Catalyst Pharmaceuticals Inc (CPRX) 2021 Q2 法說會逐字稿

Greetings, and welcome to Catalyst Pharmaceuticals, Inc. Second Quarter 2021 results. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to your host today, Ali Grande, CFO. Thank you. You may begin.

Good morning, everyone, and thank you for joining our conference call to discuss Catalysts second quarter 2021 financial results and corporate highlights. Leading the call today, we have Patrick McEnany, Chairman and Chief Executive Officer. We're also joined by Mr. Steven Miller, Chief Operating Officer and Chief Scientific Officer; and Jeff Del Carmen, Chief Commercial Officer. For the Q&A 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 Form 10-K.

At this time, I'll turn the call over to Pat.

Thank you, Ali, and thanks, everyone, for joining us this morning for our second quarter 2021 results and corporate update call. I hope that everyone is doing well and staying safe and healthy during these unusual times. We are very proud of the results that we achieved during this past quarter. Settlement revenues were $36.4 million, up 23% over the same quarter last year. During the second quarter, we completed the agreement with DyDo Pharma for the rights to develop and commercialize Firdapse in Japan, which contributed $2.7 million in revenue. Further, net Firdapse product revenues for 2021 second quarter were $33.6 million, up 14% from net product revenues of $29.6 million for the second quarter of 2020.

GAAP net income before income taxes for the past quarter was $15.9 million compared to $10.4 million in the same quarter last year. GAAP net income after taxes was $12.2 million or $0.12 per share or $0.11 per share fully diluted compared to $9.8 million or $0.09 per basic and diluted share in the second quarter of 2020. Additionally, we ended the second quarter of this year with $155.3 million in cash and short-term investments. Reported cash and short-term investments this quarter was impacted by $3.7 million invested in our open market share repurchase program. As you may recall, very late in the first quarter this year, our Board of Directors approved a share repurchase program of up to $40 million of Catalyst shares from the open market. And as of today, the company has repurchased in the open market, approximately 1 million shares of common stock at an average purchase price of $5.06 per share for a total of $5.1 million.

We continue to believe that rational purchases of our shares in the open market is prudent and increasing shareholder value. While at the same time, we are increasing the cash on the balance sheet to be utilized for strategic growth opportunities. Ali will be providing more detail shortly in her full financial report. Although we are pleased with these results, the market dynamics remain a challenge, as we and many of our peers continue to be impacted by physicians' practices that are not yet fully functional or not open to new patients or unwilling to prescribe new medications for their patients without several in person visits. Some regions of the country are more greatly impacted by the COVID-19 virus and are slower to open and remain a challenge for undiagnosed patients or newly diagnosed patients trying to get treatment.

Having said that, we are optimistic that as the country continues to recover from this pandemic. We anticipate that our Firdapse revenue trajectory will ramp further upward in the second half of this year and beyond. Jeff will add more information on this topic when he presents shortly on our commercial operations. On the human resource front, we have made great progress in filling key positions to our senior management team as well as with our Board of Directors. We have recently announced the hiring and appointment of Dr. Preethi Sundaram as Chief Product Development Officer. Dr. Sundaram, [French] to Catalyst, has a well proved experienced in-sourcing, developing and managing drug product portfolios through all phases of development. Her years of experience in evaluating and developing new medications at Sanofi Genzyme and other large pharma companies, brings a valuable resource to our team. We anticipate that Preethi will be a principal participant in future investor calls.

We also recently announced the appointment of Molly Harper to our board of directors. Molly is a Cision Pharmaceutical Executive with more than 20 years of senior leadership at several large pharma companies, including Sanofi Genzyme. Molly brings a valuable experience to our Board and her areas of global marketing -- her experience in global marketing, strategic planning and operations. Lastly, regarding human resources, we've hired a Vice President, Head of Investor Relations, that will be announced next week. This is also a critical position to be filled at time when we anticipate a transformation of our business to the next phase of growth, which we expect will likely include the acquisition of 1 or more companies marketed products, clinical programs and our technology platforms.

