How much a stock’s price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you’d invested in Catalyst Pharmaceutical (CPRX) ten years ago? It may not have been easy to hold on to CPRX for all that time, but if you did, how much would your investment be worth today?
Catalyst Pharmaceutical’s Business In-Depth
With that in mind, let’s take a look at Catalyst Pharmaceutical’s main business drivers. Coral Gables, FL-based Catalyst Pharmaceuticals, Inc. is a development-stage biopharmaceutical company, focused on the development and commercialization of therapies targeting rare neurological diseases and disorders, such as Lambert-Eaton Myasthenic Syndrome (LEMS), epilepsy (initially infantile spasms) and Tourette syndrome.
In October 2012, Catalyst in-licensed rights to Firdapse (amifampridine phosphate) from BioMarin Pharmaceutical Inc. to develop and commercialize the product in the United States. Firdapse is currently approved in the European Union as well as in the United States for the symptomatic treatment of LEMS in adults. LEMS is an ultra-rare disease and the company estimates approximately 3,000 LEMS patients in the United States.
The company is also strengthening the commercial portfolio of Firdapse. It already received multiple patents that cover the treatment of all amifampridine metabolizer types within the LEMS patient population. As a result, these patents will now provide intellectual property protection to Firdapse through 2034.
Catalyst also recently received an FDA approval for its supplemental new drug application (sNDA) for Firdapse (amifampridine) tablets in 10 mg dosage to include pediatric patients (six years and older) for treating LEMS.
Apart from Firdapse, Catalyst Pharmaceuticals is working on a generic version of Lundbeck’s Sabril (vigabatrin), CPP-109, for the treatment of infantile spasms and complex partial seizures. The company is also looking towards opportunities to diversify its business as well as invest in innovative opportunities for rare diseases.
Catalyst recorded revenues worth $141 million for 2021, reflecting an increase of 18% on a year-over-year basis
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Catalyst Pharmaceutical ten years ago, you’re probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in January 2013 would be worth $38,090.35, or a 3,709.03% gain, as of January 5, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500’s rally of 162.74% and gold’s return of 7.62% over the same time frame.
Analysts are anticipating more upside for CPRX.
Catalyst’s earnings and revenues beat estimates for third-quarter 2022. The company’s lead drug Firdapse, approved for treating Lambert-Eaton Myasthenic Syndrome — an ultra-rare disease — witnessed an encouraging uptake since its launch in 2019. Zacks analysts are optimistic about this trend and expect the same to continue in 2022. The company’s efforts to develop Firdapse for other rare neuromuscular indications are also impressive. The FDA recently approved the label expansion of Firdapse for treating LEMS in pediatric patients, which is likely to boost Catalyst’s top line. The stock has outperformed the industry year to date. However, overdependence on Firdapse for growth and the lack of any other promising candidates in its pipeline are major concerns. The stiff competition also remains a woe.
Over the past four weeks, shares have rallied 10.28%, and there have been 5 higher earnings estimate revisions in the past two months for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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