Catalyst Pharmaceutical, Inc. (NASDAQ:CPRX) Q1 2018 Earnings Conference Call May 10, 2018 8:30 AM ET
Alicia Grande - VP, CFO and Treasurer
Patrick J. McEnany - Co-Founder, Chairman, President and CEO
Steven R. Miller - COO and CSO
Gary Ingenito - CMO and Head of Regulatory Affairs
Scott Henry - ROTH Capital Partners
Greetings and welcome to the Catalyst Pharmaceuticals Inc. First Quarter 2018 Financial Results. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Aly Grande, Chief Financial Officer for Catalyst Pharmaceutical’s Incorporated. Thank you. Ms. Grande, you may begin.
Good morning, everyone and thanks for joining our conference call. On today’s call, we have Pat McEnany, Chairman and Chief Executive Officer; Dr. Steve Miller, Chief Operating Officer and Chief Scientific Officer; and Dr. Gary Ingenito, Catalyst’s Chief Medical Officer and Head of Regulatory Affairs.
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 the purposes of the 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 which may prove not to be accurate. 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 in our Annual Report on Form 10-K. At this time, it is my pleasure to turn the call over to Pat McEnany, our Chief Executive Officer.
Patrick J. McEnany
Thank you Aly and good morning everybody. Thanks for joining us today and welcome to our first quarter 2018 results call. We're pleased to update you on our recent milestones of development activity. Steve Miller will provide a status report on our pipeline and development activities Firdapse and Aly will review our financial results for the first quarter. We will then take your questions at the end of the call.
During the first quarter we achieved one of our key objectives for 2018. As demonstrated with the resubmission of our new drug application or NDA for Firdapse for the treatment of Lambert-Eaton myasthenic syndrome known as LEMS. Prior to this resubmission we had announced the results of our Type C meeting with the FDA in which the FDA advised us that our proposed filing package would be sufficient for this resubmission. However our NDA submission includes the positive results from our confirmatory Phase 3 trial in patients with LEMS which we'd announced last October. This study achieved statistical significance for the co-primary endpoints as well as for a secondary endpoint. From the date that we submitted the NDA which was March 28th, the FDA has a 60 day filing review period in which they will determine whether the NDA is complete and acceptable to file.
We've previously stated that in our NDA resubmission we would not include those limited types of congenital myasthenic syndromes that are mechanistically similar to LEMS. Rather than include these limited types of CMS in the submission we are continuing to conduct our Phase 3 trial evaluating products for the treatment of CMS. We anticipate completing enrolment of this trial in the second half of 2018 and we expect to announce top line results in the first quarter of 2019. Assuming this trial is successful we plan to seek to add CMS to any approved label for Firdapse. This plan will allow us to potentially address a much broader population of CMS patients.
Additionally we recently announced that we have begun enrolling patients in our Phase 3 trial of Firdapse in patients with MuSK antibody positive myasthenia gravis otherwise known as MuSK-MG. In August of 2017 we announced that we had reached an agreement with the FDA under a special protocol assessment for the protocol design, clinical endpoints, and statistical analysis approach for this trial. In addition we had previously received Orphan Drug Designation for Firdapse for the treatment of myasthenia gravis.
Recently we've initiated a proof of concept trial evaluating Firdapse in ambulatory patients with spinal muscular atrophy type 3. And we anticipate enrolling our first subject in the near future. We expect to enroll approximately 12 patients in this study to be conducted at the Carlo Besta Institute in Milan, Italy under the supervision of Dr. Lorenzo Maggi and expect to announce top line results in the second half of 2019.
We continue to execute on many of the pre-commercialization activities that are required to ensure the success of the potential launch of Firdapse. As we have communicated in the past, many of the necessary activities required were previously completed and are now being refreshed appropriately to align with the current healthcare environment and paradigms. One of the most visible of Catalyst activities has been in our LEMS Disease Awareness program with physicians and patients which began about three years ago. Since launching this campaign we have made significant progress raising awareness of LEMS in both communities. We've employed a multichannel approach which includes digital and print media as well as our MSOs meeting with many treating physicians.
