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CATALYST PHARMACEUTICALS INC (CPRX) Q2 2022 Earnings Call Transcript

CPRX Earnings Call - Final Transcript

CATALYST PHARMACEUTICALS INC (NASDAQ: CPRX) Q2 2022 earnings call dated Aug. 10, 2022

Corporate Participants:

Alicia Grande — Chief Financial Officer

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

Jeff Del Carmen — Chief Commercial Officer

Steven R. Miller — Chief Operating Officer and Chief Scientific Officer

Analysts:

Charles Duncan — Cantor Fitzgerald — Analyst

Joseph Catanzaro — Piper Sandler — Analyst

Joon Lee — Truist Securities — Analyst

Presentation:

Operator

Greetings and welcome to the Catalyst Pharmaceuticals Second Quarter 2022 earnings conference call. [Operator Instructions] I will now turn the conference over to your host, Ali Grande. You may begin.

Alicia Grande — Chief Financial Officer

Good morning, everyone. And thank you for joining our conference call to discuss Catalyst’s Second Quarter 2022 Financial Results and corporate highlights. Leading the call today is Patrick McEnany, Chairman and Chief Executive Officer. We are also joined by Steven Miller, Chief Operating Officer and Chief Scientific Officer; and Jeffrey Del Carmen, our Chief Commercial 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 expected future results, which may be forward-looking statements for purposes of federal securities law. 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, especially in light of the continued effects of COVID-19. 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 2021 Annual Report on Form 10-K.

At this time, I’ll turn the call over to Pat.

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

Thanks. Good morning, everyone. And thank you for joining us today on our second quarter 2022 Financial Results and Corporate Update Call. We are very pleased to report that we delivered exceptional financial performance again for the second quarter of 2022, having achieved an all-time high in total Firdapse net revenue of $53 million, representing an increase of 57.7% compared to the same period last year. Net income before income taxes for Q2 of 2022 was $28.2 million, a 77.6% increase compared to $15.9 million for Q2 of 2021. We reported GAAP net income of $21.6 million for Q2 of 2022 or $0.21 per basic share and $0.20 per diluted share.

We continue to bolster our cash position as we ended the second quarter of 2022 with $220.8 million in cash and investments and no funded debt. Our second quarter results reinforce the strength of our strategy and we are maintaining our full-year 2022 guidance of total revenues to be between $195 million to $205 million. And as of now, we are guiding to the upper end of the total revenue range. We continue to expect operating expenses of $65 million to $70 million for the full year.

Our success is directly attributable to the continued exemplary execution by all of our employees in every functional area. Their continued dedication to ensuring the patients come first and all of our daily activities at Catalyst leads to our successful execution and progress as individuals and as a company. Our confidence in our strong cash flow enabled us to opportunistically take advantage of the market conditions by repurchasing 600,000 shares of our common stock in the open market during the second quarter at an average price of $7.26 per share or about $4.4 million.

Since the start of our share repurchase program in March of 2021, we have repurchased approximately 3.2 million shares for an aggregate price of — an average price of $5.92 per share or about $19 million in the aggregate. We will continue to be disciplined in executing share repurchases when we feel it is prudent and beneficial to our shareholders. Ali, will provide more financial details in her presentation.

We are pleased to have resolved our issues with Jacobus Pharmaceuticals by reaching a mutually agreeable settlement to the patent litigation and the litigation challenging the Ruzurgi approval. As part of the settlement agreement, we acquired certain intellectual property rights, including the US and Mexico rights to Ruzurgi and its US NDAs. We also received the license of use for their know-how related to the manufacturing of the product. We believe the data included in the agreement may be useful in addition to our existing data to assist in optimizing Firdapse’s approved labeling. We are pleased to report that the transition of assets is underway and occurring efficiently. As of now, we plan to use the limited supply of Ruzurgi that we will repurchase from Jacobus to supply those patients with neuromuscular conditions other than LEMS who are without access to an approved drug and who were being treated with Ruzurgi at the time of the settlement under investigator sponsored INDs,

At the same time, we will continue to concentrate our focus and resources on addressing the needs of the LEMS patient community. Having completed this transaction, just several weeks ago, we are continuing to evaluate the complexities and the issues related to our path forward for Ruzurgi in the US and Mexico. With that said, our supplemental New Drug Application to support the approved use of Firdapse for pediatric LEMS patients has been accepted by the FDA for review. If approved, this would likely expand the use of Firdapse for this age group later this year. While the US LEMS pediatric population is a minimal number of patients, this initiative is part of our commitment to ensure that all patients have access to Firdapse for the treatment of LEMS.

