Catalyst Pharmaceuticals Inc (CPRX) 2020 Q2 法說會逐字稿

Hello, and welcome to the Catalyst Pharmaceuticals Second Quarter 2020 Results Call. (Operator Instructions) As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Ali Grande, CFO. Please go ahead.

Good morning, everyone, and welcome to today's conference call. Joining me on today's call are members of the Catalyst team, including Patrick McEnany, Chairman and Chief Executive Officer; Dr. Steven Miller, Chief Operating Officer and Chief Scientific Officer; Dr. Gary Ingenito, Chief Medical and Regulatory Officer; and Jeffrey Del Carmen, Chief Commercial 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 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 2019 annual report on Form 10-K.

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

Thanks, Ali. And thanks, everyone, for joining us this morning for our second quarter results and business update call. I hope that everyone is staying safe and healthy during these unprecedented and challenging times. We have a number of items to update you on this morning. I'll start with how pleased we are with the second quarter financial results that were achieved. Despite operating under very difficult conditions in the COVID-19 environment, we managed to generate $29.6 million in net revenue and net income of $9.8 million, which included a noncash stock-based compensation expense of $1.8 million. Additionally, we ended the quarter with $115.1 million in cash and cash equivalents and no funded debt. Ali will provide you with more financial details in a few minutes.

I want to emphasize how proud I am of our team's ongoing efforts to demonstrate their steadfast commitment to the patients that we serve. They have shown a remarkable resilience and ability to continue to expand the number of patients benefiting from Firdapse to treat their LEMS condition.

COVID-19 continues to make it difficult for patients who may have LEMS and have not received a definitive diagnosis from their physician because of their inability to schedule or concerns about in-person meeting with the physician. That has had an impact on the number of patients enrolled in Catalyst pathways.

As we had previously anticipated, travel for our sales representatives to physicians' offices continues to be mostly restricted by the pandemic. Having said that, our base of the (inaudible) LEMS patients remain solid and intact as we add new patients, albeit at a slower pace than we projected before the pandemic. We are resolute in our decision at the beginning of this year to double our field sales force and to add our inside marketing support team to assist Catalyst outreach to physicians and patients suffering from LEMS. When the effect of the COVID-19 pandemic will be behind us, I believe that we will see that we are well positioned the company for our future growth.

Jeff will provide you with more details on our commercial operations momentarily. We are extremely pleased to announce this morning that yesterday, we received the notice of allowance from the U.S. patent and trademark office. For our pending patent number 14, 128, 672 for methods of administering 3,4-diaminopyridine.

Upon paying with the patent issue fee for the patent should issue within 6 to 8 weeks. This patent, when issued by USPTO, would have the expiry date of no earlier than June 29, 2032. The expiration of this patent could also be extended based on delays in patent prosecution, if any. This extension, if any, will be calculated after the patent has been issued.

This patent will further strengthen and reinforce our exclusivity of the Firdapse brand in the United States. We'll continue to attempt to add value to Catalyst and all of our various stakeholders by further enhancing our intellectual property port portfolio. With regard to our clinical development programs, we are obviously very disappointed that we did not achieve positive efficacy results with the MSK-002 Phase III study of Firdapse as a potential treatment for MuSK antibody positive myasthenia gravis patients.

Based on our review of topline data, unfortunately, this study did not replicate the robust efficacy results that were seen in our proof-of-concept study conducted in Italy. We've just recently received the final statistical output and are continuing to analyze these final data and findings with our neuromuscular advisers to decide on what our path will be going forward for this program.

Firdapse has shown a significant and differentiated treatment benefit for LEMS patients. And we will continue our development efforts to bring this much needed medication to patients suffering with other rare neuromuscular conditions when we -- who are currently today, without any approved therapy. Steve will have more to add when he reports on our R&D activities and other clinical programs.

As previously announced, we have promoted Jeff Del Carmen to Chief Commercial Officer. Jeff is responsible for leading sales, marketing and commercial operations as we continue our Firdapse launch execution through this unprecedented time. Jeff is proving his ability by leading the sales and marketing team that successfully launched Firdapse in January of last year for the treatment of adult LEMS patients within the United States. With Jeff's leadership and experience, Catalyst is well positioned for sustained success as we continue to expand access to Firdapse in the LEMS community. As well as prepare for a potential launch of Firdapse for other treatment of patients suffering from other rare neuromuscular diseases.

