Catalyst Pharmaceuticals - Earnings Call - Q2 2021

Transcript

Speaker 0

Greetings, and welcome to Catalyst Pharmaceuticals Incorporated Second Quarter twenty twenty one Results. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host today, Ali Grondi, CFO.

Thank you. You may begin.

Speaker 1

Good morning, everyone, and thank you for joining our conference call to discuss Catalyst's Second Quarter twenty twenty one Financial Results and Corporate Highlights. Leading the call today, we have Patrick McAnnie, Chairman and Chief Executive Officer. We're also joined by Doctor. Steven Miller, Chief Operating Officer and Chief Scientific Officer and Jesse Del Carmen, Chief Commercial Officer. For the Q and A session, we'll also have Doctor.

Gary Ingenito, Chief Medical and Regulatory Officer. Before we begin, I would like to remind you that in the following comments and in the Q and 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 effects of COVID-nineteen. Actual results may vary.

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 2020 annual report on Form 10 ks. At this time, I'll turn the call over to Pat.

Speaker 2

Thank you, Ali, and thanks, everyone, for joining us this morning for our second quarter twenty twenty one results and corporate update call. I hope that everyone is doing well and staying safe and healthy during these unusual times. We are very proud of the results that we achieved during this past quarter. Total net revenues were $36,400,000 up 23% over the same quarter last year. During the second quarter, we completed the agreement with Daido Pharma for the rights to develop and commercialize Firdapse in Japan, which contributed $2,700,000 in revenue.

Further, net Firdapse product revenues for twenty twenty one second quarter were 33,600,000.0 up 14% from net product revenues of $29,600,000 for the second quarter of twenty twenty. GAAP net income before income taxes for the past quarter was $15,900,000 compared to $10,400,000 in the same quarter last year. GAAP net income after taxes was $12,200,000 or $0.12 per share or $0.11 per share fully diluted compared to $9,800,000 or $09 per basic and diluted share in the second quarter of twenty twenty. Additionally, we ended the second quarter of this year with $155,300,000 in cash and short term investments. Reported cash and short term investments this quarter was impacted by $3,700,000 invested in our open market share repurchase program.

As you may recall, very late in the first quarter of this year, our Board of Directors approved a share repurchase program of up to $40,000,000 of Catalyst shares from the open market. And as of today, the company has repurchased in the open market approximately 1,000,000 shares of common stock at an average purchase price of $5.06 per share for a total of $5,100,000 We continue to believe that rational purchases of our shares in the open market is prudent and increases shareholder value, while at the same time, we are increasing the cash on the balance sheet to be utilized for strategic growth opportunities. Allie will be providing more details shortly in her full financial report. Although we are pleased with these results, the market dynamics remain a challenge as we and many of our peers continue to be impacted by physicians' practices that are not yet fully functional, are not open to new patients or unwilling to prescribe new medications for their patients without several in person visits. Some regions of the country are more greatly impacted by the COVID-nineteen virus and are slower to open and remain a challenge for undiagnosed patients or newly diagnosed patients trying to get treatment.

Having said that, we are optimistic that as the country continues to recover from this pandemic, we anticipate that our Firdapse revenue trajectory will ramp further upward in the second half of this year and beyond. Jeff will have more information on this topic when he presents shortly on our commercial operations. On the human resource front, we have made great progress in filling key positions to our senior management team as well as with our Board of Directors. We recently announced the hiring and appointment of Doctor. Preeti Sundaram as Chief Product Development Officer.

Doctor. Sundaram brings to Catalyst a wealth of experience in sourcing, developing and managing drug product portfolios through all phases of development. Her years of experience in evaluating and developing new medications at Sanofi Genzyme and other large pharma companies brings a valuable resource to our team. We anticipate that Pripy will be a principal participant in future investor calls. We also recently announced the appointment of Molly Harper to our Board of Directors.

Molly is a seasoned pharmaceutical executive with more than twenty years of senior leadership at several large pharma companies, including Sanofi Genzyme. Molly brings a valuable experience to our Board in her areas of global marketing her experience in global marketing, strategic planning and operations. Lastly, regarding human resources, we've hired a Vice President, Head of Investor Relations that will be announced next week. This is also a critical position to be filled at a time when we anticipate a transformation of our business to the next phase of growth, which we expect will likely include the acquisition of one or more companies, marketed products, clinical programs and or technology platforms. Our R and D, regulatory and medical affairs teams diligently continued their effort to expand the label for the Firdapse brand.

