Earnings Call Transcript - CPRX Q3 2024

Operator, Operator

Thank you for waiting. My name is Kris and I will be your conference operator today. I would like to welcome everyone to the Catalyst Pharmaceuticals' Third Quarter 2024 Financial Results Conference Call. Thank you. I will now hand the call over to Mike Kalb, CFO. Please proceed.

Michael Kalb, CFO

Thank you. Good morning, everyone, and thank you for joining our conference call to discuss Catalyst Pharmaceuticals' third quarter 2024 financial results and business highlights. Rich Daly, President and CEO will lead the call today; and Jeffrey Del Carmen, our Chief Commercial Officer, and I will also present. Additionally, Dr. Steve Miller, our Chief Operating Officer and Chief Scientific Officer will be available for the Q&A. Before we begin, I would like 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 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 2023 Annual Report on Form 10-K filed with the SEC on February 28, 2024 and in our third quarter 2024 quarterly report on Form 10-Q which was filed yesterday, November 6, 2024 with the SEC.

Richard Daly, President and CEO

Thanks, Mike. Good morning, everyone, and thanks for joining us today. We are pleased to report that we achieved another quarter of exceptional financial performance, continuing our consistent growth and sustained momentum. Our results for the third quarter 2024 demonstrate our unwavering commitment to operational excellence, strategic execution, and delivering long-term value. Today's call will begin with an overview of our portfolio highlights and key strategic initiatives. We will then move on to our detailed discussion of our commercial performance and financial results for the quarter. Let's start with the financial results and commercial highlights. In Q3 2024, we reported total revenues of $128.7 million, a 25.3% increase year-over-year, which included net product revenues of $126.4 million, a 23.2% increase from Q3 2023. These results were driven by the outstanding performance of FIRDAPSE and the continued launch success of AGAMREE. I'm pleased to report that as a result of our strong performance over the first three quarters of the year, we are updating our full year 2024 total revenue guidance to between $475 million and $485 million. FIRDAPSE continues to deliver outstanding net revenues and growth well into its sixth year on the market. And we are updating our full year 2024 net revenue guidance for FIRDAPSE from the $295 million to $310 million range to the $300 million to $310 million range. Our ability to work with health care providers to identify and maintain an active list of potential patients has been foundational to our success, and we believe that we will continue to drive our growth for the foreseeable future. Additionally, as a result of AGAMREE's market success, we are updating our full year 2024 net revenue projections for AGAMREE from the $35 million to $40 million range to the $40 million to $45 million range. We are confident in AGAMREE's market potential as it continues to gain traction within the DMD community. We believe AGAMREE represents a significant advancement in corticosteroid treatment options for DMD and is well-positioned to drive meaningful long-term growth. FYCOMPA continues to deliver steady prescription numbers and generated net revenues of $32.1 million in the third quarter. The brand experienced a 12% decrease in net revenues compared to Q3 2023 due to adjustments in gross to net as previously disclosed. FYCOMPA remains on track to meet full year 2024 guidance. Jeff will offer a comprehensive overview of our commercial performance, followed by Mike's detailed review of our financials later in today's call.

