. - Analyst : You make an interesting point about, I guess, younger, maybe patients with less -- way less but staying on drug for a long period of time. One trend that's happened in the DMD base, I believe, is that doctors have kept patients on steroid longer than they might have otherwise, right? So I think, maybe, historically, if the patient had become nonambulatory, it might have been a decision point to maybe take the patient off. But now, I think the realization that you can derive improvements on upper limbs and things like that even if the patient is nonambulatory -- so I guess thinking about just the space more broadly and how maybe treatment rates have evolved, and maybe how you think about durations of therapy. These are concepts I imagine that are fluid, that you're still monitoring data to better understand. But it does seem like there are some moving parts that maybe are worth a discussion that could be beneficial to the revenue story of AGAMREE?

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Right. And I guess, mindful that you haven't guided to peak sales, and I should have known that or recall that. But I believe that there was some commentary that maybe at peak penetration, at levels of EMFLAZA of which were 30% to 40%, maybe is a reasonable base case. I don't know if that's something that's evolving or something that has the potential for upside as you see a greater ability to play in both the prednisone segment and the EMFLAZA segment.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : The point about weight and weight base, and perhaps on a revenue per-patient basis, your point is, maybe that's a little lighter in the early years of the launch. If, over time, as these boys grow, I'm trying to get a sense of what perhaps revenue per patient could look like on your therapy, say, versus EMFLAZA during pre-generic levels? And if there's a benefit, right, in terms of kind of overall net pricing per patient? And how you'd sort of frame -- I realize it's probably a complicated question with a lot of moving parts. But if you were, say, today where you sit versus perhaps more broadly penetrated into the market, does that change in a meaningful way?

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Okay. With EMFLAZA, I believe that that was a drug that effectively saw a lot of discounting and rebating, a gross to net spread that widened later in the product's life cycle. Is there something inherent in this marketplace with sort of the payer mix as you get bigger and more successful that where there's a greater toll, if you will, that drives that gross to net expansion? Or do you feel like sort of where you operate in years one through three is a good operating assumption for the long run?

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Okay. And maybe last question on AGAMREE, unless there's anything else that we feel like we've missed and you want to touch on, but one of the assumptions, I feel, in the Catalyst Pharma evaluation model that there's a lot of sensitivity around is how you model different exclusivity runways, right? So we can get to that with FIRDAPSE, but with AGAMREE, you have at a minimum seven-year orphan exclusivity. And so that's great. Maybe how you think about this asset and its runway and sort of what you'd say is your anchor patent and where that gets you.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : I see. So the IP can maybe add three, four years to the regulatory issue? Steve Miller - Catalyst Pharmaceuticals Inc - Executive Vice President, Chief Operating Officer, & Chief Scientific Officer Theoretically, with the polymorph patents, it could add up to 10.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Okay. In that polymorph, I imagine, is it like a stability, the rationale for the patentability? Steve Miller - Catalyst Pharmaceuticals Inc - Executive Vice President, Chief Operating Officer, & Chief Scientific Officer It's a particular personal form of the drug. It's [polymorph Form 1]. There actually are several polymorphs, but the drug is fairly unique. It has a tendency to undergo change in the solid state to the Form 1 polymorph sitting on the shelf. So as a result of that, a polymorph pattern can sometimes not be particularly useful if someone can make an alternate polymorph. But when the other polymorph spontaneously transitions back to the Form 1 polymorph, you actually have a pattern that could be much more helpful [for protection].

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Okay. Well, maybe shifting gears to FIRDAPSE, your largest product -- and yes, I mean, what are you seeing first half in terms of what's driving this mid to high teens, year-on-year growth if you combine first and second quarter. I like to zoom out and not think about these revenues on the quarterly basis because 1Q is so anomalous in a lot of ways. So yes, in terms of where you're sourcing that increased market penetration, the dynamic with small cell lung as well.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : When you get a tumor LEMS patient, do they tend to -- are they sticky, they stay on therapy? There's this idea, I guess, that with the chemo, if the tumor goes away the, LEMS goes away. And so I just wondered if there's a dynamic with tumor LEMS patients that maybe they just aren't on therapy as long.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Okay. So I wanted to come back to the point you made about the MG diagnosis. And that's an initial diagnosis, right, that tends to be the trigger? So there are new therapies that are -- have come to market with the FcRn class of recent. But my understanding at least is that that's kind of more of a switch opportunity from someone who's maybe been on IVIG. But I wanted to ask you, has that been a catalyst at all for increase in diagnosis rates and thus maybe becomes a product feeder for you in a way, for lack of a better term, or if it's really irrelevant, right, to the MG diagnosis rate?

