Greetings, and welcome to the Catalyst Pharmaceuticals’ First Quarter 2021 Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Alicia Grande, Vice President, Chief Financial Officer and Treasurer. Thank you. You may begin.

Good morning, everyone, and thank you for joining our conference call to discuss Catalyst’s first quarter 2021 financial results and corporate highlights. Leading the call today, we have Patrick McEnany, Chairman and Chief Executive Officer. We are joined by Dr. Steven Miller, Chief Operating Officer and Chief Scientific Officer; and Jeffrey Del Carmen, Chief Commercial Officer. For the question-and-answer session, we’ll also have Dr. Gary Ingenito, Chief Medical and Regulatory Officer. Before we begin, I would like to remind you that in the following comments and in the Q&A session, we will make statements about expected future results which may be forward-looking statements for purposes of federal securities 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 prove not to be accurate, especially in light of the effects of COVID-19. Actual results may vary. 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 2020 Annual Report on the Form 10-K. At this time, I will turn the call over to Pat.

Thank you, Ali, and thanks everyone for joining us this morning for our first quarter 2021 results and business update call. I hope that everyone is staying safe and healthy during these challenging times. Although we continue to see physician practices beginning to reopen in many parts of the country, data still supports the fact that certain parts of the country are much slower to open than others and some patients remain reluctant to have physical visits to physicians' offices or to labs. We continue to see signs that these dynamics are gradually improving and we remain optimistic that we will see a significant uptake in revenues during 2021. We are pleased to report first quarter revenues of $30.2 million versus $29.1 million for the first quarter of last year. This first quarter of 2021 will most likely be the most challenging comparison year-over-year because the first quarter of last year was only modestly impacted by COVID, while the Q1 of this year we were still recovering as we begin to move into the post-pandemic period. Despite being in recovery mode, we had a good quarter. Revenues increased almost 4% over the same quarter last year. However, there were several charges that affect our operating income and net income for the quarter, and Ali will explain those details in a few minutes. GAAP net income was $7.7 million and non-GAAP net income was $11.6 million. This year's first quarter net operating income was reduced substantially by a timing difference relating to a charge of approximately $2 million committed in the first quarter of 2021 for patient assistance and foundation support programs that we were required to expense in the first quarter rather than over four quarters of 2021. Ali will provide more detail regarding the differences for this quarter between the GAAP and non-GAAP financial results. During late in the first quarter of this year, our board of directors approved a share buyback program of up to $40 million. As of today, the company has purchased in the open market 507,555 shares of common stock at an average purchase price of $4.49 per share. We continue to believe that rational purchases of our shares in the open market is prudent and increases shareholder value while we are increasing the cash on our balance sheet to be utilized for strategic growth opportunities. We ended the quarter with $143.3 million in cash and investments and again no funded debt. On the human resource side, we are well into our search for a chief product development officer, as well as bringing in-house our investor relations function. We hope to onboard those two very important new senior leadership positions this quarter. Our commercial team continues to operate at a high level despite the challenging conditions. The growth initiatives that we put into place a little over a year ago are now beginning to accelerate new patient enrollments, which ultimately drives increased revenues. We have a number of new marketing programs that we've introduced to increase awareness of LEMS among physicians and patients, as well as the fact that there is now an FDA approved therapy in Firdapse that is deemed to be safe and effective in treating the disease. Jeff will have much more to say about our commercial operation shortly. Our research and development team continues to make good progress on their efforts to expand the label for the Firdapse brand. We expect to make a final decision before the end of this quarter regarding a potential path forward for MuSK-MG, after we complete our discussions on this topic with the FDA. Additionally, we are on target to begin enrollment of our proof-of-concept study for HNPP early next quarter. Steve will provide you with more details on these programs as well as on Firdapse's long-acting development program in a few minutes. We've also been quite busy on the business development front. We are currently evaluating and conducting due diligence on several very exciting potential opportunities to expand our portfolio of marketed products and our product pipeline of early and late-stage programs. While we haven't entered into any binding commitments to this point, we hope to pull the trigger on one or more product acquisition opportunities in 2021. Turning now to our ongoing litigation with the FDA because of the Ruzurgi approval in violation of Firdapse orphan drug exclusivity. Oral arguments occurred on March 23, 2021, and we're now waiting for a decision from the three-judge panel of the Eleventh Circuit Court of Appeals. While we don't control when the court will rule, we're hopeful that the court will render a decision in the very near future. Lastly, regarding the ongoing patent litigation with Jacobus Pharmaceuticals and PantherRx, the matter is proceeding slowly and is still in the early stages. We are vigorously pursuing the case to defend our intellectual property and we intend to protect our IP wherever we determine that someone is infringing it. At this point, I'd like to turn the call over to Jeff Del Carmen, our Chief Commercial Officer, to provide you with further details on our commercial operations.