During this quarter, we also made significant progress in our efforts to identify acquisition opportunities towards building a diversified patient-centered portfolio aligned with our overarching growth strategy. Our key priority on that strategy and business development front continues to remain broadening and diversifying our product portfolio through collaborative partnerships, acquisition and commercial stage assets or acquisitions of companies with approved rare disease therapies. To accomplish these objectives, our Chief Strategy Officer, Dr. Preethi Sundaram is tasked with spearheading a stringent and disciplined approach to evaluating assets for portfolio expansion.

At this time, we are actively engaged in advanced stages of due diligence in evaluating several opportunities to acquire products and-or companies with commercial stage products. While no agreements have been entered into at this time, we believe we are on a path to accomplish this objective in the second half of this year. We look forward to providing updates on our progress as permissible. We’ve also made significant progress in building the foundation of our formal, Environmental, Social and Governance or ESG program. We recently published our inaugural set of industry specific disclosures recommended by the Sustainability Accounting Standards Board or SASB, which is now available on the Catalyst website. This initiative constitutes the first stage of our ESG journey and we look forward to advancing our efforts on this front.

In summary, our exceptional performance was driven by the achievement of several important milestones, resulting in the financial accomplishments for the quarter and increasingly strong cash position. We are optimistic about our future and believe we are well positioned to continue to execute our growth strategy to deliver long-term value for stakeholders.

I will now turn the call over to Jeff Del Carmen, our Chief Commercial Officer, who will provide further highlights on our commercial performance.

Jeff Del Carmen — Chief Commercial Officer

Thanks, Pat. And good morning, everyone. The commercial team delivered another strong quarter, building upon the momentum from Q1. Q2 Firdapse net sales were 53 million, which represents 23.3% growth quarter-over-quarter and 57.7% growth quarter versus the same quarter last year. I’m proud of the flawless execution demonstrated by the entire commercial organization. We were successful in accomplishing our two main commercial objectives in Q2, seamlessly transitioning the remaining adult Ruzurgi LEMS patients to Firdapse without a lapse in therapy and continued significant organic growth through naive new patient enrollments. While a few more Ruzurgi patients may transition to Firdapse over the next few months, we feel that close to 100% of adult LEMS patients formally on Ruzurgi are now being treated with Firdapse.

Payer approval rates were greater than 90% for adult LEMS patients transitioning from Ruzurgi. The Catalyst patient services team did a tremendous job supporting the needs of adult LEMS patients, caregivers and healthcare professionals during this process to deliver uninterrupted therapy.

Our organic growth was also strong with 36% more naive new enrollments in Q2 than in Q1. June naive new enrollments matched March 2022 for the highest monthly total since launch. Additionally, operational excellence, maintained favorable access of greater than 90% across all payers, government or private commercial insurers continued high compliance of greater than 90% and contributed to an annual discontinuation rate of approximately 15%.

Patients enrolled in Catalyst Pathways, including those who are covered by Medicare in accessing foundation assistance, have an average copay of less than $2 per month. We expect steady organic growth in the second half of 2022, primarily driven from new patient enrollments of already diagnosed LEMS patients not yet on Firdapse, as well as a significant number of patients that are unfortunately misdiagnosed or undiagnosed. Leading indicators thus far in Q3 are very positive.

