Catalyst Pharmaceuticals, Inc.

Hello and welcome to the Catalyst Pharmaceutical second quarter 2023 financial results conference call and webcast. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may press star one at any time to be placed in the question queue. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Chief Financial Officer, Allie Grande. Please go ahead, Allie.

Good morning, everyone, and thank you for joining our conference call to discuss Catalyst Second Quarter 2023, Financial Results and Corporate Highlights. Leading the call today is Patrick McEnany, Chairman and Chief Executive Officer. We're also joined by Dr. Stephen Miller, our Chief Operating Officer and Chief Scientific Officer, and Jeffrey Del Carmen, our Chief Commercial Officer. Before we begin, I want to remind you that in our remarks this morning and in the Q&A session, We will make statements about expected future results, which may be forward-looking statements for purposes of federal securities laws. These statements relate to our current expectations, estimates, and projections and do not guarantee future performance. They involve risk, uncertainties, and assumptions that are difficult to predict and may prove not to be accurate. Actual results may vary from the expectations containing our forward-looking statements. 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 2022 Annual Report on Form 10-K. At this time, I'll turn the call over to Pat.

Thanks, Allie. And welcome, everyone, to our second quarter 2023 results conference call. Catalyst outstanding results for the second quarter of 2023 reflect FERDAP's strong organic growth performance, meaningful FICAPA revenue contributions, and continued execution excellence. Our achievements reinforce our confidence for sustained growth and further underscore the exceptional execution capabilities across all functional areas of our business. At this time, I'll present key highlights of our quarterly results. We achieved total revenues of $99.6 million during the quarter, representing 87.5 percent growth year-over-year. The strong performance reflects Ferdapp's product net revenues of $64.9 million, achieving a net revenue increase of 22.3 percent year-over-year. We are confident about the continued growth expectations for Ferdapp's based on our recent initiatives targeting oncologists that treat the subset of LIMS patients suffering from small cell lung cancer, as well as more recent LIMS epidemiology data that Jeff will discuss. Total revenues were bolstered by FICOMPA's second quarter net product revenue contribution of $34.6 million, the first full quarter under the Catalyst umbrella. Non-GAAP net income for the second quarter was $60.4 million, or 57 cents per basic share and 53 cents per diluted share. This excludes from GAAP net income non-cash stock-based compensation, depreciation, amortization of intangible assets, and our income tax provision. The expenses related to the amortization of the intangible assets associated with the acquisition of FICOMPA and Resurgy are approximately $8.5 million for the quarter and $3.3 million in non-cash stock-based compensation. GAAP net income for the second quarter was $37.8 million, or 36 cents per basic share and 33 cents per diluted share. We ended the quarter with cash and cash equivalents of $178.8 million. Several factors, including continued strong underlying demand for FERDAPs from both autoimmune and small cell lung cancer limb patients, as well as continued diagnosis of new limbs patients, provides us with the confidence to raise our total net revenue guidance for 2023 of between $380 to $390 million. Allie will provide more detailed financial highlights during her discussions in this call. Our operational synergies have been strong, and we are pleased by the efficiencies and enthusiasm demonstrated by our teams in achieving the successful commercial and medical affairs integration of Phi Kappa into our product portfolio. With the integration nearly complete, we are focused on realizing the product's full potential. In July, we further diversified Catalyst's product portfolio with the addition of Vimoralone, a promising dissociative anti-inflammatory steroid candidate for the treatment of Duchenne muscular dystrophy, or DMD, a devastating rare neuromuscular disease. As part of the DMD treatment regimen, steroids such as prednisone are commonly administered in addition to other therapies and are known to have notable side effect burden. But more alone has the potential to be an innovative new treatment option to address this important unmet need. In clinical studies, vomoralone demonstrated efficacy with a significant reduction of steroid-associated side effects and benefits for both health, bone health, growth in height, and behavior, along with reduced cardiovascular and pulmonary risk longer term. Vomoralone has been granted orphan drug and fast-track designation, and aside a PDUFA action date, of October 26, 2023. If approved, it would serve as a meaningful advancement to the current D&D standard of care treatment paradigm and represent