Catalyst Pharmaceuticals Inc (NASDAQ:CPRX) Q3 2022 Earnings Call dated Nov. 10, 2022.
Corporate Participants:
Alicia Grande — Vice President, Chief Financial Officer and Treasurer
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:
Les Sulewski — Truist Securities — Analyst
Scott Henry — Roth Capital Partners, LLC — Analyst
Albert Lowe — Piper Sandler Companies — Analyst
Presentation:
Operator
Good day ladies and gentlemen, and welcome to the Catalyst Pharmaceuticals Incorporated Third Quarter 2022 Financial Results Conference Call. [Operator Instructions]
At this time, it is my pleasure to turn the floor over to your host Ali Grande, Chief Financial Officer. Ma’am, the floor is yours.
Alicia Grande — Vice President, Chief Financial Officer and Treasurer
Good, morning, everyone, and thank you for joining our conference call to discuss Catalyst’s third quarter 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 Jeffrey Del Carmen, our Chief Commercial Officer. Further 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 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, especially in light of the continued effects of COVID-19. Actual results may vary from the expectations contained in our forward-looking statements.
The 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 will turn over the call to Pat.
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
Thanks, Ali. Good, morning, everyone, and thank you for joining us today on our third quarter 2022 financial results and corporate update call. We are incredibly proud to report our outstanding third quarter financial results which marks another consecutive quarter of FIRDAPSE’s revenue growth and an all-time high recorded quarterly net product of $57.2 million, representing a 59.3% increase over the third quarter of 2021. We reported GAAP net income of $22.7 million for the third quarter of 2022 or $0.22 per basic share and $0.20 per share — per diluted share, which also reflects a $4.6 million charge in the third quarter related to the accounting treatment for the write-down of the Ruzurgi inventory and the amortization expense related to the acquisition of certain assets from Jacobus Pharmaceutical Company.
Our non-GAAP net income for the third quarter was $28.6 million or $0.28 per basic share and $0.26 per diluted share. Non-GAAP net income removes from our GAAP net income, our non-cash stock-based compensation and depreciation and amortization and our income tax provision. Ali will have much more to say about the accounting treatment and the impact on our P&L as a result of the acquisition of certain Jacobus assets during her presentation.
We enter the fourth quarter with further confidence that we’re on the right path to achieving our 2022 objectives and goals. In the month of October, we matched our best month for new enrollments in Catalyst Pathways and as a result, we are revising upward our full-year 2022 FIRDAPSE revenue guidance to $205 million to $210 million. Our 2022 financial guidance for cash opex of $65 million to $70 million remains intact and will exclude the impact of any strategic acquisitions.
Our cash position continues to grow as we ended the third quarter of 2022 with $256 million in cash and short-term investments. This is a $35.3 million increase in 2022 third quarter over the prior quarter amount and represents the largest quarterly increase in cash and short-term investments to date which further demonstrates our continued fiscal discipline.
Please keep in mind that this is after paying the $10 million initial payment to Jacobus for acquiring the rights to certain of their assets early in the third quarter. Also, our share repurchase program is currently on hold as we are conserving cash for expected business development activities.
As you know, approximately 50% of patients with LEMS suffer with a co-morbidity of small-cell lung cancer. We have commenced a soft rollout of our new marketing initiative to reach and teach thoracic oncologists and others in the physician community to treat small-cell lung cancer about LEMS. These programs represent a large untapped opportunity for us to help oncologists identify LEMS early and thus get to our patients on drug sooner for hopefully a better quality of life. Our new oncologist-targeted programs will hit the ground full speed at the beginning of next year. Jeff will have more to say about these programs in a few minutes.
Early in the third quarter, we achieved a global settlement of all U.S. litigation involving Jacobus Pharmaceuticals as part of the acquisition of certain Jacobus assets. With the acquisition of the Ruzurgi assets completed, our team is actively assessing the path forward for the product. In the meantime, we continue to provide the existing Ruzurgi inventory to patients receiving treatment for neuromuscular conditions other than LEMS who were previously receiving the drug under existing investigator-sponsored INDs.
The long-term prospects for Ruzurgi are being evaluated which involve many complex issues related to manufacturing, regulatory, cost and financial feasibility. As part of the acquisition, we added two more patents to our intellectual property portfolio, with an additional patents listed in the Orange Book with an expiration date of February 2037, bringing the total number of U.S. patents listed in the Orange Book to six.