July net new patients were ahead of forecast due to low discontinuation rates and consistent new enrollments. Our marketing strategies continue to deliver significant return on investment by generating robust patient leads, as well as educating healthcare providers, patients and caregivers about LEMS and Firdapse. We currently have approximately by 500 high-quality patient leads stemming from our sales force, non-personal promotion, various data sources, digital marketing, inside sales and conferences. Our focus on these leads will help accelerate the opportunity for these patients to receive treatment for this disease.

As I have mentioned in the past, another opportunity for organic growth is the approximately 50% to 60% of cases of LEMS that are associated with an underlying cancer typically small cell lung cancer. Recent new enrollments are approaching 25% tumor LEMS. Our focused efforts to educate small cell lung cancer treaters through multiple marketing channels continue to show strong engagement, yielding even more patients with a proper diagnosis of LEMS.

We continue to demonstrate our commitment of a LEMS community. In July, Catalyst brought together legacy LEMS patient ambassadors. New ambassadors in the LEMS patient Advisory Council for training insights and the opportunity to interact with other LEMS patients. This inaugural patient forum is believed to be the largest gathering of LEMS patients in the United States. Furthermore, we participated at several regional and national conferences, such as the American Academy of Neurology, ASCO, and the international lung cancer conference to educate their members about LEMS and Firdapse.

In closing, we are pleased with our performance in Q2 and are excited about the significant opportunity ahead to help all adult LEMS patients. We are confident that the strategies and tactics we have put in place will deliver sustained organic growth in the second half of 2022 and beyond. I want to thank the entire team at Catalyst for their unwavering commitment to the LEMS community.

I’ll 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 — Chief Operating Officer and Chief Scientific Officer

Thanks, Jeff. Our clinical and regulatory strategy for Firdapse continues to focus on expanding access to all patients for the treatment of LEMS and enhancing the Firdapse patent estate to maximize its commercial durability. I will begin by discussing key updates around recent events relating to our intellectual property estate for Firdapse. The recent favorable settlement of the patent litigation resolving certain intellectual property disputes demonstrates the robustness of our Firdapse intellectual property estate and reinforces its exclusivity which has patent expiry dates to 2034.

As part of the settlement agreement, we acquired two patents that will further bolster our intellectual property portfolio for Firdapse. One of these two patents meets the FDA’s requirements for Orange Book listability, and as such, it was filed for listing in the FDA’s Orange Book. This will bring the total number of Orange Book-listed patents to six and should provide additional intellectual property protection to February 25, 2037. While the other patent is not listable in the Orange Book, it is still a valid patent and that is applicable to products containing Amifampridine and is therefore enforceable.

As part of the patent litigation settlement, we acquired the US and Mexico rights Ruzurgi. The acquisition of this asset aligns with our goals to serve all patients. We continue to supply Ruzurgi to existing IND holders for their patients that were on therapy at the time of the acquisition. And we’ll also offer assistance to transition to investigational Amifampridine phosphate or commercial Firdapse, if applicable and if the patient’s doctor feels the transition to these products is in the best medical interest of the patients. This is consistent with our goal of providing a safe and effective therapy for all LEMS patients.

During the first quarter of 2022, we filed a US supplemental New Drug Application seeking approval for Firdapse to treat pediatric LEMS patients and that supplement was accepted for review in the second quarter of this year. We expect the agencies to act on this supplement this year and we remain cautiously optimistic that the FDA will find it acceptable and approve it. While this initiative was underway prior to the litigation settlement, the recent acquired Ruzurgi safety data for pediatric LEMS may be beneficial in providing additional support for the supplemental NDA if needed. As you may recall, the previously approved Ruzurgi NDA was for pediatric use in LEMS patients.

An approval of this supplement would expand the access to Firdapse to include children aged six and above, as well as adults. However, as Pat mentioned, the pediatric LEMS patient population is a very small patient group with a total of US population estimated to be less than 30 in the United States. We also plan to seek through a supplementary NDA to increase the maximum dose of Firdapse from 80 milligrams per day to 100 milligrams per day. A number of Firdapse patients are already being treated at this dose after their physicians worked with the specialty pharmacy and the insurance providers to justify the higher doses.

