Shares of Catalyst Pharmaceuticals CPRX gained 16.7% on Wednesday after the company, along with its licensor, SERB, announced that it has entered into a settlement agreement with Teva Pharmaceuticals TEVA regarding the Firdapse (amifampridine) patent litigation.

The settlement agreement resolves the patent litigation brought by Catalyst and SERB on Teva for submitting an abbreviated new drug application (ANDA) to the FDA seeking marketing approval for a generic version of Firdapse 10 mg tablets before applicable patents expire.

Please note that Firdapse is currently approved in the United States, the EU and Japan for the symptomatic treatment of Lambert-Eaton Myasthenic Syndrome (LEMS) in adults. In 2022, Catalyst received FDA approval for the label expansion of Firdapse in the United States for treating LEMS in pediatric patients (six years and older). Last year, the FDA approved Catalyst’s regulatory filing to increase the maximum daily dose of Firdapse for adults and pediatric patients over 45 kg from 80 mg to 100 mg for treating LEMS.

In the past three months, Catalyst shares have gained 14.5% against the industry’s 7.7% decline.

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CPRX’s Litigation Settlement Terms With TEVA in Detail

Per the settlement terms, Teva has agreed not to market its generic version of Firdapse in the United States, subject to approval, before Feb. 25, 2035, unless specific exceptions outlined in the agreement arise. Additionally, Catalyst/SERB and Teva will end all ongoing patent litigation over Firdapse patents in the U.S. District Court in New Jersey.

However, litigation against the remaining defendants continues, with Hetero facing claims for all Orange Book-listed patents for the drug and Lupin facing claims for the Catalyst’s Firdapse patent expiring in 2037.

Catalyst and Teva are required to submit the confidential license agreement for review by the U.S. Federal Trade Commission and the U.S. Department of Justice, as mandated by law.

This is a huge win for Catalyst as it protects the company’s Firdapse sales from generic erosion in the U.S. market for LEMS treatment. The drug is the primary top-line driver for CPRX, accounting for 65% of the company’s net product sales in 2023. In the first nine months of 2024, Firdapse sales generated $223.5 million in revenues.

CPRX’s Other Marketed Products

Apart from Firdapse, Catalyst markets two other drugs in the United States — Fycompa (perampanel) CIII for epilepsy and Agamree (vamorolone) for Duchenne muscular dystrophy. The sales of these drugs generate incremental revenues for the company easing the burden on Firdapse for revenue generation.

Catalyst acquired the U.S. rights for Fycompa from Eisai in 2023. In the same year, the company also acquired North American commercial and developmental rights to vamorolone from Santhera Pharma.

Catalyst Pharmaceuticals, Inc. Price and Consensus

Catalyst Pharmaceuticals, Inc. price-consensus-chart | Catalyst Pharmaceuticals, Inc. Quote

CPRX’s Zacks Rank & Other Stocks to Consider

Catalyst currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks from the sector are Castle Biosciences CSTL and Halozyme Therapeutics HALO, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 30 days, 2024 estimates for Castle Biosciences’ earnings per share have remained constant at 34 cents. During the same timeframe, loss per share estimates for 2025 have remained constant at $1.84. In three months, shares of Castle Biosciences have gained 15.6%.

CSTL’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 172.72%.

In the past 30 days, estimates for Halozyme Therapeutics’ 2024 earnings per share have Improved from $4.05 to $4.07. Estimates for 2025 earnings per share have increased from $4.80 to $4.81 during the same timeframe. In three months, Halozyme Therapeutics’ shares have gained 3.1%.

HALO’s earnings beat estimates in three of the trailing four quarters and matched once, delivering an average surprise of 14.86%.

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