Catalyst Pharmaceuticals Inc

NASDAQ:CPRX

Earnings Call Analysis

Catalyst Pharmaceuticals Reports Strong Q3 Results and Ups Revenue Guidance

In Q3 2024, Catalyst Pharmaceuticals achieved total revenues of $128.7 million, a 25.3% increase from the previous year. The growth was propelled by strong performances from FIRDAPSE and AGAMREE, whose net revenues reached $79.3 million and $15 million, respectively. Full-year revenue guidance is now between $475 million and $485 million, reflecting optimism primarily due to FIRDAPSE's robust demand. Additionally, AGAMREE's guidance was raised to $40-45 million. The company’s success is underpinned by strategic marketing and partnerships in expanding global reach, while costs are projected to rise due to increased royalty obligations.

Strong Financial Performance in Q3 2024

Catalyst Pharmaceuticals reported a robust increase in financial performance for the third quarter of 2024, achieving total revenues of $128.7 million, an impressive 25.3% growth compared to $102.7 million in Q3 2023. This increase was fueled by net product revenues of $126.4 million, marking a 23.2% rise year-over-year, primarily driven by the successful performance of FIRDAPSE and the commercial launch of AGAMREE.

Updated Revenue Guidance for 2024

Due to these strong quarter results, Catalyst has revised its full-year total revenue guidance for 2024. The new forecast is set between $475 million and $485 million. For FIRDAPSE specifically, the company has narrowed its revenue guidance to between $300 million and $310 million, reflecting growing market strength. Additionally, AGAMREE's revenue outlook has been upgraded from a range of $35 million to $40 million to between $40 million and $45 million for the same period.

Performance of Key Products

FIRDAPSE continues to thrive despite being in its sixth year on the market, with Q3 2024 net sales reaching $79.3 million, an increase of nearly 20% from the previous year. This growth is attributed to effective patient engagement strategies, including identifying and maintaining a robust patient pipeline. The company is also focusing on educational initiatives aimed at healthcare providers to enhance patient diagnosis rates for Lambert-Eaton Myasthenic Syndrome (LEMS). AGAMREE, launched commercially in March 2024, achieved net sales of $15 million in its second full quarter since launch, exceeding initial expectations. It is gaining traction in the Duchenne Muscular Dystrophy (DMD) community, demonstrating a shift from older corticosteroid therapies like EMFLAZA and prednisone.

Sustained Growth and Future Prospects

With a current patient pipeline of around 500 diagnosed LEMS patients who have yet to commence treatment with FIRDAPSE, the company is optimistic about sustaining its growth trajectory. Future sales for AGAMREE are increasingly supported by strategic partnerships and educational efforts aimed at both healthcare providers and patient communities. The full-year performance indicates significant potential for further revenue increases as awareness and adoption expand in target patient populations.

Cost Control and Profitability

Catalyst has successfully maintained tight control over costs, reporting a decrease in research and development (R&D) expenses to $3.3 million from $83.7 million in the same quarter last year, which included a significant one-time charge. However, selling, general and administrative (SG&A) expenses rose to $45.9 million, mainly driven by expenditures related to AGAMREE's commercial launch. Despite these increased SG&A costs, the company reported a GAAP net income of $43.9 million or $0.35 per diluted share, a notable recovery from the net loss of $30.8 million in Q3 2023.

Regulatory Progress and Global Expansion

Catalyst is also making strides on the regulatory front, with a recent milestone achieved in Japan for FIRDAPSE, which is expected to launch by the end of Q4 2024. This development has been accompanied by a milestone payment of approximately $2.1 million from DyDo Pharma, the sub-licensee in Japan. Efforts to expand AGAMREE's market access in Canada are ongoing, while international partnerships are in the works to penetrate high-growth regions such as LATAM and APAC.

Clinical Advancements with SUMMIT Study

The SUMMIT study is underway, aiming to gather real-world data about AGAMREE, particularly its clinical benefits like improved bone health and quality of life for patients with DMD. This study will support future FDA applications for an enhanced label, aiming to solidify AGAMREE's position as a leading treatment option and extend its therapeutic advantages over existing alternatives.

