Catalyst Pharmaceuticals Inc (NASDAQ: CPRX) is having an incredibly rough start to the trading session this morning. However, with no news out, many are wondering why the stock is falling.
While there’s a good reason for the declines, the fall may also prove to be an incredibly strong opportunity. Today, we’ll talk about:
- Why CPRX is falling;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Here’s Why CPRX Is Falling
As mentioned above, Catalyst Pharmaceuticals is having an incredibly rough day in the market today, but with no news out, investors are wondering why. Ultimately, the declines have to do with an FDA approval. Unfortunately, the approval was not for a CPRX candidate.
In fact, the FDA recently announced the approval of Ruzurgi, a treatment being developed by Jacobus Pharma. The treatment has been indicated for use in children with Lambert-Eaton myasthenic syndrome. In fact, this is the first treatment indicated for LEMS in children.
This is where the pain comes for CPRX. At the end of the day, the company’s flagship treatment is a LEMS candidate that is being developed for use in children. With the FDA approval of a rival drug, investors seen the market potential of the drug shrinking, leading to tremendous declines.
However, this could prove to be an opportunity. Should Catalyst Pharmaceuticals receive approval for their candidate, the market opportunity is still a tremendous one, and with only one other rival drug out there, the company may have the ability to take the lion’s share of revenue from the treatment of LEMS in children, depending of course on their commercialization strategy.
So, while today’s news did prove to be painful reality for CPRX and its investors, the declines could represent an opportunity to get in on future gains at a discount.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Catalyst Pharmaceuticals, the news proved to be negative.
After all, a competitor approval means that there will be competition should the company receive approval. So, it’s not surprising to see that upset investors are pushing the stock down.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:37), CPRX is trading at $3.81 per share after a loss of $2.30 per share or 37.64% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CPRX. In particular, we’re interested in the company’s continued development of its LEMS product and the commercialization of the treatment should it be approved. Nonetheless, we’ll continue to keep a close eye on the story and bring the news to you as it breaks!
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