2018 Annual Report
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2018 ANNUAL REPORT Dear Stockholders, 2018 was a transformational year for Catalyst with the approval of Firdapse® (amifampridine phosphate) tablets, the first and only evidence-based, FDA approved treatment for adult patients suffering from Lambert-Eaton myasthenic syndrome (LEMS). This approval means that all LEMS patients (and not just a few) now have affordable access to Firdapse®. It also represents the successful culmination of many years of hard work and effort by our company. 2018 was further marked by our efforts to prepare for the commercial launch of Firdapse®, as we spent the second half of 2018 building our sales and marketing team, our market access/reimbursement operations, and our patient education and support programs. On January 15, 2019, we launched Firdapse® in the U.S., marketing the product through a field force with extensive experience with neuromuscular, central nervous system, or rare diseases products. Our team includes specialists in patient assistance, insurance navigation support, and payer reimbursement support. We also have a field-based force of medical science liaisons who are helping educate the medical community and patients about LEMS, the clinical benefits of Firdapse® in treating adult LEMS patients, and about our company’s ongoing clinical trial activities. Further, we work closely with several rare disease advocacy organizations (including Global Genes, the National Organization for Rare Disorders (NORD), and the Myasthenia Gravis Foundation of America) to help increase awareness and the level of support for patients living with LEMS, Congenital Myasthenic Syndromes (CMS) and MuSK antibody positive myasthenia gravis (MuSK-MG). In order to help patients afford their medication, we, like other pharmaceutical companies who are marketing drugs for ultra-orphan conditions, have developed an array of financial assistance programs that are available to reduce patient co-pays and deductibles to a nominal affordable amount. For eligible patients with commercial insurance coverage, a co-pay assistance program designed to keep out-of-pocket costs to $10 or less per month is available for all LEMS patients prescribed Firdapse®. We are also donating, and committing to continue to donate, money to qualified, independent charitable foundations dedicated to providing assistance generally to LEMS patients in financial need. Our goal is to ensure that no LEMS patient is ever denied access to their medication for financial reasons. We are supporting the distribution of Firdapse® through Catalyst Pathways™, our personalized treatment support program. Catalyst Pathways™ is a single source for personalized treatment support, education, and guidance through the challenging dosing and titration regimen to an effective therapeutic dose. It also includes distributing the drug through a very small group of exclusive specialty pharmacies (primarily AnovoRx), which is consistent with the way that most pharmaceutical products for ultra-orphan diseases are distributed and dispensed to patients. In addition, Catalyst Pathways™ is the gateway for our free bridge medication for patients during transitioning from investigational product while they are waiting for a coverage determination or, later on, for patients whose access is threatened by the bureaucratic complications arising from a change of insurer. The Catalyst Pathways™ program is also the access point for our Patient Assistance Program, which provides longer-term free medication for those who are uninsured or functionally uninsured with respect to Firdapse® because they may be unable to obtain coverage from their payer despite having health insurance. We are continuing to evaluate Firdapse® for the treatment of other neurological conditions and we are encouraged by the possibility that this drug can help others with rare diseases. We are currently conducting Phase 3 clinical trials evaluating Firdapse® as a treatment for CMS and MuSK-MG, with top- line results for both trials expected in the second half of 2019. We are also conducting a proof-of-concept study to evaluate Firdapse® as a treatment for Spinal Muscular Atrophy (SMA) Type 3, and we expect top-line results from this study in the first half of 2020. Finally, we are in the early stages of developing a Firdapse® sustained release (long-acting) formulation that may provide meaningful patient benefits to those suffering from rare neuromuscular diseases, including LEMS, CMS and MuSK-MG. In 2018, we reached business development milestones as well. In December 2018, we entered into a definitive agreement with Endo International for the development and commercialization of generic Sabril® (vigabatrin) tablets through Endo’s U.S. generic pharmaceuticals segment, Par Pharmaceutical. Under this agreement, we received an upfront payment and are entitled to milestones for regulatory approval and profit sharing on commercialization. We have had the privilege of working with the LEMS community for several years, and we believe that our efforts on behalf of that community have helped advance the visibility of this patient group that has been largely unrecognized in the wider medical community and society. We regularly speak with LEMS patients who reach out to us to share their patient journeys. We are carefully listening to all of these patient stories, and we use those interactions to continuously improve our services to LEMS patients and the neurologist and neuromuscular physician communities. Thank you for the continued support of Catalyst. We believe we are well positioned to achieve our vision of positively impacting lives of patients living with rare neuromuscular diseases as we continue to build our rare disease company. We are excited by the launch of Firdapse® for LEMS thus far and look forward to continued positive momentum. We would like to also thank our patients, their families, and their caregivers, for their participation in our clinical trials, and our shareholders for their continued support. Lastly, thank you to our employees for their commitment to our mission and strategic vision. We look forward to updating you on the progress to come in 2019. Sincerely, Patrick J. McEnany Chairman and CEO April 15, 2019 2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K [Mark One] ܈ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2018 OR ܆ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 001-33057 CATALYST PHARMACEUTICALS, INC. (Exact name of registrant as specified in its charter) Delaware 76-0837053 (State of jurisdiction of (IRS Employer incorporation or organization) Identification No.) 355 Alhambra Circle, Suite 1250 Coral Gables, Florida 33134 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (305) 420-3200 Securities Registered Pursuant to Section 12(b) of the Act. Common Stock, par value $0.001 per share Nasdaq Capital Market (Title of each class) (Name of exchange on which registered) Securities registered pursuant to Section 12(g) of the Act.: None Indicate by check mark if registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ܆ No ܈ Indicate by check mark if registrant is not required to file reports pursuant to Rule 13 or Section 15(d) of the Act. Yes ܆ No ܈ Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ܈ No ܆ Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ܈ No ܆ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10- K. ܆ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act: Large accelerated filer ܆ Accelerated filer ܈ Non-accelerated filer ܆ Smaller reporting company ܈ Emerging Growth Company ܆ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act ܆ As of June 30, 2018, the last business day of the Registrant's most recently completed second quarter, the aggregate market value of all voting, and non-voting common equity held by non-affiliates was $298,397,093. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ܆ No ܈ Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 102,739,257 shares of common stock, $0.001 par value per share, were outstanding as of March 14, 2019. Part III incorporates certain information by reference from the registrant's definitive proxy statement for the 2018 annual meeting of stockholders. The proxy statement with respect to the 2019 annual meeting of stockholders will be filed no later than 120 days after the close of the registrant's fiscal year ended December 31, 2018. Table of Contents Page PART I ..........................................................................................................................................................................1 Item 1.