Catalyst Pharmaceuticals Inc (CPRX) 2015 Q4 法說會逐字稿

Greetings, and welcome to the Catalyst Pharmaceuticals partner's fourth-quarter 2015 financial results. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Alicia Grande, Vice President, CFO and Treasurer. Thank you, Ms. Grande. You may now begin.

Good morning, and thank you for joining our conference call. To begin, on today's call we have Patrick McEnany, Chairman and Chief Executive Officer, and Dr. Steven Miller, Chief Operating Officer and Chief Scientific Officer.

Before we begin, let me remind you that we will be making forward-looking statements in both known and unknown risks and uncertainties which may cause Catalyst's actual results in future periods to differ materially from forecasted results. A number of factors, including those describing Catalyst's annual reports on Form 10-K for fiscal year 2015 and its other filings with the US Securities and Exchange Commission, could adversely affect Catalyst. All forward-looking statements are qualified in their entirety by this cautionary statement, and Catalyst undertakes no obligation to revise or update this presentation to reflect events or circumstances after the date hereof.

At this time, it is my pleasure to turn the call over to Patrick McEnany, our CEO.

Thanks, Allie. Good morning, everyone, and thank you for joining us today. I would like to welcome everyone to our fourth-quarter and 2015 year-end results and update call.

On today's call, I will give you an update on our activities and progress for the last year's fourth quarter and so far this year, including the FDA regulatory status for Firdapse as well as our pre-commercialization activities and infrastructure preparedness. Steve Miller will then provide an update on our various drug development programs. Following, Allie will give a brief review of our financial results for the quarter and fiscal year. Lastly, we will take your questions.

As we communicated last month, Catalyst received a refusal-to-file letter from the FDA with respect to our NDA for Firdapse. While we are disappointed at receiving this notice, we also believe that we will shortly understand what is required to resolve any open issues and to refile the Firdapse NDA. With breakthrough therapy designation and orphan drug status, we believe that we are well-positioned to work closely with the FDA.

As we have previously stated, the refusal-to-file letter does not provide comment on the acceptability of the submitted clinical data, and no judgment is made in the letter on the efficacy or safety of Firdapse. We are in communication with FDA to determine the path forward for the successful and timely resubmission of our application. At this point, we are currently scheduled to meet with the FDA in early April. After that meeting, and once we have received the formal minutes from that meeting, we expect that we will be in a better position to discuss our regulatory path forward for Firdapse.

We continue to believe that it is very important to provide patients with access to an FDA-approved therapy for the symptomatic treatment of LEMS, a therapy that would have approved prescribing information and pharmacovigilance, and be manufactured according to good manufacturing practices. To that end, we at Catalyst have invested significant capital in a very comprehensive development program assessing the safety and efficacy of Firdapse.

We also are pleased to maintain our commitment to patients living with LEMS and CMS. And we continue to enroll new patients in our expanded-access program and provide Firdapse at no cost to patients who meet the enrollment criteria.

As most of you know, February 29 was Rare Disease Day, which was observed around the globe and is led in the United States by the National Organization for Rare Diseases, or NORD, a patient efficacy organization committed to the identification, treatment and cure of rare disorders through programs of education, advocacy and research. Catalyst collaborates with NORD as a corporate member and is pleased to support the efforts of the rare disease community to find ways to broaden the awareness of rare diseases and improve access to treatments.

Global Genes, one of the leading rare-disease patient advocacy organizations in the world that promotes the need of the rare disease community, and of which Catalyst is also a corporate member, is another organization that supports patient activities to raise rare-disease awareness.

Earlier this quarter, we announced the initiation of an investigator-sponsored study of Firdapse in patients with MuSK antibody-positive myasthenia gravis. If the results for this trial support the safety and efficacy of Firdapse as a treatment for this patient population, we plan to submit an application for orphan drug designation and pursue approval of Firdapse for this additional indication.

