Does Catalyst Pharmaceuticals Need a Stimulus?

The outcome of Catalyst Pharmaceuticals’ (NASDAQ:CPRX) second phase study of its cocaine addiction treatment were much anticipated by the company and Wall Street investors. After the company announced that the trial results would be available in September, the stock rose 162 percent in the ensuing three months. When the date was pushed back two months, the stock fell 20 percent.

Investor’s concerns over the company’s preclinical studies have haunted Catalyst since it went public in 2006; after filing its initial public offering, Catalyst lost 50% of its value within the first twelve months.

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On November 7, Catalyst issued the long-awaited press release with the study’s results, which were a disappointment. The company reported that its flagship product, CPP-109 or vigabatrin, have failed to meet the endpoints of the study.

In pre-market trading shares fell 62 percent to 55 cents. As of 1 p.m. Eastern Standard Time, shares were trading even lower, at $0.495.

Even though the clinical trial did reveal any unexpected adverse events, the company said in a statement, that data did not indicate that a significantly larger proportion of vigabatrin-treated patients than placebo-treated patients were cocaine free during the the last two weeks of the treatment period. Among trial subjects, cocaine negative urine tests did not increase, and the weekly fraction of cocaine-use days did not decrease.

While vigabatrin did not meet the study’s goal, further analysis will be done on the results.

“Once we have the full data set, we will meet with our collaborator on the Phase II[b] trial, the National Institute of Drug Abuse (NIDA), to determine next steps, if any, in the clinical development program for CPP-109 for cocaine addiction,” said Catalyst’s Chairman and Chief Executive Officer Patrick J. McEnany.

The company will turn its focus on the development of its two other product candidates: Firdapse for the treatment of Lambert-Eaton Myasthenic Syndrome and CPP-115 for the treatment of infantile spasms.

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