Thanks, Pat, and good morning everyone. We are very pleased with Q1 net sales of $30.2 million, which represents a 4% growth quarter versus the same quarter last year, despite the pandemic's ongoing negative impact on diagnostic visits and subsequent new brand prescriptions. As Pat mentioned, this quarter of 2021 will most likely be the most challenging comparison year-over-year because the first quarter of last year was only modestly impacted by COVID. Strong net revenue in Q1 was driven primarily by new patient enrollments that outpaced Q4 2020, continued favorable reimbursement dynamics, and a significant decrease in discontinuations. Q1 is the third consecutive quarter with growth in new patient enrollments. In fact, new naive to 3, 4-DAP patient enrollments were higher in Q1 than any other quarter since Q3 2019, a 15% increase over Q4 2020. Our strong patient persistency resulted in continued low 90-day discontinuation rates of less than 10%, which is 40% less than Q1 of 2020. As I've mentioned on the last earnings call, we expect continued growth in 2021 versus the same quarters last year as we build upon the momentum generated in Q4. Through Q1, IQVIA COVID-19 market impact data suggest that diagnostic visits in the overall pharmaceutical market were approximately 12% lower than a hypothetical non-COVID-19 scenario. As vaccination rates continue to increase, we are confident that the diagnostic visit backlog will translate into stronger new patient enrollment trends in the upcoming quarters. Based on early observations in Q2, we are very optimistic about the growth potential for Firdapse versus the same quarter last year as well as versus Q1 of 2021. In April, new patient enrollments remained strong, and compliance and persistence rates continued to be stable. Catalyst pathways, our free personalized patient services program that offers patients and families one-on-one support throughout their treatment journey, has done an outstanding job ensuring adult LEMS patients have an optimal experience on Firdapse. Prescription approval rates remained over 90% across all payers, including government and private commercial insurers. Furthermore, 98% of re-authorizations were granted in Q1, showing that the value of Firdapse is recognized by payers. Patients enrolled in Catalyst Pathways, including those who are covered by Medicare and accessing foundation assistance, have an average co-pay of less than $2 per month. We continue to meet key milestones in the development and execution of our oncology LEMS strategy, which includes a detailed market assessment, direct work with oncology thought leaders, and ongoing market research. As we move into Phase 2 of this strategy, we are confident that through precision planning and provider education, we will be successful in achieving our ultimate goal, which is to support the unmet need of adult tumor LEMS patients. We have already seen a slight increase in the percentage of new enrollments that identify as tumor LEMS patients thus far in 2021. One key element to highlight in this area is the inclusion of LEMS testing in the most recent national comprehensive cancer network guidelines for small cell lung cancer, which outlines the need for VGCC testing in small cell lung cancer patients complaining of weakness and autonomic dysfunction, as a positive VGCC test indicates a possible LEMS diagnosis. We expect that the strategies we have in place will shorten the diagnostic journey of adult LEMS patients and enable Catalyst to serve the significant number of additional patients sooner. Our focus on providing educational and branded resources to potential adult LEMS patients has generated over 1,400 unique users that have opted in online to receive useful information regarding LEMS. Initiatives containing LEMS disease state information directed towards healthcare providers have also gained traction. In closing, we are excited about the opportunity ahead to help all adult LEMS patients. I want to thank the entire team at Catalyst for their unwavering commitment to the LEMS Community. I will now turn the call over to Dr. Steven Miller, our Chief Operating Officer and Chief Scientific Officer, for an update on R&D activities.