We also announced the receipt in the third quarter of U.S. approval of the supplemental New Drug Application for FIRDAPSE, expanding the indicated age range to include pediatric patients, six years of age and older for the treatment of LEMS. While this patient population is estimated to be less than 30 pediatric patients in the U.S., this milestone demonstrates our continued commitment to the LEMS patient community that we serve.
During the third quarter, we made significant strides in our efforts to identify acquisition opportunities towards building a diversified patient-centered portfolio aligned with our overarching growth strategy. Our key priority on the strategy and business development front continues to remain our intention to broaden and diversify our product portfolio through collaborative partnerships, acquisition of commercial-stage assets or companies.
Currently, we are in advanced stages of due diligence to acquire commercial-stage products and or companies, and while no agreements have been reached to date, we are hopeful that we’ll be in a position to announce a transaction later this year. We recently advanced our environmental, social and governance or ESG initiatives with the launch of the comprehensive assessment of key ESG topics to identify appreciable targets for our sustainability activities. These efforts will serve as the foundation for our initial sustainability report which we anticipate will be published in the first half of 2023.
Just this week, we announced the Catalyst was named Company of the Year by BioFlorida. This recognition was for the achievement of significant milestones and to the growth of Florida’s life science industry. We are honored to have been recognized for our many accomplishments which is a testament to the entire Catalyst team for their dedication and hard work. In addition, we were recently ranked number 39 in Fortune Magazine’s 2022 Top 100 Fastest Growing Companies. This ranking is based on the company’s growth in revenues, profits and stock returns over the three-year period through June 30th of 2022 for which we achieved a 176% growth during that period.
On September 15th, we were added to the S&P SmallCap 600 Index. The S&P SmallCap 600 Index is a stock market index established by Standard and Poor’s. It covers roughly the small-cap range of U.S.-listed stocks using a capitalization-weighted index. To be included in the index, the stock must have a total market cap, ranges from $850 million to $3.7 billion.
As we entered the fourth quarter with sustained momentum, we are well-positioned to continue to execute our strategic priorities to strengthen the business with opportunities that translate into added long-term value and growth for our stakeholders. We are excited by the direction in which we’re headed and expect to close out the year on a high note. I’d like to thank all of our valued Catalyst team members as well as the LEMS patients and physician community that we serve.
I’ll now turn the call over to Jeff Del Carmen, our Chief Commercial Officer to further highlight our commercial performance.
Jeff Del Carmen — Chief Commercial Officer
Thanks, Pat and good, morning, everyone. We are pleased with the tremendous results delivered in Q3, building upon the momentum from the first half of the year. Q3 FIRDAPSE net sales were $57.2 million which represents 8% growth quarter-over-quarter and 59.3% growth quarter versus same quarter last year. I’m proud of the ongoing flawless execution demonstrated by the entire commercial organization.
Q3 results reflect continued strong organic growth. New enrollments exceeded forecast resulting in 85% more net-new patients in Q3 than Q2. Additionally, the discontinuation rate of reimbursed patients in Q3 was 35% lower than Q2. Operational excellence maintain favorable access to greater than 90% across all payers. Government or private commercial insurers continued high compliance to greater than 90% and contributed to an annual discontinuation rate of less than 15%. Patients enrolled in Catalyst Pathways including, those who are covered by Medicare in accessing foundation assistance had an average copay of less than $2 per month. As Pat mentioned, we have raised our total revenue guidance to between $205 million and $210 million. We are confident that we will continue to sustain organic growth moving forward, 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 Q4 are very positive. October naive new patient enrollments matched our highest total post-launch while discontinuations were lower than forecast. Our targeted marketing strategies enable us to maintain close to 500 leads that are diagnosed LEMS patients not yet on FIRDAPSE as well as educate healthcare providers patients and caregivers about LEMS and FIRDAPSE. Focus on these leads results in approximately 50% of new enrollments each month and accelerates the opportunity for these LEMS patients to be treated with FIRDAPSE when appropriate.
Additionally, analysis of data from national laboratories indicates at least a 50% increase in voltage-gated calcium channel antibody tests in 2022 versus 2021 which further validates our efforts to shorten the diagnostic journey for LEMS patients is working.
