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What's in Store for Catalyst (CPRX) This Earnings Season?

Catalyst Pharmaceuticals, Inc. CPRX is expected to report third-quarter 2017 results on Nov 9, after the market closes. 

Last quarter, the company delivered a positive surprise of 16.67%. It topped expectations in three of the last four quarters, the average positive surprise being 12.50%.

So far this year, Catalyst’s share price has increased significantly by 183.9% compared with the industry’s gain of 1.5%.

Factors to Consider

Catalyst does not have any revenue-generating product in its portfolio. Investor’s focus is likely to be on pipeline and regulatory updates at the third-quarter earnings call. Currently, the company has three candidates under development namely Firdapse, CPP-115 and CPP-109.

Catalyst’s lead pipeline candidate Firdapse is being evaluated for the symptomatic treatment of Lambert-Eaton myasthenic syndrome (LEMS). The company expects to complete enrollment shortly and to announce top-line results from its confirmatory phase III study (LMS-003) later in the year. Meanwhile, Catalyst is conducting three preclinical abuse liability studies required by the FDA's guidance for Assessment of Abuse Potential of Drugs that was finalized in January 2017. The company intends to request a confirmatory pre-NDA meeting with the FDA to discuss the proposed NDA filing package. The company expects to submit the NDA n the first quarter of 2018.

Additionally, the company is working on developing Firdapse for additional indications. In March 2017, Catalyst announced positive top-line results from the investigator-sponsored trial evaluating Firdapse as a treatment for myasthenia gravis patients with anti-MuSK antibodies (MuSK-MG).  In August 2017, the company received agreement from the FDA on a special protocol assessment (SPA) for a study evaluating the safety and efficacy of amifampridine phosphate treatment in patients with MuSK-MG.

In the first half of 2018, the company expects to report top-line data from its ongoing clinical trial evaluating Firdapse for the treatment of congenital myasthenic syndromes (CMS).

Markedly, Catalyst’s efforts to develop Firdapse appear encouraging given the significant commercial potential in the target markets. An approval would be a huge boost for the company.

Apart from Firdapse, Catalyst is also exploring the possibility of developing CPP-115 (a GABA aminotransferase inhibitor) for the treatment of epilepsy (initially infantile spasms) and the other selected neurological indications such as complex partial seizures and Tourette’s disorder.

Moreover, the company is working on a generic version of Sabril (vigabatrin), which is marketed by Lundbeck for the treatment of infantile spasms and complex partial seizures.

Earnings Whispers

Our proven model does not conclusively show an earnings beat for Catalyst this quarter. This is because a stock needs to have both — a positive">Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen. That is not the case here, as you will see below.

Zacks ESP: Catalyst has an Earnings ESP of 0.00%. That is because the Most Accurate estimate and the Zacks Consensus Estimate are pegged at a loss of 6 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Catalyst carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.

Note that we caution against stocks with Zacks Ranks #4 or 5 (Sell rated) going into an earnings announcement, especially when the company is seeing a negative estimate revision.

 Stocks to Consider

Here are some companies to consider as our model shows that they have the right combination of elements to post an earnings beat in the upcoming quarter:

Alnylam Pharmaceuticals, Inc. ALNY has an Earnings ESP of +2.02% and a Zacks Rank #3.  The company is scheduled to release results on Nov 7.

Agenus Inc. AGEN has an Earnings ESP of +8.11% and a Zacks Rank #2.  The company is expected to release results on Nov 7.

Amedisys, Inc. AMED has an Earnings ESP of +0.62% and a Zacks Rank #2.  The company is expected to release results on Nov 7.

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