But as we move forward, we anticipate a greater emphasis to be placed on other potential development programs and external projects. Steve will provide you with greater details on the status of MuskMG, the long acting Firdapse program and the medical affairs activities. We continue to be quite active with business development. We are currently evaluating and conducting due diligence on what we believe are several very exciting opportunities to expand our portfolio of marketed products and our product pipeline of early and later stage programs. While we haven't entered into any binding commitments to this point, we are hoping to complete one or more company or product acquisitions before the end of this year.

We were very pleased to announce last quarter that we had signed a licensing agreement for exclusive Japanese rights for Firdapse with Daido Pharma, a wholly owned subsidiary of Daido Group Holdings. We are gratified to continue the expansion of our global footprint for Firdapse and to assist the LEMS community worldwide with access to safe and effective therapy. Also, are pleased that many adult Canadian LEMS patients have now have affordable access to Firdapse through our exclusive partnership with Cai Pharmaceuticals. Although we continue to wrestle with regulatory and litigation issues against Health Canada, with regard to the exclusivity that we believe that we are entitled to, CHI continues to make progress within the LIMS community in Canada. Turning to other ongoing litigation.

It has been over four months since our oral argument was held in our appeal in the FDA case. So the decision of the eleventh Circuit Court of Appeals panel could come at any time. We await that decision, but we cannot be sure when it might be issued or what the outcome might be. With respect to our patent litigation against Jacobus Pharmaceuticals and PantherRx, there is progress to report. Last week the judge denied the defendant's motion to dismiss by indicating that there were factual issues requiring a trial.

The discovery process continues and it will for some time. And it will need to progress further before we get an idea of when the trial might occur. I can also report that we are preparing to amend our complaint to include the patent that was recently issued by the USPTO. This is part of our ongoing plan to vigorously defend our intellectual property from infringement. At this point, I'd like to turn the call over to Jeff Del Carvin, our Chief Commercial Officer, to provide you with further details on our commercial activities and operations.

Speaker 3

Thanks, Pat, and good morning, everyone. We are very pleased with Q2 net Firdapse sales of $33,600,000 which represents 14% growth for the quarter versus the same quarter last year and 11% growth versus Q1 twenty twenty one. I want to take this opportunity to thank the entire Catalyst organization for their resilience and continued focus on helping all adult LEMS patients. Strong net revenue in Q2 was driven primarily by steady new patient enrollments, continued favorable reimbursement dynamics and stable discontinuation rates. Q2 new patient enrollments were 111% higher for the quarter versus the same quarter last year.

In the first half of twenty twenty one, new naive to threefour DAP patient enrollments were 42% higher than the first half of twenty twenty. Our strong patient persistency resulted in continued low ninety day discontinuation rates of less than 15%. Through the first half of twenty twenty one, discontinuations were 25% lower than the first half of twenty twenty. We continue to see a gradual recovery from the impacts of the COVID-nineteen pandemic in Q2 when compared to Q1 twenty twenty one. Patient visits and lab test procedure trends continued to improve but remained below pre COVID-nineteen levels.

Through June, IQVIA COVID-nineteen market data suggest that diagnostic visits specific to neurology are 15% less than pre pandemic levels. However, we have a robust pipeline of patient leads that are already diagnosed with LEMS, but not yet on therapy. Many of these patients are waiting to visit with their physician. I'm extremely pleased with our Q2 execution, given the sustained impact of COVID-nineteen on our business. Commercial field activity remains strong.

Combined efforts between our commercial field force, non personal promotion and inside sales enable efficient coverage of approximately 20,000 healthcare providers. In person interactions accounted for 50% of activity, which represents a twofold increase quarter over quarter. We will continue to closely monitor the course of the pandemic and its impact on patient and physician behavior during the second half of the year to ensure our field team is well prepared to effectively engage with all stakeholders, accommodating their preferences and abiding by local guidelines. We continue to invest heavily in valuable patient resources that we believe will shorten the diagnostic journey of adult LEMS patients. These educational and branded resources have generated over 1,900 unique patient or caregiver opt ins online to receive useful information regarding REMS.