This planned supplement will offer healthcare providers yet another tool to optimize the treatment of patients with Firdapse along with our many other patient support programs. The previously prescribed acquisition of Ruzurgi rights will also give us access to safety and efficacy data that further supports Catalyst seeking an increase in the Firdapse maximum dosage to 200 milligrams daily. As a reminder, Ruzurgi was previously approved at a maximum dosage of 100 milligrams per day for children. These initiatives are part of our ongoing commitment to provide an approved safe and effective treatment for all LEMS patients.

Moving on to patients with neuromuscular conditions other than LEMS. At the time of the settlement agreement, some patients were receiving Ruzurgi treatment for these neuromuscular conditions under FDA required investigator sponsored INDs. We are presently able to continue to supply Ruzurgi to those patients who are currently receiving treatment under these INDs. In doing so, our teams are actively verifying that these IND applications are current and patient engagement with these physicians is ongoing. This is important because the physicians treating these patients have an obligation to monitor the safe use of Ruzurgi and report safety observations to the FDA.

Recently, our Chief Medical Officer and I participated in an in-person meeting with our sub-license partner DyDo Pharma in Japan to discuss the progress related to the Firdapse Phase III clinical trial in Japan. The trial is proceeding on the previously disclosed schedule and we anticipate the study to be completed in early 2023. In addition, translation of Catalyst’s NDA documents to Japanese is underway in order to assemble and file an NDA in Japan in late 2023 or early 2024.

Finally, on the long-term strategy front, we have been accelerating our efforts with our business development initiatives and we are making substantial progress in evaluating strategic opportunities. We remain confident in identifying the right opportunities to maximize our capabilities and resources. We have uniquely strong teams that are highly aligned with these — and as we continue to execute on our initiatives across our business development and operations enterprises to achieve our goals. Our recent achievements demonstrate our ongoing ability to manage our initiatives successfully and achieve important milestones that have us in an excellent position to further advance our long-term growth strategies.

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

Alicia Grande — Chief Financial Officer

Thanks, Steve. We are very pleased with our financial results for the second quarter of 2022. Total revenue for the second quarter of 2022 principally from Firdapse product revenue, net was $53.1 million, a 46.1% increase when compared to total revenue of $36.4 million for the second quarter of 2021. Net income before income taxes for the second quarter of 2022 was $28.2 million, a 77.6% increase year-over-year, compared to net income before income taxes for the second quarter of 2021 of $15.9 million.

We reported GAAP second quarter 2022 net income of $21.6 million or $0.21 per basic and $0.20 per diluted share. An increase of 77.5% year-over-year compared to the second quarter 2021 GAAP net income of $12.2 million or $0.12 per basic and $0.11 per diluted share. Our effective tax rate for the first half of 2022 on an annualized basis, was 23.7% compared to 23% for the first half of 2021. For 2022, we expect that we will continue to benefit from the use of our deferred tax assets, primarily the Florida state net operating losses and the orphan drug tax credits, although those are subject to certain limitations, resulting in a more normalized tax rate.

Non-GAAP net income for the second quarter of 2022 was 30.3 million or $0.29 per basics and $0.28 per diluted share, which excludes from GAAP net income of $21.6 million, stock-based compensation expense $2 million, depreciation of 37,000 and an income tax provision of $6.6 million. This compares to non-GAAP net income for the second quarter of 2021 to 17.4 million or $0.17 per basic and $0.16 per diluted share, which excludes from GAAP net income of $12.2 million stock-based compensation expense of 1.5 million, depreciation of 31,000 and an income tax provision of $3.7 million. The above represents an approximately 73.7% year-over-year increase of non-GAAP net income.

Cost of sales was $7.6 million for the second quarter of 2022, an increase when compared to 4.6 million for the second quarter of 2021. This represents 31.2% of total operating costs for Q2 ’22, up from 22.1% of total operating cost for the second quarter of 2021. For the second quarters of both 2022 and 2021 cost of sales was approximately 14% of product revenue net, and consisted principally of royalties. As a reminder, royalties for Firdapse net sales increases by 3% on incremental net product sales exceeding $100 million in any calendar year. We expect to exceed $100 million in net product sales during the third quarter of 2022 and consequently expect the cost of sales to trend higher for the remaining two quarters of the year.