Another opportunity for organic growth is approximately 50% of cases of LEMS that are associated with an underlying cancer, typically small-cell lung cancer. Significant resources have been allocated this year to educate thoracic oncologists about LEMS and FIRDAPSE through non-personal promotion and conference engagement. We estimate that there are approximately 1,500 small-cell lung cancer LEMS patients in the United States. However, data suggests that more than 80% of small-cell lung cancer patients with LEMS are undiagnosed representing a significant opportunity. Currently, we estimate in small-cell lung cancer LEMS patients account for almost 30% of new enrollments each month.
In 2023, we will increase our share of voice to thoracic oncologists through the addition of oncology thought leader liaisons along with greater lung cancer conference participation. In addition, we continue to strengthen our relationships with lung cancer advocacy to both educate clinicians and patients about LEMS, and we are looking to partner with institutions to help more small-cell lung cancer patients to get screened and diagnosed.
Recently, Catalyst was nominated for PM360 Pharma Choice Award for patient engagement. This award nomination recognizes the great educational resources and programs that Catalyst offers LEMS patients, from one-on-one support of the patient access liaisons, virtual and live patient programs to the patient forum held earlier this year that was believed to be the largest gathering of LEMS patients in the U.S. We are pleased to have been recognized for this industry nomination which underscores our continued efforts to providing patients with valuable resources to help assist them in their LEMS treatment journey.
In closing, we are pleased with our performance in Q3 and remain very optimistic about the organic growth potential for FIRDAPSE moving forward. 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 life. I will begin by discussing the recent approval of our supplemental New Drug Application for FIRDAPSE seeking to treat pediatric LEMS patients. During the first quarter of 2022, we filed the supplemental NDA and I am pleased to report that it was approved by the FDA on September 29th of this year. With the approval of the supplemental NDA, all pediatric patients age six and above and all adults will now have access to FIRDAPSE as an FDA-approved product to treat their LEMS in the U.S. However, as Pat mentioned, the pediatric LEMS patient population is a very small patient group with the total U.S. population estimated to be less than 30 in the United States.
Next, in July of this year, we acquired two new patents from Jacobus Pharmaceutical to further bolster our intellectual property portfolio for FIRDAPSE, potentially extending our IP out to 2037. One of those patents has been listed in the FDA’s Orange Book with an expiration date of, February 25, 2037, which brings the total number of Orange Book-listed patents to six. The other patent is enforceable but not eligible for listing. As part of our acquisition of assets from Jacobus, we settled our patent litigation against Jacobus. In our review, this settlement demonstrates the robustness of our FIRDAPSE intellectual property estate, reinforces it’s exclusivity and gives us further confidence in the commercial durability of FIRDAPSE.
Additionally, as part of our ongoing IP portfolio management initiatives, we worked with the U.S. Patent and Trademark Office to amend the expiration date of one of Catalyst Orange Book-listed patents from April 7, 2034 to May 26, 2034, for an additional six weeks of exclusivity.
As part of our acquisition of assets from Jacobus, we acquired a license for Ruzurgi in the United States and Mexico. This acquisition aligns with our strategic goal to serve all LEMS patients. We are continuing to supply amifampridine tablets, two existing IND holders that had access to amifampridine tablets at the time of the settlement. These IND holders are treating about 100 patients with neuromuscular conditions other than LEMS, predominantly congenital myasthenic syndromes or CMS for which FIRDAPSE is not currently approved.
At this time, we intend to continue to supply amifampridine tablets to those patients that we’re receiving treatment under these INDs at the time of settlement. We have verified that these IND applications are current and patient engagement with these physicians is ongoing. We are also working on manufacturing initiatives in order to service these investigational new drug application amifampridine tablet request for the longer term.
Finally, we are planning to seek through a supplementary NDA to increase the indicated 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 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 the need to increase the indicated daily dosage to 100 milligrams, and this plan supplement if approved will help to optimize the treatment of those patients.
The previously described acquisition of the Ruzurgi rights gives us access to safety and efficacy data that we believe may bolster any future filings seeking to increase the indicated FIRDAPSE maximum doses to 100 milligrams per day. As a reminder, Ruzurgi was previously approved at a maximum dosage of 100 milligrams per day for children.
