Down 30% in a Day, Is Catalyst Pharmaceuticals Doomed?
Shareholders of Catalyst Pharmaceuticals (NASDAQ: CPRX) got a nasty shock on Jan. 23 when the company reported that a competitor, Teva Pharmaceutical Industries (NYSE: TEVA), was planning to make a generic version of its only marketed drug, Firdapse. With Catalyst's shares falling 30% in a day before slightly recovering, it's clear that the market is interpreting Teva's actions as severely threatening, and it's reasonable for investors to wonder if it's time to start looking for the door.
So, is this biotech on the road to desolation, or is the crash of its stock just an overreaction by panicky markets?
First, let's take a moment to understand what Firdapse means for Catalyst Pharmaceuticals. Firdapse treats Lambert-Eaton myasthenic syndrome (LEMS), a rare autoimmune disease that causes muscle weakness, fatigue, and a constellation of other symptoms. Sales of the drug were anticipated to bring in as much as $210 million in 2022, and its revenue has grown consistently since its launch in late 2018. And Wall Street analysts expect on average that it'll drive $322.1 million in revenue for 2023.
Source Fool.com