Research and development expenses were $4 million in the second quarter of 2022 compared to $4.5 million in the second quarter of 2021. And the expenses decreased as a percentage of total operating expenses to 16.2% for the second quarter of ’22 from 21.7% for the second quarter of 2021.

SG&A expenses for the second quarter of 2022 totaled $12.9 million compared to $11.5 million for the second quarter of 2021. SG&A expenses as a percentage of total operating expenses decreased to 52.6% for Q2 ’22 compared to 56.2% for the second quarter of 2021. As reported, we ended the quarter with cash and investments of $220.8 million and no funded debt, which we believe will enable us to advance our R&D programs and support our strategic initiatives of acquiring opportunities and innovative technologies to enable growth and value creation.

As a reminder, subsequent to June 30, 2022, during mid-July, we entered into a settlement agreement with Jacobus Pharmaceuticals. Since this was a third quarter 2022 transaction, it had no impact on our 2022 second quarter results. However, we are currently assessing the accounting tax impact of this transaction. Once our analysis is complete, we will provide guidance to the market if it is determined that the inputs of this transaction is material.

More detailed information and analysis of our Q2 ’22 financial performance may be found in our quarterly report on Form 10-Q which was filed with the Securities and Exchange Commission yesterday, August 9, and can be found on the Investor Relations page of our website at www.catalystpharma.com.

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

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

Thanks, Ali. In closing our prepared remarks, I’d like to add that Catalyst is well positioned to deliver sustained performance with an unwavering commitment to the LEMS community and execution of our strategic priorities. We anticipate that 2022 will continue to be a transformative year for the company with increased momentum to diversify and invest in innovative opportunities for rare diseases. We are approaching these objectives from a position of strength and look forward to enhancing our growth potential and long-term value for our stakeholders. Finally, I would like to thank all of our valued employees for their continued dedication and commitment to positively impacting patients’ lives.

Operator, we’d now like to open the call for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from the line of Charles Duncan with Cantor Fitzgerald. Please proceed with your question.

Charles Duncan — Cantor Fitzgerald — Analyst

Yes. Good morning, Pat and team. Congratulations on a really nice quarter. Thank you for taking our questions.

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

Good morning, Charles. Thank you.

Charles Duncan — Cantor Fitzgerald — Analyst

Good morning, Pat. So quickly, perhaps for — I had a couple of questions for each of you. The first is for Jeff on the commercial front. I guess I’m wondering as you think about that guidance range for revenue, what are you most interested in seeing happen to achieve that upper end and possibly raise it? Would it be new patients? Would it be persistence? Or would it be switches? It seems like the latter is already done, but what are you most keyed in on?

Jeff Del Carmen — Chief Commercial Officer

Sure. Thanks for the question, Charles. Good to hear from you. The good thing is all leading indicators and metrics that we’ve had are pointing to consistent and sustained growth. We are looking at early in Q3, already has seen strong new patient enrollments, as well as low discontinuation rates. So that’s where — in order to continue our growth. That’s where we’re going to get it from. And, like I mentioned earlier, we have significant patient leads and we know there are a lot of patients out there that we can still help. And we have those leads and our field force is doing a great job focusing on the treaters for those patients. So we hope to be able to help those patients. And those should come in, we were hopeful here in Q3 or Q4. So to answer your question, that’s where we see the ability to hit the higher end of our guidance.

Charles Duncan — Cantor Fitzgerald — Analyst

Okay. Thank you. And you provided a lot of nice detail in your prepared comments I had fewer questions. Moving on to Steve. Steve, you mentioned pediatric LEMS supplemental application, realize it’s not a very large market opportunity. But I think from a OPTIC standpoint, it is a good one, a good initiative. I guess the question that I had for you is, what kind of information were you able to provide the FDA? And secondarily, you used words cautiously optimistic, I’m wondering if that’s just a prudent statement or is there is something that you’re wondering about in terms of what the FDA — how the FDA will review the application or see the information in it?

