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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 scheduled to report second-quarter 2018 results on Aug 7, after the market closes. 

In the last reported quarter, the company’s earnings were in line with the estimates. It topped expectations in two of the last four quarters, with an average beat of 8.34%.

Year to date, Catalyst’s shares have decreased 26.1% compared with the industry’s decline of 1.2%.

 

Let’s see how things are shaping up for this quarter.

Factors to Consider

Catalyst does not have any revenue-generating product in its portfolio. Investors’ focus will be on pipeline and regulatory updates, during the second-quarter earnings call. Currently, the company has twocandidates under development namely Firdapse and CPP-115.

Catalyst’s lead pipeline candidate, Firdapse has been developed for the symptomatic treatment of Lambert-Eaton myasthenic syndrome (“LEMS”). In May 2018, the FDA accepted the new drug application (NDA) for Firdapse (which was resubmitted in March 2018), and granted Priority Review to the same. The FDA has set an action date of Nov 28, 2018.

The company is also working on developing Firdapse for additional indications. In April 2018, the company enrolled the first patient in its phase III study for MuSK -antibody positive myasthenia gravis. The company expects that the trial will take about 12 months to complete and therefore it expects to announce top-line results in the first half of 2019.

A small-blinded study on Firdapse, for the treatment of certain types of congenital myasthenic syndromes (“CMS”)in the pediatric population (2–17 years), is ongoing. However, following the discussions with the FDA, the study has been expanded beyond the pediatric patients to include adult CMS patients and the enrollment size has been increased to approximately 20 patients.

The company expects to complete enrollment in the phase III CMS (CMS-001) study before the end of 2018 and to report top-line results from this study in the first quarter of 2019. If the results of the trial are successful, the company plans to add the CMS indication to its labeling for Firdapse. 

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 other selected neurological indications such as complex partial seizures and Tourette’s disorder.

Earnings Whispers

Our proven model does not show an earnings beat for Catalyst 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.

Earnings ESP: Catalyst has an Earnings ESP of -20%. That is because the Most Accurate Estimate is pegged at a loss of 9 cents and the Zacks Consensus Estimate is pegged at a loss of 8 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 That Warrant a Look

Here are some pharma/biotech stocks that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this quarter.

Pacira Pharmaceuticals, Inc. (PCRX - Free Report) has an Earnings ESP of +14.75% and currently carries a Zacks Rank #2. The company is scheduled to release second-quarter report on Aug 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Endo International Plc. (ENDP - Free Report) has an Earnings ESP of +0.72% and currently carries a Zacks Rank #3. The company is scheduled to release second-quarter results on Aug 8.

Jazz Pharmaceuticals Plc (JAZZ - Free Report) has an Earnings ESP of +1.43% and currently carries a Zacks Rank #3. The company is scheduled release second-quarter results on Aug 7.

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