Our sub-licensee partner DyDo Pharma in Japan has just completed enrollment in their FIRDAPSE Phase 3 clinical trial which is required to seek approval for the Japanese market. Collection of the follow-up safety data is ongoing and translation of Catalyst’s U.S. NDA documents to Japanese is underway in order to assemble and file an NDA for Japan in early 2024.
Finally, on the long-term strategy front, we have been accelerating our efforts with our business development initiatives and we are in advanced stages of due diligence and we are making substantial progress in evaluating strategic opportunities. A key element in the evaluation of these opportunities as the candidate opportunities should provide a significant therapeutic benefit to patients. While we haven’t yet reached agreement on any of these opportunities, we remain confident in identifying the right opportunities to maximize our capabilities and resources.
We have uniquely strong teams that are highly aligned as we continue to execute on initiatives across our business development and operations enterprises to achieve our goals. Our recent achievements demonstrate that our ongoing ability to manage our initiatives successfully and achieve important milestones that have 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 — Vice President, Chief Financial Officer and Treasurer
Thanks, Steve. We are very pleased with our financial results for the third quarter of 2020. Total revenue for the third quarter of 2022 principally from FIRDAPSE product revenue net was $57.2 million, a 59.2% increase when compared total revenue $36 million for the third quarter of 2021. Net income before income taxes for the third quarter of 2022 was $26 million, an 84.18% [Phonetic] increase year-over-year compared to net income before income taxes for the third quarter of 2021 or $14.1 million.
We reported GAAP third quarter 2022 net income of $22.7 million or $0.22 per basic and $0.20 per diluted share. A 120.2% increase year-over-year compared to the third quarter 2021 GAAP net income of $10.3 million or $0.10 per basic and diluted share. Our effective tax rate for the third quarter of 2022 on an annualized basis was 19.7% compared to 24.3% for the third quarter of 2021. The decrease in effective tax rate for the third quarter of 2022 is due to an increase in stock option exercises in the third quarter of 2022 due to a sharp increase in our stock price. We anticipate variability in our tax rate on a quarterly basis. However, we expect a more normalized effective tax rate for the year in the range of 22% to 23%.
Non-GAAP net income for the third quarter of 2022 was $28.6 million or $0.28 per basic and $0.26 per diluted share which excludes from GAAP net income of $22.7 million, stock-based compensation expense of $2.1 million, depreciation of $35,000, amortization of $515,000 related to our Q3 ’22 license and asset acquisition from Jacobus Pharmaceutical, and an income tax provision of $3.3 million. This compares to non-GAAP net income for the third quarter of 2021, a $15.6 million or $0.15 per basic and $0.14 per diluted share which excludes from GAAP net income of $10.3 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 83.3% year-over-year increase of non-GAAP net income.
Cost of sales of $9.7 million for the third quarter of 2022 increase when compared to $5.3 million for the third quarter of 2021. This represents 30.1% of total operating cost for Q3 ’22, up from 24.2% of total operating costs for Q3 ’21. For the third quarters of ’22 and ’21, cost of sales was approximately 17% and 15% of product revenue net respectively and consisted principally of royalties due to our FIRDAPSE licensers.
As we mentioned last quarter, royalty store FIRDAPSE license stores increased by 3% when net product sales exceed exceeds $100 million in any calendar year. Since we exceeded $100 million in net product sales early in the third quarter of 2022, we expect the cost of sales will trend higher for the last two quarters of ’22.
Research and development expenses were $8.3 million in the third quarter of 2022 compared to $4.5 million in the third quarter of 2021. R&D expenses increased percentage of total operating expenses 25.9% from — for Q3 ’22 from 20.4% for Q3 ’21. This was principally due to a recording in the third quarter of ’22. About $4.1 million inventory write-off to R&D for inventory acquired in connection with the Ruzurgi acquisition.
SG&A expenses for the third quarter of 2022 total $14.2 million compared to $12.2 million for the third quarter of 2021. SG&A expenses decreased as a percentage of total operating expenses to 44.1% for Q3 ’22 compared to 55.4% for Q3 ’21. As a reminder, in early July 2022, we entered into a license and purchase agreement with Jacobus Pharmaceuticals for the rights to develop and commercialize Ruzurgi in the U.S. and Mexico. In connection with this license, we acquired $4.1 million in inventory manufactured by Jacobus and licensed and acquire intangibles with a value totaling $33.6 million. This agreement was accounted for as an asset acquisition.