Our R&D, regulatory, medical affairs teams diligently continue their effort to expand the label for the Firdapse brand. But as we move forward, we anticipate a greater emphasis to be placed on other potential development programs and external projects. Steve will provide you with greater details on the status of MusK-MG the long-acting Firdapse program and the medical affairs activities. We continue to be quite active with business development. We are currently evaluating and conducting due diligence on what we believe are several very exciting opportunities to expand our portfolio of marketed products and our product pipeline of early and later stage programs. While we haven't entered into any binding commitments to this point, we are hoping to complete 1 more company or product acquisitions before the end of this year.

We were very pleased to announce last quarter that we signed a licensing agreement for exclusive Japanese rights for Firdapse with DyDo Pharma, a wholly owned subsidiary of DyDo Group Holdings. We are gratified to continue the expansion of our global footprint for Firdapse and to assist the LEMS community worldwide with access to safe and effective therapy. Also, we are pleased that many adult Canadian LEMS patients have now -- have affordable access to Firdapse through our exclusive partnership with KYE Pharmaceuticals. Although we continue to wrestle with regulatory and litigation issues against Health Canada, with regard to the exclusivity that we believe that we are entitled to. KYE continues to make progress within the LEMS community in Canada.

Turning to other ongoing litigation. It has been over 4 months since our oral Argument was held in our appeal of it in the FDA case. So the decision of the 11th Circuit Court of Appeals Panel could come at any time. We await that decision, but we cannot be sure when it might be issued or what the outcome might be. With respect to our patent litigation against Jacobus Pharmaceutical and PantherRx, there is progress to report. Last week, the judge denied the defendants motion to dismiss by indicating that there were factual issues required in a trial. The discovery process continues and it will for some time. And it will need to progress further before we get an idea of when the trial might occur. I can also report that we are preparing to amend our complaint to include the patent that was recently issued by the USPTO. This is part of our ongoing plan to vigorously defend our intellectual property from infringement.

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 activities and operations.

Thanks, Pat, and good morning, everyone. We are very pleased with Q2 net for debt sales of $33.6 million, which represents 14% growth for the quarter versus the same quarter last year. And 11% growth versus Q1 2021. I want to take this opportunity to thank the entire Catalyst organization for their resilience and continued focus on helping all adult LEMS patients. Strong net revenue in Q2 was driven primarily by steady new patient enrollments, continued favorable reimbursement dynamics and stable discontinuation rates. Q2 new patient enrollments were 111% higher for the quarter versus the same quarter last year. In the first half of 2021, new naive to 3,4-Dap patient enrollments were 42% higher than the first half of 2020. Our strong patient persistency resulted in continued low 90-day discontinuation rates of less than 15%. And through the first half of 2021, discontinuations were 25% lower than the first half of 2020. We continue to see a gradual recovery from the impacts of the COVID-19 pandemic in Q2 when compared to Q1 2021.

Patient visits and lab test procedure trends continue to improve but remained below pre-COVID-19 levels. Through June, IQVIA COVID-19 market impact data suggests that diagnostic visits specific to neurology, are 15% less than pre-pandemic levels. However, we have a robust pipeline of patient leads that are already diagnosed with LEMS, but not yet on therapy. Many of these patients are waiting to visit with their physician. I'm extremely pleased with our Q2 execution, given the sustained impact of COVID-19 on our business. Commercial field activity remains strong. Combined efforts between our commercial field force, nonpersonal promotion and inside sales enable efficient coverage of approximately 20,000 health care providers. In person interactions accounted for 50% of activity, which represents a twofold increase quarter-over-quarter.

We will continue to closely monitor the course of the pandemic and its impact on patient and physician behavior during the second half of the year to ensure our field team is well prepared to effectively engage with all stakeholders, accommodating their preferences and abiding by local guidelines. We continue to invest heavily in valuable patient resources that we believe will shorten the diagnostic journey of adult LEMS patients. These educational and branded resources have generated over 1,900 unique patient or caregiver Opt ins online, to receive useful information regarding LEMS. Engaging with these patients and caregivers will enable catalysts to shorten their diagnostic journey and better serve the significant number of remaining patients sooner.

