Catalyst Pharmaceuticals added a second product to its lineup Wednesday with a $160 million deal for an anti-seizure medicine, and CPRX stock advanced.
Under the terms of the deal, Catalyst can now sell Eisai's epilepsy treatment, Fycompa, in the U.S.
Fycompa treats people age 4 and older with partial-onset seizures. These seizures begin in only one part of the brain. It also treats people age 12 and older with tonic-clonic seizures, also known as grand mal seizures. During these seizures, patients lose consciousness and experience convulsions.
Catalyst expects the acquisition to be accretive to earnings this year, though the company may have to pay Eisai a milestone payment and royalties.
On today's stock market, CPRX stock jumped 3.8% to close at 16.73.
CPRX Stock: Generics Come For First Drug
Chief Executive Patrick McEnany long has yearned to add another product to Catalyst's portfolio. And the news couldn't come at a better time.
On Monday, CPRX stock plummeted 29% after Teva Pharmaceutical said it wanted to launch a generic version of Firdapse. Then, Firdapse was Catalyst's only product. It treats a muscle condition often associated with lung cancer.
The first patents covering Firdapse aren't set to expire until 2032. But Teva claimed they are "not valid, not enforceable and/or will not be infringed by the commercial manufacture, use or sale" of a generic version. The dive sent CPRX stock off its mantle at the top of the IBD 50.
But on Wednesday, Catalyst said the addition of U.S. sales of Fycompa would bolster its revenue scale. Fycompa is expected to bring in net revenue of $136 million for the fiscal year ending March 31. The deal doesn't impact Catalyst's previous guidance for $205 million to $210 million in full-year net sales of Firdapse.
Overlap Between Firdapse, Fycompa
Catalyst notes Firdapse and Fycompa both treat neurological conditions. There is a 45% overlap in physicians who cover conditions treated by the two drugs, the company said in a news release.
"Coupled with the continued growth of Firdapse, our flagship product, we look forward to leveraging our proven capabilities and expanded U.S. presence in neuroscience to drive organic growth for both Fycompa and Firdapse," CEO McEnany said in a written statement.
Though CPRX stock is no longer on the IBD 50, it remains a Tech Leader. Shares also have a best-possible Composite Rating of 99, putting them in the leading 1% of all stocks when it comes to fundamental and technical measures. Catalyst's IBD Digital Relative Strength Rating has fallen to 98 out of a total 99. This measures a stock's performance in terms of 12-month performance.
CPRX stock is now below its 50-day moving average, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