Thanks for the commercial update, Jeff. I'll provide an update on our clinical pipeline to develop Firdapse for additional indications. Catalyst has now submitted our plans for a new clinical trial for the symptomatic treatment of MuSK myasthenia gravis or MuSK-MG to the FDA for review and comment. We anticipate the agency's response to our plans within the next 90 days. Specifically, our briefing materials to the FDA discuss the differences in the design of the new trial relative to the design of the completed trials. As previously announced, our evaluation of the feasibility of conducting this new trial is underway. Upon receipt of the agency's comments and completion of our feasibility analysis, we will update the investment community on our further plans for the symptomatic treatment of MuSK-MG with Firdapse. As previously announced, our multicenter Phase 3 trial for the treatment of MuSK-MG with Firdapse did not achieve statistical significance for the primary and secondary endpoints. We concluded that the trial did not meet its endpoint due to higher than expected day-to-day disease stage variability and a large placebo effect. Also previously reported, there was a marked clinical improvement upon initiation of therapy, which leads us to believe that Firdapse may provide clinical benefit for some patients. Finally, significant clinical improvement was also seen in the previous proof of concept trial. We believe our proposed new clinical trial design will address the limitation of the previous Phase 3 clinical trial. We hope the new trial design may better demonstrate the efficacy of Firdapse for the symptomatic treatment of MuSK-MG. Catalyst will be initiating a proof of concept study to evaluate the treatment of Hereditary Neuropathy with Liability to Pressure Palsies or HNPP with Firdapse during the third quarter of 2021, and the protocol for this clinical study is currently under review by the FDA. HNPP is an autosomal-dominantly inherited demyelinating peripheral nerve disease caused by a heterozygous deletion of the PMP22 gene, leading to a reduction of PMP22 proteins by 35% to 50% of normal levels, which results in disruption of the myelin sheaths of motor and sensory nerve axons. Patients with HNPP often present with focal sensory and motor deficits, including numbness and focal paralysis. The events may be triggered by mild mechanical compression innocuous to healthy people. In addition, HNPP patients are also afflicted by fatigue. Catalyst believes that HNPP affects about 6,000 patients in the United States. The scientific basis for considering this indication is that the functional demyelination in HNPP results in excessive outward current through internodal voltage-gated potassium channels. The application of a potassium channel blocker, like amifampridine, is expected to improve action potential propagation in HNPP, thereby alleviating sensory deficits, motor deficits and fatigue in HNPP. This hypothesis is supported by research in HNPP animal models with PMP22 heterozygous deletion. Moving on to other markets and research opportunities, we previously reported that we have reached agreement with the Japanese PMDA on a regulatory pathway to seek approval of Firdapse in Japan, initially for the treatment of LEMS. Additionally, in April Catalyst was granted orphan drug designation for the treatment of LEMS; Firdapse would be a new chemical entity for that market and, as such, would be granted 10 years of market exclusivity. As a reminder, the Japanese market is about 40% of the size of the U.S. market, with about 1,200 to 1,300 LEMS patients. There are also no therapies in the Japanese market for MuSK-MG and HNPP. Finally, we are hoping to complete an agreement with a development partner in Japan to carry this project to completion and to commercially market the product in Japan. Regarding our Firdapse long-acting product that is under development, we have developed the first group of candidate long-acting formulas that have also completed pharmacokinetic studies for these candidate formulations. These PK results will inform the design of future formulations with the ultimate goal of providing patients with an effective medication that they only need to take once in the morning and once in the evening. We have also interviewed numerous physicians and LEMS patients to obtain their input into the design of an optimal product that they feel would be superior to the current Firdapse product offering. That input is the basis for our design goals for the new Firdapse LA product. Catalyst has also made significant progress on developing an intellectual property estate to protect the Firdapse franchise. Last October, we reported the issuance of U.S. patent number 10-793-893, methods of administering 3, 4-diaminopyridine, expiring April 7, 2034. Catalyst has also begun to protect the Firdapse franchise and has filed suit in federal court against Jacobus Pharmaceuticals and PantherRx for induced infringement of our issued patent. A number of the documents related to this case are publicly available for anyone interested in learning more about it. In addition, Catalyst has four other pending patents related to the use of Firdapse that were recently published. All four of these patents are being prosecuted under Track One status at the U.S. Patent and Trademark Office, and we are hopeful that most, if not all of them, will issue in 2021. Assuming issuance of these patents, Catalyst also anticipates taking appropriate legal action to protect this new patented intellectual property if needed. I will now turn the call over to Ali Grande, our Chief Financial Officer, to review our financial results.

