Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) Q3 2025 Earnings Call Transcript

Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) Q3 2025 Earnings Call Transcript November 6, 2025

Operator: Greetings, and welcome to the Catalyst Pharmaceuticals Third Quarter 2025 Financial Results Conference Call and webcast. [Operator Instructions]. As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to Chief Financial Officer, Mike Kalb. Mike, please go ahead.

Michael Kalb: Thank you. Good morning, everyone, and thank you for joining our conference call to discuss Catalyst’s Third quarter 2025 financial results and business highlights. Richard Daly, President and CEO, will lead the call today; and Jeffrey Del Carmen, our Chief Commercial Officer, and I will also present. Additionally, Dr. Steven Miller, our Chief Operating Officer and Chief Scientific Officer; and Dr. Will Andrews, our Chief Medical Officer, will be available for the Q&A. Before we begin, I would like to remind you that in our remarks this morning and in the Q&A session, we will make statements about expected future results, which may be forward-looking statements for purposes of federal securities laws. These statements reflect our current expectations, estimates and projections and do not guarantee future performance.

They involve risks, uncertainties and assumptions that are difficult to predict and may not prove to be accurate. Actual results may vary from the expectations contained in our forward-looking statements. These forward-looking statements should be considered only in conjunction with the detailed information contained in our SEC filings, including the risk factors described in our 2024 annual report on Form 10-K filed with the SEC on February 26, 2025, and in our subsequent filings with the SEC, including our third quarter 2025 quarterly report on Form 10-Q, which was filed yesterday, November 5, 2025, with the SEC. At this time, I’ll turn the call over to Rich. Rich?

Richard John Daly: Thanks, Mike. Good morning, everyone, and thank you for joining us. Today’s call will begin with an overview of our portfolio highlights and key strategic growth initiatives, followed by a detailed discussion of our commercial performance and financial results for the quarter. Catalyst delivered outstanding third quarter 2025 results with accelerating momentum, strong demand for our rare disease therapies and continued progress on key strategic growth priorities. These results highlight our growing positive impact on the patient communities we serve and demonstrate our unwavering commitment to operational excellence and delivering long-term value. Catalyst reported another record quarter in Q3 2025 with total revenue reaching $148.4 million, an increase of 15.3% year-over-year.

These results were driven primarily by outstanding performance of FIRDAPSE and the growing success of AGAMREE, along with extended patient preference for FYCOMPA following generic entry. We ended the third quarter of 2025 with a cash position of $689.9 million and no debt, further reinforcing our ability to invest strategically for long-term growth. Last month, we announced that our Board of Directors authorized a new share buyback program to repurchase up to $200 million of shares of Catalyst’s outstanding common stock between October 1, 2025, and December 31, 2026. As mentioned, we believe that we can execute this share repurchase program without impairing the advancement of our business development strategy. Further, we believe that this repurchase program will enable us to provide value to our shareholders, and we are increasingly confident in our long-term outlook.

With our strong performance over the first 3 quarters of the year, we are raising our 2025 total revenue guidance to between $565 million and $585 million. Let’s start with FIRDAPSE. FIRDAPSE continues to demonstrate outstanding performance, maintaining its position as the only evidence-based approved product in the U.S. for the treatment of Lambert-Eaton myasthenic syndrome. The brand delivered another strong quarter of sustained growth, generating revenue of $92.2 million, an increase of 16.2% year-over-year. We are confident that FIRDAPSE remains well positioned for sustained organic growth across both idiopathic and cancer-associated LEMS markets, supported by a robust pool of patients and individuals progressing through their diagnostic journey.

The strong and visible demand underscores the durability of the franchise and reinforces our leadership in addressing the needs of the LEMS community. Jeff will go into more detail about our growth strategy in these distinct markets in his remarks. Since we believe that potentially 90% of cancer-associated LEMS patients remain undiagnosed, we see a meaningful opportunity to expand our reach in this high potential underserved population. We expect momentum to build in the months ahead, setting the stage for sustained growth in 2026 and beyond. We remain confident that we’ll meet our full year total net product revenue guidance for FIRDAPSE of between $355 million and $360 million. Jeff will cover the specifics in his section of the call. Moving on to AGAMREE.

