Catalyst Pharmaceuticals, Inc. (NASDAQ: CPRX) has experienced a roller-coaster ride over the past week. Shares plunged on Tuesday after the FDA approved rival drug Ruzurgi. But Catalyst stock bounced back some on Friday.
The drugmaker added to that bounce to start this week. Catalyst announced its first-quarter earnings before the market opened on Monday. Here's what you need to know about Catalyst's Q1 update.
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By the numbers
Catalyst announced Q1 product revenue of $12.4 million after generating no revenue in the prior-year period. The company's reported revenue was much higher than the average analysts' estimate of $1.6 million.
How did Catalyst's bottom line look in the first quarter? The company reported a net loss of $644.5 million, or $0.01 per share, on a GAAP basis, compared with $5.7 million, or $0.06 per share, in the same period in 2018. Wall Street analysts expected a net loss of $0.13.
The company ended the first quarter with cash, cash equivalents, and short-term investments of $50.6 million.
Behind the numbers
Catalyst's Q1 revenue came as a result of the company's launch of its first product, Firdapse, earlier this year. The FDA approved Firdapse in November 2018 for treating the rare neuromuscular disorder Lambert-Eaton myasthenic syndrome (LEMS).
Firdapse was the first and only LEMS treatment drug available until last week, when rival Jacobus Pharmaceuticals announced FDA approval of Ruzurgi for treating LEMS pediatric patients between the ages of 6 and 17. Firdapse is approved for treating adults with LEMS. Although LEMS primarily impacts adults, there's a good chance that Ruzurgi will compete head-to-head against Firdapse if physicians prescribe Jacobus' drug for off-label use in treating adults.
Though Catalyst's product revenue soared this quarter, its bottom line deteriorated. The company's spending increased significantly in Q1. Selling, general, and administrative (SG&A) expenses jumped 211% to $8.4 million from $2.7 million in the prior-year period. This increase stemmed primarily from product launch expenses, market access, and market research expenses.
There's one thing investors can count on for the rest of this year: higher spending. Catalyst expects spending for SG&A to increase even more in full-year 2019 as it continues to build up its infrastructure and commercial programs to support sales activities for Firdapse. Research and development expenses will also increase as the company conducts ongoing clinical studies.
The biggest question mark, though, is how Ruzurgi will impact Catalyst's strategy with Firdapse. Catalyst CEO Patrick McEnany acknowledged that he was "extremely surprised with the FDA's decision to approve Jacobus Pharmaceuticals' NDA." He added, "We are currently assessing our options and we expect to have more to say in that regard in the coming days."
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