Conclusion: Confidence in Strategy and Momentum

Overall, Catalyst Pharmaceuticals expressed confidence in its strategic execution and operational excellence. The company's detailed approach to patient engagement, coupled with its ability to navigate regulatory landscapes and commercial launches, positions it well for sustained success. As Catalyst continues to execute its strategic priorities, it looks forward to delivering continued growth and value to its stakeholders.

Earnings Call Transcript 2024-Q3

[Operator]

Thank you for standing by. My name is Chris, and I will be your conference operator today. At this time, I would like to welcome everyone to the Catalyst Pharmaceuticals Third Quarter 2024 Financial Results Conference Call. [Operator Instructions]

I would now like to turn the call over to Mike Kalb, CFO. Please go ahead.

[Michael Kalb, executive]

Thank you. Good morning, everyone, and thank you for joining our conference call to discuss Catalyst Pharmaceuticals Third Quarter 2024 Financial Results and Business Highlights. Rich Daly, President and CEO, will lead the call today; and Jeff Del Carmen, our Chief Commercial Officer and I will also present. Additionally, Dr. Steve Miller, our Chief Operating Officer and Chief Scientific Officer, will be available for the Q&A.

Before we begin, I would like to remind you that in our remarks this morning 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 not prove to be accurate. 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 2023 annual report on Form 10-K filed with the SEC on February 28, 2024, and in our third quarter 2024 quarterly report on Form 10-Q, which was filed yesterday, November 6, 2024, with the SEC.

At this time, I will turn the call over to Rich. Rich?

[Richard John Daly, executive]

Thanks, Mike. Good morning, everyone, and thanks for joining us today. We are pleased to report that we achieved another quarter of exceptional financial performance, continuing our consistent growth and sustained momentum. Our results for the third quarter 2024 demonstrate our unwavering commitment to operational excellence, strategic execution and delivering long-term value. Today's call will begin with an overview of our portfolio highlights and key strategic initiatives. We'll then move on to our detailed discussion of our commercial performance and financial results for the quarter.

Let's start with financial results and commercial highlights. In Q3 2024, we reported total revenues of $128.7 million, a 25.3% increase year-over-year, which included net product revenues of $126.4 million, a 23.2% increase from Q3 2023. These results were driven by the outstanding performance of FIRDAPSE and the continued launch success of AGAMREE. I'm pleased to report that as a result of our strong performance over the first 3 quarters of the year, we are updating our full year 2024 total revenue guidance to between $475 million and $485 million. FIRDAPSE continues to deliver outstanding net revenues and growth well into its sixth year on the market, and we are updating our full year 2024 net revenue guidance for FIRDAPSE from the $295 million to $310 million range to the $300 million to $310 million range.

Our ability to work with health care providers to identify and maintain an active list of potential patients has been foundational to our success, and we believe that we will -- this will continue to drive our growth for the foreseeable future. Additionally, as a result of AGAMREE's market success, we are updating our full year 2024 net revenue projections for AGAMREE from the $35 million to $40 million range to the $40 million to $45 million range. We are confident in AGAMREE's market potential as it continues to gain traction within the DMD community. We believe AGAMREE represents a significant advancement in corticosteroid treatment options for DMD and is well positioned to drive meaningful long-term growth.

FYCOMPA continues to deliver steady prescription numbers and generated net revenues of $32.1 million in the third quarter. The brand experienced a 12% decrease in net revenues compared to Q3 2023 due to adjustments in gross to net as previously disclosed. FYCOMPA remains on track to meet full year 2024 guidance. Jeff will offer a comprehensive overview of our commercial performance, followed by Mike's detailed review of our financials later in today's call.

Let's take a broader view of our Q3 accomplishments, starting with clinical and regulatory. Alongside our financial achievements, we are making strides on the clinical front with the SUMMIT study. This study aims to gather real-world data to validate AGAMREE's clinical benefits, including improvements in bone health, growth parameters, behavioral and cardiovascular outcomes. Patient enrollment now underway, we expect this study to provide long-term safety and quality of life data that we hope will support future FDA submissions for updated AGAMREE labeling aimed at demonstrating its advantages over existing corticosteroid therapies and establishing it as the leading treatment option for DMD.

