Investors in Catalyst Pharmaceuticals (NASDAQ:CPRX) have been waiting for two-and-a-half years since its marketing application was originally submitted to see the company’s flagship candidate Firdapse approved, but they may not have to wait much longer — the FDA is expected to make a decision by November 28.
Catalyst had previously submitted an NDA for Firdapse off one positive pivotal trial in Lambert-Eaton myasthenic syndrome (LEMS). While the company believed this single trial, together with other information, would be adequate for approval, the FDA issued a Refuse-to-File letter in early 2016. Following an FDA meeting, Catalyst successfully completed a second Phase 3 trial of Firdapse in LEMS, this time under an SPA. Also per the FDA’s request, the company completed three pre-clinical abuse liability studies which indicated that Firdapse does not carry abuse potential. The company included these items as part of an updated NDA package, and reported that minutes from an FDA meeting to discuss the package noted that the proposed filing would be sufficient for resubmission.
Oppenheimer analyst Leland Gershell sees smooth FDA sailing for Firdapse this time around and, as such, reiterates an Outperform rating on CPRX shares, with a $6.00 price target, which implies an upside of 102% from current levels.
Gershell opined, “At CPRX’s current valuation, we believe the market under-estimates the company’s likelihood of succeeding in its near-term regulatory and commercial objectives, all of which relate to lead candidate Firdapse […] We expect lead candidate Firdapse to begin generating revenue for CPRX by early 2019, and forecast peak 2025E sales of ~$475M. Following a surprise FDA setback in 2016, we believe CPRX has adequately fulfilled Firdapse’s registrational requirements in LEMS, for which we see approval in late 2018. We expect label expansion to congenital myasthenic syndromes (CMS) in 2020, and clinical data reveals in other ultra-orphan conditions over the next 12-18 months could catalyze upward revisions to our model. We recommend risk-tolerant investors take advantage of CPRX shares at their current levels.”
H.C. Wainwright’s Andrew Fein seems to agree with all the above, noting: “As we believe Firdapse is on the cusp of an approval for LEMS, and two Phase 3 trials in congenital myasthenic syndrome (CMS) and MuSK with topline readout in the1H19 and 2H19 respectively, we think the pipeline in a drug thesis may very well materialize in the near future […] Once approved, Firdapse should have a first-to-market, seven-year exclusivity period to prevent any compounding of the same compound. As we think that Firdapse should have a straight shot for an approval and a potential launch of Firdapse for LEMS in early 2019, we note that the steady progressing of the CMS and MuSK programs could provide near-term inflection points to expand the label.”
Largely echoing Oppenheimer’s sentiment, Fein reiterates a Buy rating on CPRX with a $6.00 price target.
Net net, the biopharmaceutical company now looks like a very compelling investing opportunity, as TipRanks analytics showcasing CPRX as a Strong Buy. With an average price target of $6.80, analysts are predicting massive upside potential of 129% for the stock. In total, Catalyst stock has received 5 Buy ratings, with no Hold or Sell ratings in the last 6 months.