Catalyst Pharmaceuticals Inc. (CPRX) stock surged to a 12-year high of $5.59 on Wednesday. Investors were positive about the prospect of Firdapse to treat a rare autoimmune disorder, Lambert-Eaton Myasthenic Syndrome (LEMS). This follows disappointing fourth-quarter results. Traders believed the stock to be a good investment and the current levels call for a buy.
Majority of the analysts recommended a “buy” rating while expecting the stock to reach $8.33 per share in the next 52 weeks. In late 2018, they had believed that the Firdapse approval created a buying opportunity despite the negativity surrounding the drug as there is no FDA approved treatment for the disorder. LEMS is an autoimmune disorder which causes muscle weakness.
The FDA granted orphan drug status and Breakthrough Therapy designation for Firdapse. After successfully completing two Phase 3 clinical trials, Catalyst submitted its NDA in May 2018 and received priority review by FDA with PDUFA date of November 28, 2018. The company closed its first LEMS Phase 3 trial for Firdapese in 2014 and submitted its first NDA in 2015, only to receive a “Refusal to File” from FDA in early 2016.
As requested by the FDA, the second phase 3 trial was successfully completed in 2017, meeting both primary and secondary endpoints with very low P values. With data sets from two successful phase 3 trials, the drug has been approved and used for the same indication for many years in the European Union, the odds for FDA approval are extremely high.
The company received backlash from Senator Bernie Sanders for high pricing of Firdapse as Catalyst has set an annual list price of $375,000. In reply, Catalyst vindicating its stand and stated it could cost $10 or less for the patients who are under coverage.
For the fourth quarter, Catalyst reported a wider loss due to the increased launch spending for the recently-approved Firdapse across the US. Higher clinical trial expenses, which are ongoing for various indications and the trend is expected to continue in 2019, continued to lift R&D expenses higher.
The company estimates that there are about 3,000 LEMS patients in the United States and claims data reviewed over the most recent two-year period indicates that about 1,500 unique patients are currently diagnosed. The next or third phase of the company’s launch strategy will gear up later this year.
Shares of Catalyst opened lower on Wednesday but changed course to the green territory. The stock has risen over 115% in the past year and over 162% in the past three months.
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