Catalyst Shares Plunge Following FDA Approval of Rival LEMS Drug

Stock going down

Shares of Catalyst Pharmaceutical fell more than 42 percent in after-hours trading Monday after the U.S. Food and Drug Administration (FDA) approved a rival drug for pediatric patients with Lambert-Eaton myasthenic syndrome (LEMS).

In November, Florida-based Catalyst won the approval for Firdapse (amifampridine), the first-ever approved treatment for LEMS. The approval was marked with some controversy, particularly after Catalyst set a list price of $375,000 for the treatment. U.S. Sen. Bernie Sanders, an outspoken critic of high drug prices, accused Catalyst of price gouging, particularly since the family-owned Jacobus Pharmaceutical had been giving away treatments to 200 LEMS patients. On Monday, Jacobus was awarded approval for its LEMS drug, Ruzurgi (amifampridine), which is the only medication approved for patients between the ages of six to 17.

In its announcement, the FDA said the use of Ruzugri in the pediatric population was supported by evidence from well-controlled studies of the drug in adult LEMS patients. That suggests that doctors treating adults with LEMS could opt to prescribe Ruzugri over Catalyst’s Firdapse, which is why the stock took a significant hit in after-hours trading. Ruzugri’s effectiveness in LEMS was established by a randomized, double-blind, placebo-controlled withdrawal study of 32 adult patients in which patients were taking Ruzurgi for at least three months prior to entering the study. The study compared patients continuing on Ruzurgi to patients switched to placebo. Effectiveness was measured by the degree of change in a test that assessed the time it took the patient to rise from a chair, walk three meters, and return to the chair for three consecutive laps without pause. The patients that continued on Ruzurgi experienced less impairment than those on placebo, the FDA said in its announcement.

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Ruzugri was approved under Priority Review, as well as Fast Track Designation. Ruzurgi also received Orphan Drug designation.

LEMS is an autoimmune disorder that affects the connection between nerves and muscles and causes weakness and other symptoms in affected patients. LEMS affects approximately one in 100,000 people in the United States and about 3 million people globally. In LEMS, the body’s immune system attacks the connection between cells and muscles. The most common symptoms of the autoimmune disorder are proximal muscle weakness and fatigue. Symptoms can be life-threatening when the weakness involves respiratory muscles. Approximately 50 percent of LEMS patients have an underlying malignancy.

Sanders, who is running as a candidate for the Democratic nomination for President of the United States, has not yet commented on the approval of the rival LEMS treatment. After Sanders critical comments regarding the price of Firdapse, Catalyst responded to Sanders by reminding him that Jacobus only provided its LEMS medication to 200 patients.

“The approval of Firdapse by the FDA means that all LEMS patients in the United States now have access to this much-needed medication,” Catalyst said in its response.

Following the approval of Ruzugri, shares of Catalyst fell from Monday’s close of $6.11 to $3.88 in premarket trading.

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