Moving on to global expansion milestones. In parallel, we continue to make progress on our global expansion efforts, aiming to broaden our rare disease portfolio through strategic alliances in key markets outside the U.S. Recent milestones in Japan and Canada highlight our commitment to delivering innovative therapies to rare patients worldwide. In late September, DyDo Pharma, our sub-licensee in Japan, secured regulatory approval for FIRDAPSE 10-milligram tablets for the treatment of LEMS, paving the way for the launch of FIRDAPSE in Japan, which they have advised us is expected by the end of Q4 2024. Additionally, this achievement resulted in a milestone payment of approximately $2.1 million.

Our partner in Canada, Kye Pharmaceuticals, is working diligently to file for AGAMREE's regulatory approval. This milestone will mark another advancement in expanding our rare disease portfolio, paving the way for health care providers and patients in Canada to access this therapy. While no agreement has been entered into to date, we remain focused on establishing strategic partnerships in LATAM and APAC, both high-growth regions to enhance market access and drive expansion. Regarding our strategic initiatives, our efforts remain strong with our business development teams actively evaluating a range of promising opportunities in the rare disease space. Our strategy is focused on accretive and near-accretive opportunities, predominantly in later-stage derisked assets with a clear path to maximizing value.

Our teams have been actively searching for and pursuing strategic opportunities, and we have also seen a notable increase in inbound opportunities. This rise in inbound engagement is a strong signal of the market's confidence in our commercial track record, credibility and industry reputation. This momentum positions us well to drive value through strategic partnerships and growth initiatives, aligning with our long-term commitment to deliver sustained value.

In conclusion, as we continue to diligently execute our threefold strategy: first, outstanding commercial execution; second, portfolio diversification; and third, global expansion, we believe we are well positioned to capitalize on emerging opportunities, sustain our growth trajectory and drive long-term success.

At this time, I'll turn the call over to Jeff, who will provide an overview of our commercial performance. Jeff?

[Jeffrey Del Carmen, executive]

Thanks, Rich, and good morning, everyone. We are thrilled to announce the outstanding third quarter performance of our entire commercial portfolio. These results highlight our strategic focus and operational excellence, which continue to fuel our commercial success. Q3 results were propelled by sustained organic growth in FIRDAPSE, steady prescriptions from FYCOMPA and the continued robust commercial launch of AGAMREE. Total net product revenues for Q3 reached $126.4 million, marking a 23.2% increase compared to the same quarter last year. Based primarily on the continued strong performance of FIRDAPSE and the strong performance of AGAMREE, which we launched commercially in March of this year, we have increased our full year revenue estimate to between $475 million and $485 million, which is further detailed in the press release issued last night.

I will now provide a breakdown of Q3 net product revenue by product. Let's begin with discussing FIRDAPSE. Our efforts to support patients living with Lambert-Eaton myasthenic syndrome with FIRDAPSE have been remarkably successful this quarter. Q3 net sales of $79.3 million represent an almost 20% increase over the same quarter last year. New LEMS patient enrollments and net new patients both exceeded forecast, while the annual discontinuation rate was below the forecast of 20%. Prescription approval rates were greater than 90% across all payers, government and private commercial insurers.

Ordering patterns and refill rates during Q3 returned to historical norms of around 90%. Our demonstrated strategic growth initiatives continue to build a strong LEMS patient pipeline, ensuring steady treatment adoption and long-term organic growth. We sustain a pipeline of approximately 500 diagnosed LEMS patients at various stages of their diagnostic journey who have not yet started on FIRDAPSE. This group generally accounts for around half of our new patient enrollments, significantly supporting our steady annual organic growth. Additionally, we continue to be pleased with the progress we are making with LEMS education programs aimed at health care providers and potential LEMS patients to drive high rates of voltage-gated calcium channel antibody testing, helping to shorten the diagnostic journey and increasing patient eligibility for treatment with FIRDAPSE.