Last week, we also reported that our marketing authorization for Firdapse to treat LEMS was approved by Health Canada. We believe that the commercial opportunity in Canada is about 10% of the U.S. prevalence of LEMS patients. We are excited about providing a Health Canada approved drug for LEMS patients while expanding our global footprint for their neighbors to the north. We are currently in final discussions with an established Canadian marketing and distribution partner and expect to finalize our agreement in the very near future.

Several weeks ago, we have met with the pharmaceuticals and medical device agency, or PMDA, the regulatory agency responsible for approving drugs in Japan to discuss the clinical and regulatory requirements for gaining an approval of Firdapse for LEMS patients. I believe that we have an agreement to a reasonable and efficient program to gain approval in Japan. We are in early discussions with several potential sales and marketing partners in the territory. Steve will have a little bit more to say on that program shortly.

As you can imagine, we are very disappointed with the report and recommendations filed by the magistrate in our lawsuit challenging the FDA's authority to approve or RESURG, despite our orphan drug exclusivity from Firdapse. For context, however, I want to stress that the interim report of the magistrate and its recommendations is by no means dispositive. The final decision lies with the district court judge. Our next step in the process to file our objections to the report and recommendations, and our attorneys are hard at work on that and expect a document to be filed this week. In other words, this has been just the next step in the process and has given us an opportunity to provide further focus on the legal issues we see as being paramount in our case. We still expect the final decision in this case sometime later this year.

I'll now turn the call over to Jeff Del Carmen, our Chief Commercial Officer, who will provide you with an update on our commercial operations.

Thank you, Pat, and good morning, everyone. I'm very excited about the opportunity to lead the Catalyst commercial team and continue the success that we've had since launch. As we previously shared, COVID-19 has impacted certain aspects of our commercial business. However, we continue to drive key areas of our business forward.

In mid-March, we announced the suspension of all travel face-to-face interactions to ensure the safety of our team, our patients and all health care professionals. While some areas of the country appear to be starting to open up, we're still seeing a greatly reduced number of LEMS patient office visits.

LEMS patients have been rightfully worried about venturing out the hospitals or physician offices for anything other than emergency care. As a reminder, LEMS patients have 2 separate key risk factors making them susceptible to severe COVID-19 disease and that they are often over the age of 60 and have weakened immune systems.

While we have adjusted our approach significantly, we continue to support our patients caregivers and health care professionals during a time that requires flexibility and willingness to do everything necessary to support the LEMS community. Despite these obstacles, our second quarter 2020 net sales of $29.6 million represents an increase of 3% over net sales in Q2 of 2019. This is a significant achievement considering Q2 of 2019 was prior to the commercial availability of RESURG as well as the COVID-19 pandemic. I'm proud to say that we now have over 600 patients that have received a Firdapse prescription since launch. While new patient enrollments were slightly lower-than-expected in Q2, and we continue the positive trend of strong medication compliance and persistence.

The 90-day discontinuation rates have continued to improve from last quarter, trending to around 15%. And since the end of January, we see discontinuation to RESURG has slowed significantly. In fact, June discontinuations were the lowest monthly total since April of 2019.

I'm extremely pleased with our commercial team's ability to deliver this result despite the significant challenges we faced. Based on early observations in the third quarter, we believe this strong performance will continue into the second half of the year.

In July, new patient enrollments approached pre-COVID-19 levels. We feel that there is pent-up demand specifically adult patients that are diagnosed with LEMS that are not yet on Firdapse that will be prescribed Firdapse once these patients are able to visit their health care provider. Also, among our existing base of patients, compliance and adherence remained very high, and discontinuation rates remain low in July. Our Catalyst pathways patient services team continues to do a tremendous job responding to patient needs, doing everything possible to support our patients and physicians during this period. We reiterate our confidence in our supply of Firdapse for the LEMS community, and we are happy to report that not 1 patient has gone without medication, a well documented concern that rare disease patients have at this time.

Prescription approval rates remain around 90% across all payers, government or private commercial insurers. Our financial and co-pay support programs continue in full force, 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 a month.