We recently announced top-line results from our Phase 1B study of CPP-115 in normal, healthy volunteers. The results showed significant increases in brain levels of the surrogate marker for potential efficacy, gamma-aminobutyric acid, or GABA. We feel this data is encouraging because it provides evidence that CPP-115 significantly raises brain GABA, a mechanism known to effectively treat epilepsy, infantile spasms and, potentially, Tourette's disorder.

Last month, we announced the hiring of Brian Elsbernd as Senior Vice President of Legal and Compliance. Mr. Elsbern's primary responsibility will be leading the development, management, and monitoring of our corporate strategy, philosophy and processes as well as corporate quality. Brian brings extensive experience from the biopharmaceutical industry to our management team as we expand our team to continue to execute our drug development strategies and prepare for the future commercialization of Firdapse.

As reported yesterday, we ended the year with approximately $58 million in cash and short-term investments with no debt. In the past, we have stated that we had sufficient cash to get through approval on launch of Firdapse, which we previously expected in mid-August. Because of the receipt of the refusal-to-file letter, we are currently shifting the completion of our commercial launch plan and further conserving cash with the goal of getting through an approval and launch of Firdapse without an additional capital raise.

I will now turn the call over to Dr. Steve Miller, who will provide further updates on our pipeline and scientific developments.

Thanks, Pat, and good morning, everyone. In December, we completed submission of the NDA for Firdapse for the treatment of Lambert-Eaton myasthenic syndrome and congenital myasthenic syndromes. Both of these diseases are ultra-rare, with prevalences in the United States believed to be approximately 3,000, and 1,000 to 1,500 patients respectively. As Pat previously stated, we are currently scheduled to meet with the FDA in early April to try to resolve any open issues and to resubmit our NDA for Firdapse as soon thereafter as possible.

As Pat also previously mentioned, the refusal-to-file letter does not comment on the safety and efficacy information provided in our NDA. It is our hope that the issues raised in the letter can be resolved in a relatively short period of time and that our NDA can be resubmitted in the second and third quarter. However, until we meet with the FDA and work out a path forward that is acceptable to the agency, we will not be able to lay out our future development plans for Firdapse and the timing of our activities.

On our pipeline, we recently announced top-line results from our Phase 1B double-blind, placebo-controlled, safety and tolerance study of CPP-115 in normal, healthy volunteers. The results showed significant increases in brain levels of the surrogate marker for potential efficacy, gamma-aminobutyric acid, or GABA. The main adverse effect of prolonged elevated brain GABA, somnolence, was also observed.

While the primary objective of this study was to obtain safety and tolerance data for CPP-115 administered over 14 days, brain GABA levels were measured as a surrogate marker of potential efficacy since CPP-115 is the second-generation GABA immuno-transfers inhibitor. Specifically, this study examined GABA levels in both the parietal occipital cortex, a gray-matter-rich region that approximates brain regions thought to be associated with epilepsy, and which was previously studied for Vigabatrin. The supplementary motor area, which is thought to be associated with Tourette's Disorder, was also studied. The maximum brain GABA increases in both brain regions ranged from about 150% to over 200% of baseline levels as measured by magnetic resonance spectroscopy.

We are presently evaluating the full results of this study, including additional data from laboratory safety tests and pharmacokinetic modeling of the patients in this study, and developing a plan to make CPP-115 Phase 2-ready. We hope to commence our next study sometime in 2016, subject to the availability of funding.

We are currently conducting a small clinical trial to support any future NDA we file for Firdapse for the treatment of CMS. The trial is a small blinded trial in the pediatrics CMS population ages two to 17. We are also currently supporting an investigator-sponsored adequate and well-controlled clinical trial evaluating safety, tolerability and efficacy of Firdapse as a symptomatic treatment for patients with MuSK antibody-positive myasthenia gravis.

The MuSK study is being conducted by a team of researchers led by Renato Mantegazza, M.D., Director, Department of Neural Immunology and Neuromuscular Diseases at the Fondazione Instituto Neurologico Carlo Besta in Milan, Italy, a major referral center for myasthenia gravis patients, including MuSK antibody patients -- antibody-positive myasthenia gravis patients.

