Teva Pharmaceutical said Monday it plans to knock off Catalyst Pharmaceuticals' only approved drug. As a result, CPRX stock — which has sat atop the IBD 50 for weeks — crashed.
Firdapse is a treatment for people age 6 and older with Lambert-Eaten myasthenic syndrome, also known as LEMS. LEMS is an autoimmune condition in which the immune system attacks the body's own tissues. It causes weakness in the upper legs and hips, and is often tied to small cell lung cancer.
Now, Teva says the patents protecting Firdapse are "not valid, not enforceable and/or will not be infringed by the commercial manufacture, use or sale" of a generic version. Catalyst has 45 days to file a patent infringement lawsuit in federal court to trigger a stay of Teva's application until May 2026.
On today's stock market, Catalyst Pharma stock plummeted 29% to end the regular session at 14.76. Teva stock lost a fraction and closed at 10.38.
CPRX Stock: Analysts Expect Bullish Growth
Firdapse is Catalyst's only marketed product. Sales in the third quarter surged more than 59%. Analysts following CPRX stock expect a repeat performance from the December quarter. They call for 48% sales growth to $56.8 million, according to FactSet.
But a lower-cost generic would eat into future sales expectations.
Catalyst noted six patents currently protecting Firdapse. The earliest of those wouldn't expire until June 2032. Teva hopes to launch a generic Firdapse well before those patents expire.
"Catalyst is currently assessing the notice letter and intends to vigorously enforce its intellectual property rights relating to Firdapse," the company said in a news release.
Top-Notch Biotech Stock Undercuts Its 50-Day Line
CPRX stock has led the IBD 50 list of elite growth stocks for weeks. Shares are also on the Tech Leaders list and have perfect IBD Digital ratings across the board.
Shares broke out of a cup-with-handle base after topping a buy point at 16.76 in late November, according to MarketSmith.com. Catalyst stock has since launched into a profit-taking zone.
The bearish move sent CPRX stock definitively below its 50-day moving line for the first time since late 2022.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