While FIRDAPSE continues to perform incredibly well, we’re equally encouraged by the market potential and performance of AGAMREE. AGAMREE continues to outperform expectations, generating $32.4 million in net product revenue in Q3 2025, a 115.2% increase year-over-year from Q3 2024. These results are largely driven by steady conversion from both prednisone and EMFLAZA, a strong 90% patient retention rate and growing adoption across virtually all of the DMD centers of excellence around the United States. AGAMREE’s commercial execution continues to track well with strong patient retention and increasing prescriber engagement, further supported by recent full deployment of our dedicated field team back in April. Continued transitions from both branded and generic therapies, along with growing market receptivity and payer alignment due to an increased appreciation for AGAMREE’s potential differentiation from the current standard of care, reinforce our confidence in raising full year outlook to between $105 million and $115 million.

Catalyst continues to actively enroll patients in the SUMMIT study, an open-label 5-year follow-up study designed to evaluate the long-term clinical safety profile of AGAMREE, including potential benefits on behavior, stature, bone health and cardiovascular health. Finally, let’s take a look at FYCOMPA. FYCOMPA delivered higher-than-anticipated results in the third quarter of 2025 with revenue of $23.8 million, which reflects a year-over-year decrease of 25.8%. This performance was driven in part by patients electing to stay on their existing treatment plan following generic entry for FYCOMPA tablets in Q2 2025. Although we anticipate the impact of generic entry to increase going forward as other entrants eventually come to the market, we are raising our full year net product revenue guidance for this product to between $100 million and $110 million.

Now I’d like to reiterate what we believe sets us apart. Catalyst’s competitive advantage is built on the strength of not only our field efforts from both our sales and medical teams, but also our patient engagement services that we offer through Catalyst Pathways for patients taking FIRDAPSE and AGAMREE. Catalyst Pathways is our personalized treatment support program for patients who are enrolled in the program and serves as a single source for personalized treatment support, education and guidance to the dosing and titration regimen required to reach an effective therapeutic dose for each patient’s therapy. We believe that navigating the health care system with this support is far better for patients needing treatment for their rare diseases and for the health care community in general.

Finally, our strong relationship with health care and rare disease communities continues to drive meaningful stakeholder engagement. Together, our single-source approach enables the patients we serve to streamline access, identify appropriate therapy, receive timely treatment and remain compliant with their care. We believe these differentiating capabilities will enhance prospects for creating uncommon value for our current patients and for other rare diseases patients in the future. Let’s turn to business development. We remain highly disciplined in our business development strategy, and we continue to actively evaluate a broad range of opportunities, many of which are inbounds, reflecting growing awareness of the value we create for patients in need.

We also have an aggressive outreach initiative, resulting in over 100 assessments since January. The support services that we have developed through Catalyst Pathways for patients who are taking FIRDAPSE and AGAMREE are industry-leading and can be applied to any rare therapeutic area. So we remain therapeutic area agnostic. We believe our integrated infrastructure with our sales teams identifying potential patients and Catalyst Pathways providing direct support to patients, getting the patients on therapy, keeping them on therapy and ensuring the patient receives the optimum dose are important components of our continued success and our core capabilities that we see as not universally available through other companies serving patients living with rare diseases.

Now for an update on IP. We continue to advance initiatives to protect long-term value for our portfolio. On August 26, we announced the settlement of our pending FIRDAPSE patent litigation with Lupin. As part of the settlement, Lupin received a license to market generic FIRDAPSE beginning in February of 2035, on the same market entry date as Teva Pharmaceuticals had previously agreed to in their settlement. This settlement leaves only one patent case still pending against Hetero USA, Inc. The trial date has been set for March of 2026, which is prior to the expiration of the automatic 30-month stay set for May 26, 2026. I’d like to reiterate my previous comment, as we have consistently stated, we will vigorously defend our IP for all of our products.

With that, I’ll turn the call over to Jeff, who can provide additional insights into our commercial performance. Jeff?

Jeffrey Del Carmen: Thanks, Rich. Q3 2025 marked another record-setting quarter for our commercial organization, generating net product revenue of $148.4 million, a 17.4% increase compared to Q3 2024. These results highlight continued strong execution across our portfolio and sustained demand for our differentiated therapies. As Rich noted, Catalyst again delivered organic growth from FIRDAPSE, continued adoption of AGAMREE and stronger-than-expected revenue from FYCOMPA. Our Q3 2025 net product revenue underscores the strength and resilience of our rare disease platform. FIRDAPSE continues to deliver sustained organic growth. Q3 2025 revenue results of $92.2 million reflect its robust growth trajectory, driven by durable demand and continued execution of our growth strategy, resulting in 16.2% growth in Q3 2025 compared to Q3 2024.

