Catalyst Pharmaceuticals "hit the ball out of the park" in the first quarter, says Chief Executive Patrick McEnany. But CPRX stock fell after earnings missed the Street's forecasts.
During the first quarter, Catalyst earned 26 cents per share. Earnings soared 117% year over year, but missed forecasts by 6 cents. Adjusted earnings ballooned 128% to 41 cents per share.
McEnany says analysts didn't account for roughly $13 million in amortization and expenses related to marketing the company's new anti-seizure medication, Fycompa. Catalyst acquired the right to sell Fycompa in the U.S. from Eisai in late January.
He notes the company didn't have those amortization costs until a week ago. So, there was no way for the Street to correctly model them. Including those, Street estimates should have been closer to 22-23 cents per share, he told Investor's Business Daily.
"It's a little perplexing," he said. "We hit the ball out of the park, really, from every metric you can think of."
On today's stock market, CPRX stock crashed 19.2% to close at 14.15.
CPRX Stock: Sales Skyrocket
The period marked Catalyst's first with two products on the market. Sales catapulted 98% to $85.4 million and beat expectations for $81.6 million.
Firdapse, a treatment for Lambert-Eaten myasthenic syndrome, or LEMS, brought in $57.5 million in sales. Firdapse sales surged 34% year over year. LEMS is an autoimmune disease in which the immune system attacks the body's own tissues.
Fycompa, Catalyst's newest product, generated $27.8 million in sales.
Catalyst predicted $375 million to $385 million in full-year sales. The midpoint of the outlook came in a hair below CPRX stock analyst forecasts for $381.5 million. But McEnany says the company is still on the lookout for new deals to bolster its sales.
"We're in deep due diligence on a number of projects right now where we're hoping to be able to add one more project before the end of the year," he told IBD.
The No. 1 Biotech Stock
CPRX stock leads a group of nearly 800 biotech stocks, according to MarketSmith.com. It has perfect Composite and EPS Ratings of 99. This puts shares in the top 1% of all stocks when it comes to fundamental and technical measures, as well as earnings growth.
Shares also have a strong Relative Strength Rating of 97, putting their 12-month performance in the leading 3% of all stocks, IBD Digital shows.
CPRX stock also ranks fifth on the IBD 50 list of elite growth stocks.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