Finally, we continue to collaborate with top thoracic oncology institutions to implement screenings that will help accelerate diagnosis of the more than 90% of small cell lung cancer LEMS patients that remain undiagnosed. Based on leading indicators going into Q4, we are narrowing FIRDAPSE's full year 2024 guidance to between $300 million and $310 million, which is the result of us increasing the lower end of our previous guidance range.

Next, I would like to discuss AGAMREE. We are proud of AGAMREE's growing presence in the market as a breakthrough treatment for DMD. This quarter, AGAMREE's performance exceeded our expectations with robust net sales of $15 million, driven by its expanding adoption. Our strategic partnerships and initiatives to educate health care providers and the patient community about AGAMREE's unique benefits have been instrumental in this success. We continue to see transitions to AGAMREE from both corticosteroid segments, 45% from EMFLAZA and 43% from prednisone. In addition, 84% of the top DMD centers of excellence and greater than 170 unique health care providers have already prescribed AGAMREE. We are exceeding our target of 85% reimbursed shipments and average less than 9 business days to approval. We expect the time to approval to decrease as payers finalize their policies over the next couple of months. Based on the promising demand trend and encouraging payer landscape, we are raising our AGAMREE full year 2024 net product revenue guidance to between $40 million and $45 million.

Lastly, I would like to provide a brief overview of FYCOMPA. This quarter, FYCOMPA has delivered solid results, driven by steady demand, sustaining its position in the market. Q3 net revenues of $32.1 million further fortifies our revenue diversification. FYCOMPA remains firmly on course to achieve its full year 2024 net product revenue guidance of between $130 million and $135 million. In summary, our outstanding performance in Q3 demonstrates the strength of our product portfolio and our ability to address the needs of diverse patient populations. Our strategic investments in marketing, education and patient support have been key drivers of this success, and we remain committed to building on this momentum. We look forward to continuing to deliver sustained commercial execution that is making a meaningful difference in the lives of patients. I want to thank the entire team at Catalyst for their unwavering commitment to patients and look forward to a successful Q4.

I will now turn the call back over to Mike.

[Michael Kalb, executive]

Thank you, Jeff. Our performance during the third quarter of 2024 has set us on pace for another strong year, driven by solid financial performance, financial discipline and strong execution. The successful launch of AGAMREE in mid-March, along with the continued performance of FIRDAPSE and FYCOMPA has strengthened our foundation for sustained growth. Our total revenues for the third quarter of 2024 were $128.7 million, an approximate 25.3% increase when compared to total revenue of $102.7 million for the third quarter of 2023. Product revenues net for our lead product FIRDAPSE were $79.3 million, a 19.7% increase year-over-year compared to $66.2 million. Product revenues net for the third quarter of 2024 for FYCOMPA were $32.1 million compared to $36.4 million, an 11.9% decrease from the prior year period, driven by increased gross to net deductions, resulting from higher costs tied to arrangements between the company and distributors and government agencies.

For 2023, revenues were booked under a size cost arrangements, which were lower. Product revenues net in the third quarter of 2024 for AGAMREE were $15.0 million, reflecting the continued strength of the commercial launch. As a reminder, Q3 2024 was the second full quarter of AGAMREE commercialization. Additionally, included in license and other revenue is a $2.1 million milestone payment earned upon DyDo's receipt of regulatory approval to commercialize FIRDAPSE for the treatment of patients with LEMS in Japan. As previously disclosed, we are entitled to additional payments if certain milestones are achieved and a transfer price is applied to products supplied to DyDo.

Cost of sales expense were approximately $19.3 million in the third quarter of 2024 compared to $14.2 million in the third quarter of 2023 and consisted principally of royalties. As a reminder, royalties for FIRDAPSE increased by 3% when net product sales exceed $100 million in any calendar year, which was surpassed during the second quarter of 2024. As a result, we expect cost of sales to trend higher as the year progresses. Additionally, AGAMREE carries a royalty in the range of low double digits to mid-20s as a percent of net revenue, depending on sales achievements within a calendar year. Further details on our royalty obligations for AGAMREE are reported in our Q3 2024 Form 10-Q and are expanded upon within the MD&A section.

