Catalyst Pharmaceuticals Announces Third Quarter 2020 Financial Results and Provides Business Update

CORAL GABLES, Fla., Nov. 09, 2020 (GLOBE NEWSWIRE) -- Catalyst Pharmaceuticals, Inc. (Catalyst) (Nasdaq:CPRX), a commercial-stage biopharmaceutical company focused on developing and commercializing innovative therapies for people with rare debilitating, chronic neuromuscular and neurological diseases, today reported financial results for the third quarter ended September 30, 2020 and provided a business update.

“I am pleased to report on a very productive third quarter and on our continued commercial execution under challenging conditions and remain confident that we will continue to see more success as physicians and other providers adapt to this virtual working environment. Also, we are very encouraged by the number of new LEMS patient starts that were initiated over the past 2 months and are hopeful that this is the beginning of a trend,” said Patrick J. McEnany, Chairman and Chief Executive Officer of Catalyst Pharmaceuticals. Mr. McEnany added, “Additionally, during the third quarter we were excited to announce the issuance of our U.S. patent for Firdapse®, which we believe significantly fortifies our intellectual property position. We continue to work diligently alongside partners to protect Firdapse® and to ensure that we are able to advance and make available therapeutics for patients suffering from rare neurological conditions.”

Q3-20 Financial Results

  • Product revenue, net in the third quarter of 2020 was $29.2 million, compared to $30.9 million for the third quarter of 2019.
  • Operating income for the third quarter of 2020 was $11.7 million, compared to $13.8 million in the third quarter of 2019.
  • Reported net income of $43.3 million, or $0.42 per basic and $0.41 per diluted share, in the third quarter of 2020, compared with net income of $13.6 million, or $0.13 per basic and diluted share, for the third quarter of 2019.
  • Net income in the third quarter of 2020 includes $31.3 million ($0.30 per basic and $0.29 per diluted share) of benefit from recording of deferred tax asset, upon reversal of valuation allowance.
  • Research and development expenses for the third quarter of 2020 were $3.7 million as compared to $4.6 million for the third quarter of 2019.
  • Selling, general and administrative expenses for the third quarter of 2020 totaled $10.0 million as compared to $8.1 million in the third quarter of 2019.

Corporate Highlights and Milestones

  • U.S. Patent for Firdapse® for "Methods of Administering 3,4-Diaminopyridine" issued.
  • District Court’s ruling against us in our lawsuit versus the FDA.
  • Appeal to the 11th Circuit Court of Appeals has been made in lawsuit versus FDA and court has granted request for an expedited hearing.
  • Executed license agreement with KYE Pharmaceuticals to make Firdapse® available to LEMS patients in Canada.
  • Launched legal challenge to Health Canada’s decision to overlook Firdapse® data exclusivity.
  • Actively engaged in evaluation of potential acquisition of products or companies.

Other Firdapse® Development Programs

  • Enrollment in proof-of-concept spinal muscular atrophy type-3 study has been completed and we expect to report top-line data before year-end.
  • Continuing the evaluation of the data from the MuSK-MG trial to determine the future of the program.
  • Firdapse® long-acting formulation development program continues on schedule.
  • Proof-of-concept studies for other additional neuromuscular indications are expected to commence in the near future.

COVID-19 Impact

  • Issued a no travel and remote work policy for all Catalyst employees on March 16th.
  • Diligently working to reduce COVID-19 impact on new patient starts, enrollments and revenues.
  • We believe that our current base of LEMS patients on reimbursed Firdapse® remains fairly stable and very compliant to their medication regimen.
  • Have not experienced any disruptions in the supply chain or production of Firdapse® and believe the safety stock of Firdapse® is more than adequate for currently anticipated needs.
  • Proudly partnered with First Responder’s Children’s Foundation/COVID-19 Emergency Response Fund, which provides emergency grants to support frontline emergency and healthcare workers and their families enduring financial hardship during this COVID-19 pandemic.

Balance Sheet and Key Activities in 2020

At September 30, 2020, Catalyst had cash and cash equivalents and investments of $127.1 million and no funded debt.