In addition, our Catalyst pathways patient services team continues to be dedicated to supporting the needs of adult LEMS patients, caregivers and health care professionals. This is evidenced by prescription approval rates, which remain over 90% across all payers, government or private commercial insurers. 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. In closing, we are excited about the significant opportunity ahead to help all adult LEMS patients. We are confident that the strategies and tactics we have put in place will appropriately minimize discontinuations, generate new patient enrollments and shorten the diagnostic journey for adult LEMS patients. Once again, 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 now provide an update on our clinical pipeline and our development efforts for Firdapse. As you know, we are developing a long-acting formulation of amifampridine phosphate in order to provide patients with a more convenient dosing regimen and a more consistent therapeutic effect. A number of candidate formulations have been prepared, and 3 of the most promising formulations were evaluated in a pharmacokinetic called PK study completed in the fourth quarter of 2020. The results of this first PK study are being used to inform the design and refinement of additional product formulations now under development and an additional PK study will be conducted later this year. We have also completed a number of advisory panel meetings with both patients and physicians in order to establish the optimum target characteristics of the long-acting formulation of amifampridine phosphate that are desired by the LEMS patient community and treating physicians.

As previously announced, Catalyst submitted our plans, including the protocol for a new clinical trial for the symptomatic treatment of MuSK Myasthenia Gravis, or MuSK-MG, to the FDA for their review and comment. The FDA provided written comments that question suitability of both the revised study design and the ability of the initial MUSK-MG pilot study to be supportive. Therefore, we can't rule out the possibility that a single study similar in design to MSK-002 would not be sufficient for potential approval of the MuSK indication. Based on the positive reports from physicians and patients that participated in our previous studies, we are planning to convene an expert panel to discuss the options and review a likelihood of success for a MuSK-MG indication for Firdapse. Upon completion of this expert review, Catalyst will update the investment community on our determination as to whether to continue the development of Firdapsefor syndication.

Next, we previously announced that we plan to conduct a proof-of-concept study evaluating Firdapse as a treatment for hereditary neuropathy with liability to pressure policies for HNPP, a rare neuromuscular genetic disorder affecting about 6,000 patients. The FDA reviewed our proposed protocol for this study and requested that we research, evaluate and develop a new patient-centric endpoint for the syndication prior to embarking on a proven passive study. Therefore, considering the undeveloped and exploratory nature of the endpoint, we have decided not to proceed with a company-sponsored study of Firdapse for the syndication at this time. But we are in discussions with the proposed investigator who will wish to do the study as investigator sponsor study on the syndication with our support.

Catalyst continues to raise healthcare provider awareness of LEMS through our medical affairs programs and accredited continuing medical education or CME course of outcomes is now available through us. To date, 4,000 mostly health care provider learners have looked at the course and 1,300 have taken the CME test. This fall, Catalyst will host a LEMS learning program for neuromuscular fellows from various academic medical centers, including hands on training sessions on neuromuscular.

Catalyst has continued to make progress on developing an intellectual property as a state to protect the Firdapse franchise. Last October, we reported the issuance of U.S. patent #10-793-893 administering 3, 4-Diaminopyridine expiring April 7, 2034. Catalyst began protecting the Firdapse franchise by filing suit last year on federal court against Jacobus Pharmaceutical and PantherRx for infringement of the issue. Recently, Jacobus' Motion to dismiss the case was denied and the case is currently in the discovery phase. Many of the documents related to this case are publicly available for anyone interested in knowing more about the case. Additionally, in April, the USPTO allowed patent #11,060,128 for Firdapse and this patent issued in July 13, 2021. The patent is directed to the use of suitable doses of amifampridineto treat patients suffering with LEMS that are slow metabolizers in amifampridine. Any drug product containing amifampridine with a label for the treatment of LEMS that states the patented dosing regimens and doses in the dosing and administration section of the product label could possibly infringe this patent.

Catalyst attempts to amend our current infringement suit with this new patent in order to protect this new election project. Catalyst also has 3 other pending patents related to the use of Firdapse. All of these patents are being prosecuted under track 1 status at the U.S. patent trademark office, and we remain hopeful that most, if not all of them issued in 2021. Assuming issuance of these additional patents, Catalysts plan to take appropriate legal action to protect this impacted intellectual property.