Jeffrey Del Carmen, Chief Commercial Officer

Thanks, Rich, and good morning, everyone. We are thrilled to announce the outstanding third quarter performance of our entire commercial portfolio. These results highlight our strategic focus on operational excellence, which continues to fuel our commercial success. Q3 results were propelled by sustained organic growth in FIRDAPSE, steady prescriptions from FYCOMPA, and the continued robust commercial launch of AGAMREE. Total net product revenues for Q3 reached $126.4 million, marking a 23.2% increase compared to the same quarter last year. Based primarily on the continued strong performance of FIRDAPSE and the strong performance of AGAMREE, which we launched commercially in March of this year. We have increased our full year revenue estimate to between $475 million and $485 million, which is further detailed in the press release issued last night. I will now provide a breakdown of Q3 net product revenue by product. Let's begin with discussing FIRDAPSE. Our efforts to support patients living with Lambert Eaton Myasthenic Syndrome with FIRDAPSE have been remarkably successful this quarter. Q3 net sales of $79.3 million represent an almost 20% increase over the same quarter last year. New LEMS patient enrollments and net new patients both exceeded forecast, while the annual discontinuation rate was below the forecast of 20%. Prescription approval rates were greater than 90% across all payers, government and private commercial insurers. Ordering patterns and refill rates during Q3 returned to historical norms of around 90%. Our demonstrated strategic growth initiatives continue to build a strong LEMS patient pipeline, ensuring steady treatment adoption and long-term organic growth. We sustain a pipeline of approximately 500 diagnosed LEMS patients at various stages of their diagnostic journey who have not yet started on FIRDAPSE. This group generally accounts for around half of our new patient enrollments, significantly supporting our steady annual organic growth. Additionally, we continue to be pleased with the progress we are making with LEMS education programs aimed at health care providers and potential LEMS patients to drive high rates of voltage-gated calcium channel antibody testing, helping to shorten the diagnostic journey and increasing patient eligibility for treatment with FIRDAPSE. Finally, we continue to collaborate with top thoracic oncology institutions to implement screenings that will help accelerate diagnosis of the more than 90% of small cell lung cancer LEMS patients that remain undiagnosed. Based on leading indicators going into Q4, we are narrowing FIRDAPSE full year 2024 guidance to between $300 million and $310 million, which is the result of us increasing the lower end of our previous guidance range. Next, I would like to discuss AGAMREE. We are proud of AGAMREE's growing presence in the market as a breakthrough treatment for DMD. This quarter, AGAMREE's performance exceeded our expectations with robust net sales of $15 million, driven by its expanding adoption. Our strategic partnerships and initiatives to educate health care providers and the patient community about AGAMREE's unique benefits have been instrumental in this success. We continue to see transitions to AGAMREE from both corticosteroid segments, 45% from EMFLAZA and 43% from prednisone. In addition, 84% of the top DMD centers of excellence and greater than 170 unique health care providers have already prescribed AGAMREE. We are exceeding our target of 85% reimbursed shipments and average less than 9 business days to approval. We expect the time to approval to decrease as payers finalize their policies over the next couple of months. Based on the promising demand trend and encouraging payer landscape, we are raising our AGAMREE full year 2024 net product revenue guidance to between $40 million and $45 million. Lastly, I would like to provide a brief overview of FYCOMPA. This quarter, FYCOMPA has delivered solid results driven by steady demand, sustaining its position in the market. Q3 net revenues of $32.1 million further fortifies our revenue diversification. FYCOMPA remains firmly on course to achieve its full year 2024 net product revenue guidance of between $130 million and $135 million. In summary, our outstanding performance in Q3 demonstrates the strength of our product portfolio and our ability to address the needs of diverse patient populations. Our strategic investments in marketing, education and patient support have been key drivers of this success, and we remain committed to building on this momentum. We look forward to continuing to deliver sustained commercial execution that is making a meaningful difference in the lives of patients. I want to thank the entire team at Catalyst for their unwavering commitment to patients and look forward to a successful Q4. I will now turn the call back over to Mike.