Research and development expenses were $3.3 million in the third quarter of 2024, down from $83.7 million in the third quarter of 2023, which included an $81.5 million IP R&D charge. SG&A expenses for the third quarter of 2024 totaled $45.9 million compared to $33.6 million in Q3 2023. The increase in SG&A expenses in the third quarter of 2024 was principally due to incremental operating expenses to support the continued commercial launch of AGAMREE. Net income before income taxes for the third quarter of 2024 were $57.2 million, an improvement year-over-year compared to a net loss of $38 million for the third quarter of 2023.

We reported GAAP net income for the third quarter of 2024 of $43.9 million or $0.35 per diluted share compared to GAAP net loss for the third quarter of 2023 of $30.8 million or $0.29 per diluted share. This increase in net income is driven predominantly by increased FIRDAPSE revenue, the revenue resulting from the commercial launch of AGAMREE and the fact that in Q3 2023, there was an $81.5 million charge related to the acquired in-process R&D for the AGAMREE acquisition. It is worth noting that while selling, general and administrative expenses have increased principally due to the incremental expenses incurred in support of AGAMREE, as noted above, we remain extremely focused on a disciplined approach to cost management throughout the company.

Our year-to-date effective tax rate through the first 9 months of 2024 was 24% compared to 23.5% through the 9 months of 2023. Our effective tax rate is affected by many factors, including the number of stock options exercised in any given period and is likely to fluctuate in future periods. As Jeff mentioned, based primarily on the continued strong performance of FIRDAPSE and the strong performance of AGAMREE, which we launched commercially in March of this year, we have increased our full year 2024 revenue guidance to between $475 million and $485 million, which is further detailed in the press release that we issued last night.

However, if we elect to make future acquisitions of drug products in earlier stages of development, we expect that our R&D expenses will become more significant in future periods. Additionally, based on year-to-date R&D expenses, we believe that full year 2024 R&D expense will be significantly lower than our previously provided guidance due to the timing of certain R&D-related initiatives and will likely be less than $15 million for the year.

Non-GAAP net income for the third quarter of 2024 was $71.1 million or $0.57 per diluted share which excludes from GAAP net income, amortization of intangible assets related to our acquisitions of FYCOMPA, AGAMREE and Ruzurgi of $9.3 million, stock-based compensation expense of $4.4 million, the income tax provision of $13.3 million and depreciation of $106,000. This compares to non-GAAP net loss in the third quarter of 2023 of $25.6 million or a loss of $0.24 per basic and diluted share, which excludes from GAAP net income, amortization of intangible assets related to our acquisitions of FYCOMPA and Ruzurgi of $8.5 million, stock-based compensation expense of $3.8 million, the income tax benefit of $7.3 million and depreciation of $81,000.

As I mentioned, in Q3 2023, we acquired the exclusive rights to North America for AGAMREE in advance of U.S. FDA approval, which required that the company expensed the acquired IP R&D at the time of acquisition. Based on recent feedback from the U.S. Securities and Exchange Commission, or SEC, we will no longer adjust non-GAAP net income or loss for acquisition-related IP R&D expenses. This change has been reflected in the non-GAAP reporting in the press release we issued last night.

As reported, we ended the third quarter of 2024 with cash and cash equivalents of $442.3 million compared to $137.6 million as of December 31, 2023. The increase in cash of $304.7 million was driven in part by the January 9, 2024 capital raise that resulted in $140.7 million in net cash proceeds. The remaining increase in cash is driven primarily by $168.9 million in cash generated from operations of the business. I would like to note that when compared to year-to-date September 2023, we generated approximately $81 million more in cash from operations year-to-date through September 2024. We believe our current funds and strong balance sheet continue to allow us the financial flexibility to support our strategic initiatives such as business development and portfolio expansion, meet our potential contractual obligations and fund our existing commercial and R&D programs.

