Catalyst (CPRX) Up 14.1% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Catalyst Pharmaceutical (CPRX). Shares have added about 14.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Catalyst due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Catalyst Q1 Loss Narrows, Firdapse Off to a Good Start

Catalyst reported a loss of 1 cent per share in the first quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of 13 cents and the year-ago loss of 6 cents.

The company’s revenues of $12.4 million in the first quarter of 2019 surpassed the Zacks Consensus Estimate of $1 million. The company did not record any revenue in the year-ago quarter. Revenues came entirely from Firdapse, the company’s first approved drug for the treatment of Lambert-Eaton myasthenic syndrome (LEMS). The drug was launched in the United States in January 2019 after receiving the FDA approval in November 2018.

Quarter in Detail

The company said that Firdapse had a strong start. As of May 9, 2019, the drug has been prescribed to409 unique LEMS patients. This included 81 patients previously naive to any form of amifampridine.

Research and development (R&D) expenses were $3.3 million, almost the same as $3.2 million in the year-ago quarter. The R&D costs included expenses in medical, regulatory affairs and quality assurance programs as well as expenses from the company’s Firdapse clinical trials, studies and Expanded Access Program.

General and administrative expenses totaled $8.4 million, surging 228.7% from the year-ago quarter. The increase is attributable to higherselling expenses, including the cost of the sales force and supporting personnel, product launch expenses, and market access and research expenses. The company expects selling, general and administrative expenses to increase in 2019, as it continues to build the infrastructure, and invest in commercial and patient programs to support Firdapse sales activities in 2019.

Pipeline Update

Catalyst is also working on developing Firdapse for additional indications. The company is currently conducting phase III studies, evaluating the drug for the treatment of congenital myasthenic syndromes (“CMS”) and anti-MuSK -antibody positive myasthenia gravis (MuSK-MG).

The company expects to report top-line results from the phase III MuSK-MG and CMS studies in the second half of 2019.

Catalyst is conducting a proof-of-concept study, evaluating Firdapse as a symptomatic treatment for patients with SMA type III. The company expects to report top-line results from the study in the first half of 2020.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 133.55% due to these changes.

VGM Scores

At this time, Catalyst has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Catalyst has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.