Michael Kalb, CFO

Thank you, Jeff. Our performance during the third quarter of 2024 has set us on pace for another strong year driven by solid financial performance, financial discipline and strong execution. The successful launch of AGAMREE in mid-March along with the continued performance of FIRDAPSE and FYCOMPA has strengthened our foundation for sustained growth. Our total revenues for the third quarter of 2024 were $128.7 million, an approximate 25.3% increase when compared to total revenue of $102.7 million for the third quarter of 2023. Product revenues net for our lead product FIRDAPSE were $79.3 million, a 19.7% increase year-over-year compared to $66.2 million. Product revenues net for the third quarter of 2024 for FYCOMPA were $32.1 million compared to $36.4 million, an 11.9% decrease from the prior year period driven by increased gross to net deductions resulting from higher costs tied to arrangements between the company and distributors and government agencies. For 2023, revenues were booked under assigned cost arrangements which were lower. Product revenues net in the third quarter of 2024 for AGAMREE were $15.0 million, reflecting the continued strength of the commercial launch. As a reminder, Q3 2024 was the second full quarter of AGAMREE commercialization. Additionally, included in license and other revenue is a $2.1 million milestone payment earned upon DyDo's receipt of regulatory approval to commercialize FIRDAPSE for the treatment of patients with LEMS in Japan. As previously disclosed, we are entitled to additional payments if certain milestones are achieved and a transfer price is applied to product supply to DyDo. Cost of sales expense were approximately $19.3 million in the third quarter of 2024 compared to $14.2 million in the third quarter of 2023 and consisted principally of royalties. As a reminder, royalties for FIRDAPSE increased by 3% when net product sales exceed $100 million in any calendar year, which was surpassed during the second quarter of 2024. As a result, we expect cost of sales to trend higher as the year progresses. Additionally, AGAMREE carries a royalty in the range of low double digits to mid-20s as a percent of net revenue depending on sales achievements within a calendar year. Further details on our royalty obligations for AGAMREE are reported in our Q3 2024 Form 10-Q and are expanded upon within the MD&A section. Research and development expenses were $3.3 million in the third quarter of 2024, down from $83.7 million in the third quarter of 2023, which included an $81.5 million IP R&D charge. SG&A expenses for the third quarter of 2024 totaled $45.9 million, compared to $33.6 million in Q3 2023. The increase in SG&A expenses in the third quarter of 2024 was principally due to incremental operating expenses to support the continued commercial launch of AGAMREE. Net income before income taxes for the third quarter of 2024 were $57.2 million, an improvement year-over-year compared to a net loss of $38 million for the third quarter of 2023. We reported GAAP net income for the third quarter of 2024 of $43.9 million or $0.35 per diluted share compared to GAAP net loss for the third quarter of 2023 of $30.8 million or $0.29 per diluted share. This increase in net income is driven predominantly by increased FIRDAPSE revenue, the revenue resulting from the commercial launch of AGAMREE, and the fact that in Q3 2023, there was an $81.5 million charge related to the acquired in-process R&D for the AGAMREE acquisition. It is worth noting that while selling, general, and administrative expenses have increased, principally due to the incremental expenses incurred in support of AGAMREE. As noted above, we remain extremely focused on a disciplined approach to cost management throughout the company. Our year-to-date effective tax rate through the first 9 months of 2024 was 24% compared to 23.5% through the 9 months of 2023. Our 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. As Jeff mentioned, based primarily on the continued strong performance of FIRDAPSE and the strong performance of AGAMREE, which we launched commercially in March of this year, we have increased our full year 2024 revenue guidance to between $475 million and $485 million, which is further detailed in the press release that we issued last night. However, if we elect to make future acquisitions of drug products in earlier stages of development, we expect that our R&D expenses will become more significant in future periods. Additionally, based on year-to-date R&D expenses, we believe the full year 2024 R&D expense will be significantly lower than our previously provided guidance due to the timing of certain R&D-related initiatives and will likely be less than $15 million for the year. Non-GAAP net income for the third quarter of 2024 was $71.1 million, or $0.57 per diluted share, which excludes from GAAP net income amortization of intangible assets related to our acquisitions of FYCOMPA, AGAMREE and RUZURGI of $9.3 million, stock-based compensation expense of $4.4 million, the income tax provision of $13.3 million and depreciation of $106,000. This compares to non-GAAP net loss in the third quarter of 2023 of $25.6 million or a loss of $0.24 per basic and diluted share, which excludes from GAAP net income, amortization of intangible assets related to our acquisitions of FYCOMPA and REZURGI of $8.5 million, stock-based compensation expense of $3.8 million, the income tax benefit of $7.3 million, and depreciation of $81,000. As I mentioned, in Q3 2023, we acquired the exclusive rights to North America for AGAMREE in advance of U.S. FDA approval, which required that the company expense the acquired IPR&D at the time of acquisition. Based on recent feedback from the U.S. Securities and Exchange Commission, we will no longer adjust non-GAAP net income or loss for acquisition-related IPR&D expenses. This change has been reflected in the non-GAAP reporting and the press release we issued last night. As reported, we ended the third quarter of 2024 with cash and cash equivalents of $442.3 million compared to $137.6 million as of December 31, 2023. The increase in cash of $304.7 million was driven in part by the January 9, 2024 capital raise that resulted in $140.7 million in net cash proceeds. The remaining increase in cash is driven primarily by $168.9 million in cash generated from operations of the business. I would like to note that when compared to year-to-date September 2023, we generated approximately $81 million more in cash from operations year-to-date through September 2024. We believe our current funds and strong balance sheet continue to allow us the financial flexibility to support our strategic initiatives, such as business development and portfolio expansion, meet our potential contractual obligations, and fund our existing commercial and R&D programs. More detailed information and analysis of our third quarter 2024 and year-to-date September 2024 financial performance may be found in our quarterly report on Form 10-Q, which was filed with the Securities and Exchange Commission yesterday, November 6, and can be found on the Investor Relations page on our website at www.catalystpharma.com. At this time, I'll turn the call back over to Rich.