Steven R. Miller — Chief Operating Officer and Chief Scientific Officer

Thank you for the questions, Charles. Let me answer your second question first. It’s just a prudent statement. It would be very presumptuous of any of us to make a statement about what we think that the FDA is going to do. We have to respect them to do their job and review the application. So I am unaware of anything that is deficient in the application. We think it’s acceptable. But again, that’s up to the FDA to decide, not us.

And can you remind me of the first question?

Charles Duncan — Cantor Fitzgerald — Analyst

Yes. The information that you provided, obviously not — [Speech Overlap]

Steven R. Miller — Chief Operating Officer and Chief Scientific Officer

Yes. Obviously, we had an expanded access program for years, even before approval and continued it after approval for patients that wanted to continue to seek treatment. We encourage them to switch to Ruzurgi because that was the approved product for pediatric LEMS but some patients didn’t. The bottom line is that what we submitted in our application was all of the pediatric safety data that we had, along with the simulation of how adult data translates to pediatric patients. It’s exactly the same approach that Jacobus took to get Ruzurgi approved for pediatric patients.

Charles Duncan — Cantor Fitzgerald — Analyst

Okay, makes sense. And then back to you, Pat. One last question regarding business development activities, appreciate all the color on that, and the goal of completing something by the end of the year. I guess my question is, would you anticipate if something happened by the end of the year that that could be accretive to revenue opportunities next year? Would you look to leverage the established commercial infrastructure? And finally, do you have a preference for use of cash or stock in some future transaction?

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

Yes. Great question, Charles. Obviously, we would love to think we could leverage our sales force with the same call point. I think that’s going to be difficult. We spent a lot of time looking at neuro and neuromuscular opportunities, and really where — we came up empty. So we, as you know about a year ago, we expanded our therapeutic reach to look into other therapeutic categories other than oncology. But we nevertheless expect that there will be some synergy in terms of back-office, market access, patient services, things like that, but not with the field force. And we anticipate that it would be accretive to revenues next year where we — again, our focus shifted about six months ago to approved or marketed products. So that’s now where we are focused.

With regard to cash or stock, I think that we’re in a position — our cash position is strong, continues to grow quarter-by-quarter. We have not tapped into the debt markets. We know that there is plenty of debt available if we want to take it on. So I think the needs and the desires of a target come into play. And I think we’re in an equally good position to do a cash deal or stock deal or a combination. [Technical Issue] [Speech Overlap]

Operator

Our next question on the line of Joseph Catanzaro with Piper Sandler. Please proceed with your question.

Joseph Catanzaro — Piper Sandler — Analyst

Hey, guys. Thanks for taking my questions and congrats on the nice quarter here. Maybe the first one in terms of the guidance and in light of what you saw in 2Q, where your expectations are for the pace of naive new patient enrollments in the second half of the year relative to what you saw in the first half? It seems like you saw some good steady growth. Would you expect that to continue at the same pace, accelerate, or perhaps temper in the back half of the year? Thanks. And then I have a follow-up or two.

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

Thanks, Joe, for the question. I’ll turn that over to Jeff.

Jeff Del Carmen — Chief Commercial Officer

Yes. And based on the leading indicators, like I mentioned, Joe, we do expect the pace of the growth to continue. New enrollments are very strong. Discontinuation rates remain steady. So we’re excited about the growth potential that’s still remaining out there.

Joseph Catanzaro — Piper Sandler — Analyst

Okay. Got it. And then, definitely — Go ahead, Pat. Sorry.

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

Yes. No. But just to reiterate with Jeff, he’d said earlier that the organic growth, we still anticipate to be in the 15% to 20% range for the year. And so we’re confident that there are a number of naive patients out there that we can help.

Joseph Catanzaro — Piper Sandler — Analyst

Okay. I just wanted to follow up on something, I think you said, Jeff, about 25% of the naive new enrollments in the quarter were from tumor LEMS, just wondering if you have a target number there that would mean you’re capturing as much of that opportunity as possible?

