Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) Q4 2022 Earnings Call Transcript

Catalyst Pharmaceuticals, Inc. (NASDAQ:CPRX) Q4 2022 Earnings Call Transcript March 16, 2023

Operator: Greetings and welcome to the Catalyst Pharmaceuticals Fourth Quarter and Full Year 2022 Financial Results Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. . As a reminder, this conference is being recorded. It is now my pleasure to introduce one of your host, Ali Grande, Chief Financial Officer. Please go ahead.

Alicia Grande: Good morning, everyone and thank you for joining our conference call to discuss Catalyst’s fourth quarter and full year 2022 financial results and corporate highlights. Leading the call today is Patrick McEnany, Chairman and Chief Executive Officer. We are also joined by Dr. Steven Miller, our Chief Operating Officer and Chief Scientific Officer; and Jeffry Del Carmen, our Chief Commercial Officer. For the Q&A session, we will also have Dr. Gary Ingenito, our Chief Medical and Regulatory Officer. Before we begin, I would like to remind you that in the following comments and in the Q&A session, we will make statements about our 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. 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 2022 Annual Report and Form 10-Q. At this time, I will turn the floor over to Pat.

Patrick J. McEnany: Thanks, Ali and welcome everyone to our fourth quarter and full year 2022 results conference call. I’m pleased today to highlight the progress we’ve made across our business throughout 2022 and now into the start of 2023. As we did in yesterday’s press release, let me highlight several key points. 2022 was a pivotal year for Catalyst as we delivered exceptional financial performance exceeding our 2022 total net revenue guidance projections driven by consecutive quarterly revenue growth and fiscal discipline. The robust results capped an important year of transformation as we successfully executed our strategic initiatives across all segments of the business. This included attaining a favorable resolution of the capital litigation relating to the RUZURGI, along with the U.S. rights, underscoring the strength of the FIRDAPSE intellectual property portfolio.

The receipt of a positive U.S. court decision supporting FIRDAPSE orphan drug exclusivity, the approval of an expanded pediatric indication for FIRDAPSE, and the recent acquisition of FYCOMPA. With our site set on further expansion, these accomplishments added considerable strength to our neuroscience presence and confidence that we can accelerate the company’s long-term growth strategy. Important to note, FIRDAPSE continues its strong performance and remains the cornerstone of our success. We are pleased with the strong demand and growth for FIRDAPSE, as we continue to see very positive trends across a number of our key performance indicators, which Jeff will address shortly. Our full year 2022 total revenues were $214 million, representing a 52% year-over-year increase compared to $141 million in total revenue for 2021.

Fourth quarter total net revenues were $61 million, a 59% increase compared to $38 million in 2021. We reported GAAP net income of $83 million for the full year of 2022 or $0.80 per basic share and $0.75 per diluted share, a 110% increase compared to $39 million or $0.38 per share basic and $0.37 per share diluted. In 2021, further non-GAAP net income for the full year 2022 was $114 million or $1.10 per basic and $1.02 per diluted share, a 93% increase compared to $59 million… .

Operator: Ladies and gentlemen, please hold while we reconnect our speakers.

Patrick J. McEnany: Okay. Our full year 2022 total net revenues were $214 million representing a 52% year-over-year increase compared to $141 million in total net revenue for 2021. Fourth quarter total net revenues were $61 million, a 59% increase compared to $38 million in 2021. We reported GAAP net income of $83 million for the full year of 2022 or $0.80 per basic share and $0.75 per diluted share, a 110% increase compared to $39 million or $0.38 per basic share and $0.37 per diluted share in 2021. Further non-GAAP net income for the full year 2022 was $114 million or $1.10 per basic share and $1.02 per diluted share, a 93% increase compared to $59 million or $0.57 per basic share and $0.55 per diluted share for the full year 2021.

Additionally, we ended 2022 with $298 million in cash and cash equivalents. With another year of expected growth in front of us, we have recently provided the market with our forecast of full year 2023 total net revenues of between $375 million and $385 million, representing a 75% to 80% increase in total net revenue compared to 2022. We have also forecasted FIRDAPSE’s 2023 net revenues to be between $245 million and $255 million. And based on 11 months of sales projections, we expect FYCOMPA 2023 net revenues to be approximately $130 million, having closed the acquisition of FYCOMPA in late January of this year. Additionally, we continue to expect that FYCOMPA will be accretive to our EBITDA and EPS for this year. Ali will provide further financial highlights and details during her remarks.