As previously announced, Catalyst intends to expand our portfolio of rare disease treatments beyond the therapeutic promise to Firdapse. With the recent addition of Dr. Preethi Sundaram, our new Chief Product Development Officer, we formalized our efforts to expand our Catalyst product offerings and our research and development pipeline through focused external opportunity searches and evaluations. Preethi will provide guidance and oversight for new research programs that will hopefully bring much needed new therapies to rare disease patients, as well as provide leadership on the overall optimization and integration in Catalyst product offerings in R&D programs. I will now turn the call over to Ali Grande, our Chief Financial Officer, to review our financial results.

Thanks, Steve. Yesterday, we filed 2021 Form 10-Q to the SEC and reported our second quarter financial reports in our press release. We are very pleased with our financial results for the second quarter. Let me highlight a few of those results now. As reported, we ended the quarter with cash and investments of $155.3 million and no funded debt, which we believe will 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. Total net revenues for the second quarter of 2021 was $36.4 million, a 23% increase when compared to total revenue of $29.6 million for the second quarter of 2020. 2021 total revenues included $2.7 million of proxies related to our license agreement with DyDo for Japanese development and commercialization rights.

Our second quarter sales continued to be impacted by the pandemic although, as Jeff mentioned, we continue to see rail recoveries. Despite these challenges, total Firdapse product revenue net were $33.6 million for the second quarter of 2021, 14% higher than net product revenue was 29.6% for the second quarter in 2020. As Steven just mentioned, we are optimistic about our revenue growth in 2021 as hopefully the effect of the COVID-19 pandemic subsides. We reported GAAP net income of $12.2 million for Q2 2021 or $0.12 per basic $0.11 per diluted share, 24% increase when compared to GAAP net income of $9.8 million or $0.09 per basic and diluted share for Q2 2020.

Before I continue, let me take a moment to provide more color on our second quarter tax rate. Our effective tax rate in the second quarter of 2021 on an underlying basis was 22% as compared to 5.7% in the second quarter of 2020. The tax rate for Q2 2020 benefited from the use of 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 asset relating to state net operating losses and the orphans drug tax credit. Although those are subject to certain limitations, resulting in a more normalized tax rate once we burn off our NOL.

Non-GAAP net income for Q2 '21 was $17.4 million or $0.17 per basic and $0.16 per diluted share, which excludes from GAAP net income to base compensation expense of $1.5 million, depreciation of $31,000 on the income tax relation of $3.7 million. This compares to non-GAAP net income for Q2 '20 of $12.2 million or $0.12 per basic and $0.11 per diluted share, which excludes from GAAP net income, stock based compensation of $1.8 million, depreciation of $29,000 and the income tax provision of approximately $600,000. Because of the significant effects of the use of our deferred tax assets in the second quarter of 2020 compared to the second quarter of 2021. We believe that this non-GAAP measure is useful to an overall understanding of our resource of operations for the second quarter of 2021 when compared to the same quarter of 2020.

Cost of sales of approximately $4.6 million for Q2 2021, slightly up compared to $4.1 million. For the second quarter of 2020, in line with the increase of net product revenue at 14% of revenues for both quarters. Research and development expenses were $4.5 million for Q2 2021 compared to $4.4 million for Q2 2020. Even though we've represented a 2% increase over the same quarter of the previous year and the expenses remained consistent at 22% and 23% total operating costs for the second quarter of 2021 and the second quarter of 2020, respectively. Research and development expenses stayed relatively consistent. As we consider our MuSK-MG clinical trial as the main proof-of-concept study during 2020, we'll continue activities to close out the studies and related clinical sites in 2021. Continuing our long active formulation development and our expanded access program. We expect that research and development expenses will continue to be substantially in 2021 and beyond as we continue the development of our long active formulation program for Firdapse, continue our expanded access programs and evaluate further the treatment for other neuromuscular disease.