New patient enrollments exceeded forecast. Prescription approval rates remained above 90% across both government and commercial payers and discontinuation rates were in line with expectations, tracking below an annualized rate of 20%. These indicators reflect strong patient adherence and reinforce the foundation for sustained performance. Leading indicators, including new patient starts and refill volumes through October continue to trend positively, reinforcing our confidence in achieving our full year 2025 FIRDAPSE net product revenue guidance of between $355 million and $360 million. Our next phase of growth for FIRDAPSE will come from both idiopathic LEMS and cancer-associated LEMS. For idiopathic LEMS, we continue to advance our patient identification efforts by augmenting data sources, further expanding the pool of over 500 LEMS patients in active diagnostic stages.

With a dedicated sales force of 16 regional account managers and enhanced lead optimization efforts that better target patients most likely to initiate FIRDAPSE treatment, these patients now represent over 50% of new starts each quarter, strengthening our confidence in sustaining future organic growth. In addition, we have intensified efforts to expand VGCC antibody testing among patients often misdiagnosed with myasthenia gravis, which remains the most common misdiagnosis for LEMS patients. We have seen sustained VGCC antibody testing growth of 9% quarter-on-quarter over the last 2 years, with only approximately 30% penetration on the idiopathic side of the LEMS market opportunity, we have clearly identified the potential sustainable growth.

Our expansion strategy for cancer-associated LEMS is sharply focused on multiple critical levers, broadening access to VGCC antibody testing and streamlining the diagnostic pathway, now further reinforced by the recent NCCN small cell lung cancer guideline update on July 25 and our efforts to update the oncology care pathways and expanding HCP education on those updated pathways. As Rich mentioned, we are continuing to execute on those fronts. First, we have launched a frictionless testing model designed to remove referral bottlenecks and accelerate the time to diagnosis. Second, the updated NCCN guidelines now include VGCC antibody testing and recommend amifampridine, the only evidence-based approved treatment for patients with LEMS, potentially providing a strong tailwind for market adoption.

Third, we are pursuing new collaborations with leading oncology networks to integrate these updated NCCN guidelines into their care pathways. Lastly, we continue to expand our footprint across the community to educate those concentrated oncology centers on the updated care pathways. With over 90% of cancer LEMS patients still undiagnosed, the unmet need remains significant. We see a clear opportunity to drive awareness, increase access and deliver meaningful impact across the LEMS community. As we move forward, we’re executing with precision to accelerate diagnosis, increase adoption and position FIRDAPSE for sustained momentum through 2026 and beyond. Turning to AGAMREE. AGAMREE continues to demonstrate strong market momentum as a differentiated therapy for Duchenne Muscular Dystrophy.

In the third quarter of 2025, we generated net product revenue of $32.4 million, a 115.2% increase over the third quarter of 2024. Adoption is expanding steadily across key treatment centers. To date, each of the top 45 DMD centers of excellence have enrolled at least 1 patient on AGAMREE and 255 unique health care providers have submitted enrollment forms, reflecting broad and growing engagement across the community. Since launch, approximately 43% of patients being treated with AGAMREE transitioned from prednisone and 41% from EMFLAZA, highlighting AGAMREE’s broad clinical relevance across established treatment segments. Reimbursement performance remains robust with success rates above 85%, in line with our expectations. Our commercial team continues to execute effectively, driving targeted provider education and deepening payer engagement to support durable uptake and sustained market expansion.

Given the continued strength of these trends, we are raising our full year net product revenue guidance for AGAMREE to a range of between $105 million and $115 million. Finally, FYCOMPA delivered Q3 2025 net product revenue of $23.8 million, reflecting continued demand following the first generic entry for tablets in late May. We remain cautiously optimistic on FYCOMPA brand loyalty and based on stronger-than-expected performance in the first 9 months, we are raising full year 2025 FYCOMPA revenue guidance to between $100 million and $110 million. As previously noted, we do expect continued revenue erosion from generic competition to impact FYCOMPA performance in Q4 and beyond as more generics enter the market. In summary, our commercial team continues to execute with strong discipline and focus, delivering robust portfolio performance and advancing our next phase of growth.

