Catalyst Pharmaceuticals, Inc. (CPRX) Earnings Call Transcript & Summary

Good morning, and welcome to the 2020 Annual Meeting of Stockholders of Catalyst Pharmaceuticals, Inc. I'm Ali Grande, the Chief Financial Officer of Catalyst. Before we get started, I would like to go over a few items so you know how to participate in today's meeting. You have joined the annual meeting, either using your computer speaker system or by telephone conference line. [Operator Instructions] We will try to answer any questions you may submit after the formal portion of the meeting is completed. But in the interest of time, we may alternatively choose to respond to questions following the meeting directly to a shareholder who submitted the question. If you have already voted your shares and do not wish to change your vote, there will be no need to take any action at the meeting. If you wish to vote your shares at the meeting, you may do so if you are participating in the meeting on the meeting web page, and you follow the instructions on that page. You must have the control number that Continental has provided to you in order to vote your shares at the meeting. Today's meeting is being recorded. I would now like to introduce Patrick J. McEnany, CEO of Catalyst Pharmaceuticals, who will preside over this meeting.

Good morning, all, and welcome to the 2020 Annual Meeting of the stockholders of Catalyst Pharmaceutical, Inc. I'm Patrick J. McEnany, the Chairman, President and CEO of the company. Before the Stockholders Meeting begins, I want to welcome you and express the thanks to the company's Board of Directors and management for your attendance here today. Our agenda for this meeting calls for your vote on 6 matters. Thereafter, we will either answer any questions that you are going to submit or reach out to the person asking the question after the meeting to answer their questions. Before the formal business of the meeting begins, I'd like to introduce you to members of our Board of Directors and our officers who are in attendance at the meeting. Directors President are Richard Daly, David Tierney; Charles O'Keeffe, Phil Coelho and Don Denkhaus. Our Officers that are present are Dr. Steven Miller, our Chief Operating Officer and Chief Scientific Officer; Dr. Gary Ingenito, our Chief Medical & Regulatory Officer; Alicia Grande, our Chief Financial Officer; Brian Elsbernd, our Chief Compliance Officer and Chief Legal Officer; & Jeffrey Del Carmen, our Chief Commercial Officer. I'd also like to introduce you to our Corporate Secretary, Philip Schwartz, who will serve as secretary of this meeting. If anyone wants to vote at the meeting, they may do so through the voting portal on the meeting web page. I will now call this meeting to order. Mr. Schwartz, will you please present to the meeting a list of the stockholders of the company entitled to notice of/and to vote at the meeting?

Mr. McEnany, I hereby present to the meeting the list of the stockholders of the company entitled to notice of/and to vote at the meeting. The stockholders list arranged in alphabetical order showing stockholders of the company at the close of business on June 22, 2020, the record date fixed for the determination of stockholders entitled to notice of/and to vote at this meeting, shows that there were outstanding on the record date and entitled to vote at this meeting, a total of 103,415,365 shares of common stock of our company. The common stock is entitled to one vote per share.

The list of stockholders will remain available for inspection during this meeting. After this meeting, it will be preserved among the records of the company. Mr. Schwartz, will you now present the certificate of mailing, certifying the mailing of the notice of the annual meeting, proxy statement and other proxy materials on July 14, 2020.

Mr. Chairman, I present to the meeting a transfer agent certificate signed by Continental Stock Transfer & Trust company, showing that the company's annual report to stockholders, the notice of Annual Meeting of Stockholders, proxy statement and proxy card were mailed on July 14, 2020, to the company's stockholders of record on June 22, 2020, the record date fixed for the meeting by the Board of Directors.

The original transfer agent certificate will be annexed to the minutes of this meeting. Before proceeding with the business of the meeting, it is in order to appoint an inspector of elections to conduct the votes by ballot or proxy, which will be taken at the meeting. Therefore, I appoint Mr. Schwartz as inspector of elections to conduct the votes by ballot or by proxy, which will be taken at the meeting.

I move for the adoption of the following resolution resolved that the appointment of Philip B. Schwartz as inspector of elections to conduct any votes by ballot or by proxy, which will be taken at this meeting is hereby approved and confirmed.