During the quarter, current quarter, our focused and diligent process to pursue value-added transaction opportunities has come to fruition with the successful acquisition of the U.S. rights to FYCOMPA from Eisai Company Limited. We are extremely pleased to have delivered on this important objective for 2022. FYCOMPA not only broadens our commercial product portfolio with the first and only noncompetitive AMPA receptor antagonist for epilepsy, but also adds a growing revenue base, further augmenting our already strong revenue and earnings growth of FIRDAPSE. More importantly, the addition of FYCOMPA serves as a complementary growth driver and a strategic market adjacency within neuroscience that establishes a potential gateway to expand into rare epileptic diseases.

We are already working closely and collaboratively with the Eisai FYCOMPA U.S. leadership and expect to complete the full transaction of FYCOMPA — transition of FYCOMPA activities by midyear 2023, and we look forward to the future onboarding into the Catalyst family, many of the Eisai employees who have been responsible for the success of FYCOMPA epilepsy program to date. During this quarter, although we did not enter into any new contracts to acquire additional products, we continue to make significant strides in our efforts to identify acquisition opportunities that align with our overarching growth strategy to build a diversified patient-centric portfolio. Our key priority on the strategy and business development front remains our intention to broaden and diversify our product portfolio through collaborative partnerships and acquisitions of commercial stage assets and/or companies.

Currently, we are in advanced stages of due diligence on several commercial stage products and/or companies and strongly believe that a transformational expansion of our portfolio that offers the potential to further implement our near and long-term growth strategy could occur in 2023. We remain optimistic about FIRDAPSE’s long-term growth prospects. During 2022, we made significant advancements related to FIRDAPSE’s intellectual property estate, which included the affirmation of the token drug market exclusivity. Additionally, we were granted three new patents and ended the year with six FDA Orange Book listed patents that go out to 2037, which we believe supports the product’s long-term durability. We remain confident about the strength of FIRDAPSE’s intellectual property estate, supported by the successful outcomes achieved in 2022.

That said, we are limited to what we can say at this point about ongoing cut litigation other than to say that we intend to vigorously depend and prosecute any infringers of our intellectual property related to FIRDAPSE. We will, of course, provide regular updates in our disclosures filed with the SEC, which will be available on the company’s website. Having ended the year with several significant achievements that aided the company’s growth, we were pleased to be recognized for these accomplishments. These included being recognized as one of Forbes 2023 America’s Best Small Companies for the second consecutive year, inclusion in Fortune’s 2022 top 100 small companies, and being honored as Florida’s 2022 Company of the Year as well as being added to the S&P Small Cap 600 Index.

These recognitions represent the culmination of our Catalyst team’s patient-centric attitude, work ethic and commitment to excellence. In closing, the Catalyst team’s accomplishments underscore the significant advancements in our evolution to becoming a leading innovative rare disease biopharmaceutical company. We expect these achievements coupled with our expanded capabilities and disciplined approach to capital allocation, to drive sustainable growth and enhance value as part of our long-term vision. I’ll now turn the call over to Jeff Del Carmen, our Chief Commercial Officer, who will provide an update on our commercial activities.

Jeff Del Carmen: Thanks, Pat and good morning, everyone. 2022 was a very successful year for Catalyst as well as the LEMS community. First, we are very proud to announce that over 1,000 unique patients have now received the FIRDAPSE enrollment from launch to date, which is a tremendous milestone for LEMS patients in the United States. We are very pleased with the full year FIRDAPSE net sales of $214 million, representing a 52% increase year-over-year, driven by consecutive quarterly FIRDAPSE net product sales growth. In Q4, net FIRDAPSE sales were $61 million, a 6% growth quarter-over-quarter. These achievements demonstrate the strength of our commercial strategy and capabilities, giving confidence for continued organic growth.

The foundation of the FIRDAPSE business is solid. Operational excellence drove new patient starts, maintained favorable prescription approval rates of greater than 90% across all payers, government or private commercial insurers; continued high compliance of 90%; and lower discontinuations. Naive new enrollments in 2022, not including LEMS patients that transition from RUZURGI to FIRDAPSE were 25% greater year-over-year, while the annual discontinuation rate was 15%. The Q4 discontinuation rate was only 2.8%. Patients enrolled in Catalyst Pathways, including those who are covered by Medicare, in accessing foundation assistance have an average co-pay of less than $2 per month. As Pat mentioned, we have forecast FIRDAPSE’s net revenues of $245 million to $255 million.