Jeff Del Carmen — Chief Commercial Officer

We haven’t quite established what the target number is. Our goal for 2022 was to really implement some educational tools out there to help physicians or small cell lung cancer treaters to learn about LEMS and then that there is a treatment out there, Firdapse. So that was our whole goal, to learn and to implement those channels or those programs this year and then to see more of the return next year. We’re happy to see the initial return here, so the increase. I had mentioned previously that 20% of the new enrollments were about — about 20% were tumor LEMS patients. Now that we’re starting to see about 25%, we’re hopeful that that will accelerate next year to potentially 35-ish, but we haven’t really put a final target in place to what we’re hoping to see in 2023.

Joseph Catanzaro — Piper Sandler — Analyst

Okay and last one for me. Steve, you mentioned that one patent you received from Jacobus that you intend to have listed. I’m wondering if maybe you could provide some details around explicitly what that one patent covers?

Steven R. Miller — Chief Operating Officer and Chief Scientific Officer

That patent contains claims for a new and novel previously unknown impurity that appears in all products that contain Amifampridine.

Joseph Catanzaro — Piper Sandler — Analyst

Okay, got it. Thanks. Thanks so much for taking my questions and then congrats again on the quarter.

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

Thank you, Joe.

Operator

Our next question comes from the line of Joon Lee with Truist Securities. Please proceed with your question.

Joon Lee — Truist Securities — Analyst

Good morning, guys. This is Less [Phonetic] on for Joon. And thank you for taking my questions. I just want to follow up on the patent question. So now after acquiring two additional patents from Jacobus, you now have a potential to have six in the Orange Book and IP protection out to 2037. My question is, are you aware of any potential ANDA filers for generic version of Amifampridine coming this fall? Is there a chance there will be a filer? And essentially, how strong is IP — your IP to prevent any potential filers for a generic being approved?

Steven R. Miller — Chief Operating Officer and Chief Scientific Officer

Thank you. Well let me answer your second question.

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

I’ll take the first part of that, Less. We anticipate, as we’ve said, very nice growth for the product long-term. And we would be remiss if we didn’t think that generic competition or generic companies would not, at some point, file in and-or Paragraph IV. So we’re prepared for that. And so we don’t know of any yet, but we’ll be ready.

Steve, you want to talk about the strength of the IP?

Steven R. Miller — Chief Operating Officer and Chief Scientific Officer

Sure. There is very little that I can actually say regarding the strength of the patents on advice of Counsel. It’s generally a bad practice to talk about potential future litigation strategies. Basically, it is just very high level. I can just tell you that we believe they are good patents and they are enforceable.

Joon Lee — Truist Securities — Analyst

Thank you for that color. Then one more for me on the IND patients that are still on Ruzurgi. When do you expect that to conclude and the patients to transition to Firdapse? Thank you.

Steven R. Miller — Chief Operating Officer and Chief Scientific Officer

You want me to take that or will you, Pat?

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

Yes, go ahead, Steve. Please take that.

Steven R. Miller — Chief Operating Officer and Chief Scientific Officer

We are in the midst of transferring all the assets from Jacobus with regard to the purchase of the Ruzurgi assets. Part of those assets include existing inventory of Ruzurgi. We are still evaluating the duration to which we can continue to provide that and what the long-term plans are for the ongoing supply for Ruzurgi to patients who continue — who are currently receiving Ruzurgi.

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

And I’ll add to that, Steve. Yes, most of those patients under investigator INDs are not LEMS patients, most are other neuromuscular conditions like congenital myasthenic syndrome. So it’s probably not appropriate to discuss off label use of Firdapse for those patients at this point, Less.

Joon Lee — Truist Securities — Analyst

Great. Thank you for that color, guys. Appreciate it.

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

Thank you.

Operator

And we have reached the end of the question and answer session. I’ll now turn the call back over to Pat McEnany for closing remarks.

Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer

Thanks everyone for joining our call. We look forward to our next corporate updates. Have a great day.

Operator

[Operator Closing Remarks]

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