As previously noted, the acquired inventory was expensed to R&D during the third quarter of 2022. The related license and acquired intangibles asset will be amortized in straight line basis over the next 14.5 years resulting in amortization going forward of approximately $580,000 per quarter. During July 2022, we paid Jacobus $10 million at closing in connection with the license and asset acquisition and we’ll will pay $10 million on the second and third anniversary of the closing. In addition, we will pay a small-single digit royalty on amifampridine product sales in the U.S. as defined in the agreement with certain annual minimums until the related patents expire which may be reduced or eliminated under certain circumstances. More detailed information and analysis of our Q3 ’22 financial performance may be found in our quarterly report on Form 10-Q which was filed with the Securities and Exchange Commission yesterday November 9th and can be found on the Investor Relations page of our website at www.catalystpharma.com.
As reported, we ended the quarter with cash and investments of $256.1 million which we believe will enable us to advance our R&D programs and support our strategic growth initiatives to diversify our product portfolio.
And with that, I will 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 say that the Catalyst team delivered a tremendous third quarter performance, once again attaining many operational and financial milestones, reflecting our businesses, strength and the successful execution of our strategy. I am proud of how Catalyst teams are performing and the positive impact that we’re having on patients’ lives which is fueled by our dedicated employees who have a shared commitment to the patient community that we serve. With our strong year-to-date performance and our positive outlook for the fourth quarter, we are well-positioned to achieve our near and long-term goals and deliver value to our stakeholders.
Operator, we’d now like to open the call for questions.
Questions and Answers:
Operator
[Operator Instructions] And our first question comes from Joon Lee from Truist. Go ahead, Joon.
Les Sulewski — Truist Securities — Analyst
Yes, good morning. This is Les on for Joon. Thank you for taking my questions, and congrats on the progress. Just a few questions from me here. So first on the — can you comment on how many patients are currently on FIRDAPSE to date and how many of those are small-cell lung cancer patients? Good morning, Les. Thanks for the question. I’ll turn that over to Jeff Del Carmen.
Jeff Del Carmen — Chief Commercial Officer
Yeah. Thanks for the question. We haven’t provided patient numbers historically. What I can tell you is that recent month like I mentioned, about 30% of our new enrollments are small-cell lung cancer are LEMS patients and that number will continue to grow as we implement some of the small-cell lung cancer LEMS strategies that I mentioned.
Les Sulewski — Truist Securities — Analyst
Okay. Got it. Well, so to build up on that, can you kind of I guess expand on how you are targeting this population? And I appreciate the comments you made earlier, but starting next year and throughout, as we progress throughout the year, how many of these 1,500 small-cell lung cancer patients could you potentially target and get on drug over the course of the year?
Jeff Del Carmen — Chief Commercial Officer
It’s hard to say as far as what we expect but we expect to move up that number from 30% that we’re seeing currently to about 35% to 40% in 2023, so that’s the type of growth that we’re expecting next year. As far as the programs that we’re putting in place, the thought leader liaisons that we are budgeting for, think those individuals as working with some of the high-volume cancer institutions around the country. And the key with those — that partnership will be to create programs that allow for small-cell lung cancer patients to be tested with — through VGCC test and really to be identified and diagnosed sooner hopefully to help these patients out. So that’s our approach there. And once these patients are diagnosed then they typically will be referred to either to a neuromuscular specialist or neurologists or we also — there are some oncologists, thoracic oncologists that will diagnose and treat on their own. So that’s the whole strategy with the thought leader liaisons. And that’s to supplement our efforts that we already have out there that we’re educating these physicians through multiple channels to — about LEMS the disease state as well as the available treatment which is FIRDAPSE.
Les Sulewski — Truist Securities — Analyst
Great. It’s helpful. And on — looking at your midpoint of your guidance, I guess would imply 4Q would be flat or a little bit down versus 3Q. Is it to do with seasonality or something else that tried this?
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
No, Les, this is Pat. We just — we’ve always been conservative, we’re going to remain conservative. For the first time as you know this year, we gave guidance so we’re working our way through this and we’re comfortable with providing that range. I, sitting here today, based on the start for this quarter, I would not say to you that we’re going to have a down quarter.