This study is designed as a one-to-one, randomized, double-blind, placebo-controlled, crossover outpatient study to evaluate the safety, tolerability and potential efficacy of amifampridine in patients diagnosed with MuSK MG. The study is planned to include approximately 20 patients, and we anticipate reporting top-line results from the study in about a year. Catalyst is providing study drug and financial support for this study.

I will now turn the call over to Allie to review our financial results.

Thanks, Steve. Yesterday, we reported a GAAP net loss of $20.2 million, or $0.25 per basic and diluted share, for the 12 months ended December 31, 2015, as compared to a GAAP net loss of $15.5 million, or $0.24 per basic and diluted share, for the same period in 2014. Excluding non-cash gains, up $55,000, attributable to the change in fair value of liability classified warrants, non-GAAP net loss was $20.3 million, or $0.25 per basic and diluted share, for the year 2015.

In comparison, 2014 non-GAAP net loss was $14.5 million, or $0.23 per basic and diluted share, which excludes a non-cash loss of $994,000 attributable to the change in fair value of liability classified warrants.

For the fourth quarter of 2015, we reported a GAAP net loss of $5.8 million, or $0.07 per basic and diluted share, compared to a GAAP net loss of $3.5 million, or $0.05 per basic and diluted share, for the same period in 2014. Excluding non-cash gain of $390,000 for the change in fair value of liability classified warrants, non-GAAP net loss was $6.2 million, or $0.07 per basic and diluted share, for the fourth quarter of 2014. In comparison, the non-GAAP net loss for the fourth quarter of 2015 was $4 million, or $0.06 per basic and diluted share, and excluded a non-cash gain of $472,000 attributable to a change in fair value of liability classified warrants.

Research and development expenses were $3.8 million and $11.8 million for the fourth quarter and full year 2015, respectively. Compared to an R&D spend of $2.4 million and $10.1 million in the fourth quarter and full year of 2014. Research and development expenses for 2015 increased from the prior year primarily due to continued activities related to ongoing studies and trials for Firdapse and CPP-115, the cost of our Firdapse expanded-access program and costs associated with the filing of our NDA for Firdapse.

We expect that our R&D spend for 2016 will increase primarily as a result of our continued clinical development efforts for Firdapse, including our recently started clinical trial for CMS in pediatric population, our clinical program for MuSK myasthenia gravis and our expanded-access program.

General and administrative expenses were $2.4 million and $8.6 million for the fourth quarter and full year 2015, respectively, compared to $1.6 million and $4.5 million, respectively, in the fourth quarter and full year 2014. The increase from year to year is primarily due to increases in headcount and related expenses and pre-commercialization expenses as we expanded our operations for the potential future commercialization of Firdapse. (inaudible) biopharmaceutical company and Catalyst had no revenues in the fourth quarters of 2015 and 2014 or the full years 2015 and 2014.

At December 31, 2015, we have cash, cash equivalents, CDs and short-term investments of approximately $58.4 million and no debt. This includes $34.9 million of net proceeds from our February 2015 offering in which we sold 11.5 million shares of common stock and the proceeds of warrants and stock options exercised during 2015.

Based upon our current financial position and forecast of available cash, we continue to believe that these researches should give us sufficient runway for approval and product launch of Firdapse, assuming these occur before the end of the first quarter of 2017.

More detailed financial information and analysis may be found in the Company's annual report on Form 10-K, which was filed with the Securities and Exchange Commission yesterday, March 15, 2016, and can be found on the investors relations page of our website at www.catalystpharma.com.

Now, I would like to turn the call back to Pat.

Thanks, Allie. Before we answer your questions, I'm going to summarize our major goals and potential milestones looking at the coming months.