Our new website is dedicated to educating both patients and healthcare providers. In addition to these activities our medical affairs team presence at national and regional neurology and neuromuscular conferences for the past two years has provided us the opportunity to help educate many healthcare providers about the LEMS disease state. Additionally we are spending a great deal of time working with highly qualified vendors to develop a very comprehensive patient services program. We expect that our program will provide numerous features including personalized patient and physician education, assistance with access, and treatment support for patients and caregivers.
Lastly discussions continue with interested parties for a collaboration on both generic Sabril and CPP-115, our next generation GABA-AT inhibitor. While no agreement has yet been reached, we will keep you advised as developments occur. I will now turn the call over to Steve Miller, our Chief Operating Officer and Chief Scientific Officer who will provide more information about our development pipeline.
Steven R. Miller
Thank you Pat and good morning everyone. As Pat mentioned this was a very exciting quarter for Catalyst as we have resubmitted our NDA for Firdapse. This submission came following our successful Phase 3 confirmatory trial as well as a positive Type C with the FDA. Our preliminary data package submitted to the FDA for this Type C meeting included both positive data from our Phase 3 trial as well as data from our abuse liability studies indicating that Firdapse does not have abuse potential. We feel confident that we have addressed the necessary components that are required by the FDA and we look forward to hearing from the agencies regarding the acceptability of our NDA for filing.
As Pat mentioned we decided not to include the CMS indications in our NDA for Firdapse indicated for LEMS. This decision came after internal deliberation as well as a discussion with the FDA and we have decided to focus initially on the LEMS indication in our NDA. This will allow us to separately focus on our NDA submission for LEMS and our ongoing Phase 3 trial for CMS and seek to add a CMS indication to the label for Firdapse in the future assuming an initial approval of the LEMS indication. Our Phase 3 trial titled CMS-001 is evaluating Firdapse for the treatment of CMS. This trial is a randomized double blind placebo controlled outpatient [ph] to period to treatment crossover trial designed to evaluate the efficacy and safety of Firdapse in patients aged two years and above diagnosed with CMS. We anticipate completing enrollment in this trial in the second half of 2018 and announce a top line results in the first quarter of 2019. If successful we are hopeful that we will be able to submit these results and add the CMS indications to our label with an already approved NDA for Firdapse.
We have recently begun enrolling patients in our Phase 3 trial known as MSK-002 for the treatment of the MuSK-MG using Firdapse. This trial is a Phase 3, randomized, double-blind placebo controlled parallel group trial designed to evaluate the safety, tolerability, and efficacy of Firdapse in patients with MuSK-MG and a small sample of patients with a subtle coating [ph] receptor MG as well. As Pat mentioned earlier we have reached an agreement with the FDA -- for this Phase 3 trial meaning that the FDA agreed with our proposed trial design and clinical endpoints prior to our initiation of the trial. This is a pivotal trial which will have sites in the U.S. and Italy. We are excited to have initiated this trial as MuSK-MG is a severe condition that affects about 3000 to 4800 patients in the U.S. and there are currently no effective approved therapies.
As previously announced we have begun our Phase 2 study in patients suffering from spinal muscular atrophy or SMA Type 3. We believe that Firdapse can be affective in enhancing neural muscular junction transmission which could slow motor neuron triggered issue, degeneration and also provide symptomatic relief for these patients who otherwise often suffer from motor neuron degeneration and a loss of mobility. This is a company sponsored adequate and well controlled proof of concept study and we expect to receive top line results in the second half of 2019. Assuming positive results we will collaborate with the FDA to design the best clinical development path for Firdapse for the treatment of SMA Type 3.
Our expanded access program continues to provide access to amifampridine phosphate tablets free of charge for patients who have no other treatment options and for which the patients treating physician feels this can improve their disease condition. The program is currently designed only for patients diagnosed with LEMS, CMS, or [indiscernible]. I will now turn the call over to Aly to review our financial results.
Thanks Steve. All reference to per share in this call refers to basic undiluted shares. For the quarter ended March 31, 2018 Catalyst reported a GAAP net loss of 5.7 million or $0.06 per share compared to a GAAP net loss of 5 million or $0.06 per share for the same period in 2017. For the first quarter of 2018, non-GAAP net loss was the same as GAAP net loss as there were no non-GAAP adjustments. Excluding our non-cash loss of 397,000 attributable to the change in fair value of liability costs, non-GAAP net loss was 4.6 million or $0.06 per share for the first quarter of 2017.