We are also happy to see that COVID-19 has not significantly increased the number of adult LEMS patients on Firdapse that have needed to transition to Medicaid or our patient assistance program. Our customer service levels and ratings continue to exceed expectations. This further validates who we are as a company and how we always focus on doing what's right for patients. Despite the challenges posed by the pandemic, our regional account managers patient access liaisons and medical science liaisons has done an excellent job being a valued resource for both health care providers and the LEMS community. We remain confident that our updated commercial strategies field force expansion, inside sales lead generation and communication effort and expanded nonpersonal promotion to health care professionals in the LEMS community will successfully position the team for growth in the second half of 2020.

While these are challenging times, our team is committed to making Firdapse accessible to all adult patients with LEMS. I'll now turn the call over to Dr. Steven Miller, our Chief Operating Officer and Chief Scientific Officer, for an update on R&D activities. Steve?

Thanks for the commercial update, Jeff. I'll now provide an update on our clinical pipeline to develop Firdapse for additional neuromuscular indications. First, I will turn to our Phase III clinical trial results for MuSK-MG to evaluate the safety, tolerability and potential efficacy of Firdapse for the symptomatic treatment of these patients. Yesterday, we announced top line results from our Phase III clinical trial, MSK-002, evaluating Firdapse for the treatment of adults with MuSK-MG. As Pat previously stated, based on our review of the top line data from the trial, statistical significance for the primary endpoint of myasthenia gravis activities of daily living score, or MG ADL, was not achieved, nor was it achieved for the secondary endpoint of quantitative myasthenia gravis score, or QMG, with p-values of 0.22 and 0.37 for each of these endpoints, respectively.

This trial was a multi-site international trial conducted in the United States, Italy and Serbia. It was double-blind, placebo-controlled, clinical trial conducted under a special protocol assessment with the FDA. The trial enrolled more than 60 MuSK antibody positive patients. It also enrolled more than 10 anti-acetylcholine receptor antibody myasthenia gravis or AChR-MG patients who were assessed with the same clinical endpoints. However, achieving statistical significance in this subgroup of patients was not required by the protocol. Additional details of this trial are available on clinicaltrials.gov.

Naturally, we are disappointed by these results and even surprised, given the results seen in the proof-of-concept study. Like the LEMS population, Firdapse was safe and well tolerated in the MuSK-MG patient population. On a positive note, the MuSK-MG patients that ultimately were randomized showed a clinical improvement of 5.3 points on the MG-ADL scale during the 6-week run-in period prior to randomization. A 2-point improvement or more is considered clinically meaningful. So this MG-ADL decrease represents a significant clinical improvement in the patient's condition during the run-in period of the trial. Further, 47 of the 55 randomized MuSK-MG patients who participated in the trial continued to the open-label extension study and a preliminary review of the unlock data from that study indicates that the -- that significant improvement seen during run-in continues into the open-label extension, demonstrating to us a durable clinical effect.

Our analysis of all the trial data is ongoing and in the near future, we will be meeting with several of our MuSk-MG key opinion leaders to discuss the results. We thank the patients and their families for participating in this trial and also the investigators for their dedication to this important clinical research. Catalyst plans on making a complete analysis of all trial data available at a future medical meeting or in a future publication.

The second trial, I would like to provide an update on is our proof-of-concept study in SMA Type 3, which is ongoing in Italy and Serbia, and is evaluating the safety, tolerability and potential efficacy of amifampridine for the symptomatic treatment of SMA Type 3 in ambulatory patients. SMA is caused by related genetic defects to the SMN protein in motor neurons. This initial proof-of-concept study is a crossover design with a 2-week treatment time in each period and is designed to measure changes in SMA disease symptoms, but will not study disease progression. SMA type 3 has an estimated prevalence of between 2,900 and 3,600 patients. It is important to note that all 4 types of SMA are caused by various genetic defects to the same gene that codes for the SMN protein, resulting in variations in severity, which are broadly characterized as SMA Types 1 through 4. If this proof-of-concept study is successful, Catalyst intends to discuss the design of a multicenter Phase III clinical trial with the FDA in which we intend to address both symptomatic treatment and disease progression and perhaps more than 1 type of SMA.

COVID-19 restrictions did cause a delay in starting the SMA trial in Serbia, but those restrictions have now been lifted, and the last patients are enrolled in actively participating in the study. And we anticipate reporting top line results from this study by the end of the year.