More detailed information and analysis of our third quarter 2024 and year-to-date September 2024 financial performance may be found in our quarterly report on Form 10-Q, which was filed with the Securities and Exchange Commission yesterday, November 6, and can be found on the Investor Relations page on our website at www.catalystpharma.com.

At this time, I will turn the call back over to Rich. Rich?

[Richard John Daly, executive]

Thanks, Mike. Before we close, I want to reaffirm our confidence in the resilience of our business and the robust strategies driving our long-term growth. This quarter's performance underscores our commitment to innovation, commercial and operational excellence and delivering consistent value. I would also like to express my sincere gratitude to our dedicated team whose commitment to excellence in our patient communities have been instrumental in achieving our continued success. Looking ahead, our focus is on executing strategic priorities and expanding our commercial portfolio. With a solid framework in place, Catalyst is well positioned to sustain our momentum and drive continued success. We appreciate our stakeholder support, and we look forward to sharing our progress in the coming quarters.

At this time, I'll turn the call back to the operator and look forward to taking your questions. Thank you.

[Operator]

[Operator Instructions]

And your first question comes from the line of Joon Lee with Truist Securities.

[Joon Lee, analyst]

So my first question is, now that FIRDAPSE will be commercially available in Japan this year, what are you looking for in a partner to commercialize in other regions such as China? And then as a follow-up, just curious what drove the gross to net adjustment for FYCOMPA? And how should we expect that to trend going forward?

[Richard John Daly, executive]

Steve, do you want to take that one?

[Steven Miller, executive]

Sure. As we previously announced, we expect -- and Rich described, we expect again -- I'm sorry, FIRDAPSE to be launched in Japan at the end of the year. And we continue to evaluate other territories throughout the world to expand the FIRDAPSE market into, and we'll report that to the investment community when we have more to say about it.

[Richard John Daly, executive]

Regarding China, thanks for the question. Regarding China, we continue to explore opportunities in China. And as they become more apparent and clearer, we'll bring that information forward. So thank you.

[Jeffrey Del Carmen, executive]

Can you repeat your question about FYCOMPA, Joon, please?

[Joon Lee, analyst]

Yes, sorry. I was just curious what drove the gross to net adjustment for FYCOMPA and how we should expect that to trend going forward?

[Richard John Daly, executive]

Mike, do you want to handle that?

[Michael Kalb, executive]

Sure. Thanks, Rich. So as we've previously disclosed, our fees, which are reflected in gross to net are higher, specifically with distributors, government agencies compared to last year when we were under the TSA with Eisai. So I would say where we're at is probably reflective of what we think those fees will be going forward, certainly as long as we have exclusivity.

[Richard John Daly, executive]

Yes. And I just want to add on to that. As Jeff mentioned in his part of the call that the performance of the product from a prescription basis is solid. And so that's why we reaffirmed our guidance on that. So the product is performing really well. It's just, I think, a situation where the fees are just higher than we would experience if we were under Eisai's agreements.

[Michael Kalb, executive]

And the one thing I just want to add on that, our fees are consistent with other companies of our size, I believe, from my experience.

[Operator]

And your next question comes from the line of Jason Gerberry with Bank of America.

[Unknown Analyst]

This is Pavan on for Jason. First question on FIRDAPSE. Can you speak to what was the real source of uptake of FIRDAPSE? Was it idiopathic or small cell lung cancer patients? And how has the number of patients in your pipeline of identified candidates been? Is it sort of steady or growing or over time being depleted? Just some color on the future growth opportunity there. And then with regards to AGAMREE, with the improved near-term ramp, wondering if you have any thoughts on the peak sales potential. Is EMFLAZA still a good comp? Or should we be thinking about AGAMREE even higher than EMFLAZA at this point?

[Richard John Daly, executive]

Pavan, thank you for the question. Jeff, do you want to take the first 2?

