While there's no telling precisely when a new bull market is going to roll around, it will because eventually one always does. That means now's the time to identify shares of businesses that are positioned to soar once sentiment improves.

Biotech Catalyst Pharmaceuticals (CPRX 2.65%) is one good candidate. Unlike many of its biotech peers, it's already quite profitable. Here's why it's a good move for investors to consider it right now.

Business is booming, and another drug is on the way

Until early 2023, Catalyst had only one medicine on the market, Firdapse, which treats a rare neuromuscular disease called Lambert-Eaton myasthenic syndrome (LEMS). But don't mistake LEMS' rarity for an indicator of Firdapse's ability to be profitable. In 2022, sales of the drug were $214 million, a jump of 52% compared to 2021.

And Catalyst is conducting clinical trials to expand its number of indications -- most recently to include children between ages 6 and 17. As a result, Firdapse could bring in as much as $255 million in 2023.

Presently, there's no competitor in the market for LEMS therapies as no other medicine has regulatory approval to treat the condition specifically. So Catalyst should be able to derive further revenue growth by entering international markets as it's currently doing in Japan and as it plans to do in other markets in Asia.

Catalyst also has another major revenue driver on the way. In early 2023, it purchased the rights to commercialize Fycompa, a treatment for epilepsy. The company sees $130 million of additional sales coming into its coffers this year as a result. That could boost the top line to as much as $385 million, an 80% jump from the prior year. Note that there are some competitors in the epilepsy space, which could be a headwind to securing a large market share right off the bat.

Yet another reason to like Catalyst Pharmaceuticals stock is its current valuation. Its price-to-earnings (P/E) multiple of 24.8 is pretty much exactly in the middle of the pack when compared to its industry or to the wider market. While it's no bargain, its valuation is unlikely to go lower if its top and bottom lines are thriving.

Be mindful of the risks

There are a couple of risks with Catalyst Pharmaceuticals, however, and both are important to understand.

One is that investors simply don't have much information about what the business is planning in research and development (R&D), or in acquiring additional pharmaceutical assets for commercialization. Whereas most other biotechs publicize their pipeline activity extensively, Catalyst has opted for an acquisition-driven portfolio rather than substantial internal R&D of new programs.

That means that it's impossible to know what projects will drive its future revenue as those projects are currently cooking in other companies' ovens, and they won't be under Catalyst's control until they're purchased. Put differently, shareholders are largely in the dark about the company's future direction beyond further commercialization of its existing pipeline assets.

The other major risk is that Teva Pharmaceuticals is aiming to commercialize a generic version of Firdapse. Catalyst is likely to use litigation to block the attempt, but it's unclear if that will succeed. Even if Teva is successful, it will take some time before it can gain market share -- so the issue isn't an existential one, just a matter of whether the biotech's rapid growth can continue.

Given the balance of risks and Catalyst's anticipated growth trajectory, I believe it's a good idea to buy this stock. Just recognize that it's not a safer pharmaceutical company, but a somewhat risky biotech play.