Why This Isn’t the End of Catalyst Pharmaceuticals

Catalyst Pharmaceuticals Inc. (NASDAQ: CPRX) saw its shares get halved just Tuesday morning alone, following a business update regarding its Lambert-Eaton myasthenic syndrome (LEMS) treatment. The company provided an update on the content of the planned resubmission of the New Drug Application (NDA) to the the U.S. Food and Drug Administration (FDA) for Firdapse (amifampridine phosphate), which currently has Breakthrough Therapy and Orphan Drug designations for LEMS.

The company recently met with the FDA to obtain greater clarity regarding what will be required to accept the Firdapse NDA for filing. Along with its Phase 3 LMS trial, the FDA requires that Catalyst submit positive results from an additional “adequate and well-controlled study” in patients with LEMS.

Separately, the FDA has stated that it is open to discuss a study design that could efficiently accomplish the requirement with a small, short-term study. There is also a requirement for several more short-term toxicology studies, which are expected to start soon.

Patrick J, McEnany, CEO of Catalyst, commented:

While we are very disappointed by this delay, Catalyst and our employees remain committed to working with the FDA and bringing Firdapse to market for patients suffering with LEMS and congenital myasthenic syndromes (CMS). We are surprised with the FDA’s request for an additional clinical study for Firdapse, but are encouraged that the agency is open to an efficient, small short-term study design.  We are currently in discussions with the FDA, and our clinical experts regarding the protocol and logistics for this confirmatory study. As always, we remain committed to LEMS and CMS patients with our continued research and our expanded access program, which continues to enroll new patients and provide Firdapse at no charge to eligible patients.

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However is might not be the end of Catalyst, looking at the books. At the end of March 2016, the company had $52 million in cash and investments, which it believes will be sufficient to complete the additional studies, as well as for funding operations. Just a year ago, the total was $75.97 million. At this cash burn rate, Catalyst could have a couple more years before raising additional funding might be required.

Shares of Catalyst were trading down 47.6% at $0.65 on Tuesday, with a consensus analyst price target of $7.06 and a 52-week trading range of $0.51 to $5.80.