Thanks, Steve. Yesterday we filed our 2021 Form 10-Q with the SEC and reported first quarter financial results in a press release. At a high level, our financial results for the first quarter are in line with our internal expectations. Let me highlight a few of those results now. As we reported, we ended the quarter with cash and investments of $143.3 million and no funded debt, which we believe would enable us to advance our R&D programs and support our strategic initiatives of acquiring earlier stage opportunities and innovative technologies to enable growth and value creation. Net revenues for the first quarter of 2021 were $30.2 million, compared to $29.1 million for Q1 2020. As expected, our first quarter sales continue to be impacted by the COVID-19 pandemic. In addition, in the first quarter of the calendar year, like many companies in our industry, we are impacted by the reset of patient deductibles. Despite these challenges, our revenues were almost 4% higher in the first quarter of 2021 compared to the first quarter of 2020. As Steven just mentioned, we are optimistic about our revenue growth in 2021 as the impact of the COVID-19 pandemic subsides. We reported GAAP net income of $7.7 million for Q1 2021 or $0.07 per basic and diluted share, compared to GAAP net income of $10.4 million or $0.10 for basic and diluted share for Q1 2020. Before I continue, let me take a moment to provide more color on our first quarter tax. Our effective tax rate in the first quarter of 2021 was 22.5%, compared to 5.4% in the first quarter of 2020. At the same time, we benefited in Q2 2020 from the use of our deferred tax assets, which is a noncash item. While we expect to use the balance of our federal net operating losses in 2021, we expect that we will continue to benefit in future periods from the use of our deferred tax assets relating to paid net operating losses and the credit, although those are subject to certain limitations, resulting in a more normalized tax rate once we burn out our net operating losses. In the first quarter of 2021, we recorded a $2 million charge relating to commitments to make charitable donations to 501 foundations that support LEMS patient programs. While such contributions were required to be expensed in the first quarter of 2021 when we committed to the contributions, they will support LEMS patient programs for the 2021 fiscal year. Non-GAAP net income for Q1 2021 was $11.6 million or $0.11 per basic and diluted share, which excludes from GAAP net income stock-based compensation expense of $1.6 million, depreciation of $0.1 million, and the provision for income taxes of $2.2 million. This compares to the non-GAAP net income for Q1 2020 of $0.6 million or $0.12 per basic and diluted share, which excludes from GAAP net income the base compensation of $1.5 million, depreciation of $14,000, and the provision for income taxes of $0.6 million. Because of the significant effect of the use of our deferred tax assets in the first quarter of 2021 compared to the first quarter of 2020, we believe that this non-GAAP measure is useful for an overall understanding of our resource operations for the first quarter of 2021 compared to the first quarter of 2020. Cost of sales of $4.7 million for Q1 2021 were slightly up compared to $4.2 million for Q1 2020, at 15% and 14% of revenues respectively. As a reminder, our cost of products continue to benefit from inventory expenses from inventory expense prior to FDA approval of Firdapse, these to a lesser degree than in prior quarters. Research and development expenses were $3 million for Q1 2021, down from $4.2 million for Q1 2020, a 29% decrease year-over-year is primarily due to increases in clinical trial expenses as we completed our MuSK-MG clinical trial and SMA proof-of-concept study during 2020. We expect that research and development expenses will continue to be substantial in 2021 and beyond as we conduct approval concept study for HNPP, continue our expanded access programs, and continue the development of a long-acting formulation program for Firdapse, as well as regulatory paths to seek approval of products for the treatment of LEMS in Japan and evaluate starting with a treatment for other neuromuscular diseases. We expect R&D will also increase in future periods if we successfully execute our strategic initiatives to acquire or in-license innovative technology and our earlier-stage opportunities in other therapeutic categories outside of neuromuscular diseases. SG&A expenses for Q1 2021 totaled $12.7 million compared to $10.1 million in Q1 2020, a 26% increase year-over-year, largely attributable to the timing of the reporting of charges related to our commitment to make charitable contributions to 501 foundations supporting LEMS patient programs, as well as increases in costs for legal expenses associated with our ongoing litigation and the cost of additional personnel to support our expanding operations. We expect that SG&A expenses will continue to be substantial in 2021 as we conduct efforts to increase revenues from Firdapse sales and take steps to further expand our business. More detailed information and analysis can be found in the company's quarterly report on Form 10-Q, which was filed with the Securities and Exchange Commission yesterday and can be found on the Investor Relations page of our website. With that, I'll turn the call over to Pat.