Engaging with these patients and caregivers will enable Catalyst to shorten their diagnostic journey and better serve the significant number of remaining patients sooner. In addition, our Catalyst Pathways patient services team continues to be dedicated to supporting the needs of adult LEMS patients, caregivers and healthcare professionals. This is evidenced by prescription approval rates, which remain over 90% across all payers, government or private commercial insurers. Patients enrolled in Catalyst Pathways, including those who are covered by Medicare and accessing foundation assistance have an average co pay of less than $2 per month. In closing, we 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 appropriately minimize discontinuations, generate new patient enrollments and shorten the diagnostic journey for adult LEMS patients. Once again, I want to thank the entire team at Catalyst for their unwavering commitment to the LEMS community. I will now turn the call over to Doctor. Stephen Miller, our Chief Operating Officer and Chief Scientific Officer, for an update on R and D activities.

Speaker 4

Thanks for the commercial update, Jeff. I'll now provide an update on our clinical pipeline and our development efforts with Firdapse. As you know, we are developing a long acting formulation of amifampridine phosphate in order to provide patients with a more convenient dosing regimen and a more consistent therapeutic effect. A number of candidate formulations have been prepared and three of the most promising formulations were evaluated in a pharmacokinetic or PK study completed in the fourth quarter of twenty twenty. The results of this first PK study are being used to inform the design and refinement of additional product formulations now under development and an additional PK study will be conducted later this year.

We have also completed a number of advisory panel meetings with both patients and physicians in order to establish the optimum target characteristics of the long acting formulation of amifantrine phosphate that are desired by the LEMS patient community and treating physicians. As previously announced, Catalyst submitted our plans, including the protocol for a new clinical trial for the symptomatic treatment of MuSK myasthenia gravis or MuSK MG to the FDA for their review and comment. The FDA provided written comments that question the suitability of both the revised study design and the ability of the initial MuSK MG pilot study to be supportive. Therefore, we can't rule out the possibility that a single study similar in design to MSK-two would not be sufficient for potential approval of the MuSK indication. Based on the positive reports from physicians and patients that participated in our previous studies, we are planning to convene an expert panel to discuss the options and review a likelihood of success for a MuSK MG indication for Firdapse.

Upon completion of this expert review, Catalyst will update the investment community on our determination as to whether to continue the development of Firdapse for this indication. Next, we previously announced that we plan to conduct a proof of concept study evaluating Firdapse as a treatment for hereditary neuropathy with liability depression policies or HNPP, a rare neuromuscular genetic disorder affecting about six thousand patients. The FDA reviewed our proposed protocol for this study and requested that research evaluate and develop a new patient centric endpoint for this indication prior to embarking on a proof of concept study. Therefore, considering the undeveloped and exploratory nature of the endpoint, we have decided not to proceed with a company sponsored study of Firdapse for this indication at this time, but we are in discussions with the proposed investigator who may wish to do the study as an investigator sponsored study on this indication with our support. Catalyst continues to raise health care provider awareness of LEMS through our medical affairs programs.

An accredited continuing medical education or CME course about LEMS is now available through Medscape. To date, 4,000 mostly healthcare provider learners have looked at the course and 1,300 have taken the CME test. This fall, Catalyst will host a LEMS learning program for neuromuscular fellows from various academic medical centers, including hands on training sessions from neuromuscular experts. Catalyst has continued to make progress on developing an intellectual property estate to protect the Firdapse franchise. Last October, we reported the issuance of U.

S. Patent number Ten-seven90Three-eight93, methods of administering thirty four dimenopiridine expiring 04/07/2024. Catalyst began protecting Firdapse franchise by filing suit last year in federal court against Jacobus Pharmaceuticals and PembrolRx for infringement of the issued patent. Recently, Jacobus' motion to dismiss the case was denied and the case is currently in discovery phase. Many of the documents related to this case are publicly available for anyone interested in learning more about the case.

Additionally, in April, the USPTO allowed patent number 10000006000128 for Firdapse, and this patent issued in 07/13/2021. The patent is directed to the use of suitable doses of amifampridine to treat patients suffering with LEMS that are small metabolizers of amifampridine. Any drug product containing amifampridine with a label for treatment of LEMS that states the patented dosing regimens and doses in the dosing and administration section of the product label could possibly infringe this patent. Catalyst intends to amend our current infringement suit with this new patent in order to protect this new intellectual property. Catalyst also has three other pending patents related to the use of burners.

All of these patents are being prosecuted under Track one status at the U. S. Patent and Trademark Office, and we remain hopeful that most, if not all of them, will issue in 2021. Assuming issuance of these additional patents, Catalyst plans to take appropriate legal action to protect this new patented intellectual property. As previously announced, Catalyst intends to expand our portfolio of rare disease treatments beyond the therapeutic promise of Firdapse.