We are confident that our diversified portfolio, best-in-class commercial capabilities and focused execution position us well to capture the significant growth opportunities ahead. As we look to close 2025, our priorities remain clear: driving commercial excellence, broadening patient access and maximizing the value of our portfolio to deliver sustainable growth and long-term shareholder value. I would like to thank the entire Catalyst team for their continued dedication and commitment to performance, execution and the patients we serve. At this time, I would like to turn the call back over to Mike.

Michael Kalb: Thank you, Jeff. Our performance during the third quarter of 2025 has kept us on pace for another strong year, driven by our solid financial performance, financial discipline and strong execution. Our total revenues for the third quarter of 2025 were $148.4 million, an approximate 15.3% increase when compared to total revenues of $128.7 million for the third quarter of 2024. The third quarter of 2024 included approximately $2.3 million of license and other revenue, which consisted principally of a milestone payment that we earned from our sublicensee, DyDo Pharma, upon its receiving regulatory approval to commercialize FIRDAPSE for the treatment of patients with LEMS in Japan compared to license and other revenue in the third quarter of 2025 of $27,000.

Net income before income taxes for the third quarter of 2025 were $71.0 million, a 24.2% increase year-over-year compared to $57.2 million for the third quarter of 2024. We reported GAAP net income for the third quarter of 2025 of $52.8 million or $0.42 per diluted share. GAAP net income increased by 20.3% year-over-year compared to GAAP net income for the third quarter of 2024 of $43.9 million or $0.35 per diluted share. Non-GAAP net income for the third quarter of 2025 was $86.1 million or $0.68 per diluted share, which excludes from GAAP net income, amortization of intangible assets related to our acquisitions of FYCOMPA, AGAMREE and Ruzurgi of $9.3 million, stock-based compensation expense of $5.7 million, the income tax provision of $18.3 million and depreciation of $100,000.

This compares to non-GAAP net income for the third quarter of 2024 of $71.1 million or $0.57 per diluted share, which excludes from GAAP net income, amortization of intangible assets related to our acquisitions of FYCOMPA, AGAMREE and Ruzurgi of $9.3 million, stock-based compensation expense of $4.4 million, the income tax provision of $13.3 million and depreciation of $100,000. Our year-to-date effective tax rate through the first 9 months of 2025 was 23.6% compared to 24.0% through the first 9 months of 2024. The effective tax rate is affected by many factors, including the number of stock options exercised in any given period and is likely to fluctuate in future periods. Cost of sales expense was approximately $22.7 million in the third quarter of 2025 compared to $19.3 million in the third quarter of 2024 and consisted principally of royalties.

As a reminder, AGAMREE royalties paid to the product licensor equal 5% of net sales up to $100 million for 2025 and 7% of net sales in excess of $100 million and up to $200 million with additional increases as net sales increase. The company is also required to make a $12.5 million sales-based milestone payment once AGAMREE’s net product revenue for a fiscal year reaches $100 million. When this occurs, this milestone payment will be capitalized and amortized over the estimated remaining useful life of the asset. Further details on our royalty obligations for AGAMREE as well as FIRDAPSE and FYCOMPA are disclosed in our third quarter Form 10-Q. Research and development expenses were $2.7 million in the third quarter of 2025 compared to $3.3 million in the third quarter of 2024.

Our R&D spending in the third quarter of 2025 was comprised mainly of costs to support our 2 ongoing AGAMREE studies. Selling, general and administrative or SG&A expenses for the third quarter of 2025 totaled $47.5 million as compared to $45.9 million in Q3 2024, reflecting in part an increase in our cancer-associated LEMS activities. As reported, we ended the third quarter of 2025 with cash and cash equivalents of $689.9 million compared to $517.6 million at December 31, 2024. This increase in cash of $172.3 million between the end of ’24 and September 30, 2025, was largely driven by $163.8 million in cash generated from operations of the business. This highlights our continued focus on profit optimization and cash flow generation. We believe our current funds, along with our expected continued generation of cash from operations, continue to allow us the financial flexibility to fund our existing R&D programs, meet our potential contractual obligations and support our strategic initiatives, business development and portfolio expansion efforts, leading to long-term growth and value creation.

More detailed information and analysis of our third quarter 2025 financial performance may be found in our quarterly report on Form 10-Q, which was filed with the Securities and Exchange Commission yesterday, November 5, and can be found on the Investor Relations page of our website. At this time, I will turn the call back over to Rich. Rich?