Thanks, Ali. I'd like to close our prepared remarks by emphasizing the effort and performance of all of our employees as a team during these challenging times to continue their diligent efforts to assist all LEMS patients, their caregivers, and their healthcare providers. I'll now turn the call over to the operator so that we may take your questions.

Thank you. Our first question is coming from Charles Duncan of Cantor Fitzgerald. Please go ahead.

Thank you. Morning, Pat and team, congratulations on a good quarter and progress. Had a couple of questions for you, in particular for Jeff. Perhaps provide a little more color on how the quarter's going or how it went. Can you just confirm that you saw quarterly growth in terms of new patient ads of roughly 15% from Q4 to Q1? Is that the case and perhaps provide a little bit more color on the breadth and depth of prescribers. So are you broadening your prescriber base, or are you deepening within a prescribers practice?

Thanks, Charles for the question. Yes, I will confirm there was a 15% growth in new patient enrollments seen or experienced in Q1 versus Q4 last year, so that I do confirm that. The second part is when we take a look at who our new enrollers are, the significant or the vast majority, I'd say about 85% to 90% of our new enrollments are coming from physicians that are first-time prescribers. And that goes to show, that's why we target such a broad base of neurologists and neuromuscular specialists with both RAMs as well as our three ways: RAMs, our field force, inside sales, as well as non-person promotion. So to answer your question, 90% of our new enrollments are coming from new writers.

Okay. And then I guess as a follow-on, when these prescribers get feedback from their patients, do you have you seen any prescribers say that they have additional perspective patients within their practice, and have any of them followed up with deepening their prescription practice within their practice to other patients?

Yes. Remembering that this is an ultra-orphan disease and we think there are about 8,000 patients out there. But to answer your question, there are positions out there that are repeat writers. More specifically, those that are neuromuscular specialists that may see more patients with these types of symptoms as LEMS. So there are many repeat writers. Now from a general neurologist standpoint, there are physicians that have multiple patients because they see a lot of myasthenia gravis patients, and they look at their practice from previous years and some of these patients that maybe they had misdiagnosed or probably zero negative in myasthenia gravis patients. That now they're starting to think maybe I should test this patient for VGCC antibodies to see if they are potentially adult LEMS patients. So we're seeing physicians that prescribe it once and then look across their patient base and say maybe this other patient could be a LEMS patient. So we're seeing that in both ways, yes.

Okay. Very good. That's helpful. I appreciate that added color. I did want to ask Steve a question about the pipeline. I'm not sure you're going to be able to be all that disclosive, Steve. But I'm wondering if you could provide any color on the elements of difference between the past MuSK-MG study and any particular element that you could highlight that may reduce the variability or reduce the potential compounding effect that you saw in MuSK-MG as you've proposed to the agency?

Charles, I can't give any specific details about the new design. Obviously, the FDA may actually ask for changes, so it would be premature to give you a whole lot of specific details. Generally, I can tell you, as you'll recall from the earlier part of the presentation, that the primary causes of the previous failure to achieve statistical significance were primarily related to a high amount of variability in the disease state. The other observation that we had was patients generally showed a significant improvement in their condition upon initiation of therapy. So without giving any specific details about the trial, I can tell you that we included design elements in the new trial that will take advantage of both of those observations. In the case of noise, you simply collect more data. And in the case of the initiation of therapy, you change the design to take advantage of the fact that initiation of therapy seems to show an improvement.