The Company plans to continue investing in the following key activities in 2020 and 2021:

  • Expansion of U.S. commercialization of Firdapse®.
  • On-going development programs evaluating Firdapse® for the treatment of MuSK-MG and SMA Type 3, and our Expanded Access Program for Firdapse®.
  • Continue support for our Firdapse® long-acting formulation and other development programs.
  • Support Canada pre-commercialization activities for Firdapse®.
  • Continue Japan regulatory activities to seek marketing authorization for Firdapse®.

More detailed financial information and analysis may be found in the Company's Quarterly Report on Form 10-Q, which was filed with the Securities and Exchange Commission (SEC) on November 9, 2020.

Non-GAAP Financial Measures

Excluding expenses related to stock-based compensation of $1.5 million, non-GAAP1 net income for the third quarter of 2020 was $44.8 million, or $0.43 per basic and $0.42 per diluted share. This compares to non-GAAP1 net income of $14.4 million, or $0.14 per basic share and $0.13 per diluted share, excluding stock-based compensation expense of $817 thousand, for the third quarter of 2019. Excluding expenses related to stock-based compensation of $4.8 million, non-GAAP1 net income for the nine months ended September 30, 2020 was $68.3 million, or $0.66 per basic share and $0.64 per diluted share. This compares to a non-GAAP1 net income of $26.6 million, or $0.26 per basic and $0.25 per diluted share, excluding stock-based compensation expense of $2.7 million, for the nine months ended September 30, 2019.

Conference Call

Catalyst management will host an investment-community conference call and webcast at 8:30 a.m. ET, tomorrow, Tuesday, November 10, 2020 to discuss the financial results and provide a corporate update. Investors who wish to participate in the conference call may do so by dialing (877) 407-8912 for domestic and Canadian callers or (201) 689-8059 for international callers. Those interested in listening to the conference call live via the internet may do so by visiting the Investors page of the company's website at www.catalystpharma.com and clicking on the webcast link on the Investors home page. A webcast replay will be available on the Catalyst website for 30 days following the call by visiting the Investor page of the company's website at www.catalystpharma.com.

About Catalyst Pharmaceuticals

Catalyst Pharmaceuticals is a commercial-stage biopharmaceutical company focused on developing and commercializing innovative therapies for people with rare debilitating, chronic neuromuscular and neurological diseases, including Lambert-Eaton myasthenic syndrome (LEMS), anti-MuSK antibody positive myasthenia gravis (MuSK-MG) and spinal muscular atrophy (SMA) Type 3. Catalyst's new drug application for Firdapse® (amifampridine) 10 mg tablets for the treatment of adults with LEMS was approved in November 2018 by the U.S. Food & Drug Administration ("FDA"), and Firdapse® is commercially available in the United States. Further, Canada’s national healthcare regulatory agency, Health Canada, recently approved the use of Firdapse® (amifampridine) for the treatment of patients in Canada with LEMS.

Firdapse® is currently being evaluated in clinical trials for the treatment of MuSK-MG and SMA Type 3 and has received Orphan Drug Designation from the FDA for myasthenia gravis.

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements involve 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 (i) the impact of the effects of the COVID-19 pandemic on Catalyst’s 2020 net product revenues and on the timeline for reporting the top-line results from Catalyst’s SMA Type 3 proof-of-concept study, (ii) whether, even if Catalyst is successful in commercializing Firdapse®, Catalyst will achieve sustained positive cash flow and profitability, (iii) the effect on Catalyst’s business and future results of operations of the approval by the FDA of Ruzurgi® for the treatment of pediatric LEMS patients (ages 6 to under 17); (iv) whether Catalyst's suit against the FDA seeking to vacate the FDA's approval of Ruzurgi® will ultimately be successful; (v) whether Firdapse® will ever be approved for commercialization for the treatment of MuSK-MG, SMA Type 3, or any other disease, and (vi) those other factors described in Catalyst's Annual Report on Form 10-K for the fiscal year 2019 and its other filings with the U.S. Securities and Exchange Commission (SEC), could adversely affect Catalyst. Copies of Catalyst's filings with the SEC are available from the SEC, may be found on Catalyst's website, or may be obtained upon request from Catalyst. Catalyst does not undertake any obligation to update the information contained herein, which speaks only as of this date.

