Catalyst Pharmaceutical (CPRX) stock fell about 8% between Thursday and Friday. Even though the company just announced its first FDA approval for Firdapse, a treatment for Lambert-Eaton Myasthenic Syndrome (LEMS), investors still fear patients won’t want to spend the money for the medication. There’s already a much less expensive (but not FDA approved) drug, called 3,4-DAP from Jacobus Pharmaceutical, which is currently treating patients with LEMS.
The celebration, however, is that CPRX gained its first FDA approval. Analyst Charles C. Duncan from Cantor Fitzgerald says he has an “enhanced conviction Firdapse has notable potential to “catalyze” a paradigm shift for LEMS and other high-burden muscle weakness diseases.” Additionally, Duncan ups his model price for the drug from $160K to $200K, but believes his projections could prove conservative, with time.
“We think the company’s commercial strategies, including patient access plan, sales force build and other go-to market strategies, as well as pricing will be discussed around mid-December in advance of market launch in early January. During our recent NDR, management cited contemporary neuromuscular orphan pricing of between $160K and more than $500K the past few years (Radicava, Spinraza, Soliris, Exondys 51) as indications of what it may consider for Firdapse, underpinned by the clinical data and burden of disease considerations that it has made in pre-approval due diligence. We believe that, given the rarity of LEMS, clinical data generated in two P3 trials, and expanded patient access facilitated by approval and establishment of insurance coverage for Firdapse, this price range is justifiable, although we assume $200K/year,” Duncan said.
The analyst predicts around 200 out of 300 patients will transition from using 3,4-DAP to Firdapse in 2019. Duncan notes at least half of those on free drugs are at two sites, which will make transitioning the groups easier. With that in mind, Duncan reiterates an Overweight rating for CPRX with a target price of $8, showing an upside of about 216%. (To watch Duncan’s track record, click here)
CPRX stock is a buy across the board. Out of five analysts on the Street who’ve reviewed this stock, all four are bullish. The consensus price target stands at $6.8, showing an upside of around 137%. (See CPRX’s price targets and analyst ratings on TipRanks)