Richard John Daly: Thanks, Mike. As you heard on today’s call, Catalyst is closing 2025 with strong momentum and an unwavering commitment to deliver value for the patients we serve. This confidence is reflected in our updated guidance, which we raised after careful consideration and with respect to market conditions. This quarter’s exceptional results reflect the strength of our commercial execution, the resilience of our business model and the depth of talent across our organization. I want to thank our employees, partners and shareholders for their continued support and dedication. As we finish 2025 with ongoing momentum, we look forward to continued success. Thank you for joining us on today’s call, and I’ll now turn the call back over to the operator for questions.

Q&A Session

Operator: [Operator Instructions] Our first question today is coming from Samantha Semenkow from Citigroup.

Samantha Semenkow: Congratulations on the great quarter. First question is on FIRDAPSE. I’m wondering as you start to penetrate and really put a lot of effort into the oncology portion of the LEMS business, are you able to share any anecdotes or data points that you have thus far that can really help us begin to quantify how those efforts are progressing? And then on FYCOMPA, do you have a sense of what proportion of the patients are expected to stay loyal to branded FYCOMPA? I’m just trying to figure out as these additional generics come to the market, how much erosion we’re looking at for this fourth quarter?

Richard John Daly: Thanks for the question, Sam. For the first one, I’ll turn it over to Jeff. Jeff, you want to give us some update?

Jeffrey Del Carmen: As far as the cancer-associated LEMS and providing maybe some anecdotes or leading indicators on how performance is going, we will do that in future quarters. What we’re continuing to do is, like we mentioned on the earnings call, the — our first goal was really to get that testing in place, which we were successful. Secondly, the updates to the NCCN guidelines, which again, we were also very successful in doing that last July. So very pleased with that. Currently, what we’re doing is we’re educating and working on educating physicians and group practices and hopefully partnering with them to change their care pathways and then also have screening arrangements put in place. Moving forward, when we are successful with those discussions and those partnerships, we will share some of the leading indicators.

Richard John Daly: So to build on that as well, oncology is a highly structured and complex marketplace. And so since the NCCN guidelines, which actually gives us the opportunity or license, if you will, to begin those discussions, we got that back at the end of July. And we’re really excited about the conversations we’re having with the decision-makers in the oncology marketplace. It is a process. We are working through it, and we expect, as we’ve said in the past that, that will deliver results in 2026. Sam, I’m just going to move on to your next question, if that’s okay. So Jeff, the FYCOMPA stickiness, any thoughts on that?

Jeffrey Del Carmen: Sure. So as you see by the revenue numbers that we’ve reported, FYCOMPA continues to perform very well. And we do believe a lot of that is from brand loyalty and the stickiness. As additional generics enter the market later this year, we do expect additional erosion to revenue. However, we do also expect some patients to remain loyal to the brand. As far as a specific percentage, we haven’t really provided guidance on that. And we’re very confident in our guidance that we did provide for FYCOMPA.

Operator: Next question today is coming from Joon Lee from Truist Securities.

Asim Rana: This is Asim, on for June. Just a couple from us. Just on the FYCOMPA stickiness, why are patients choosing to stay on FYCOMPA longer? What are you hearing from them? And can you remind us how many generics are currently in the market and how many you could expect by year-end? And then just on FIRDAPSE, are you actively seeing oncology practices following the updated NCCN guidelines? Or would you say that’s more of a 2026 story?

Richard John Daly: I’m sorry, could you just repeat the second question? I just lost you for a second.

Asim Rana: Yes. Just on FIRDAPSE, are you actively seeing oncology practices following the updated guidelines? Or is that more of a 2026 story?

Richard John Daly: Jeff, on the stickiness, obviously, FYCOMPA is a one of one in the marketplace. And then we have one generic in there. So do you want to speak to the potential stickiness?

Jeffrey Del Carmen: Sure. So when you take a look at the generic competition right now for FYCOMPA, there’s one and that’s Teva. Teva’s generic is at about a 17-plus percent discount to FYCOMPA. So it’s a relatively good market for us when competing against Teva’s product. The stickiness, a lot of patients are afraid that to switch medications for antiseizure medications. What they don’t want is something where a generic 1 month and then it’s different so that they have a breakthrough seizure. So one of the things that they like to do is stay on the brand that they’ve been on for the last 10, 12-plus years. So that lends to the stickiness of the product. Also, we still have field personnel for FYCOMPA that are out there talking to many of the physicians that prescribe antiseizure medications and financial resources to help patients that are on FYCOMPA.