Moving on to market expansion plans for Firdapse. Catalyst Canadian NDS for the symptomatic treatment of LEMS was approved in early August of this year. We anticipate having Canadian labeled product complete -- completed and ready in the near future. As was previously discussed, Catalyst is actively seeking a marketing distribution partner to market Firdapse in the Canadian market. Catalyst is also continuing to market expansion activities in the territory of Japan. As was previously reported, COVID-19 delayed our meeting with the Japanese Pharmaceuticals and Medical Device Agency or PMDA, until Q3. But I can now report that we have completed the meeting and have reached a tentative of agreement on a regulatory pathway to seek approval of Firdapse in Japan.

Catalyst will be conducting a small clinical trial in Japanese subjects, and the details of that trial will be made available at a future date when registered on the Japanese National Institute of Public Health's Registry of Clinical Trials website.

Approximately 3 years ago, the Japanese government designated the approval of amifampridine as a priority drug for the Ministry of Health, Labor and Welfare, or MHLW, and they have been actively soliciting companies to develop and file an NDA for this drug. Due to the fact that this drug is a priority for the MHLW, may have been helpful and cooperative in this process to formalize the regulatory path to seek approval of Firdapse in Japan.

Patients have long -- have requested a long-acting version of Firdapse in order to eliminate the need to plan their daily activities around multiple doses of Firdapse. We are now actively developing this new product and will provide updates in the future when the product characteristics have been finalized. At this stage of the development program, a variety of candidate formulations have been developed and their drug release properties are being studied in order to optimize the long-acting symptomatic treatment of LEMS. Catalyst will also be supporting investigator sponsored, proof-of-concept studies in the near future for additional neuromuscular conditions to be evaluated, such as Kennedy's Disease, hereditary neuropathy with liability to pressure palsies or HNPP and possibly others. As the plans for these trials are finalized, Catalyst will provide more details about the trial, design, disease, prevalence and timing.

Moving on to intellectual property. Pat described the recent allowance of our pending patent methods of administering 3, 4-diaminopyridine. This patent claims a method of treating a human patient diagnosed with 3, 4-diaminopyridine sensitive disease by administering 3, 4-DAP cells to slow acetylcholine in patients having certain mutations in each area of the NAT2 gene. We are pleased that a patent for this discovery that was made by the Firdapse development team many years ago has finally been allowed, and we believe this patent will provide additional protection for the Firdapse product franchise. This extended period of product protection will permit Catalyst to carry our research on new uses and product improvements for years to come.

Upon issuance, Catalyst intends to list this patent in the FDA's Orange Book with an expiration date of at least June 29, 2032. Upon being listed in the Orange Book, no generic equivalent of Firdapse furnace may be approved by the FDA unless the numeric drug applicant can prove that they do not infringe the listed patent or until the applicants successfully challenges the validity of the listed patent. In the first half of 2020, the COVID-19 help emergency had little effect on our R&D programs with only minor delays to the MuSK-MG, SMA and the long-acting Firdapse programs, and there has -- was no effect on the commercial production. However, the Kennedy's disease and HNPP programs are investigator-sponsored studies that were delayed by several months due to academic-institutions-related restrictions that are now being lifted. Catalyst anticipates that these 2 programs will be resumed this fall.

Despite the challenging current environment due to COVID-19 and the impacts that the global health crisis is having and has had on our time lines. We remain extremely committed to our research programs to evaluate Firdapse for other neuromuscular indications. Additionally, our current supply of Firdapse for patients with LEMS and for ongoing clinical trials has not been affected by COVID-19. Overall, we are excited about the opportunities to expand the current Firdapse label into additional indications as well as in additional countries and to develop a better product for all these patients.

We will provide any updates on these clinical and regulatory paths as they become available. 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 second quarter 2020 Form 10-Q and reported GAAP net income of $9.8 million or $0.09 per basic and diluted share compared to GAAP net income of $11 million or $0.11 per basic and $0.10 per diluted share in the same period of 2019. For the second quarter of 2020, non-GAAP net income, excluding $1.8 million of expenses related to noncash sub mix compensation, was $11.6 million or $0.11 per basic and diluted share.

In comparison, second quarter 2019 non-GAAP net income, excluding $925,000 of expenses related to noncash stock-based compensation, was $11.9 million or $0.12 per basic and $0.11 per diluted share. Net product revenue for Firdapse was $29.6 million for the second quarter of 2020 with related cost of sales of $4.1 million. For the second quarter of 2019, net product revenue from Firdapse was $28.8 million with related cost of sales in the quarter of $4.3 million. It's important to remember that our gross margins in both the 2020 and 2019 periods, continued to benefit from the inventory manufactured and expense prior to the FDA approval of Firdapse.

