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What's in Store for Catalyst (CPRX) This Earnings Season?

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Catalyst Pharmaceuticals, Inc. (CPRX - Free Report) is expected to report second-quarter 2017 results on Aug 9.  Last quarter, the company recorded in-line earnings. It topped expectations in three of the last four quarters with average positive surprise of 14.59%.

Catalyst’s share price has increased significantly by 173.3% year to date, compared with the Zacks classified industry’s gain of 1.4%.

Factors to Consider

Although Catalyst does not have any revenue-generating product in its portfolio, investor’ocus will be on pipeline and regulatory updates at the Q2 call. Currently, the company has three candidates under development – Firdapse, CPP-115 and CPP-109.

Its lead pipeline candidate Firdapse is being evaluated for the symptomatic treatment of Lambert-Eaton myasthenic syndrome (LEMS). In fact, Catalyst started enrolling patients in a second phase III study (LMS-003) on Firdapse for LEMS (LMS-003) in Dec 2016. In Oct 2016, The company reached an agreement with the FDA under a Special Protocol Assessment (SPA) for protocol design, clinical endpoints and statistical analysis approach to be taken in Catalyst's upcoming phase III study evaluating Firdapse.

Top-line data from the study are anticipated in the second half of 2017. Notably, a positive outcome would allow the company to resubmit the new drug application (NDA) for Firdapse for the treatment of LEMS in the same period.

Additionally, Catalyst is working on developing Firdapse for additional indications. In Feb 2016,  an investigator-sponsored study on Firdapse for the symptomatic treatment of MuSK-antibody positive myasthenia gravis  (MuSK-MG)  was initiated.  In March 2017, it reported top-line data from this study that showed statistically significant results. According to the investigators the data showed a large clinical benefit to patients.

Apart from Firdapse, Catalyst is also exploring the possibility of developing CPP-115 (a GABA aminotransferase inhibitor) for the treatment of epilepsy (initially infantile spasms) and the other selected neurological indications such as complex partial seizures and Tourette’s disorder. Catalyst is also working on a generic version of Sabril (vigabatrin), which is marketed by Lundbeck for the treatment of infantile spasms and complex partial seizures.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Catalystis this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.

Zacks ESP: Catalyst has an Earnings ESP of 0.00%. That is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 6 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Catalyst carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat.

Note that we caution against stocks with Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision.


Stocks to Consider


Here are some companies to consider as our model shows that they have the right combination of elements to post an earnings beat in the upcoming quarter:

Tesaro, Inc. (TSRO - Free Report) has an Earnings ESP of +17.06% and a Zacks Rank #3.  The company is scheduled to release results on Aug 8. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Puma Biotechnology, Inc. (PBYI - Free Report) has an Earnings ESP of +3.33% and a Zacks Rank #3.  The company is expected to release results on Aug 8.

Impax Laboratories, Inc. has an Earnings ESP of +7.14% and a Zacks Rank #3.  The company is expected to release results on Aug 9.

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