So I think all those things contribute to the stickiness, and that’s what we’ve seen in the revenue that we reported. Does that answer your question about FYCOMPA?

Asim Rana: Yes.

Jeffrey Del Carmen: Okay. Great. And as far as the NCCN guidelines and the adoption of those, it is more of a 2026 — part of our 2026, that’s when we’ll see more of the adoption. But it is significant in our discussions with these group practices in getting the care pathways changed and to adopt the NCCN guidelines. So we’re starting to see those discussions pay off. But again, our goal for 2025 and the remainder of this year is really to accelerate screening for these patients, which will turn into hopefully patients that will be diagnosed with small cell lung cancer LEMS next year and then also transition to FIRDAPSE.

Operator: [Operator Instructions] Our next question is coming from Leland Gershell from Oppenheimer.

Rohan Mathur: It’s Rohan on for Leland. Congrats on another strong quarter. I wanted to ask on AGAMREE, if you’ve seen any changes in the prescriber base. It’s been talked about before how as people get more acquainted with longer-term data from AGAMREE and real world data, more prescribers may be inclined to come on and give their patients AGAMREE. Have you seen any change in the breakdown there or any new prescribers? And more so on AGAMREE, just given the scope of what the differentiated steroid can do, are you exploring any other opportunities outside of Duchenne? And yes, that’s all for me.

Richard John Daly: Rohan, thanks for the question. Jeff, do you want to handle first?

Jeffrey Del Carmen: Sure. So for AGAMREE, we’re extremely pleased with how the launch has gone thus far over the last 1.5 years plus. And we have seen strong adoption. And like I mentioned, the top 45 centers of excellence for Duchenne Muscular Dystrophy make up about 80% of the steroid prescriptions for boys living with DMD. And each of the top 45 have enrolled at least 1 patient on AGAMREE. So that’s strong adoption there. When you take a look at the top 100 centers of excellence, we have over 95% penetration in those markets — in those centers of excellence. So again, broad adoption. And then also, we’ve talked about the adoption across both segments of prednisone as well as EMFLAZA. So very confident and pleased with that performance thus far.

And also the 257 health care providers that have prescribed AGAMREE, at least 1 patient on AGAMREE. So again, strong adoption. Now what our focus is to continue to deepen that adoption so that we can get more and more patients within each center on AGAMREE as these physicians see the differentiation of AGAMREE versus the other steroids. So that’s our goal moving forward.

Richard John Daly: On the second question regarding additional opportunities beyond Duchenne. First, we’ll turn it over to Will Andrews, our Chief Medical Officer. Will?

William Andrews: Yes. Thank you, Rich. We are evaluating life cycle management opportunities for consideration of add-on indications for AGAMREE. And as an example, you can imagine, we look at disorders that have muscle inflammation that significantly affect function in patients and even other inflammatory disorders. So we are actively evaluating life cycle management opportunities.

Richard John Daly: Thanks, Will. And I would just emphasize that our life cycle opportunities are focused in the rare space. So we want to continue with the profile that we have with the product. So we’re really excited about the things we’re exploring right now, and we’ll probably be addressing those in future — on future calls.

Operator: Next question today is coming from [ Pavan Patel ] from Bank of America.

Unknown Analyst: The first one is on AGAMREE. I believe you mentioned that you’ve reached nearly all of the DMD centers of excellence. So maybe if you can provide some more color on the depth of prescribing versus breadth? And what feedback are you getting from physicians and payers about the profile? And what do you see as the main hurdle to full conversion in this patient population? And then on FIRDAPSE, just the growth is pretty strong on a year-over-year basis, and you reaffirmed your full year guidance for that product rather than raising it. So that sort of implies a sequential slowdown. Just wondering if this reflects conservatism? Or are you anticipating that true slowdown in 4Q? And can you elaborate on which growth driver, whether it’s new patients, enhanced dosing or persistence is contributing the most to your year-over-year growth?

Richard John Daly: So I’m sorry, just clarifying your second question, and we’ll come back to that. Jeff, do you want to handle the first one on centers of excellence and depth and breadth?