Okay, very good, that's helpful. We'll await those details. My last question is perhaps for Pat. Regarding business development activities, you've conducted some diligence or I think that you stated that you haven't gotten any firm commitments in terms of how to move forward. But are there any particular drug classes or areas of focus that you can highlight that would, in particular, leverage your existing successful approach to marketing Firdapse because it would seem to me that not only is the drug itself an asset, but your back-office and abilities with Firdapse in the LEMS patient population could be leveraged across other orphan disorders?

Yes. Good question, Charles. Thank you. Obviously, we'd love to leverage our existing sales force with another neuromuscular product. Those are very difficult to find. And when they are available, they're extremely costly. About a year ago, we decided to expand our therapeutic look into general neurology. At the end of last year, we decided that we would be interested in products in any therapeutic area outside of oncology. Oncology is just too complicated. So we do want to stay in the rare disease space, ideally neuromuscular or neuro, but we're looking at other therapeutic areas. We believe with rare disease drugs like Firdapse to treat LEMS, we do believe that we can replicate our sales and marketing team and put together a really strong effort in another therapeutic area such as endocrinology or immunology. So, I think we're well positioned and looking at a broad spectrum of therapeutic categories right now, again anything outside of oncology.

Okay, that's helpful. Thank you for taking my questions. Congrats on the quarter.

Thank you, Charles.

Thank you. Our next question is coming from Joon Lee of Truist. Please go ahead.

Good morning. This is Les on for Joon. Thank you for taking my questions. So I just wanted to get back to the revenue line. And you've mentioned on the last call, you also saw a significant increase in new patient starts. Perhaps you can quantify what that percentage increase was. You did mention it was 15% in the early stages of this quarter. Essentially what I am looking for is what impacted the sequential decline? I thought it was slight at 2% or so from Q4. If you could just provide a little bit more color on that. Thank you, and I have a follow-up.

Yes. We're not going to be that specific. I can tell you the new patient enrollments from Q3, Q4 of last year, and Q1 of this year sequentially have increased, and we continue to see increases. We believe that the same should hold true for the rest of the year, right. We're not prepared to be that specific as to percentages or number of the new enrollments.

Okay. And we go to the litigation side, I believe, end of March we received some news from the Federal Court in Canada regarding the dismissal of the application against Ruzurgi. Can you comment on that? And then there appears that there was no appeal made. So I just wanted to know what that means for your partnership with key and your expected commercialization efforts in Canada.

Yes, it's a good question and I'll turn that over to Brian Elsbernd, our Chief Legal and Compliance Officer.

Yes. Thanks for the question, but I'm not exactly sure where it's coming from. We have not received any such notification of a loss of our ongoing action. We're actually waiting on a decision from the Federal Court of Canada. We've actually been in contact with our lawyers in the last couple of days. There has been no decision yet from the hearing that was held back in December.

Okay. Well then I guess my mistake, but perhaps can you just kind of update us on any news that we can potentially see in the near term and any sort of timelines that you would expect.

With regard to our lawsuit against Health Canada?

Yes.

Brian, do you want to opine on that?

We're expecting a decision any day now, literally any day now. I'll be honest, I check the docket in Canada on a daily basis to see if there is a decision. So when we hear something, I'm sure it will be public and you'll hear the answer.

Excellent. Okay. Thank you. Last one for me and I'll jump back in the queue. Just regarding the share repurchases, I guess, great choice given where the stock is, but can you just kind of perhaps remind us what the expiration date is on the $40 million repurchase program, and have you established any kind of accelerated buybacks where that trigger a certain price in the stock?

Yes, we haven't put any timelines on the $40 million purchase. I think that we were thinking internally and our discussions at the board level would likely be a one-year program. We want to be strategic and thoughtful about these purchases, and we want to do it on a rational basis. There really is no accelerating program. It's just from time to time dipping into the market when we think it's appropriate to repurchase additional shares.

Great. Thank you for the clarity.

At this time, I would like to turn the floor back over to management for any additional or closing comments.

Thank you for joining us today and I look forward to future calls. Have a great day. Thank you.

Ladies and gentlemen, thank you for your participation. You may disconnect your lines or log off the webcast at this time and have a wonderful rest of your day.