Catalyst Pharma Plummets On Competition For Pricey LEMS Drug

Catalyst Pharmaceuticals Inc CPRX shares were sinking Tuesday and trading to their lowest levels since late March, with the downward move attributed to the approval of a drug rivaling its Firdapse.

What Happened

The FDA announced late Monday it is giving the go-ahead for privately held Jacobus Pharma's Ruzurgi for treating pediatric patients ages 6-17 with Lambert-Eaton myasthenic syndrome, or LEMS.

LEMS is an autoimmune disorder that affects the connection between nerves and muscles, impairing the ability of nerve cells to send signals to muscle cells. This disorder commonly occurs in patients with cancer such as small cell or lung cancer.

The approval was based on the effectiveness of Ruzurgi, established by a randomized, double-blind, placebo-controlled withdrawal study of 32 adult patients who were taking the candidate three months prior to entering the study.

Why It's Important

The overall prevalence of LEMS is estimated at 3 per million people worldwide, according to Jacobus. 

Catalyst's Fridapse tablet was greenlighted by the FDA in November and made commercially available in the U.S. in January. The drug is priced at an elevated $375,000 per year.

"We are pleased with the robust momentum that we have seen since the launch of Firdapse, including patient enrollment forms, the breadth of prescribers, and positive reimbursement trends," Catalyst CEO Patrick McEnany said in the fourth-quarter earnings report released in March.

Incidentally, ahead of the Firdapse approval, patients had access to a similar drug from Jacobus for free under an FDA-approved compassionate use program and also from compounding pharmacies at a fraction of Catalyst's price tag, according to Endpoints News.

The November approval vested Catalyst with exclusivity, precluding others from marketing similar versions.

The approval of Ruzurgi could change all this. The FDA provides leeway for the usage of approved medications even for unapproved uses if physicians determine that if they are a better treatment option for their patients.

Catalyst now faces the risk of patients who are unhappy with Firdapse's price tag switching allegiance to Jacobus' drug through off-label usage.

Catalyst shares were down 39.36 percent at $3.70 at the time of publication Tuesday. 

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