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Catalyst (CPRX) Up 6.9% Since Last Earnings Report: Can It Continue?

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A month has gone by since the last earnings report for Catalyst Pharmaceutical (CPRX). Shares have added about 6.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Catalyst due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Catalyst Q1 Earnings Lag Estimates, Revenues Rise Y/Y

Catalyst reported earnings of 12 cents per share for the first quarter of 2022, which missed the Zacks Consensus Estimate of 14 cents. The company had reported earnings of 7 cents in the year-ago quarter.

Adjusted earnings (adjusted for stock-based compensation, depreciation and tax provision) came in at 18 cents per share in the reported quarter compared with 11 cents a year ago.

Total revenues of $43.1 million were in line with the Zacks Consensus Estimate. Sales rose 42.7% from the year-ago quarter’s $30.2 million. The top line primarily comprised sales of Firdapse and nominal license and other revenues.

Quarter in Detail

Firdapse generated sales worth $43 million in the first quarter, up 42.4% year over year. License and other revenues were nominal at $0.05 million in the reported quarter.

Research and development (R&D) expenses of $3.4 million increased from $3 million reported in the year-ago quarter.

Selling, general and administrative (SG&A) expenses totaled $16.4 million, up from $12.7 million reported in the year-ago quarter.

As of Mar 31, 2022, CPRX had cash, cash equivalents and investments worth $198 million compared with $191 million as of Dec 31, 2021..

2022 Guidance

Catalyst reiterated the guidance it had provided earlier this year.

For 2022, the company continues to expect total revenues in the range of $195-$205 million, suggesting a 38-45% increase from the 2021 figure. It also expects annual cash operating expenses in the range of $65-$70 million.

The guidance assumes continued recovery in the macro-economic and healthcare activity throughout 2022 from the pandemic lows.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

Currently, Catalyst has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Catalyst has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Catalyst belongs to the Zacks Medical - Drugs industry. Another stock from the same industry, ChemoCentryx (CCXI), has gained 53.6% over the past month. More than a month has passed since the company reported results for the quarter ended March 2022.

ChemoCentryx reported revenues of $5.46 million in the last reported quarter, representing a year-over-year change of -47.3%. EPS of -$0.55 for the same period compares with -$0.43 a year ago.

For the current quarter, ChemoCentryx is expected to post a loss of $0.50 per share, indicating a change of +10.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +2% over the last 30 days.

ChemoCentryx has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.


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