[Jeffrey Del Carmen, executive]

Yes. The small cell lung cancer LEMS patient mix of our total patients still -- it's around 20% to 25% of our total patients. So very, very strong percentage there. We do expect that to slightly go up over time. Our efforts towards small cell lung cancer are really focused on getting these patients, helping these patients the 90% of the small cell lung cancer LEMS patients that are currently undiagnosed. We want to help these patients get tested and then become addressable as treatment -- patients for treatment on FIRDAPSE. As far as the pipeline goes, this number, we've done a fantastic job of refilling these patients. So pipeline patients that become on active FIRDAPSE patients, we backfill those patients with new leads. So it's been very consistent of over 500 pipeline patients over the last 2 to 3 years. And we expect that number to maintain at 500 at least in the near term.

[Richard John Daly, executive]

Pavan, on your -- the last question you asked regarding whether EMFLAZA is a good surrogate for us. I think it is a relatively good surrogate, but I think we have to take into account the shape of the market. And by that, I mean, when EMFLAZA launched, effectively, there was no other countervailing voice in the market. Certainly, there was prednisone in the market, but they had no voice. And when we launched, we're launching into a competitive market, an active competitive market. And I want to be really clear about this. We're thrilled with the performance of AGAMREE, absolutely thrilled with the performance.

We think that EMFLAZA is a relatively good surrogate for where we could end up. However, we believe that we have a better product. We think that the opportunity is here for us to prove that over time. That's one of the reasons for the SUMMIT study. And for the performance of the product, we think the uptake is good. And based on what we're seeing in the early markers, and I think Jeff can echo this from his experience and his team's experience, behavior is bearing out in marketplace, the improved behavior on the part of the patients. And we have early data regarding growth that we've actually shared at some medical conferences. So we think EMFLAZA is a relatively good surrogate for us at this time.

Jeff, I don't know if you want to make any comments. We also have Gary Ingenito on the line as well, and he can speak to the -- some of the data that was presented recently at a conference. Gary, I don't know if you want to make any comments about that data.

[Gary Ingenito, executive]

No, I think the data was very well received, very exciting. And again, lots of interest in AGAMREE.

[Operator]

Your next question comes from the line of Charles Duncan with Cantor.

[Charles Duncan, analyst]

Congrats on a nice quarter. I had questions around AGAMREE versus FIRDAPSE and commercial strategy. First of all, when you think about FIRDAPSE, it seems like it's about finding new patients. With AGAMREE, it's a little bit different. So can you help us understand the synergies that you see in the commercial efforts? And then I had a follow-up on the SUMMIT study.

[Richard John Daly, executive]

Thanks. Thanks for the question, Charles. I'll turn it over to Jeff for the answer.

[Jeffrey Del Carmen, executive]

Charles, so you're absolutely right. They're very different in the sales approach. Our efforts for FIRDAPSE are really focused on helping these patients get tested, diagnosed and then treated on FIRDAPSE. So we've had education and resources applied towards education and testing for a very long time to help educate these health care providers. The significant data point regarding our prescribers for FIRDAPSE, over 80% of FIRDAPSE prescribers are onetime prescribers only. So that we have to make sure that we cast a wide net for the physicians out there, neuromuscular specialists, but just as importantly, the general neurologists that are out there. So we have to make sure we're -- we have a broader coverage with our sales force, our nonpersonal promotion and other marketing efforts.

As far as for boys living with Duchenne Muscular Dystrophy, it's a very, very targeted concentrated prescriber. I think we've mentioned this in the past, 250 prescribers make up about 90% of the steroid prescribers for boys living with DMD. So we know where the prescribers are. They're concentrated in about 100 centers of excellence. So that's where we go. Diagnosis, about 95% of Duchenne muscular dystrophy patients are diagnosed. So our efforts there are really focused on educating physicians about the benefits of AGAMREE for those boys living with DMD. So that's how we really go about our businesses selling its competitive selling, sharing those benefits of AGAMREE. And it looks like we're making significant inroads on that front.

[Charles Duncan, analyst]

That's helpful. My follow-up question is, I guess that's a great segue to my follow-up, which is on the SUMMIT study. I'm wondering if you could provide a little bit more color on what you anticipate for that study over the course of the next year in terms of number of patients? And really, what is the target product profile that you are seeking in terms of the enhanced label with that study?