Firdapse has demonstrated that it provides an important therapeutic benefit to LEMS and CMS patients and potentially for other indications. And we remain confident in its potential approval and future launch. We are focused on resolving any open issues we have with FDA in successfully resubmitting an NDA for Firdapse as soon as possible. We know the FDA delay is frustrating, but know that our internal team and outside regulatory counsel have been working around the clock to prepare for our upcoming meeting with the FDA.

We will also continue to advance our drug pipeline, build out our management team and progress with commercialization plans for Firdapse, albeit at a more measured pace. I continue to be encouraged with advances in rare diseases, and Catalyst remains committed to providing education and awareness about LEMS and CMS to patients, physicians and payers.

We work closely and support organizations that advocate for patients with rare diseases, such as the National Organization of Rare Diseases and Global Genes. We must broaden awareness and improve access to these very important therapies.

With that, I would like to thank all of you for participating in today's call and open up the call for questions.

(Operator Instructions) Charles Duncan, Piper Jaffray.

Hi, guys. Thanks for the overview and for taking my question. My first question is regarding the interactions with FDA. I know that you haven't completed those, but I'm kind of wondering in the upcoming meeting with FDA, what do you expect the discussion to focus on? And also, did the information requested in the complete -- or in the refusal-to-file letter include any analyses from your -- the Catalyst-run trials or -- and/or past academic studies of 3,4-DAP?

Charles, there were no questions with regard to additional analyses of our data requested in the RTF. But as we have stated in a previous press release, the FDA has requested additional supporting information. To that point, we expect to gain clarity on several open issues that still remain when we meet with the FDA in early April.

So there were -- as we, again, previously stated, there was a question with regard to our attempt to include CMS in the initial label. And, other than that, we are really not in a position to provide more specifics about the content of the RTF until we meet with the FDA for a number of reasons. One of them is from a competitive point of view, and also sensitivity of dealings with the agency we need to be cognizant of.

So for those reasons, we really don't want to be more specific until we have our meeting; come out of that meeting with an understanding; we see the formal minutes of the meeting, which we should receive within 30 days of the meeting. And then we will be in a better position to present our path forward and a new timeline.

Okay, that's helpful, Pat. But at this point, do you anticipate any additional clinical or nonclinical studies to be required? And if so -- if not, whatever, what is your best guess as to timing of a refiling, approximately?

Yes, Charles, we are not going to comment on the requirements, clinical or nonclinical, until we meet with the FDA and present our entire plan and our path forward. So I think that's premature. It's a good question. I understand it, but we are not prepared to talk about that today.

And so our timeline, again, is we expect to meet with the FDA in early April. We expect to receive the minutes from that -- the formal minutes from that meeting within 30 days of that meeting. We hope that we can turn around the required information in a relatively short period of time. At that point, the FDA -- we anticipate there will be a new 60-day review of the materials submitted in the NDA. And hopefully at that point, we have an acceptance of our NDA for filing.

Okay. And then the last question that I have regarding this is I'm kind of wondering what changed, if anything. Because it seemed like with the Firdapse program, it was relatively straightforward. You were requested to conduct the study that you conducted. Is there a different study they asked for, or is there new information? Or could it have been the CMS, or did they get some input from some other company or whatever? What do you think changed that? Or was it just simply something that you forgot or neglected to supply in the file that -- or in the NDA that resulted in the refusal to file?

Charles, part of it is administrative; technical, if you will. And, again, I can't say what has changed. I know that from the FDA's point of view, our filing was not complete. And we anticipate fixing it and providing the incomplete data that was requested. So at this point, really, I think until we meet with them and get further clarity, I just think that's as much color as we can provide at this point.

Okay, that makes sense. Thanks for the added information.

(Operator Instructions)

Thanks again for your participation on this call. I would once again like to thank all of our stakeholders for their support in helping Catalyst deliver on its promise to advance the treatment for patients suffering from rare unmet medical needs. We look forward to providing more updates in the near future once we meet with the FDA and determine the regulatory path forward for Firdapse. Thank you.

Thank you. This concludes today's conference. Thank you for your participation, and you may now disconnect your lines at this time.