Les Sulewski — Truist Securities — Analyst
Got it. That’s helpful. I’ll jump back in the queue. Thank you.
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
Thank you.
Operator
Thank you. Our next question comes from Charles Duncan from Cantor Fitzgerald. Go ahead, Charles.
Unidentified Participant — — Analyst
Hi, good morning. It’s Ben on for Charles. Thank you for taking our questions, and congratulations on the quarter. So I have a couple on the commercial and then I have a follow-up. So, I guess I was wondering if you could start by characterizing whether the patient growth was from breadth or depth in the prescriber base. And then, I was also, hoping you could discuss the user reviews as well as if you’ve seen a distinction between treatment-naive patients, first is the switchers from Ruzurgi and if there has been a difference in persistence between those two groups. Thanks.
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
Great. Thanks for the question. Jeff?
Jeff Del Carmen — Chief Commercial Officer
Sure. So as far as the breadth or depth, significant part of our prescriber base our one-time writers, about 75% of our writers are again only had one patient in this. That’s truly indicative of a therapeutic area that they — there is not a center of excellence that treats LEMS. In other therapeutic areas or orphan diseases, there may be a handful of these centers throughout the country but that’s not the case for LEMS. So we’re seeing broader and wider base of prescribers. And that is a potential in the future is that when we look at it, about 40% of our enrollments in Q3 were from neuromuscular specialists. Neuromuscular specialists will see a volume, a higher volume of potential LEMS patients. So we think in the future there is opportunity as physicians gain experience with prescribing FIRDAPSE and seeing LEMS patients and know what to look for, that hopefully, they will look within their practice to identify additional LEMS patients that are appropriate for FIRDAPSE too.
As far as the difference between the Ruzurgi patients that transitioned over to FIRDAPSE, we’re not seeing any difference in persistence. And these patients — the product works, the transition — these patients did not lapse in therapy when they were transitioned over and we’re not seeing any higher discontinuation rate for that subset of patients versus the patients that were always just on FIRDAPSE. Does that answer your questions?
Unidentified Participant — — Analyst
Yeah, absolutely. Thank you. And I have a quick follow-up. So, I heard, I think I caught during the comments that there are non-LEMS patients with neuromuscular disorders, who are still on Ruzurgi. So I was wondering if you could characterize the disease states of those patients and if that may be a pool from which you would just pursue — of indications from which we pursue clinical development. And if you would, would you choose to go that route with Ruzurgi or FIRDAPSE? Thanks.
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
Yes. Great question. I’ll ask Dr. Miller to answer that.
Steven R. Miller — Chief Operating Officer and Chief Scientific Officer
Thank you, Paul. It’s actually a compound question, so remind me if I don’t hit all the questions. The disease that I mentioned in the part of our — earlier part of our discussion and most of these patients have is congenital myasthenic syndromes and it’s about 100 patients that are currently being treated with Ruzurgi under investigator INDs. The disease is actually not a single monolithic disease but consists of a collection of over 50 different genetic disorders. We have studied it in the past, we have had discussions with the FDA about clinical trial design for this disease. And the reality is that the agency wants to see clinical trials that are stratified by genetic subtypes and so that makes clinical trial design quite difficult. And we are currently evaluating if we have enough patients to go after — to pursue an indication for congenital myasthenic syndromes at this time. But right now, we don’t have any specific plans to pursue the indication for congenital myasthenic syndromes, and we will continue to provide the patients with Ruzurgi because that’s what they’re used to. And we have manufacturing initiatives underway in order to try to provide those patients with the drug for a longer term.
Unidentified Participant — — Analyst
Wonderful. That’s very helpful. Thank you very much. And yeah, I think that’s all from me. Congratulations on the quarter.
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
Thank you.
Steven R. Miller — Chief Operating Officer and Chief Scientific Officer
Thank you.
Operator
Thank you. And our next question comes from Scott Henry from ROTH Capital. Go ahead, Scott.
Scott Henry — Roth Capital Partners, LLC — Analyst
Thank you, and congratulations Pat and his whole team on such tremendous success you’ve had with FIRDAPSE. I did have a couple of questions. I guess for Ali, first did you pull out the $4 million for that Ruzurgi payment? I don’t think you did, I — it looked a little bit like a one-time expense in the quarter.