[Richard John Daly, executive]

Great question, Charles. I'm going to turn over to Gary regarding the next year, and then we can also have Gary give us a sense of the target product profile we're seeking as well as Jeff can weigh in on that, too. Gary?

[Gary Ingenito, executive]

Thank you. Yes. Well, the study is a 5-year study because, as you know, DMD is progressive. It progresses at different rates in individuals. So really, it's the long-term data that is probably the most revealing about the target profile for AGAMREE. It's -- we are in the site activation stages of the study. It's not a traditional registry in the sense that Catalyst is seeking to collect the highest quality, most consistent data of previous registry type studies. By that, I mean, not only do you go through the usual steps of getting a site qualified and activated, but for the bone imaging, the DEXA and the spine x-rays. We actually have a central reading facility. The each site must be trained. They must have the proper equipment. They have to pass a quality test. And the same for those participating in the cardiac sub-study where we're looking at the transmural strain profiles by echocardiography.

So again, each site requires 2 sets of training. You've got to bring in the cardiology department, the radiology department. And so I think as we progress in site activation, we expect that then the prescribers will be able to get their patients enrolled into the study over the next 5 years and then tracking them for that period of time. The profile we see is really to what we already believe about the product, have seen in preclinical and the clinical data generated to date, which is that we will have a very positive effect on bone health. We will reduce fracture rates. We will not produce cataracts and that there will be a limited increase in weight that will stabilize over the long haul. And then, of course, from the efficacy perspective, as we've already demonstrated in the Phase III trials, preserve muscle strength and mobility.

[Operator]

And your next question comes from the line of Samantha Semenkow with Citi.

[Samantha Semenkow, analyst]

Just a quick one on AGAMREE. I know it's really early in the launch, but I'm curious if you're seeing any trends on durability of therapy so far as in are patients tending to stay on therapy after switching? And then again, your patient mix seems to be quite stable compared to last quarter. Is the expectation that this trend will continue? Or do you expect it to shift at some point in the future?

[Richard John Daly, executive]

Thanks for the question, Sam. Jeff, do you want to handle this?

[Jeffrey Del Carmen, executive]

Sam, your first question about discontinuations or durability on AGAMREE, we are seeing very strong discontinuation rates, positive discontinuation rates of about 15%, what we had expected. So -- and that's been very stable over the last couple of months. And so yes, that's a positive. And as far as the mix, are you talking specifically about the transitions from prednisone and also EMFLAZA?

[Samantha Semenkow, analyst]

Yes, exactly.

[Jeffrey Del Carmen, executive]

Okay. So Sam, you're right, and they are stable since the last quarter. And we do expect that percent or that mix to be pretty consistent. It's positive for us because it shows that we are getting transitions across both corticosteroid segments, whereas initially planning on this launch, we anticipated the EMFLAZA switches to be a lot more significant, and we're very pleasantly surprised that we are consistently getting the prednisone switches. So we expect that to be pretty consistent moving forward, too.

[Samantha Semenkow, analyst]

Great. And just a follow-up on the discontinuation rate. For that, can you just elaborate on what makes that really positive in your view? And also what is driving the 15% that you're seeing discontinue?

[Jeffrey Del Carmen, executive]

15% to 20% is typically what we had forecast, and we see that as a good gauge for discontinuation, and it's meeting that. And what was your other question about that, Sam? What are the drivers?

[Samantha Semenkow, analyst]

What are the drivers? Yes, exactly.

[Jeffrey Del Carmen, executive]

What's interesting and what's great for the Duchenne community is the fact that there are a lot of new products that are available. So as part of this and new products that are becoming approved is the evaluation of what products that they're on. So -- and for example, if they're going to be on a gene therapy, they have to consider what they're going to do. And so there are some patients that discontinue because of that choice, they have to evaluate if they should be on AGAMREE at this point. But -- so it's just a slight number, a small number. But as far as efficacy, side effects, there is no key contributor to that. Nothing really stands out. It's a small percentage there, 15%. So it's a temporary discontinuation, Sam, that I was talking. So these patients that over time, they will go back on to AGAMREE, we expect.

[Operator]

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.