Why Is Catyalyst Pharma (CPRX) Stock Crashing Today?

Catalyst Pharmaceuticals CPRX stock crashed over 50% after the company announced that the FDA has requested additional data in its resubmission of a new drug application for Firdapse, a treatment for Lambert-Eaton myasthenic syndrome.

In February, Catalyst hits a major obstacle when it received a “refusal-to-file” letter from the FDA. The regulatory agency determined that Catalyst had not submitted sufficient information for it to complete a preliminary review of Firdapse.

The FDA has now stated that Catalysts needs to submit not one, but two sets of positive results from a studies of patients with Lambert-Eaton myasthenic syndrome. The company will also needs to conduct several toxicology studies.

The issue with these new studies, aside from the fact that Catalyst’s portfolio of approved drugs remains empty, is that they are often very costly and time consuming.

“We are surprised with the FDA’s request for an additional clinical study for Firdapse, but are encouraged that the agency is open to an efficient, small short-term study design. We are currently in discussions with the FDA, and our clinical experts regarding the protocol and logistics for this confirmatory study,” said Catalyst CEO Patrick J. McEnany.

 Just 10 days ago, Catalyst reported its fourth-quarter 2015 earnings, posting a loss of 7 cents on R&D expenses that were up over 60% year-over-year. More time and money researching Firdapse is simply something that Catalyst cannot afford right now.

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