In 2023 we are confident that our strategic growth initiatives will drive organic growth moving forward. LEMS education programs targeting health care providers, patients and caregivers have led to a significant increase in voltage-gated calcium channel antibody test, which will shorten the diagnostic journey for LEMS patients and lead to more patients being eligible for treatment with FIRDAPSE. Additionally, we will increase the share of voice of thoracic oncologists through the newly hired oncology thought leader , small cell lung cancer, LEMS-focused educational programs available on a variety of platforms as well as greater lung cancer conference participation. Also we are working on strategic partnerships with institutions to help more small cell lung cancer patients get screened and diagnosed.

We consistently identify a steady stream of approximately 450 diagnosed primarily non-tumor LEMS patients that are not yet on FIRDAPSE, which contribute around 50% of new patient enrollments each quarter. Thus far in Q1, net new patients are tracking to match or exceed Q4 driven by consistent new patient enrollments and low discontinuation rates. The commercial organization is excited about the addition of FYCOMPA, which serves as a complementary growth driver and strategic market adjacency within neuroscience that establishes a potential gateway for Catalyst to expand into rare epileptic diseases. FYCOMPA net revenues for 2023 are forecast to be $130 million for approximately 11 months of sales. Catalysts will capitalize on proven commercial capabilities to enhance the growth potential of FYCOMPA, an established first-in-class commercial stage epilepsy asset.

We are making great progress hiring marketing, sales, and sales leadership for our epilepsy franchise with an effective Catalyst start date of May 1st. The vast majority of the epilepsy franchise will be staffed from Eisai employees currently dedicated to FYCOMPA. We were proud to participate in the ringing of the NASDAQ closing bell on February 28, 2023 in recognition of International Rare Disease Day to help shed light on the important unmet need for rare diseases in partnership with leading advocacy groups. Catalyst is committed to continue collaboration with the rare disease and LEMS advocacy and new partnerships with epilepsy advocacy groups. We will continue to ensure access to FIRDAPSE to LEMS and FYCOMPA for appropriate epilepsy patients through established assistance programs.

In closing, we are very optimistic about the organic growth potential for FIRDAPSE and thrilled with the addition of a best-in-class epilepsy franchise. Demonstrated operational excellence positions Catalysts well to deliver the forecast combined net revenues of $375 million to $385 million in 2023, and leverage the 45% overlap in FYCOMPA and FIRDAPSE physician call points. I want to thank the entire team at Catalyst for their unwavering commitment to patients and look forward to a successful 2023. I will now turn the call over to Dr. Steven Miller, our Chief Operating Officer and Chief Scientific Officer, for an update on R&D activities.

Steven R. Miller: Thanks, Jeff. Our clinical development and regulatory strategy for FIRDAPSE continues to focus on expanding access to all LEMS patients, enhancing the FIRDAPSE patent to state to maximize its commercial potential and to integrate the newly acquired FYCOMPA product into Catalyst’s systems. First, I would like to discuss our development efforts to increase the indicated maximum dose of FIRDAPSE from 80 milligrams per day to 100 milligrams per day. We anticipate meeting with the FDA to outline our strategy in the second quarter, and assuming a positive outcome of that meeting plan to file a supplemental NDA in the third quarter of this year, seeking to increase the indicated maximum daily dosage of FIRDAPSE to 100 milligrams per day.

A number of LEMS patients are already being treated at 100 milligrams daily dosage of FIRDAPSE after their physician worked with the pharmacy and insurance providers to justify the higher dose. Other patients on the current indicated maximum dose of 80 milligrams per day and their physicians have expressed a need to increase the indicated daily dosage to 100 milligrams to optimize therapy and this planned supplement, if approved, will help those patients. The previously acquired RUZURGI rights gave us access to safety and efficacy data for those patients treated at 100 milligram daily dose, and that data has been incorporated into our strategy, along with our own data, including safety data for patients treated at a 100 milligram daily dose of FIRDAPSE, and we believe that the combined data set constitutes an acceptable basis for seeking a 100 milligram maximum indicated daily doses for FIRDAPSE.