_________________________
1 Statements made in this press release include a non-GAAP financial measure. Such information is provided as additional information and not as an alternative to Catalyst's financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP). This non-GAAP financial measure is intended to enhance an overall understanding of Catalyst's current financial performance. Catalyst believes that the non-GAAP financial measure presented in this press release provides investors and prospective investors with an alternative method for assessing Catalyst's operating results in a manner that Catalyst believes is focused on the performance of ongoing operations and provides a more consistent basis for comparison between periods. The non-GAAP financial measures in this press release exclude from the calculation of net income (loss) the expense associated with non-cash stock-based compensation.  Non-GAAP income (loss) per share is calculated by dividing non-GAAP income (loss) by the weighted average common shares outstanding.

 
CATALYST PHARMACEUTICALS, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
       
  For the Three Months
Ended September 30,
  For the Nine Months
Ended September 30,
  2020   2019   2020   2019
Revenues:              
Product revenue, net $ 29,166,658     $ 30,897,444     $ 87,907,894     $ 72,183,782  
Revenues from collaborative arrangements   150,000       --       150,000       --  
Total revenues   29,316,658       30,897,444       88,057,894       72,183,782  
Operating costs and expenses:              
Cost of sales   3,878,760       4,387,461       12,169,499       10,360,874  
Research and development   3,749,233       4,597,039       12,321,687       12,534,362  
Selling, general and administrative   9,984,961       8,067,792       30,881,367       25,471,974  
Total operating costs and expenses   17,612,954       17,052,292       55,372,553       48,367,210  
Operating income (loss)   11,703,704       13,845,152       32,685,341       23,816,572  
Other income, net   33,567       393,415       481,069       1,187,091  
Net income (loss) before income taxes   11,737,271       14,238,567       33,166,410       25,003,663  
Income tax provision (benefit)   (31,602,596 )     608,388       (30,379,459 )     1,058,039  
Net income (loss) $ 43,339,867     $ 13,630,179     $ 63,545,869     $ 23,945,624  
               
Net income (loss) per share:              
Basic $ 0.42     $ 0.13     $ 0.61     $ 0.23  
Diluted $ 0.41     $ 0.13     $ 0.60     $ 0.23  
               
Weighted average shares outstanding:              
Basic   103,535,431       102,974,105       103,452,025       102,864,571  
Diluted   106,316,241       107,045,234       106,386,617       105,821,609  
                               

 

 
CATALYST PHARMACEUTICALS, INC.
 
CONDENSED CONSOLIDATED BALANCE SHEETS
       
  September 30,
2020
  December 31,
2019
  (unaudited)    
ASSETS      
Current Assets:      
Cash and cash equivalents $ 117,105,973     $ 89,511,710  
Short-term investments   10,002,749       5,007,050  
Accounts receivable, net   5,871,893       10,536,997  
Inventory   4,747,538       1,956,792  
Prepaid expenses and other current assets   5,614,052       4,351,074  
Total current assets   143,342,205       111,363,623  
Deferred tax assets   31,347,442       --  
Operating lease right-of-use asset   12,167       793,252  
Property and equipment, net   149,119       210,467  
Deposits   8,888       8,888  
Total assets $ 174,859,821     $ 112,376,230  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current Liabilities:      
Accounts payable $ 2,005,340     $ 4,117,447  
Accrued expenses and other liabilities   16,226,609       19,981,295  
Total current liabilities   18,231,949       24,098,742  
Operating lease liability, net of current portion   --       647,532  
Total liabilities   18,231,949       24,746,274  
       
Total stockholders’ equity   156,627,872       87,629,956  
Total liabilities and stockholders’ equity $ 174,859,821     $ 112,376,230  
               

 

Investor Contact
Brian Korb
Solebury Trout 
(646) 378-2923
bkorb@troutgroup.com

Media Contact
David Schull
Russo Partners
(212) 845-4271
david.schull@russopartnersllc.com

Company Contact
Patrick J. McEnany
Catalyst Pharmaceuticals
Chief Executive Officer
(305) 420-3200
pmcenany@catalystpharma.com

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