Alicia Grande — Vice President, Chief Financial Officer and Treasurer
Yes, it will be a one-time expense in this quarter. It’s related to the inventory that we — expense related to our acquisition from Jacobus.
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
And, Scott, that was included in our GAAP net income.
Alicia Grande — Vice President, Chief Financial Officer and Treasurer
Yes, in our R&D caption.
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
Yeah.
Scott Henry — Roth Capital Partners, LLC — Analyst
And I believe it was included in the non-GAAP too, correct?
Alicia Grande — Vice President, Chief Financial Officer and Treasurer
Correct. We did not exclude it from non-GAAP.
Scott Henry — Roth Capital Partners, LLC — Analyst
Perfect. Thank you. And Ali, since I’ve got you there, interest income is starting to become a meaningful number, approximately what rate do you get on that cash balance?
Jeff Del Carmen — Chief Commercial Officer
Scott, we — yeah, the rates have moved up nicely and of course our investments are all very conservative buying 90 days for the most part 90-day T-bills. And those rates earlier this year were 7 basis points and today we’re giving right around 3.5 to 4 depending on when you buy them. So significant increase and potential for larger investment income.
Scott Henry — Roth Capital Partners, LLC — Analyst
Yes, good time to have a lot of cash. And then, I guess just on a bigger picture question. I ask this question a lot on the calls, but how do you view the organic growth currently, particularly with the non-small cell lung cancer boost you’re getting? Where would you kind of categorize that?
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
Scott, I’ll turn it over to Jeff again.
Jeff Del Carmen — Chief Commercial Officer
Yeah. Hi, Scott. Our organic growth and we’ve demonstrated this over the last several years is about 15% to 20% annually and we are very confident that we will continue to sustain that organic growth.
Scott Henry — Roth Capital Partners, LLC — Analyst
Okay. And then final question. You’ve got a good — you’ve got a strong patent position in place, multiple Orange Book-listed patents. Just with regards to expectations, would you expect someone to challenge these? Should we be surprised if someone challenges or– I mean, I typically think of that as just part of the business cycle. Any thoughts on that?
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
Yeah. Scott, you’re exactly right. With the drug that’s doing in excess of $200 million, again we would be remiss if we didn’t expect at some point to be challenged, it’s just — it’s part of the business. So, I can tell you that it’s anticipated and we will be prepared.
Scott Henry — Roth Capital Partners, LLC — Analyst
Okay. Great. Thank you for taking the questions.
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
Yeah.
Operator
And our next question comes from Joe Catanzaro from Piper Sandler. Go ahead.
Albert Lowe — Piper Sandler Companies — Analyst
Hi, everyone. This is Albert on for Joe. And first-off congratulations on a really nice quarter. I was interested in your comments on, there was a 50% increase in the calcium channel antibody test. I was just wondering if you could maybe provide a little more insight and maybe quantify how many of these tests were done.
Jeff Del Carmen — Chief Commercial Officer
What I can tell you is just national laboratories that we partnered with and that data is available. What we can say is when we looked at the raw number and I don’t have that raw number on me but when we looked at it, the number was at least 50% greater in 2022 versus 2021. That data has been very hard to obtain just because of the pandemic and its six months delayed in getting that information. So what it signifies is that our efforts to get patients tested understand symptoms and how to test for LEMS, it’s working and that patients are now that were unable to get into these hospitals for diagnostic tests are now able to get in there. So that should also get more positive VGCC test and those patients will now be addressable, and we can now help these patients get on FIRDAPSE sooner. So that’s what that number was really meant to signify.
Albert Lowe — Piper Sandler Companies — Analyst
Okay, great. Thanks. Maybe one more quick one. I was just wondering is it a significant portion of patients that are kind of already pushing this maximum daily dosage of 80 milligrams a day?
Jeff Del Carmen — Chief Commercial Officer
When we look at our patients, about 40% of our patients are at 80 milligrams or higher. So yeah, that’s what we look at our current patient base.
Albert Lowe — Piper Sandler Companies — Analyst
Okay, great. That’s very helpful. All right. Thank you.
Patrick J. McEnany — Co-Founder, Chairman, President and Chief Executive Officer
Thank you.
Operator
And that appears to be the last question at this time. I would now like to turn it back to Pat McEnany for any 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 update and have a great day. Thank you.
Operator
[Operator Closing Remarks]