With the recent addition of Doctor. Preeti Sundaram, our new Chief Product Development Officer, we have formalized our efforts to expand both Catalyst's product offerings and our research and development pipeline through focused external opportunity searches and evaluations. Prithee will provide guidance and oversight for new research programs that will hopefully bring much needed new therapies to rare disease patients as well as provide leadership on the overall optimization and integration of Catalyst product offerings and R and D programs. I will now turn the call over to Ali Grande, our Chief Financial Officer, to review our financial results.

Speaker 1

Thanks, Steve. Yesterday, we filed our 2021 Form 10 Q with the SEC and reported our second quarter financial reports in our press release. We are very pleased with our financial results for the second quarter. Let me highlight a few of those results now. As reported, we ended the quarter with cash and investments of $155,300,000 and no funded debt, which we believe will enable us to advance our R and D programs and support our strategic initiatives of acquiring earlier stage opportunities and innovative technologies to enable growth and value creation.

Total net revenues for the second quarter of twenty twenty one was $6,400,000 a 23% increase when compared to total revenue of $29,600,000 for the second quarter of twenty twenty. 2021 total revenues included $2,700,000 of upfront fees related to our license agreement with Dairo for Japanese development and commercialization rights. Our second quarter sales continued to be impacted by the pandemic, Although as Jeff mentioned, we continue to see gradual recovery. Despite these challenges, total Firdapse product revenue net were million for the second quarter twenty twenty one, 14% higher than net product revenue or BRL29.6 million for the second quarter in twenty twenty. As Peran just mentioned, we are optimistic about our revenue growth in 2021 as hopefully the impact of the COVID-nineteen pandemic subside.

We reported GAAP net income of 12,200,000.0 for Q2 twenty twenty one or $0.12 per basic and $0.11 per diluted share, 24% increase when compared to GAAP net income of $9,800,000 or $09 per basic and diluted share for Q2 twenty twenty. Before I continue, let me take a moment to provide more color on our second quarter tax rate. Our effective tax rate in the second quarter of twenty twenty one on an annualized basis is 22 compared to 5.7% in the second quarter of twenty twenty. The tax rate for Q2 twenty twenty benefited from the use of our deferred tax assets, which is a non cash item. While we expect to use the balance of our federal net operating losses in 2021, we expect that we will continue to benefit in future periods from the use of our deferred tax asset relating to state net operating losses and the orphan drug tax credit, although those are subject to certain limitations resulting in a more normalized tax rate once we burn up our NOLs.

Non GAAP net income for Q2 twenty twenty one was $17,400,000 or $0.17 per basic and $0.16 per diluted share, which excludes from GAAP net income, sub base compensation expense of 1,500,000.0 depreciation of $31,000 and the income tax provision of $3,700,000 This compares to non GAAP net income for Q2 twenty twenty of $12,200,000 or $0.12 per basic and $0.11 per diluted share, which excludes from GAAP net income stock based compensation of $1,800,000 depreciation of $29,000 and the income tax provision of approximately 600,000 Because of the significant effects of the use of our deferred tax assets in the second quarter of twenty twenty compared to the second quarter of twenty twenty one, we believe that this non GAAP measure is useful to an overall understanding of our results of operations for the second quarter of twenty twenty one when compared to the same quarter of twenty twenty. Cost of sales of approximately $4,600,000 for Q2 twenty twenty one slightly up compared to $4,100,000 for the second quarter of twenty twenty, in line with the increase of net product revenue at 14% of revenues for both quarters. Research and development expenses were R4.5 million dollars for Q2 twenty twenty one compared to R4.4 million dollars for Q2 twenty twenty.

U. S. Dollars represented a 2% increase over the same quarter of the previous year, and the expenses remained consistent at 2223% total operating costs for the second quarter of twenty twenty one and the second quarter of twenty twenty, respectively. Research and development expenses stayed relatively consistent as we completed our MuSK MG clinical trial and SMA proof of concept study during 2020, but continued activities to close out the studies and mutated clinical sites in 2021, continue our long acting formulation development and our expanded access programs. We expect that research and development expenses will continue to be substantial in 2021 and beyond as we continue the development of our long acting formulation program for Firdapse, continue our expanded access programs, evaluate Firdapse as a treatment for other neuromuscular disease.

