Please ensure Javascript is enabled for purposes of website accessibility

Why Catalyst Pharmaceuticals Stock Is Popping Today

By George Budwell - Updated Apr 14, 2019 at 12:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The drugmaker's Q4 earnings release was a big hit with investors.

What happened

Shares of Catalyst Pharmaceuticals (CPRX 3.34%), a maker of drugs for rare diseases, rose by as much as 19.1% on more than three times the average daily volume today. What sparked this rally?

Catalyst's shares are jumping in response to the company's fourth-quarter and full-year earnings report released after the bell Monday. The news is that Firdapse, the company's newly approved medicine for patients with the autoimmune disease Lambert-Eaton Myasthenic Syndrome (LEMS), is off to a strong start since its launch on Jan. 15. 

An index finger pressing a "buy now" tab on a keyboard.

Image source: Getty Images.

So what

Despite concerns that Firdapse's commercial launch would be undermined by access to a cheaper form of the drug known as 3,4-DAP, Catalyst stated that it has already transitioned large numbers of LEMS patients onto its treatment, and that most payers are readily providing coverage for the drug. That's obviously great news for Catalyst and shareholders.

Check out the latest earnings call transcript for Catalyst Pharmaceuticals.

Now what

Turning to the details, the company reported that 250 LEMS patients were now taking Firdapse, instead of 3,4 DAP. The drug's rapid uptake has been helped by the fact that most patients are only paying $10 out of pocket for the drug. Previously, skeptics argued that Firdapse's premium price point and a lack of coverage by third-party payers would stunt the drug's adoption. In hindsight, those concerns now appear to have been wildly overstated.

Is Catalyst a buy on this news? With two more late-stage trial readouts on the horizon and Firdapse off to an unexpectedly strong start, this orphan-drug play seems poised to head even higher. As such, investors may indeed want to take a flier on this promising growth play right now.

 

 

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Catalyst Pharmaceuticals, Inc. Stock Quote
Catalyst Pharmaceuticals, Inc.
CPRX
$11.13 (3.34%) $0.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
377%
 
S&P 500 Returns
123%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.