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What Drives Catalyst Pharmaceuticals Above 250% This Year?

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Shares of Catalyst Pharmaceuticals, Inc. (CPRX - Free Report) have soared 285.7% this year so far, massively outperforming the industry’s gain of 9.8%. Here we analyze the factors that have led to this huge rally.

Catalyst Pharma’s key drug Firdapse is currently approved in the EU for the symptomatic treatment of Lambert-Eaton myasthenic syndrome (LEMS) in adults. However, the drug is not yet approved in the United States.

Notably, the company announced positive top-line results from a second phase III study of Firdapse for treatment of LEMS. The findings showed that Firdapse has a relieving effect of significant magnitude when it comes to treating the symptoms of LEMS.  The company remains on track to resubmit a new drug application to the FDA in the first quarter of 2018.

Catalyst Pharmais also working to develop Firdapse for additional indications. It initiated an investigator-sponsored phase II/III study on the drug in February 2016 for the symptomatic treatment of MuSK-antibody positive MG.  In March, the company reported top-line data from the same trial. The company expects to initiate MuSK-MG phase III study in the first quarter of 2018.

In October 2015, the company began a small blinded study on Firdapse for treating certain types of congenital myasthenic syndromes (CMS) in the pediatric population (ranging from two to 17 years of age). However, post discussions with the FDA, the study has been expanded beyond the purview of minors to include adult CMS patients and the enrollment size has grown to nearly 20 patients. Top-line data from the study is expected in the first half of 2018. Positive data would allow the company to add the CMS indication to Firdapse’s label (either as part of the NDA resubmission for Firdapse for LEMS or as a supplement to the resubmission).

Catalyst Pharma had acquired in-licensed rights to Firdapse from BioMarin Pharmaceutical Inc. (BMRN - Free Report) back in 2012 for development and commercialization of the product in the United States.  The drug enjoys a Breakthrough Therapy status, granted by the FDA for treatment of LEMS. It also boasts an Orphan Drug designation, courtesy of the regulatory body, for both LEMS and CMS besides MG.

It is to be noted that LEMS is an ultra-rare disease and therefore its market represents great potential despite drugs and treatments like steroids, azathioprine, other immunosuppressants and intravenous immunoglobulin are currently in use. Additionally, guanidine HCl tablets are approved for treatment of LEMS. However, the drug is unrecognized as an effective therapeutic option due to significant side effects. This, in turn, has created ample space for introducing new therapies in the market for LEMS.

Also, CMS is an ultra-rare disease affecting around 1,000 and 1,500 citizens across the United States. Moreover, approximately 5-8% of the MG patient population is estimated to be MuSK antibody-positive. Therefore, approval of Firdapse to administer for these diseases will be a huge boost to the company, driven by its promising commercial potential in the target markets.

Further, Catalyst Pharma is on track to explore the possibility of developing CPP-115 (a GABA aminotransferase inhibitor) for addressing epilepsy (initially infantile spasms) and treating other selected neurological indications namely, complex partial seizures and Tourette’s disorder.

Incidentally, CPP-115 is tagged with both an Orphan Drug status in the United States for treatment of infantile spasms as well as an Orphan Medicinal Product designation in the EU for West syndrome (a form of infantile spasms).

 

Zacks Rank & Stocks to Consider

CatalystPharma carries a Zacks Rank #3 (Hold). Two better-ranked health care stocks are Sucampo Pharmaceuticals and Corcept Therapeutics Incorporated (CORT - Free Report) , both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sucampo’s earnings per share estimates have moved up from 31 cents to $1.12 for 2017 and from $1.15 to $1.19 for 2018 in the last 30 days. The company delivered a positive earnings surprise in three of the last four quarters with an average beat of 15.63%. Share price of the company has surged 32.6% year to date.

Corcept’s earnings per share estimates have been revised upward from 78 cents to 88 cents for 2018 in the last 60 days. The company pulled off positive earnings surprises in two of the trailing four quarters with an average beat of 14.32%. Shares of the company have skyrocketed 142.7% year to date.

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