[Indiscernible] 3.3 million for the first quarter of 2018 compared to 2.8 million for the same period in 2017. The increase in R&D when compared to the same period in 2017 was principally due to an increasing consulting expenses as we prepared to submit our NDA for Firdapse for the treatment of LEMS during March 2018 offset by decreases in clinical expenses including related drug costs. We expect that our R&D spend will continue to be substantial throughout the balance of 2018 as we are bound to ongoing clinical studies and continuing our expanded access program for Firdapse.
General and administrative expenses for the first quarter of 2018 totaled 2.7 million compared to 1.9 million in the first quarter of 2017. The increase when compared to the same period of 2017 is primarily due to increase in pre-commercialization expenses. We expect G&A expenses including pre-commercialization expenses to increase in 2018 as we expand our operations and headcount to build up our infrastructure and commercial programs in preparation for potential Firdapse launch in 2019.
Catalyst had no revenue scenarios in the fourth quarter of 2018 or 2017. At March 31, 2018 Catalyst had cash and investments of 77.9 million and no debt. Although there can be no assurance we believe that this researches will be sufficient to support our planned operations in 2019 without considering revenues and cash receipts that we might receive in 2019 if we are successful in obtaining an approval for Firdapse and launching the product in 2019. More detailed information and analysis maybe found in the company's quarterly report and Form 10-Q which was filed with the Securities and Exchange Commission yesterday May 9, 2018 and can be found on the Investor Relations page of our website at www.catalystpharma.com. I will now turn the call back to Pat.
Patrick J. McEnany
Thanks Aly. Obviously we are really pleased about the progress we've made thus far in 2018 and believe we are in a strong position following our NDA resubmission for Firdapse for LEMS. We are confident in our submission and after discussions with the FDA we believe that we have included all components required for the submission. We look forward to the potential approval of this NDA for LEMS as it will be a significant milestone for the benefit of patients who are suffering from LEMS.
As a company we are taking all the steps necessary to plan for what we hope to be a successful commercial launch. We will continue to work diligently to advance our other potential indications for Firdapse and we are hopeful that we can bring a treatment option to patients suffering from several other rare and debilitating diseases. We will keep you apprised as we achieve other significant milestones this year. This will be the end of our formal presentation and we'll turn it over to the operator for questions.
Thank you. [Operator Instructions]. Our first question comes from the line of Scott Henry with ROTH Capital. Please proceed with your question.
Thank you and good morning. I guess for starters, I don't know if you've commented if you received priority reviews, is that something we'll find out on the acceptance even if it's expected, when is the formal granting of that?
Patrick J. McEnany
Scott as we understand it, when we get formal notice of acceptance we expect that at that time we will be notified for the type of review it will get priority versus standard review.
Okay, great. And assuming you do get priority review and you get acceptance within that time clock when would you expect the launch of the product, would early 2019 be the best estimate at this point. I'm just trying to get a sense of how much time you need between final approval and actual launch?
Patrick J. McEnany
Yes, so if we do receive a priority review we would expect that that would be a PDUFA date of sometime close to the end of November. And it would be very unlikely that we would launch the drug in December just for a lot of reasons. And so from our point of view for planning purposes we're considering based on an approval a launch in early January of next year.
Okay, great, and final question just with regards to the launch in the expanded access program, it would seem like that's a group of patients that would be relatively easy to convert from being in the expanded access program to being on drugs. I guess could you comment on that and I don't know if you've given any color around the size of the expanded access program but just trying to get a sense of how that could create a more robust launch? Thank you.
Patrick J. McEnany
Yeah, Scott we haven't talked definitively about the number of patients in our expanded access program but we agree with you we think that serves as a pretty good bolus of patients for launch. And so we will be working with in advance of approval -- hopeful approval. We will actually be bringing case managers on board as part of our program to make sure that we do have that robust launch.
Okay, great thank you for taking the questions.
Patrick J. McEnany
Thank you Scott.
Thank you. [Operator Instructions]. There appear to be no further questions at this time. I will turn the floor back to management for closing comments.
Patrick J. McEnany
Great, thank you. So I'd like to thank everybody again for their participation this morning on the call. We anticipate that 2018 will continue to be an exciting year for us. Thank you again to our shareholders for your continued support. Goodbye.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.