Jeffrey Del Carmen: Sure. So very good question. And it truly does vary across all the centers of excellence. What’s very unique about Duchenne Muscular Dystrophy is one center of excellence is far different from the next one. So there’s not one uniform way that they prescribe steroids for their boys living with DMD. So we have many of these centers with multiple patients on it like 10, 20 and in some cases, many more than that or much more than that. And then we have other centers that only have a handful of patients. So that’s what our goal is. We have to look at these as a unique center of excellence, one center, it means that you know one center of excellence. So we have to identify a variety of ways to help provide education on the differentiation for AGAMREE for that center that’s pertinent to them.

So hopefully, that answers your question, but it varies across all top 45 and the top 100. And then as far as the payers, when we look at the payer reception for AGAMREE. I mentioned it on the call, over 85% of the patients are reimbursed and it’s much more than that. So it’s a very strong reception by the payer and the payer landscape, we’re very pleased with, and we don’t anticipate it changing here [indiscernible].

Richard John Daly: [ Pavan,] your second question, we just want to clarify, was about the year-over-year strength and what are the growth drivers that we anticipated that you mentioned new patients, dosing. I think there was one — a third one you mentioned as well.

Unknown Analyst: The last one was persistence of patients. Yes. And then also on the sequential like slowdown implied by the guidance, if you can explain that?

Jeffrey Del Carmen: Just to make sure we work on FIRDAPSE, correct. Okay. So Yes. And what I want to talk about here is I did mention this, that the growth from FIRDAPSE will come from multiple segments, both idiopathic LEMS as well as the cancer-associated LEMS. What we’re seeing now is the 500 or so patients that — the pool of patients that we have that are somewhere in their diagnostic journey for LEMS. We are able to help these patients or convert these patients onto treatment appropriately much more quickly. And we’re doing that by helping focus our field force, our dedicated field force of 16 [ RAMs ] now on the right leads to help these patients get on therapy. So that’s one thing. Another thing is we are — we have many initiatives in place to get VGCC antibody testing added to panels, like an example is myasthenia gravis.

So once that’s added, we’ll also see a growth in the number of patients that are tested and hopefully diagnosed with LEMS, which we can then focus on and help these patients get on therapy. Another thing is we’ve identified additional data sources that are providing more LEMS — prospective LEMS patients to us, which will then turn into leads and increase our pool of patients. We also utilize machine learning that helps triangulate claims data. So here’s a quick example is we’ve noticed that patients that have a negative AChR test as well as a positive VGCC test. Those patients are more likely to get on FIRDAPSE treatment and get on treatment sooner. So then we provide those leads to our [ RAM ] team to help those patients accelerate their time to get on product.

So that’s been very beneficial. A couple of other things, a pharmacy intervention program. What we’re doing is we noticed that in some cases, it takes patients a little longer to titrate than the label to get on to their optimal — appropriate optimal dose. And our pharmacy outreach and the intervention program, we’ve seen benefits from that program that has accelerated that time to get on their appropriate optimal maintenance dose more efficiently. So a lot of those things are helping contribute to today’s growth, and we are confident we’ll continue to provide levers for us to grow in the future. And then in 2026, we expect CA LEMS to more — contribute more to the growth of FIRDAPSE.

Richard John Daly: Is that — [ Pavan ], does that address your question?

Unknown Analyst: Yes, that addresses the question pretty well. And then I guess just like in terms of like the guidance, why not take it up on FIRDAPSE at the product level given the strength thus far? Just what’s the rationale behind that? Is that just conservatism? Or is there something that you expect in 4Q, whether there was a one timer in 3Q or something like that?

Richard John Daly: So we know this product really, really well. For 7 years it’s been on the market. So we’re confident in our ability to forecast the product. Jeff, do you want to speak at a high level to the performance of new enrollees in the third quarter, just at a high level.

Jeffrey Del Carmen: Sure. New enrollees were very strong and much higher than we had forecasted. So it was the highest month that we’ve had in 2 years.

Richard John Daly: So — but those patients, obviously, we don’t get a full year from those patients. So we’re looking forward to that growth continuing as we go into 2026. So we’re seeing very positive trends. We like what we see. We like what we see on the testing growth as well. And there’s a touch — I would say a touch of seasonality in the fourth quarter. So we can look at sequentials and we can look at year-over-year, but we’re confident in our continued growth.

Operator: Next question today is coming from Luke Herrmann from Robert W. Baird.

Luke Herrmann: Congrats on the quarter. First on AGAMREE, given this week’s outcome of confirmatory data from the approved PMOs, which is obviously just really unfortunate for the community, but do you think this can sort of emphasize the importance of an optimal steroid regimen for physicians and patients and their families?