Research and development expenses were $4.3 million for the second quarter of 2020 as compared to $4.6 million for the second quarter of 2019. Research and development expenses for the second quarter of 2020 were in line with those of the second quarter of 2019 and primarily consisted of expenses for medical and regulatory affairs, the quality assurance programs, expenses from our ongoing Firdapse clinical trials and studies and costs for our expanded access programs.

We expect that research and development costs will continue to be substantial in 2020, as we consider our ongoing -- as we continue our ongoing clinical trials and studies in MuSK-MG and SMA Type 3, continue our expanded access program and our long-acting formulation program for Firdapse.

We began to move forward with our required clinical study evaluating Firdapse for the treatment of LEMS in Japan and began to evaluate Firdapse as the treatment for other neuromuscular diseases. SG&A expenses for the second quarter of 2020 totaled $10.8 million compared to $9 million in the second quarter of 2019.

The increase when compared to the same period in 2019 is primarily attributable to the expansion of our sales force in the first quarter of 2020, including related noncash sub rate compensation, the cost of additional supporting personnel and the cost of contracting with our rare disease experience in self sales agencies.

We expect that SG&A expenses will continue to be substantial in 2020 as we continue to build our infrastructure and commercial and patient programs in support of the expansion of our sales activities for Firdapse and continuing to pursue our lawsuit against the FDA.

On June 30, 2020, Catalyst had cash and investments of $115.1 million and no funded debt. 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 of (inaudible) and can be found on the Investor Relations page of our website at www.catalystpharma.com.

Now I'll turn the call over to Pat.

Thanks, Ali. I just want to reiterate how pleased I am with the operational results that our team has realized during 2020. We look forward to continuing our effort to assist adult LEMS patients and their treating physicians to find their way to an FDA-approved therapy for this debilitating disease.

We will continue our efforts to study Firdapse for other rare neuromuscular conditions that are without an effective therapy as well as advancing our work on a more patient friendly, long-acting formulation of Firdapse. This morning's announcement regarding the notice of allowance for our pending patent is very important as we continue to invest in Firdapse as a potential therapy for other rare neuromuscular conditions. Lastly, we are excited to see our global footprint expand as we gained approval in Canada and continue our efforts to prepare to seek approval in Japan as well as our concerned effort to bring other molecules and/or companies under the Catalyst umbrella.

And with that, we'll open the line for questions. Operator?

(Operator Instructions)

Our first question today is coming from Charles Duncan from Cantor Fitzgerald.

Congratulations on the commercial performance during this very challenging year. Yes. So I had a couple of questions on the commercial side and then one on the pipeline in the future. With regard to the net revenue -- impressed with that, given the challenges of COVID. But I'm wondering if you could deconvolute that a little bit and talk about the impact of new patients versus persistence? And was there any pricing action in the quarter? And then I wanted to ask you a follow-up regarding the size of the sales force.

Sure. Jeff, do you want to take that?

Yes, no problem. As far as new patient enrollments for the quarter, we're not giving out exact numbers, but they were slightly lower than we had forecasted. But the positive side is we really focused on patients that were already diagnosed but not yet on Firdapse, and we have a strong analytics team here that provides us those leads and our sales force goes out there and has those discussions with the physicians. And however, that physician and they often want to engage, we are ready to go with virtual engagements or live face-to-face if that city or that institution allows. And so that's where we're -- we've been able to help those patients get enrolled is by identifying those patients. And as far as the discontinuations, like I mentioned, Charles, we significantly stabilize the discontinuations, and we're seeing about 15% of the patients now, the 90-day patients that are discontinuing. So we had a strong month of that -- quarter on that side as well.

Charles, let me just add that we did gain new patients in second quarter. And without being specific, as you know, is a challenging quarter. And we did say when we had our Q1 results call, that we were withdrawing guidance because we just didn't know what was going to happen in the rest of the year. And we're pleasantly surprised that new patient enrollments did grow, albeit not at the pace that we had predicted early in the year when we gave guidance. But we -- more patients are continuing in Q2 and so far in Q3 to have new naive patients having access to an FDA-approved therapy in Firdapse. And with regard to pricing, there was no -- in Q2, there was no -- or actually this year, there's been no change in the price of Firdapse.