a pivotal reflection point for the company's growth potential. We anticipate the commercial launch in Q1 of 2024 based on the current timeline. Lastly, with regard to the Memorial Loan, We'll have more details to provide in our third quarter conference call regarding our commercial launch details, financial impact, and expectations for the near and longer term. I want to take this opportunity to make several accounting points on the Vemura Loan Program. We believe that we will take a one-time third quarter charge of $75 million for the acquisition of the Vemura Loan license. as that expense is considered in-process R&D, because Vermeer Loan is not as of yet FDA approved or commercial. Also, as part of the transaction, we made an approximate $15 million investment in Santera, representing approximately 11% ownership in Santera. That investment will be recorded on the balance sheet and marked to the market at the end of each quarter. Additionally, we anticipate a modest increase in OPEX in the second half of this year as we prepare for the anticipated launch of a Vemora Loan in Q1 of next year. Steve, Jeff, and Ali will have more to say about the Vemora Loan program shortly. Last week, we submitted the supplemental NDA to the FDA seeking to increase the maximum daily dose of VirDaps from 80 to 100 milligrams. We believe that a substantial number of LIMS patients may benefit from an approved increased dosage, and we are confident that this has the potential to address an important need for these patients. In Japan, our Japanese partner, Daito Pharma, continued to make meaningful progress with its ongoing Phase III study of FERDAPs or MF amperdine. In mid-July, they reported positive interim Phase III results, and we now anticipate the NDA submission to the PMDA in Japan by the end of this year. Upon submitting the NDA for FERDAPs in Japan, Our territorial rights to develop and market FERDAPs under the license with CERB, previously BioMoren, expands to include key markets in Asia, Australia, South and Central America. We plan to use this expansion to accelerate our global growth strategy for FERDAPs, first into targeted markets like China and South Korea before evaluating and pursuing others. Initiatives are underway to identify potential partners in these targeted territories as part of our strategic plan. We look forward to providing further updates on these activities after the NDA submission in Japan. Clearly, we've been very busy on the business development front, as I discussed earlier. We continue to successfully execute our portfolio expansion efforts as well as our continuing effort to identify additional assets for potential acquisition or in licensing in the rare neurology and epilepsy therapeutic areas and expand the geographical footprint of our existing products. We are reviewing additional therapies that are commercial stage and or late stage product development. As Jeff will discuss, The recent in-licensing of the Memorial Loan is a synergistic addition to our Ferdapps commercial and medical affairs teams, which will enable Catalyst to provide high levels of service to both DMD physicians and patients, and highlights part of our strategy to add new products that leverage our expertise, capabilities, and rare disease infrastructure. Our investments in the two new assets attained this year align with our capital allocation priorities. Our fiscal discipline has enabled us to fully fund these programs in the entirety using available cash reserves. Our operational and commercial performance continues to fortify our growing cash position, providing a strong foundation to support our future growth initiatives. We expect to have an event-driven second half of the year that started with the closing of the license for vermorolone in July, the submission of the supplemental NDA to the FDA last week to increase the maximum daily dose of Ferdaps from 80 to 100 milligrams per day, and just several months away now from a PDUFA action date of October 26 for vermorolone. as well as the NDA submission in Japan by Dido Farmer by year end. As we move forward in the second half of this year and into next year, our business plan is fairly straightforward. Continue to grow the Ferdaps and Phi Kappa brands. Defend vigorously all of our intellectual property. Prepare for a highly successful launch of a moral loan geographic expansion of our FERDEP's footprint, and to bring in another product or company, ideally an epilepsy program. This past quarter, we were pleased to announce the appointment of Tamar Thompson to Catalyst Board of Directors. Her knowledge and experience in rare diseases, health policy, and government affairs will add valuable insights to our board and strategic planning. I want to take this time to acknowledge and thank our very patient-centric and dedicated team here at Catalyst for all that they do every day to improve the lives of people that are suffering with rare neurological conditions. I'll now turn the call over to Jeff DelCarmon, our Chief Commercial Officer, who will update you on our commercial activities.