Question: Jason Gerberry - BofA Securities Inc. - Analyst : And so the typical pattern there, though, is that you -- there was a discussion with the clinician, and then they're making a confirmatory diagnosis with the diagnostic, and then switching the patient off of something like an IVIG or their FcRn over to FIRDAPSE. Is that typically what happens then?

Question: Jason Gerberry - BofA Securities Inc. - Analyst : And then you mentioned small cell, and I guess on the one hand, when I first started to think about this concept, oncology is a pretty vast, pretty expansive area. So was this going to entail a full-blown kind of commercial oncology sales force buildout, but it sounds like there's some concentrated oncology centers that you work with. Can you elaborate a little bit more on the strategy and how you're able to have that reach without massively reconfiguring your sales organization?

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Is there some sort of -- can you just remind me the number of these centers and how -- to what proportion of small cell lung is sort of captured in that? And is there -- has there been -- maybe what's been the trend in like the last three or four years with this? You said, at some point, maybe 3% to 4%, then you said 20% to 25% are not treated, so just maybe how we're seeing the progress here.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : I see. And so where you're at right now, I realize you have this pipeline of patients in terms of how penetrated into LEMS you are now. How should investors think about the durability of that, maintaining that level of a pipeline? Imagine you get to larger numbers and that annualized growth rate starts to moderate in future years, but maybe I just wanted to get your perspective on that.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Okay. And then maybe just similarly, as we did with AGAMREE, just thinking about the IP situation here, you have a patent trial. I think there's a claim construction hearing next year. And a trial, I believe, would be 2026, although I don't know if the hearing actually has been scheduled. So in terms of milestone events -- Steve Miller - Catalyst Pharmaceuticals Inc - Executive Vice President, Chief Operating Officer, & Chief Scientific Officer Market hearing has not been scheduled. The defendants continue to file motions with the court, (inaudible), which is interesting because it costs them a lot of money. I'm not sure why they want to do that. Let me just generally say something about litigation. We recognize that any kind of litigation in any company is something that can sometimes cause concern in the investor community. So we're working diligently to bring these cases to a resolution as quickly as possible, any one that's as favorable as possible to accountants and shareholders. Now having said that, let me tell you about a couple of recent events that I think highlight that we are directionally moving in that direction of resolution. The first is that one of the Paragraph 4 filings, a company called (inaudible) has actually signed. And they're actually due -- I think they're selling for February of 2037, which is the expiration date of the last patent for filings. In addition to that, a second company, which was at the first filing, has actually stopped the challenge of the entire family of patents that span from 2032 to 2034. And as a result of that, starting with the challenge, the case against them has been dismissed. And directionally, I think that what that points to is that, gradually, there is some resolution coming to these cases.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : And so the one that stopped challenge on the 2030-2034 patent, that was one of -- how many [are there in the] first file? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 07, 2024 / 1:50PM, CPRX.OQ - Catalyst Pharmaceuticals Inc at Bank of America CNS Therapeutics Virtual Conference Steve Miller - Catalyst Pharmaceuticals Inc - Executive Vice President, Chief Operating Officer, & Chief Scientific Officer There were three first filers, and they were one of the first filers.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Yes, okay. And so the terminal patent that I believe runs through 2037 is the impurity patent, if I have that right. And so why do you think that will be difficult for generics to avoid infringement? Steve Miller - Catalyst Pharmaceuticals Inc - Executive Vice President, Chief Operating Officer, & Chief Scientific Officer Well, it's an impurity that can show up in some formulations, depending on how the product is formulated. If the impurity is found in their formulation, then the way the claims are awarded, then it goes to the patent, because the patent patents the presence of the specific impurity.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : Yes. And so, is something like claim construction? Typically, it can kind of affect the broadness of a patent. And so, on the one hand, depending upon how the claims get interpreted, does that open up to prior [art-based arguments] or non-infringement type of strategies? Steve Miller - Catalyst Pharmaceuticals Inc - Executive Vice President, Chief Operating Officer, & Chief Scientific Officer Well, claim construction, those are typically items for full trial, and are not the kind of items that come up during the market hearings, the claim construction. Those typically would be items of what specifically do the claims mean and how broad do these definitions can be applied to the specific technology that's being reviewed.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : No, understood. I understood. That's just why I tried to keep it high level. But look, gentlemen, thanks so much for joining us. And hopefully, you have a good rest of your day.

Question: Jason Gerberry - BofA Securities Inc. - Analyst : All right, of course. All right, guys.