A month has gone by since the last earnings report for Catalyst Pharmaceutical (CPRX). Shares have lost about 6.7% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Catalyst due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Catalyst reported adjusted earnings of 57 cents per share for the third quarter of 2024, beating the Zacks Consensus Estimate of 49 cents. The company had incurred an adjusted loss of 24 cents in the year-ago quarter.
Total revenues, the majority of which comprised product revenues, amounted to $128.7 million in the reported quarter, representing growth of 25.3% year over year. The recorded figure also surpassed the Zacks Consensus Estimate of $123 million.
Catalyst’s top line primarily comprised revenues from the sale of Firdapse and Fycompa CIII. Revenues generated from the sale of the newly launched Agamree (vamorolone) also contributed to the top line.
CPRX’s Q3 Results in Detail
Firdapse generated sales worth $79.3 million in the reported quarter, up 19.7% year over year. The reported figure beat the Zacks Consensus Estimate of $77.6 million and our estimate of $77.2 million, driven by the organic sales growth of Firdapse. The drug has been witnessing strong demand and increasing prescription rates from LEMS patients, as well as continued diagnosis of new LEMS patients.
Fycompa generated net product revenues of $32.1 million in third-quarter 2024, which missed the Zacks Consensus Estimate of $34.3 million as well as our model estimate of $35 million. Fycompa sales recorded a year-over-year decline of 11.9%.
In the second full quarter of commercialization since launch, Agamree generated revenues worth $15 million, up 72% sequentially. The reported figure beat the Zacks Consensus Estimate of $11 million and our estimate of $10.4 million.
Research and development (R&D) expenses were $3.3 million in the reported quarter, down 96.1% year over year. This is due to the inclusion of a one-time expense of $81.5 million in the year-ago quarter.
Selling, general and administrative expenses totaled $45.9 million, up 36.7% from the year-ago quarter figure. This uptick in costs is primarily due to the launch of Agamree and the cumulative commercial and marketing activities to support three commercial products compared with two in 2023.
As of Sept. 30, 2024, Catalyst had cash, cash equivalents and investments worth $442.3 million compared with $375.7 million as of June 30, 2024.
CPRX Raises 2024 Financial Guidance
Catalyst now expects total revenues in the range of $475-$485 million compared with the previous guidance of $455-$475 million for the full year, boosted by the continued growth of Firdapse, Fycompa and additional net product revenues from Agamree. The projected range includes the $2.1 million milestone payment received from DyDo after it secured the approval of Firdapse in Japan for LEMS.
For 2024, the company now projects its Firdapse revenues in the band of $300-$310 million compared with the previously guided range of $295-$310 million. Fycompa revenues continue to be expected in the $130-$135 million band. Catalyst expects Agamree revenues to be in the band of $40-$45 million, up from the previously guided range of $35-$40 million.
Additionally, Catalyst expects its full-year R&D expenses to be less than $15 million due to delays in the timing of certain R&D-related initiatives.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Catalyst has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Catalyst has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Catalyst belongs to the Zacks Medical - Drugs industry. Another stock from the same industry, Catalent (CTLT), has gained 3.7% over the past month. More than a month has passed since the company reported results for the quarter ended September 2024.
Catalent reported revenues of $1.02 billion in the last reported quarter, representing a year-over-year change of +4.2%. EPS of -$0.13 for the same period compares with -$0.10 a year ago.
For the current quarter, Catalent is expected to post earnings of $0.10 per share, indicating a change of +141.7% from the year-ago quarter. The Zacks Consensus Estimate has changed -70% over the last 30 days.
Catalent has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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