Richard Daly, President and CEO

Thanks, Mike. Before we close, I want to reaffirm our confidence in the resilience of our business and the robust strategies driving our long-term growth. This quarter's performance underscores our commitment to innovation, commercial and operational excellence, and delivering consistent value. I would also like to express my sincere gratitude to our dedicated team whose commitment to excellence and our patient communities have been instrumental in achieving our continued success. Looking ahead, our focus is on executing strategic priorities and expanding our commercial portfolio. With a solid framework in place, Catalyst is well-positioned to sustain our momentum and drive continued success. We appreciate our stakeholders' support, and we look forward to sharing our progress in the coming quarters. At this time, we'll turn the call back to the operator and look forward to taking your questions. Thank you.

Operator, Operator

And your first question comes from the line of Joon Lee with Truist Securities. Please go ahead.

Joon Lee, Analyst

Thank you for taking the questions. So my first question is, now that FIRDAPSE will be commercially available in Japan this year, what are you looking for in a partner to commercialize in other regions such as China? And then as a follow-up, I'm just curious, what's your growth adjustment for FYCOMPA, and how should we expect that to trend going forward? Thank you.

Richard Daly, President and CEO

Steve, you want to take that one?

Steven Miller, Chief Operating Officer and Chief Scientific Officer

Sure. As we've previously announced, we expect, or as Rich described, we expect again — I'm sorry, FIRDAPSE to be launched in Japan at the end of the year. And we continue to evaluate other territories throughout the world to expand the FIRDAPSE market into, and we'll report that to the investment community when we have more to say about it.

Jeffrey Del Carmen, Chief Commercial Officer

Regarding China — thanks for the question. Regarding China, we continue to explore opportunities in China, and as they become more apparent and clearer, we'll bring that information forward, so thank you.

Richard Daly, President and CEO

Can you repeat your question about FYCOMPA, Joon, please?

Joon Lee, Analyst

Yes, sorry. I'm just curious what drove the gross to net adjustment for FYCOMPA and how we should expect the trend going forward. Thank you.

Michael Kalb, CFO

Sure. Thanks, Rich. So as we previously disclosed, our fees, which are reflected in gross to net, are higher, specifically with distributors, government agencies, compared to last year when we were under the TSA with ASAI. So I would say where we're at is probably reflective of what we think those fees will be going forward, certainly, as long as we have exclusivity.

Richard Daly, President and CEO

Yes, and I just want to add on to that. As Jeff mentioned in his part of the call, that the performance of the product from a prescription basis is solid. And so that's why we reaffirmed our guidance on that. So the product is performing really well. It's just I think a situation where the fees are just higher than we would experience if we were under ASAI's agreements.

Joon Lee, Analyst

Thank you.

Richard Daly, President and CEO

Thank you.

Michael Kalb, CFO

And the one thing I just want to add on that, our fees are consistent with other companies of our size, I believe from my experience.

Operator, Operator

And your next question comes from the line of Jason Gerberry with Bank of America. Please go ahead.

Unidentified Analyst, Analyst

Hey, guys. This is Pavan on for Jason. First question on FIRDAPSE. Can you speak to what was the greatest source of uptake of FIRDAPSE? Was it idiopathic or small cell lung cancer patients? And how has the number of patients in your pipeline of identified candidates been? Is it sort of steady or growing or over time being depleted? Just some color on the future growth opportunity there. And then with regards to AGAMREE, with the improved near-term ramp, wondering if you have any thoughts on peak sales potential. Is EMFLAZA still a good comp or should we be thinking about AGAMREE even higher than EMFLAZA at this point? Thanks again.

Richard Daly, President and CEO

Pavan, thank you for the question. Jeff, do you want to take the first two?