I second the motion.

You've heard the motion to approve and confirm the appointment of Philip B. Schwartz as inspector of elections. Those in favor, signify their approval by say, Aye, those opposed, no. [Voting]

Aye.

Aye.

Aye.

I will now present to the meeting the oath of inspector of elections and annex the original oath of the inspector of elections to the minutes of this meeting. Mr. Chairman.

Mr. Chairman, I present to the meeting the oath of inspector of elections, which I had executed.

The inspector of elections has been requested to determine the number of shares of common stock represented at this meeting in person or by proxy and to advise whether or not a quorum is present. I now call on Mr. Schwartz to make his report.

As inspector of elections, I find the accounts of the stockholders who are present in-person or are represented by proxy at this meeting indicates that the holders of more than a majority of the shares issued and outstanding and entitled to vote are present at this meeting, and therefore, in accordance with the company's bylaws, constitutes a quorum.

Since a quorum is present, we will proceed with the meeting. There are 6 items of business to be acted upon at this meeting, namely: one, to elect the directors, Patrick J. McEnany, Philip H. Coelho, Charles B. O’Keeffe, David S. Tierney, Richard J. Daly and Donald A. Denkhaus to serve until the 2021 Annual Meeting of Stockholders or until their respective successors are duly elected and qualified or until their earlier death, resignation or removal. Two, to approve an amendment to the company's certificate of incorporation to increase the number of authorized shares of common stock from 150 million shares to 200 million shares. Three, to approve an amendment to the company's 2018 Stock Incentive Plan that will increase the shares of common stock available for issuance under that plan by an additional 2.5 million shares from 7.5 million shares to 10 million shares. Four, to ratify, on an advisory basis, the extension of the company's Stockholders' Rights Plan until September 20, 2022, that was previously approved by the company's Board of Directors. Five, to approve on an advisory basis, the 2019 compensation of the company's named executive Officers as set forth in the proxy statement. And Six, to ratify the selection of Grant Thornton LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. We will now proceed into the consideration of these matters. As was noted previously, you'll be able to vote in the manner permitted on the meeting web page, if you choose to do so, and you have the control number provided to you by Continental. If you have already submitted your proxy, please do not vote at the meeting unless you want to revoke your proxy and cast your vote in-person at this meeting. Please vote on each matter as soon as the motion regarding such matter has been made and seconded. The electronic votes submitted at this meeting through the meet -- the voting portal will be collected after all of the matters to be considered at this meeting have been voted upon. We will now proceed to the consideration of the first proposal.

I nominate Patrick J. McEnany, Philip H. Coelho, Charles B. O’Keeffe, David S. Tierney, Richard J. Daly and Donald A. Denkhaus to serve as directors of the company until the 2021 Annual Meeting of Stockholders or until their successor is duly elected and qualified or until their earlier death, resignation or removal.

I second the motion.

Are there any further nominations? If not, I declare the nominations closed. Would you please vote now on the nomination of each director to serve as a director of the company until the 2021 Annual Meeting of Stockholders or until their successor is duly elected and qualified or until their earlier get resignation or removal. [Voting]

Has everyone had an opportunity to both if so, I declare the polls closed with regard to the election of directors. We will now move on to the consideration of the next proposal.

I move that the following resolution be adopted. We saw that the amendment to the company's certificate of incorporation that would increase the number of authorized shares of the company's common stock from 150 million shares to 200 million shares in the form presented in the company's annual meeting proxy statement is hereby ratified and approved.

I second the motion?

Would you please vote now on the approval of the amendment to the company's certificate of incorporation to increase the number of authorized shares of the company's common stock from 150 million shares to 200 million shares? [Voting]

Has everyone had an opportunity to vote? If so, I declare the polls closed with regard to the proposal -- proposed amendment to the company's certificate of incorporation. We now move to the consideration of the next proposal.

I move that the following resolution be adopted, resolved that the amendment to the company's 2018 Stock Incentive Plan to increase the number of shares of common stock available for issuance under the plan by 2.5 million shares in the form presented in the company's annual meeting proxy statement is hereby ratified and approved.

