Markets

Why Catalyst Pharmaceuticals, Inc. Soared in March

What happened

Catalyst Pharmaceuticals (NASDAQ: CPRX), an orphan drugmaker, gained a whopping 77% last month, according to data from S&P Global Market Intelligence. What sparked this breakout?

Catalyst's shares initially popped on the company's fourth-quarter earnings report on March 18. But the biotech's shares got a second major jolt from a corporate presentation at the Oppenheimer's 29th Annual Healthcare Conference on March 20.

A rocket taking off

Image source: Getty Images.

Taken together, the biotech's latest earnings release and corporate update helped to assuage investors' concerns regarding Firdapse's recent commercial launch. Firdapse was approved by the Food and Drug Administration as a treatment for the rare autoimmune disease Lambert-Eaton myasthenic syndrome (LEMS) in late 2018. 

So what

Firdapse's commercial debut in America was widely expected to be a flop by industry insiders. After all, this branded drug is basically a vastly more expensive version of a medicine known as 3,4-DAP that's been available for free to most patients for over 20 years.

Nonetheless, Catalyst was still able to transition a large number of 3,4-DAP users onto Firdapse during the first two months of 2019. This rapid adoption rate strongly supports the company's internal forecast that Firdapse could eventually generate between $300 million to $900 million in sales as a LEMS treatment.   

Now what

Catalyst has big plans for Firdapse. Later this year, the drugmaker is scheduled to announce late-stage results for the drug in patients with congenital myasthenic syndromes and myasthenia gravis. And next year, Firdapse's proof-of-concept trial in patients with type 3 spinal muscular atrophy is also slated to produce top-line results. If all the stars align, this highly controversial orphan drug could turn out to be a blockbuster-level product. Catalyst's shares, in that case, might have a lot more room to run. 

10 stocks we like better than Catalyst Pharmaceuticals
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Catalyst Pharmaceuticals wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of March 1, 2019

George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

CPRX

Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More