In addition, we expect R and D will also increase in future periods if we successfully execute on our strategic initiatives to acquire or in license innovative technologies and or earlier stage opportunities in other superior categories outside of neuromuscular diseases. SG and A expenses for the second quarter of twenty twenty one totaled $11,500,000 compared to $10,800,000 in the second quarter of twenty twenty. Even though this represents a 6% increase over the same quarter of the previous year, SG and A expenses remained consistent at 56% of total operating costs for both the second quarter of twenty twenty one and the second quarter of twenty twenty. We expect that SG and A expenses will continue to be substantial in 2021 as we continue our efforts to increase revenues from Firdapse sales and take steps to further expand our business. More detailed 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 yesterday, August 9, 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.

Speaker 2

Jeff, Steve, Valley, thank you for your reports. I'd like to close out our prepared remarks by making the statement to the entire Catalyst team in thanking them for their dedication and continued patient focused mission during these challenging times to ensure that all LEMS patients have affordable access to Firdapse. I'll now turn the call over to the operator so that we may take your questions.

Speaker 0

Thank you. At this time, we will conduct a question and answer session. Our first question comes from Charles Duncan with Cantor Fitzgerald. Please proceed.

Speaker 5

Yes. Pat and team. Congratulations on a good quarter. Thank you for taking my question. First question is on Firdapse commercial, second is on pipeline and third is on strategy.

And so regarding the first question, I guess I'm wondering if Jeff could provide some additional color on the effectiveness of the patient resources to shorten the diagnostic journey that he mentioned, particularly interested in the diagnosed versus prevalence assumptions that you're making. How are you shortening this diagnostic journey? And then also be interested in whether or not you want to provide Firdapse revenue guidance. I'm not sure if Allie said that. Got to tell you, there's a lot of background noise.

And so I'm not sure if I heard all of her comments on guidance.

Speaker 2

Yes. Charles, we're not providing any guidance yet. Thank you for your questions, by the way. We still think that we need to monitor what's happening with COVID before we're able to provide any guidance at this point. So our policy is at this point, no guidance.

And with regard to how we're shortening the diagnostic journey, I'll let Jeff answer that, versus the prevalence. As we both mentioned in our remarks, it is a little bit more difficult these days. We have tools in place to shorten that journey. But the real issue is at the physician's offices where a lot of them are not fully functional at this point or they're not taking new patients or they're requiring several in person visits before they'll prescribe a new medication. So those are some of the dynamics that we're dealing with.

And one of the reasons why we're at this point unwilling to provide a revenue guidance. But Jeff, do you want to talk about the diagnostic journey and the tools we're using? Sure.

Speaker 3

And thanks for the question, Charles. First and foremost, we are very confident in the prevalence. We always stated that about three thousand patients, adults with LEMS. And we I strongly believe that it is our responsibility as manufacturing an ultra rare disease to provide patient educational resources and also educate our other potential stakeholders, physicians. With that, we

Speaker 4

are

Speaker 3

providing educational resources that are it's about LEMS, it's about some of the symptoms that these patients may be having as well as pointing these patients to a free test that we have for LEMS, free PGCC test. But it's all a lot of information that they can take, discuss with their caregiver and also bring into physicians. So that's been extremely helpful for these patients. As I referenced, we have 1,900 patients or caregivers that have opted in. And with that, those opt ins, we're allowed to engage with these stakeholders and provide the information that they request and then have ongoing conversations with these patients.

So hopefully, that helps address your question as to what we're doing with these patients. Charles?

Speaker 2

Yes. One of if I may, Jeff, let me add to that, Charles. We have an effort on the health care provider side and education. Steve pointed out, we have two programs that are ongoing as we speak. One is continuing medical education credits that are available to docs, which we are hosting through Medscape.

And I believe that we have about 1,500 unique docs who have signed up for this review. I think four hundred five hundred at this point have actually received credits for studying about LEMS, the disease, and some of the therapies that are used to treat this particular disease. And then we have our ambassadors program, which is for neuromuscular specialists or fellows in various academic institutions around the country who we educate about LEMS. And they go back to their institutions and they are supposed to go back and hold meetings with about another 15 or so of their colleagues at their institution to further spread the knowledge base around the disease, Lambert Eaton Myasthenic Syndrome. So there's not only the program for patients, but we do have programs for healthcare providers to educate them.

And we think that all of these combined really will help shorten the journey for patients to a definitive diagnosis and ultimately to effective treatment.