Jeffrey Del Carmen, Chief Commercial Officer

Yes, hi, Pavan. The small cell lung cancer LEMS patient mix of our total patients, it's still around 20% to 25% of our total patients. So, very, very strong percentage there. We do expect that to slightly go up over time. Our efforts towards small cell lung cancer are really focused on getting these patients, helping these patients, the 90% of the small cell lung cancer LEMS patients that are currently undiagnosed, we want to help these patients get tested and then become addressable as treatment patients for treatment on FIRDAPSE. As far as the pipeline goes, this number, we've done a fantastic job of refilling these patients. So, pipeline patients that become active FIRDAPSE patients, we backfill those patients with new leads. So it's been very consistent of over 500 pipeline patients over the last 2 to 3 years. And we expect that number to maintain at 500 at least in the near-term.

Richard Daly, President and CEO

Pavan, in response to your question about whether EMFLAZA is a suitable comparison for us, I believe it serves as a fairly decent benchmark; however, we need to consider the market dynamics. When EMFLAZA was introduced, there were no significant competing products in the market. Although prednisone was available, it wasn't a notable contender. In contrast, we are entering a competitive landscape with our launch. I want to emphasize how pleased we are with the performance of AGAMREE. We genuinely feel that EMFLAZA is a relatively good benchmark for our potential outcomes, but we also believe that we offer a superior product. We see a significant opportunity to demonstrate this over time, which is part of the reasoning behind the SUMMIT study. In terms of performance, we think the uptake is strong, and from what we observe, early indicators are promising. I believe Jeff can corroborate this with his own experiences and those of his team, as we are seeing improved patient engagement in the marketplace. We also have initial data from recent medical conferences. So at this stage, we believe EMFLAZA is a reasonable comparison for us. Jeff, if you have any thoughts to add, we also have Gary Ingenito with us, who can discuss some of the recent data presented at a conference. Gary, would you like to share your insights on that data?

Gary Ingenito, Team Member

No, I think the data was very well received, very exciting, and again, lots of interest in EMFLAZA and AGAMREE.

Richard Daly, President and CEO

Great. Thanks.

Gary Ingenito, Team Member

Thanks, guys, and congrats on a great quarter.

Richard Daly, President and CEO

Thank you very much.

Operator, Operator

Your next question comes from the line of Charles Duncan with Cantor. Please go ahead.

Charles Duncan, Analyst

Hey, good morning, Rich and team. Congrats on a nice quarter, and thanks for taking our question. I had questions around AGAMREE versus FIRDAPSE's commercial strategy. First of all, when you think about FIRDAPSE, it seems like it's about finding new patients. With AGAMREE, it's a little bit different. So can you help us understand the synergies that you see in the commercial efforts? And then I had a follow-up on the SUMMIT study.

Richard Daly, President and CEO

Thanks, Charles. Thanks for the question, Charles, and I'll turn it over to Jeff for the answer.

Jeffrey Del Carmen, Chief Commercial Officer

Hi, Charles. So you're absolutely right. They're very different in the sales approach. Our efforts for FIRDAPSE are really focused on helping these patients get tested, diagnosed and then treated on FIRDAPSE. So we've had education and resources applied towards education and testing for a very long time to help educate these health care providers. The significant data point regarding our prescribers for FIRDAPSE, over 80% of FIRDAPSE prescribers are one-time prescribers only. So we have to make sure that we cast a wide net for the physicians out there, neuromuscular specialists, but just as importantly, the general neurologists that are out there. So we have to make sure we have a broader coverage with our sales force, our non-personal promotion, and other marketing efforts. As far as for boys living with Duchenne muscular dystrophy, it's a very, very targeted, concentrated prescriber. I think we've mentioned this in the past, 250 prescribers make up about 90% of steroid prescribers for boys living with DMD. So we know where the prescribers are. They're concentrated in about 100 centers of excellence. So that's where we go. Diagnosis, about 95% of Duchenne muscular dystrophy patients are diagnosed. So our efforts there are really focused on educating physicians about the benefits of AGAMREE for those boys living with DMD. So that's how we really go about our businesses selling its competitive selling, sharing those benefits of AGAMREE. And it looks like we're making significant inroads on that front.

Charles Duncan, Analyst

That's helpful. My follow-up question is, I guess that's a great segue to my follow-up, which is on the SUMMIT study. I'm wondering if you could provide a little bit more color on what you anticipate for that study over the course of the next year in terms of number of patients, and really, what is the target product profile that you are seeking in terms of the enhanced label with that study?