Okay. That's helpful, Pat. And to Jeff, I really appreciated all the operating metrics that you shared. Regarding the size of the sales force, do you feel like it's rightsized now? And I guess the 2Q results, nice to see. But do you feel like the sales force was fully operational there? Or is it really going to be perhaps a second half of the year impact where we see them being able to get out and talk to new prescribers or deepen the prescriber interactions.

Jeff?

Charles, fantastic question. And the first thing that I'll stress is we have not seen the full impact of our expansion. We hired such experienced sales representative regional account managers, we call them here. And we do feel this is rightsized. And we feel -- like I mentioned, that there is a pent-up demand. And the reason why they are still making or providing value is because we find leads, whether it's from inside sales, whether it's from non personal promotion. But ultimately, the regional account managers that are reaching out to the health care providers to discuss Firdapse and if it's appropriate for that patient. And that's how the patient ultimately gets enrolled. So we are seeing a benefit. We feel the team is rightsized and we are excited about the future because we know we have yet to see the full impact that this team will have once the country opens up.

Let me just let me just add to that, Charles. As you know, early this year, we basically doubled the size of our field sales force. We brought on board an inside marketing support team that assists our ramps, our regional account managers. And so that was completed actually in February and early March, and of course, we all know what happened in March and with the no-travel ban or with a travel ban, I should say. And so yes, it's been challenging and difficult because let me tell you, these regional account managers want to get out there and they want to assist patients in finding an approved therapy.

And so it's been challenging because the meetings, for the most part, have been virtual. They've been on teams or Zoom or just telephonically. And what's exciting is that this very seasoned team is in place. As things turn around, we're going to really see the traction that we gained by doubling that sales force and bringing on board the inside marketing support team.

That makes a ton of sense. If I could just ask one question on the pipeline, either for Steve or Gary. I guess I'm thinking about that MuSK-MG result, and I'm a little surprised as well given the randomized withdrawal protocol design and the -- and I think you said there is an average of a 5-point improvement during the first part of it and the run-in phase of the study. So I guess, I'm wondering if you've been able to take a look at patient level data. And if you've identified any outliers or patient heterogeneity that would cause you to think about this result as being perhaps not the result of an ineffective drug, but the result of a trial that was somehow compounded? And then what you would see as potential next steps, if the latter?

Well, thank you for the question, Charles. The -- as you point out, the data is somewhat paradoxical with what appeared to be a good clinical improvement during run in, but yet lack of statistical significance in the randomized portion of the clinical trial. This is top line data that we've only received a few days ago. We haven't had time to go through all the patient data in detail. Our analysis is ongoing. And part of that analysis, once we work through it will also be to meet with our key opinion leaders for us to try to get a better understanding of exactly what happened in this trial. And once we have a clear understanding, both among ourselves and our key opinion leaders, we will be deciding on what the ultimate future of the program is.

Okay. Last question for Pat. Sorry for all the questions. Congratulations on the new IP. I'm a little surprised about that because I don't think we've ever really talked about that. Perhaps I've overlooked it in our diligence in the past. But I'm kind of wondering what are the key claims or anything in particular that you could highlight about that? And do you feel that, that this particular patent has, if you will, some resiliency in terms of any challenges? And does it change your perspective on investing in the Firdapse franchise?

So Charles, we -- right now, we can't speculate on how it may affect any particular company or program. Other than we believe that our patent is strong and will be very enforceable against any potential generic competition. With regard to the claims, maybe Steve can give you a high-level look. That notice of allowance in the patent claims are listed, by the way. So Steve?

Well, as we said in our press release, the claims are centered around the method of use of the drug to treat DAP sensitive disease in patients that are slow acetylators that have certain defects to the allele that codes for the N-acetyltransferase type 2 gene. At this point, I can't comment on any strategies or how we might actually implement the defense of those claims, but we feel that overall, it's a useful patent, and we do intend to ensure that to the degree that it makes sense to defend our intellectual property.

Our next question today is coming from Joe Catanzaro from Piper Sandler.

This is Charles on for Joe. My first question is just around guidance and whether -- and if or when you would plan on reissuing 2020 guidance?