Speaker 3

Correct. And one other thing is we've already seen Charles patients that have reported that they bring up LEMS to the physician, to their physician is something that they may have based on the information that they're provided. So we've seen traction there from the patient and physician engagement. And the last thing I'm going to add to this is we have both branded and unbranded videos that are offered on our websites that are may be helpful to patients and caregivers as well. So a lot of resources out there to help these patients.

Speaker 5

Very good. It seems value added for the community and I appreciate all the color. My next question was pipeline. Sorry for taking so much time. And that is perhaps for Steve.

Regarding the long acting form, I'm wondering, it sounds like you're doing or did some PK studies and doing another one. Can you provide any additional color on the timing? Because it seems like you're getting traction in the market with the non long acting form of Ferdafsen. And I'm wondering how much is this needed or so is this a nice to have or a need to have in terms of the franchise?

Speaker 2

Thanks for the question.

Speaker 4

We actually have had a number of patients tell us that this is really a need to have. Many patients really don't like the inconvenience of having to stop what they're doing and time when they're going to take their doses of amifampridine throughout the day. And so they really want this drug. Now as you point out, we've done very well with sales and it's growing and that basically points to the overall effectiveness of the medicine itself. And so it's only going to get better for the patients when the sustained release version of this product becomes available.

Speaker 5

Any thoughts on timing? I know there's a reason perhaps competitive or whatever to not be all that disclosive, but thoughts broad timing?

Speaker 4

From a broad point of view, we have about another year or so of formulation work to do, at which point we basically will start appropriate clinical trials to support the enhanced efficacy of this product relative to the IR version of the product. We anticipate bringing this product to market before our orphan drug exclusivity expires.

Speaker 5

Okay, great. That's helpful. And then last question on strategy. Pat, you mentioned some hires and going into a transformative period for the company in terms of executing strategy with regard to acquisition of products, platforms or companies. And I guess I'm wondering, what do you favor?

Is this kind of acquisition that you're looking for something that can tuck in within a very effective commercial sales effort at this point? Or does it take it in a different direction? Or are you focused more on leveraging your experience within orphan neurology? Can you provide additional update or additional color on your strategy there?

Speaker 2

Sure, Charles. Yes, ideally, we'd love to be able to leverage our sales force with another neuromuscular product in the bag. And we've tried that most of last year. We had a couple of attempts, which unfortunately did not work out. And I think it's a bit restrictive.

We're going to grow our business and it may not be in neuromuscular. And I think we described on our last call that we would our interest is in expanding the spectrum to include just about any therapeutic category outside of oncology, which is very crowded and a very difficult space to work in. So ideally, it's got to be something that we think has a high likelihood of success and something that is affordable to us. Let me use an example of endocrinology, which we looked at a potential asset about a year ago. That's certainly not a product that would be carried in the bag by our neuromuscular sales team.

And we really think that we've done such a great job and our sales and marketing team has done a great job in bringing Firdapse to market that we could replicate that in other therapeutic categories like endocrinology, for example, and put together a 15 to 20 person sales force or regional account managers to bring a product outside of neuromuscular to market. But we also think that clearly we want to stay in the rare disease space. So again, the only thing that we are avoiding is obviously something that is too big a bite for us and something that is in oncology. So that's a fairly broad approach. Ideally, with an acquisition, we'd like to think that a validated technology platform came with that.

That may or may not be the case. There are some interesting small molecules out there, biologics, as well as cell and gene therapy projects. So we've got a fairly broad spectrum to look at in various stages of development.

Speaker 5

That's helpful. What do you think about financing it in terms of debt versus equity? What kind of transaction are you contemplating?

Speaker 2

Well, we think that our equity is awfully cheap. And I guess what CEO doesn't think that. But so we as we pointed out, we have $155,000,000 in cash as of sixthirty. That cash is growing by 10,000,000 to $15,000,000 per quarter. We know that we have access to probably at least $100,000,000 in debt, term loans.

A number of large banks as well as some of the more boutiques have come to us and talked to us about taking on debt. We've been reluctant in the past, but it may be a good instrument to use to make an acquisition with.

Speaker 5

Maybe cheap money. Appreciate you providing all the additional detail. Thank you.

Speaker 2

Sure. Thank you, Charles.

Speaker 0

Thank you. At this time, I would like to turn the call back over to management for closing comments.

Speaker 2

Thank you for joining us today, and I look forward to future calls. Have a great day.

Speaker 0

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation, and have a great day.