The investment community will be regularly updated on this project as it progresses. I would next like to comment on our previously approved supplemental new drug application for FIRDAPSE to treat pediatric LEMS patients. During the first quarter of 2022, we filed this supplemental NDA and it was approved by the FDA on September 29, 2022. With the approval of this supplemental NDA, all pediatric patients age six and above and all adults now have access to FIRDAPSE as an FDA-approved product to LEMS in the United States. The pediatric LEMS patient population is a very small patient group, estimated to be less than 30 patients in the United States. With this supplement highlights our commitment to ensure that all LEMS patients have access to FIRDAPSE.

Regarding our global expansion, our sublicense partner, DyDo Pharma in Japan, has completed the enrollment in their FIRDAPSE Phase III clinical trial, which is required to seek approval for the Japanese market, and the safety follow-up phase of that study to collect safety data in a Japanese patient population is ongoing. We continue to anticipate completion of that trial by the end of the year and assuming the trial is successful, a Japanese NDA submission in 2024. It is estimated there are about 1,200 to 1,300 LEMS patients in Japan. Moving on to our recent business development success, we completed the acquisition of the U.S. rights to FYCOMPA from Eisai in January of this year. FYCOMPA or perampanel, is the first and only approved AMPA receptor antagonist or inhibitor.

AMPA receptors enable fast, excitatory synaptic transmission throughout the central nervous system and are indispensable for learning rate and synaptic chastity. Epileptologists believe that seizure, generation, and spreading can be dependent on over activation of AMPA receptors. Hyperactivity induced by seizures might also alter AMPA receptor function and duration of exultation. Hyper activation of AMPA receptors is highly neurotoxic, adding to secondary damage induced by seizures and electric genesis. FYCOMPA, as an AMPA receptor antagonist can actually reverse these effects and improve seizure control. FYCOMPA is approved as a unique anti-seizure medication to treat partial onset seizures with or without secondarily generalized seizures of people with epilepsy who are four years of age and older, and with other medications to treat generalized tonic-clonic seizures in people with epilepsy who are 12 years of age and older.

A recently published case review from a group of European neurologists treating rare epilepsies working under the framework of the network for therapy and rare epilepsies reported in the widely respected Journal Epilepsia how FYCOMPA is capable of significantly reducing seizures in patients with epilepsies that resulted from specific genetic mutations. Of the 137 patients treated with perampanel, 60 patients or 43.5% sustained over 75% reduction in seizure frequency and includes 38 patients or 27.5% with a greater than 90% reduction in seizure frequency. High efficacy was consistently observed and reported in seven different rare genetic epilepsies. Moving on to our medical information function. Catalyst neuromuscular medical sales liaisons or MSLs, are actively reaching out to thoracic oncologists to build relationships and provide education about the importance of testing their patients for LEMS in order to expand the use of FIRDAPSE by those patients.

Oncologists that already treat LEMS in their practices have found that FIRDAPSE maintain muscle strength, improve the patient’s and physician’s perception of well-being and the patient’s ability to maintain functional mobility. All of these domains are critical in the minds of an oncologist, and they understand the quality of life and functional mobility are important for a better treatment outcome. These efforts will help broaden the use of FIRDAPSE to treat LEMS across additional medical specialties, including oncology. With the acquisition of FYCOMPA, Catalyst also plans to add up to six additional MSLs in the U.S. to support the FYCOMPA product. FYCOMPA is a mature product that has extensive public knowledge base within the medical community that treats epilepsy.

This MSL team will be responsible for continuing to spread this knowledge among physicians to treat epilepsy and to also address any questions and concerns that these physicians may have about using FYCOMPA to treat epilepsy patients. As a service to the physician community, Catalyst provides support for the development of continuing medical education or CME programs, that are part of the former ongoing educational positions. A new LEMS Medscape CME case-based virtual symposium will launch next week entitled the dysfunction in the neuromuscular junction and the emphasis on cancer-associated LEMS. Part of Catalyst’s efforts to develop new therapies for rare disease patients include the development, maintenance, and enforcement of patents. FIRDAPSE is protected by six patents listed in the FDA’s approved drug products with therapeutic equivalents, the so-called Orange Book, and is also protected by other granted and pending patents.