Richard Daly, President and CEO

Great question, Charles. I'm going to turn it over to Gary regarding the next year, and then we can also have Gary give us a sense of the target product profile we're seeking, as well as Jeff can weigh in on that, too. Gary?

Gary Ingenito, Team Member

Thank you. Yes, the study is a 5-year study because, as you know, DMD is progressive. It progresses at different rates in individuals. So, really, it's the long-term data that is probably the most revealing about the target profile for AGAMREE. We are in the site activation stages of the study. It's not a traditional registry in the sense that Catalyst is seeking to collect the highest quality, most consistent data of previous registry-type studies. By that I mean not only do you go through the usual steps of getting a site qualified and activated, but for the bone imaging, the DEXA and the spine X-rays, we actually have a central reading facility. Each site must be trained. They must have the proper equipment. They have to pass a quality test. And the same for those participating in the cardiac sub-study, where we're looking at the transmural strain profiles by echocardiography. So again, each site requires two sets of training. You've got to bring in the cardiology department, the radiology department, and so I think as we progress in site activation, we expect that then the prescribers will be able to get their patients enrolled into the study over the next 5 years, and then tracking them for that period of time. The profile we see is really to what we already believe about the product, have seen in preclinical and the clinical data generated to date, which is that we will have a very positive effect on bone health, we will reduce fracture rates. We will not produce cataracts, and there will be a limited increase in weight that will stabilize over the long haul. And then, of course, from the efficacy perspective, as we've already demonstrated in the Phase III trials, preserve muscle strength and mobility.

Charles Duncan, Analyst

Excellent. Thanks for taking the question, and appreciate the guidance raise.

Operator, Operator

And your next question comes from Samantha with Citi. Please go ahead.

Samantha Semenkow, Analyst

Hi, good morning and thanks for taking the question. I just had a quick one on AGAMREE. I know it's really early in the launch. I'm curious if you're seeing any trends on durability of therapy so far, as in, are patients tending to stay on therapy after switching? And then, again, your patient mix seems to be quite stable compared to last quarter. Is the expectation that this trend will continue, or do you expect it to shift at some point in the future? Thank you.

Richard Daly, President and CEO

Thanks for the question, Sam. Jeff, do you want to handle this?

Jeffrey Del Carmen, Chief Commercial Officer

Hi, Sam. In response to your first question about AGAMREE, we are observing strong positive discontinuation rates at around 15%, which aligns with our expectations. This trend has remained stable over the past few months, which is encouraging. Regarding your question about the mix, are you specifically referring to the transitions from prednisone and EMFLAZA?

Samantha Semenkow, Analyst

Yes, exactly.

Jeffrey Del Carmen, Chief Commercial Officer

Okay. So, Sam, you're right, and they are stable since the last quarter, and we do expect that percent or that mix to be pretty consistent. It's positive for as I speak because it shows that we are getting transitions across both corticosteroid segments. Whereas initially planning on this launch, we anticipated the EMFLAZA switches to be a lot more significant. And we're very pleasantly surprised that we are consistently getting the prednisone switches. So we expect that to be pretty consistent moving forward, too.

Samantha Semenkow, Analyst

Great. Thank you. And just a follow-up on the discontinuation rate. For that, can you just elaborate on what makes that really positive in your view? And also, what is driving the 15% that you're seeing discontinue? Thank you.

Jeffrey Del Carmen, Chief Commercial Officer

15% to 20% is typically what we had forecasted. And we see that as a good gauge for discontinuation, and it's meeting that. And what was your other question about that, Sam? What are the drivers?

Richard Daly, President and CEO

Yes, exactly.

Jeffrey Del Carmen, Chief Commercial Officer

What's interesting and beneficial for the Duchenne community is the introduction of many new products. As part of this, there is an evaluation of the therapies patients are currently using, especially if they are considering a gene therapy. Some patients decide to discontinue their current treatment due to this choice. They need to assess whether they should continue with AGAMREE at this time. However, this represents only a small portion of the patient population. In terms of effectiveness and side effects, there are no significant factors contributing to this decision. The percentage of patients discontinuing is about 15%, and it is a temporary situation. We anticipate that over time, these patients will return to AGAMREE.

Samantha Semenkow, Analyst

Got it. That's super helpful. Thank you for the question and congrats on a good quarter.

Richard Daly, President and CEO

Thank you. Thanks very much.

Operator, Operator

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.