Yes, that's a great question, Joe. Thanks for the question. With -- I think that when we get more comfortable what the rest of this year is going to look like, hopefully, this pandemic will be, for the most part, behind us by the end of next year or early Q1 or Q2 of next year. But it's still too early for us at this point to provide guidance or actually be able to state when we will be able to provide guidance again just based on the fluid nature of this disease and the pandemic.

So at this point, we're not prepared to say when we will be able to provide guidance.

Okay. Got it. And just looking for some quantitative Firdapse metrics. Would you be able to say the total existing reimbursed patients on therapy at the end of the quarter?

Will we be able to say that?

Yes. Could you -- are you able to provide the number of total reimbursed patients on Firdapse at the end of 2Q?

Yes. We showed some of these metrics that we've provided early on were very important as we launch the drug. And we -- in the past 2 quarters, we have pulled back on providing all of the metrics that we previously provided and feel that the variance from quarter-to-quarter can be to too much emphasis on a particular metric. So we're more comfortable with giving guidance that are -- that the number have enrolled in patients on drug -- reimbursed drug is growing. And that's about the extent of the guidance that we're prepared to provide or the metrics that we're prepared to provide at this point.

Okay. I understand. And to the extent that you're able to talk about the MuSK-MG data in any detail at this point. I'm just wondering where exactly the trial failed in the randomized portion? Was it more that the placebo scores didn't change or that the Firdapse scores and the MD-ADL didn't hold steady? And then what could a potential path forward look like?

Joe, it's a little too early for us to give any details about how the specific response came out in the 2 treatment arms of the study. We're still analyzing all the data, and we'll have more to say about it in the future after we completed the analysis.

Okay. And just a last question on the patent. Could you explain in some greater detail how exactly a patent covering the slow acetylator phenotype for NAT2 translates to broad patent exclusivity for using 3,4-DAP in those patients, I guess, in LEMS and potentially indications with beyond LEMS?

Joe, you're asking a question about the legalities of enforcing the patent, and I just can't comment on it.

Our next question today is coming from Leland Gershell from Oppenheimer.

(technical difficulty) execution during the challenging quarter. Pat, a question on -- just as you have the discontinuation rates. We understand this correctly. When you mentioned 15% or so of the 90-day discontinuation rates, does that include patients who are switching off to Ruzurgi? Or is it simply patients who have discontinued 3, 4-DAP therapy? And with regard to switches to Ruzurgi, are those patients primarily patients who had been on Ruzurgi and then went on Firdapse and are going back? Or is it also a mix of new patients who haven't been treated going on Firdapse, but then for whatever reason opting to go on Ruzurgi? Then I have a follow-up.

Jeff, do you want to take that question?

Sure. The 90-day discontinuation rate of 15% does include Ruzurgi. Any patients that discontinue to go to Ruzurgi. And Leland, your other question, could you repeat that second part of it?

Yes. Just so we have sort of a handle on switches from Firdapse and want to understand if the patients who are switching from Firdapse, are those patients who have previously been on Ruzurgi or for that reason going back on? Or is it new patients coming on to therapy for the first time who may want perhaps dosing flexibility that Ruzurgi provides? Just so we understand what the what the components of switches are going forward as more patients -- as the mix shift to more patients who had not previously been any 3, 4-DAP formulation?

Sure. So the new enrollments that we are getting right now, none of those patients, I mean, in the first quarter, we saw a couple of patients that had -- that were all previously on a 3, 4-DAP. But since the first quarter, we really haven't seen any patients new enrollments. That were on 3,4-DAP. So what we call naive patients, so naive to 3,4-DAP. That -- those are the patients that we've seen that are newly enrolled.

Okay. And then a question just on the Japanese opportunity. Would you able to help us understand what the potential patient population with LEMS that's treatable with Firdapse would be? And any time lines you could share on when you might be able to be approved there?

Sure. With regard to the patient population, the -- it's -- Japan is about 40% of the U.S. population. And as you advanced industrial economy. And so the patients have access to medical care, just like Western Europe and the United States. So I would anticipate that you can just use about 40% of the U.S. numbers for -- to model Japan. With regard to time lines, it's too early for us to say. We haven't disclosed anything publicly about overall time lines at this point.

I might add, that we do expect orphan designation in this -- and that would come with a priority review. So there is an interest by MHLW to get this drug approved as quickly as possible for the Japanese population.

We've reached end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Thank you very much for joining us today. We look forward to future calls. Have a great day. Thank you.

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