I second the motion.

Would you please vote now on the approval of the amendments of the company's 2018 Stock Incentive Plan to increase the number of shares of common stock available for the issuance under the plan by 2.5 million shares? [Voting]

Has everyone had an opportunity to vote? If so, I declare the polls closed with regard to the proposed amendment to the company's 2018 Stock Incentive Plan. We will now move on to consideration of the next proposal.

I move that the following resolution be adopted. We saw that the advisory vote on the ratification of the amendment to the company's Stockholders' Rights Plan in the form presented in the company's annual meeting proxy statement is hereby ratified and approved.

I second the motion.

Would you please vote now with regard to the ratification on an advisory basis of the amendment to the company's Stockholders' Rights Plan as amended? [Voting]

Has everyone had an opportunity to vote? If so, I declare the polls closed with regard to the ratification on an advisory basis of the amendment to the company's Stockholders' Rights Plan as amended. We will now move to the consideration of the next proposal.

I move that the following resolution be adopted, resolved that the stockholders of Catalyst Pharmaceuticals approve on an advisory basis, the 2019 compensation of its named executive officers as disclosed in the proxy statement for the Annual Meeting of Stockholders held on August 20, 2020, pursuant to Item 402 of Regulation S-K, including the narrative discussion of executive compensation, the accompanying tabular disclosure regarding the named Executive Officer compensation and the corresponding narrative disclosure in footnotes.

I second the motion.

Would you please vote now with regard to the approval on an advisory basis of the 2019 compensation of the company's named executive officers? [Voting]

Has everyone had an opportunity to vote? If so, I declare the polls closed with regard to the approval on an advisory basis of the 2019 compensation of the company's named executive officers. We will now move to consideration of the final proposal.

I move that the following resolution be adopted, resolved that the engagement of Grant Thornton LLP as the company's registered independent public accounting firm for the fiscal year ending December 31, 2020, is hereby ratified and approved.

I second the motion.

You've heard the foregoing motion to ratify the engagement of Grant Thornton LLP as the company's independent auditors for the fiscal year ending December 31, 2020. Would you please proceed to vote with regard to the motion before the meeting? [Voting]

Has everyone had an opportunity to vote? If so, I declare the polls closed with regard to the motion to ratify the engagement of Grant Thornton LLP as the company's independent auditors for the fiscal year ending December 31, 2020. Now that all voting has been completed, I'd like to request that the inspector of elections report on the votes taken in-person or by proxy at this meeting.

Mr. Chair, the following is my report in my role as inspector of elections of the votes taken at the meeting. Except for the advisory vote on the ratification of the amendment to the Stockholders' Right Plan and on the election to the Board of Directors of Mr. Coelho, neither of which received the requisite votes for approval, each of the other proposals that was considered and voted on at this Annual Meeting of Stockholders has been approved by the requisite vote of stockholders required to approve each such proposal.

I move that the report of the inspector of elections be accepted and approved.

I second the motion.

You've heard the motion to accept and approve the report of the inspector of elections. Those in favor, signify their approval by saying, Aye, those opposed, say, no.

Aye.

The motion is carried. The report of the inspector of elections has been accepted and approved and will be attached to the minutes of this meeting. With respect to the failure Mr. Coelho to obtain a majority of the vote, under the company's bylaws, Mr. Coelho will be obligated to tender his resignation to the Board and the Board without Mr. Coelho's participation will decide on whether to accept his resignation. With respect to the failure of the advisory vote on the ratification of the amendment to the Stockholders' plan, the Board will consider how to proceed with respect to the Stockholders' Rights Plan in light of the failure of the advisory vote. In both cases, the company will report to the current report on Form 8-K, the Board of Directors' decision each of these matters upon a decision is made.

Mr. Chairman, no questions have been posed.

Okay. Is there any further business to come before the meeting? There being no further business to come before the meeting, a motion to return is in order.

I move that this meeting be adjourned.

I second motion doesn't in favor signify your approval by saying, Aye, those opposed, say, no.

Aye.

Aye.

Aye.

The motion is carried, and this meeting is adjourned. Thank you for joining us.