Three companies have filed generic drug applications for FIRDAPSE and on March 1st of this year, Catalyst initiated legal proceedings against all of them to protect and enforce our intellectual property rights. Catalyst remains confident on the strength and enforceability of our patents. As these cases proceed, Catalyst will provide regular updates to the investment community but please understand, like all litigation, our comments and updates will need to be limited to information in the public court records, with no additional forward-looking statements. Regarding FYCOMPA, there are a few patents listed in the FDA’s Orange Book for the FYCOMPA suspension and tablet products. The first of these is a composition of matter and primary indication patent.

Prior to our acquisition of this asset, the Patent and Trademark Office determined that an extended expiration date of May 23, 2025. Subsequent to that, a redetermination of the expiration date was requested, that is still pending, and which contends that it should be June 8, 2026 due to the approximately 13 additional months it took the DDA to determine that FYCOMPA should be Schedule III, which the agency and PTO omitted from their prior exploration date calculations. There is no assurance this latest request will succeed and if it does not, the final expiration date will be May 23, 2025, which Catalyst could still challenge if we feel it is appropriate to do so. The other Orange Book listed patent claims the commercial personal form of perampanel for FYCOMPA, and this patent expires on July 1, 2026.

Catalyst is evaluating whether or not to enforce this patent at this time and upon completion of that evaluation will inform the investment community on our plans regarding this patent. Moving on to business development, Pat described our significant portfolio expansion with the acquisition of FYCOMPA this quarter, and we are continuing to identify additional assets for potential acquisition. It is also important to point our strategy. As the specific biochemical origins of epilepsy are increasingly being elucidated, the medical field of epilepsy treatment is evolving into more of a precision medicine approach, with increasing numbers of rare epilepsies being identified and with specific therapies being developed for each. As a rare disease company, Catalyst’s acquisition of FYCOMPA is our entree into an expanding rare disease field in a way that self-funds the commercial infrastructure that will support the acquisition and marketing of additional new rare epilepsy assets.

At this time, I would now like to turn the call over to Alicia Grande, our CFO.

Alicia Grande: Thanks, Steve. We are very pleased with our financial results for the fourth quarter and full year 2022 and remain steady in our performance. We reported GAAP net income for 2022 of $83.1 million or $0.80 per basic and $0.75 per diluted share, a 110% increase year-over-year, compared to 2022 — GAAP net income of $39.5 million or $0. 30 per basic — $0.37 per diluted share. Total net revenue for 2022, principally from FIRDAPSE’s first revenue net was $214.2 million, a 52% increase year-over-year when compared to total net revenue of $140.8 million for 2021. For the year 2022, our effective tax rate was 21% compared to 25% for the year 2021. The decrease in the effective tax rate for 2022 is due to an increase in stock option exercises during the year due to an increase in our stock price.

We expect that our FX — will fluctuate in future periods and remain higher in future periods than was for the year 2022. Non-GAAP net income for 2022 was $113.1 million or $1.10 per basic and $1.02 per diluted share, which excludes GAAP net income of $83.1 million, stock based compensation expense of $7.9 million, depreciation of $141,000, amortization of $1.1 million, and an income tax provision of $21.6 million. This compares to non-GAAP net income for 2021 of $58.9 million or $0.57 per basic and $0.55 per diluted share, which excludes from GAAP net income of $39.5 million, stock-based compensation expense of $6.1 million, depreciation of $192,000 and an income tax provision of $13.2 million. The above represents an approximately 93% year-over-year increase of non-GAAP net income.

Cost of sales of $34.4 million for 2022 increased when compared to $21.9 million for 2021. For both years, 2022 and 2021, cost of sales was approximately 16% of product revenue net and consisted principally of royalties due to our FIRDAPSE licenses. Research and development expenses were $19.8 million in 2022 compared to $16.9 million in 2021, an increase of $2.9 million in R&D was principally related to the acquisition of $4.1 million of RUZURGI inventory, fully recorded to expense in the third quarter of 2022, offset by an overall decrease in R&D expense. R&D expenses decreased as a percentage of total operating expenses to 18% for 2022 from 19% for 2021. SG&A expenses for 2022 totaled $58.2 million compared to $49.6 million for 2021. The increase of $8.6 million when compared to the prior year is due to, among other changes, increases in compensation and benefit expenses as we continue to grow our business, additional charitable contributions to supporting LEMS patients and amortization of intangibles, acquiring connection with the RUZURGI acquisition in July of 2022.