In addition, we expect R&D will also increase in future periods if we successfully execute on our strategic initiatives to acquire or in license innovative technologies. And/or earlier-stage opportunities. There's been various categories outside neuromuscular disease. SG&A expenses for the second quarter of 2021 totaled $11.5 million compared to $10.8 million in the second quarter of 2020. Even though it represents a 6% increase over the same quarter of the previous year, SG&A expenses remained consistent at 56% total operating cost for both second quarter of 2021 and second quarter of 2020. We expect that SG&A expenses will continue to be substantial in 2021 as we continue our efforts to increase revenues from Firdapse sales and we expect that to further expand our business.

More detailed information and analysis may be found in the Company's quarterly report on Form 10-Q which was filed with the Securities and Exchange Commission yesterday, August 9, and can be found on the Investor Relations page of our website, at www.catalystpharma.com. And with that, I'll turn the call over to Pat.

Jeff, Steve, Ali, thank you for your reports. I'd like to close on our prepared remarks by making this segment to the entire Catalyst team in thanking them for dedication and continued patient focus version during these challenging times to ensure that all LEMS patients have affordable access to Firdapse. I'll now turn the call over to the operator, so that we may take your questions.

(Operator Instructions) Our first question comes from Charles Duncan with Cantor Fitzgerald.

Pat and team, congratulations on a good quarter. My first question is on Firdapse commercial, second is on pipeline and third is on strategy. And so regarding the first question, I guess I'm wondering if Jeff could provide some additional color on the effectiveness of the patient resources to shorten the diagnostic journey that he mentioned, particularly interested in the diagnosed versus prevalence assumptions that you're making? How are you shortening this diagnostic journey? And then also be interested in whether or not you want to provide Firdapse revenue guidance. I'm not sure if Ali said that, I got to tell you, there's a lot of background noise. And so I'm not sure if I heard all over comments on guidance.

Yes. Charles, we're not providing any guidance yet. Thank you for your questions, by the way. We still think that we need to monitor what's happening with COVID before we're able to provide any guidance at this point. So our that policy is, at this point, no guidance. And with regard to how we're shortening the diagnostic journey, I'll let Jeff answer that versus the prevalence. As we both mentioned in our remarks, it is a little bit more difficult these days. We have tools in place to shorten that journey. But the real issue is at the physician's offices, where there -- a lot of them are not fully functional at this point or they're not taking new patients or they're requiring several in person visits before they'll prescribe a new medication. So those are some of the dynamics that we're dealing with. And one of the reasons why we're at this point, unwilling to provide a revenue guidance. But Jeff, do you want to talk about the diagnostic journey and the tools we're using.

Sure and thanks for the question, Charles. First and foremost, we are very confident in the prevalence. We always stated that about 3,000 patients, adults with LEMS. And we -- I strongly believe that it is -- our responsibility is manufacturing and ultrarare disease to provide patient educational resources and also educate our other potential stakeholders, physicians. With that, we are providing additional resources that are -- it's about LEMS, it's about some of the symptoms that these patients may be having as well as pointing these patients to a free tests that we have for LEMS, VGCC test. But it's all -- a lot of information that they can take, discuss with their caregiver and also bring in to physicians. So that's been extremely helpful for these patients. As I referenced, we have 1,900 patients or caregivers that have opted in. And with that, those options, we're allowed to engage with these stakeholders and provide the information that they request and then have ongoing conversations with these patients. So hopefully, that helps address your question as to what we're doing with these patients, Charles?

So if I may Jeff...

Let me add to that, Charles, we have an effort on the health care provider side in education, as Steve pointed out, we have 2 programs that are ongoing as we speak. One is the continuing medical education credits that are available to docs, which we are hosting through Medscape. And I believe that we have about 1,500 unique docs who have signed up for this review. And I think 4 or 500 at this point have actually received credits for studying about LEMS the disease and the -- some of the therapies that are used to treat this particular disease. So we have a -- and then we have our ambassadors program, which is for neuromuscular specialists or fellows rather in various academic institutions around the country, who we educate about LEMS, and they go back to their institutions, and they are supposed to go back and hold meetings with about another 15 or so of their colleagues at their institution to further spread the knowledge base around the disease, Lambert-Eaton Myasthenic Syndrome. So there's not only the program for patients, but we do have programs for healthcare providers to educate them. And we think that all of these combined really will help shorten the journey for patients to a definitive diagnosis and ultimately to effective treatment.

