Catalyst Pharma loss widens in Q4 due to Firdapse launch

Catalyst Pharmaceuticals (Nasdaq: CPRX) reported a loss of $0.14 per share compared to $0.12 loss expected by the street. The increase in loss is primarily due to the increased launch spending for the recently-approved Firdapse across the US. It’s worth noting that FDA approved Firdapse in November for treating patients with Lambert-Eaton Myasthenic Syndrome (LEMS). Shares of the firm are down 5% in the extended hours of trading as the company expects expenses to increase in 2019, which would delay profitability.

For the Q4 period, loss increased to $15.3 million compared to $5.5 million reported last year. The jump in loss is attributed to a surge in Research and development (R&D) and General and Administrative (G&A) expenses. The rise in R&D expense was due to increased clinical trial expenses which are ongoing for various indications and the trend is expected to continue in 2019.

G&A expenses increased to $6.9 million due to increased pre-launch spending for Firdapse. The expenses are going to rise in 2019 to broaden the reach of Firdapse across the US. As of December 31, Catalyst cash position stood at $58.5 million with no debt. The company estimates that the cash balance would help the firm to manage operations for the next 12 months.

Commenting on how 2019 plans, CEO Patrick McEnany said, “In 2019, we will remain laser-focused on the commercial launch of Firdapse, as well as on our efforts in the clinic to evaluate Firdapse as a potential therapy to treat other rare neuromuscular diseases.” It’s worth noting that Firdapse is the first and only drug to be approved by the FDA for treating LEMS patients.

Catalyst has set an annual list price of $375,000 for Firdapse despite the backlash from Senator Bernie Sanders for high pricing. The company has replied to Sanders stating that for patients who are under coverage, co-pay costs per month would be $10 or less vindicating its stand.

Research Pipeline

When it comes to other indications Congenital Myasthenic Syndromes (CMS) and MuSK antibody positive myasthenia gravis (MuSK-MG), Phase 3 top-line results are expected in the second half of 2019. For the spinal muscular atrophy (SMA) Type 3 proof of concept trial, top-line results are slated to come in the first half of 2020.

In the Q4 period, Catalyst also received $500,000 as revenue for its partnership with Endo for generic drug Sabril for treating patients who are suffering from infantile spasms and refractory complex partial seizures.

Shares of the biopharma firm have jumped above 60% this year after the company launched Firdapse this year. As the company broaden the drug presence across the US, revenue is expected to increase in 2019 which would result in further stock price increase in the near future.