As a percentage of total operating expenses, SG&A expenses decreased to 52% for 2022 compared to 56% for 2021. As reported, we ended 2022 with cash and equivalents of $298 million. Our continued revenue growth and prudent expense management allowed us in late January 2023 to use approximately $162 million of our cash to acquire FYCOMPA without any diluted financial. We believe our strong cash position continues to allow us to such financial flexibility to execute on our current programs and strategic initiatives. Catalyst is aware of the second value and situation. The company does not hold any deposits for the periods of such events or any other regional banks. More detailed information and analysis of fourth quarter and full year 2022 financial performance may be found in our Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission yesterday, March 15th, and can be found on the Investor Relations page of our website at www.catalystpharma.com.

And with that, I will turn the call over to Pat.

Patrick J. McEnany: Thanks, Ali. We entered 2023 focused on growing and diversifying our revenues, strengthening our position within the neuroscience space with our site set on further expansion, and serving our patient communities. We have all the elements in place for another strong year. We are well positioned to drive sustainable growth that aligns with our core mission to deliver value to our patients, health care providers, and shareholders. Finally, I thank all of our employees for their continued dedication and commitment to positively impacting patients’ lives. At this time, I’d like to turn the call over to the operator to open the line for questions.

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Q&A Session

Operator: Thank you. . Our first question comes from Joe Catanzaro with Piper Sandler.

Joseph Catanzaro: Hey guys, thanks for taking the questions. And congrats on the nice quarter. Maybe just two quick ones for me around FIRDAPSE. So you said with — there’s about 1,000 unique patients since launch and that’s obviously over a period of about four years. But wondering what you could say that number suggests about the penetration into what you see as a total LEMS opportunity? And then a follow-up, Steve, I think you said there are some patients already on the 100 mg dose. Can you say what percent do you think that is and then what are your expectations around what percent of patients currently on 80 mgs that would step up to 100 mg, if that label is updated in the future? Thanks.

Patrick J. McEnany: Jeff, do you want to take the first question, please, and then I’ll turn it over to Steve.

Jeff Del Carmen: Sure. Hi Joe. The question about penetration of the total population, we feel the penetration is around 25% right now. Significant opportunity remaining because if you look at the total population of about 3,000 patients and unfortunately some of these patients passed away and the new patients are diagnosed. So while there’s about 25% penetration, like I mentioned, very optimistic and confident about the continued growth sustainability.

Patrick J. McEnany: Steve, do you want to take the 100 milligram?

Steven R. Miller: Yes. Joe, we haven’t actually publicly disclosed the number of patients on the 100 milligram dose because it requires the physicians to work independently at Catalyst to get authorization to move to that dose. It’s not a very large number, but it’s — there are some patients who are on the 100-milligram daily dose. With regard to the number of 80-milligram patients, I really don’t want to speculate on that. All I can say to you is that about 40% of the patients are on 80. We believe a portion will move to 100. And there are some patients on 60 who may move to 80 as well.

Joseph Catanzaro: Okay, got it. That’s helpful. Thanks for taking my questions.

Operator: Thank you. Our next question comes from Charles Duncan with Cantor Fitzgerald.

Pete Stavropoulos: Hi, this is Pete Stavropoulos on for Charles. Hi patent team, congratulations on all the progress for the quarter. I just have a couple of questions that relates to FYCOMPA. The first is, can you discuss your strategy for reinvigorating the brand and how can — or will Catalyst leverage the company’s current infrastructure for the FYCOMPA franchise?

Patrick J. McEnany: Great, thank you. Jeff, do you want to take the reinvigorating the brand?

Jeff Del Carmen: Sure. I think first and foremost, our priority is to fully integrate the epilepsy franchise with the FYCOMPA personnel. That’s what we hope to do by midyear. When we take over the sales and marketing on May 1st, we are going to focus on applying the resources to the physicians that are currently prescribing FYCOMPA, the ones that are prescribing new to brand. There are about 6,700 targets that we’ll be focusing all of our resources towards, and that’s how we’ve surpassed our sales force. So hopefully, that gives you a little bit of a beat behind how we’re going to do this. We’ll be more prepared to share our business approach during our next conference call — earnings call in May.

Patrick J. McEnany: Yes, and as Jeff had pointed out, there’s about a 45% overlap between the comp points for FIRDAPSE and FYCOMPA, and we don’t want to confuse things out of the gate. But when the transition is completed, we expect in the second half of the year that basically the reps for FYCOMPA and FIRDAPSE will actually carry both products.

Pete Stavropoulos: Great and thanks.