Correct. And one other thing is we've already seen Charles, patients that have reported that they bring up LEMS to the physician to their position is something that they may have based on the information that they're provided. So we've seen traction there from the patient and physician engagement. And the last thing I'm going to add to this is, we have both branded and unbranded videos that are offered on our website that are may be helpful to patients and caregivers as well. So a lot of resources out there to help these patients.

Very good. Seems value-added for the community, and I appreciate all the color. My next question was pipeline, sorry for taking so much time. And that is perhaps for Steve. Regarding the long-acting form, I'm wondering, it sounds like you're doing -- or it did some PK studies and doing another one. Can you provide any additional color on the timing? Because it seems like you're getting traction in the market with the non lung acting form of Firdapse. And I'm wondering how much is this needed? Or -- so is this a nice to have or need to have in terms of the franchise?

Thanks for the question. We actually have had a number of patients tell us that this is really a need to have. Many patients really don't like the inconvenience of having to stop what they're doing and time when they're going to take their doses of amifampridine throughout the day. And so they really want this drug. Now as you point out, we've done very well with sales and it's growing, and that basically points to the overall effectiveness of the [medicine] itself. So it's only going to get better for the patients when the sustain release version of this product becomes available.

Any thoughts on timing? I know there's a reason perhaps competitive or whatever to not be all that disclosed, but thoughts on behind timing.

From a broad point of view, we have about another year or so of formulation work to do. At which point, we basically will start appropriate clinical trials to support the enhanced efficacy of this product relative to the IR version of the product. We anticipate bringing this product to market before our orphan drug exclusivity expires.

Okay. Great. That's helpful. And then last question on strategy. Pat, you mentioned some hires and going into a transformative period for the company in terms of executing strategy with regard to acquisition of products, platforms or companies. And I guess I'm wondering, what do you favor? Is this kind of acquisition that you're looking for something that can tuck-in within a very effective commercial sales effort at this point? Or does it take it in a different direction? Or are you focused more on leveraging your experience within orphan neurology? Can you provide additional update or additional color on your strategy there?

Sure, Charles. Ideally, we'd love to be able to leverage our sales force with another neuromuscular product in the bag. And we've tried that most of last year. We had a couple of attempts, which, unfortunately, did not work out. And I think it's a bit restrictive. We're going to grow our business and it may not be in neuromuscular. And I think we described on our last call that we would we -- our interest is in expanding the spectrum to include just about any therapeutic category outside of oncology, which is very crowded in a very difficult space to work in. So ideally, it's going to be something that we think has a high likelihood of success and something that is affordable to us. We -- let me use an example of endocrinology, which we looked at a potential asset about a year ago, that's certainly not a product that would be carried in the bag by our neuromuscular sales team.

And we really think that we've done such a great job, and our sales and marketing team done a great job in bringing Firdapse to market that we could replicate that in other therapeutic categories like endocrinology, for example. And put together a 15 to 20 person sales force or regional account managers to bring a product outside of neuromuscular to market. But we also think that clearly, we want to stay in the rare disease space. And so again, the only thing that we are avoiding is obviously something that is too bigger bite for us and something that is in oncology, such a fairly broad approach. Ideally, with an acquisition, we'd like to think that a validated technology platform came with that. That may or may not be the case. There are some interesting small molecules out there, biologics as well as cell and gene therapy projects. So we've got a fairly broad spectrum to look at, in various stages of development.

That's helpful. What do you think about financing it in terms of debt versus equity, what kind of transaction are you contemplating?

Well, we think that our equity is awfully cheap. I guess what CEO doesn't think that. But -- so we -- as we pointed out, we have $155 million in cash as of 6/30. That cash is growing by $10 million to $15 million per quarter. We know that we have access to probably at least $100 million in debt term loans, a number of large banks as well as some of the more takes have come to us and talk to us about taking on debt. We've been reluctant in the past, but it may be a good estimate to use to make an acquisition with.

Maybe cheap money. Appreciate you providing all the additional detail. Thank you.

Sure. Thank you, Charles.

Thank you. At this time, I would like to turn the call back over to management for closing comments.

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

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation, and have a great day.