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Catalyst Pharmaceuticals stock soars to record high

By Staff Correspondent |

Catalyst Pharmaceuticals (NASDAQ: CPRX) stock soared to a record high of $7.67 on Wednesday as phase 3 trial results date is nearing for Firdapse’s congenital myasthenic syndrome indication. Market analysts believe that the trial is an important milestone and potential stock-moving catalyst.

This is an important project for Catalyst for several years as there are currently no approved therapies for CMS, and very few off label alternatives that unfortunately provide limited symptomatic relief and for a small portion of the known CMS types. Despite an increase in the costs and expenses, the company will be benefited by the product revenue after its first Firdapse product launch.

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Image for representation. Courtesy: PublicDomainPictures from Pixabay

Despite being a small-cap pharmaceutical company, market analysts believe that the stock has a rich valuation as it became cash flow-positive along with expected continued strong growth. The valuation is likely to remain attractive in the near term as the opportunity remained ample backed by several meaningful upcoming catalysts.

The stock is predicted to attract long-term investors and patient investors as the short-term run-up, which Catalyst had into second-quarter earnings in the back half of July and into early August, turned them to profit-taking. After the earnings, the stock fluctuation remained largely unchanged despite the huge revenue beat.

Read: Why Toyota Motor stock turned costlier

With regard to enrollments, the company remained steady to grow significantly in the coming quarters and Catalyst could continue beating the expectations until the end of next year. Despite higher costs and expenses hurting the bottom line, Catalyst’s gross margin turned out to be attractive as it remains 85% of sales in the second quarter.

For the most recently completed second-quarter, Catalyst swung to a profit from a loss last year backed by the yielding of product revenue. The results were benefited by the continued strength of the commercial launch of Firdapse, the first and only evidence-based, FDA approved the drug for the treatment of adult patients with Lambert-Eaton myasthenic syndrome (LEMS).

Listen to on-demand earnings calls and hear how management responds to analysts’ questions

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