Richard John Daly: That’s a great question. This is a community that’s very, very tight. They know they see everything, and they’re really engaged with us and obviously, all the companies. When we think about the use of a product like AGAMREE, it’s obviously the first product that a patient gets on. It’s recommended, it’s foundational therapy. And these stories are unfortunate for the community. But as we gain further and further strength and momentum in the market, we believe that we can fill the necessary gaps that might be coming out about as a result of some of these conversations. Jeff, do you want to speak to what we might have heard so far about some of these issues surrounding the studies? Yes.

Jeffrey Del Carmen: Sure. I mean, I’ll stick to the AGAMREE and steroids. I think what Rich was mentioning too is that steroids are the foundation of treatment for those [ suffering from DMD ] and so that we know that having that is the biggest part of this. And regardless of what other products that come out, the steroids will always be the first thing that they will treat their patients with.

Richard John Daly: Yes. And I think our patient advocacy and then patient support really helps us to kind of weather that — those bumps in the market that don’t necessarily affect us directly. And the support that we give to the patients through Catalyst Pathways is really a strong opportunity for the patients to get past some of these situations. So we think we can continue to perform well.

Luke Herrmann: Great. And then I just had one on the financials and some commentary on payment timing in relation to the cash balance, I think you noted a lower gross to net expense. Is that material for gross to net going forward? And was that a benefit in 3Q?

Michael Kalb: Sure. Thanks for the question. It’s not insignificant. So from a materiality perspective, certainly, we thought it was noteworthy. And then sorry, what was the second part of that question?

Luke Herrmann: Was — is this an impact on a go-forward basis? Or did it affect 3Q as well?

Michael Kalb: It is in Q3 and impacts the future as well. This is a permanent change to our contract terms.

Richard John Daly: I just want to emphasize that it’s a permanent change. We experienced this one-timer mostly because if you think about a shift, we renegotiated a very, very important, very large contract with the buyer, and they used to pay twice a month. Now they only pay once a month. So we received their payment October…

Michael Kalb: October 2, we received approximately $24.9 million. That under the old terms would have been by September 30.

Richard John Daly: So for this issue specifically because you’re asking about it, we don’t expect this one to repeat. So this is a one-timer, and that’s why we called it out in the Q. We wanted to be sure that we were clear about how it might affect Q3, but we expect the customer to continue to pay once a month, and we think that’s accommodated for or will be accommodated for on a go-forward basis.

Operator: The next question today is coming from Sudan Loganathan from Stephens Inc.

Kesav Chandrasekhar: This is Kesav on for Sudan. Congrats on the great quarter. My first question is just like roughly with the 17% off the WAC when Teva came in, what’s the expected discount on FYCOMPA after more tablet and suspension generics enter later this year? And how does that discount curve look? And then my second one is kind of just on FIRDAPSE. With Hetero moving to trial slated for March 2026, what was the general sentiment during the Markman hearing considering that Teva and Lupin kind of decided to settle?

Richard John Daly: So on the first part of the — first question, what we see is a mix shift, as you would expect. So when a generic enters the market, especially one that’s so heavily influenced here by Medicaid, we’re not affected in the Medicaid on our volume basis. So we did not — we have not given price. But as we forecasted, we will lose volume. And then there’s a mix shift. So there’s — as a percentage, a higher percentage of Medicaid, a lower percentage of commercial. And so that’s what causes the price to go down. So the volume changes and it shifts and then we have an impact on price. So does that answer your question?

Kesav Chandrasekhar: Yes, it does.

Richard John Daly: Okay. Great. Now your second question about hetero and where we stand, I’m going to turn it over to Steve Miller. Steve?

Steven Miller: Thank you. With regard to the Markman hearing, it was relatively routine. There was a number of items that were simply pushed off to trial. [ Judge said ] simply that’s a matter for trial. There were no outcomes that dramatically changed the view of the enforceability of the patents for either side and the strength of the cases. We continue to remain confident that our intellectual property is strong, and we’re going to vigorously defend it. I also want to point out that like all the litigants in the past, we continue to have discussions with all of them, including Hetero. And if this last litigant has something to say that we think is in the best interest of the shareholders, we [indiscernible].

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

Richard John Daly: We’re really appreciative of the support that we’ve received from the market, and we’re really appreciative of the work that our employees have done in support of patients. And thank you again for your participation in the call today.

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