Catalyst shares dive amid speculation about 'off-label' rare disease rival

Shares in Catalyst Pharmaceuticals have dived after the US regulator approved a potential competitor to its rare disease drug Firdapse, which has been at the centre of a drug pricing row.

The regulator approved a drug from family-owned pharma Jacobus Pharmaceutical for children aged six to 17 years of age with Lambert-Eaton myasthenic syndrome (LEMS).

LEMS is an autoimmune disorder of the nervous system of unknown cause, which can be deadly and can lead to weakness in the legs, arms, neck and face, and problems with the body’s autonomous body functions.

While the FDA’s story is that this is the first approval to treat LEMS in children, the speculation is that doctors could prescribe the drug “off label” for adults too, as a cheaper alternative to Catalyst’s drug.

Catalyst caused controversy earlier this year when it hiked the price of Firdapse (amifampridine) to $375,000 per year.

Prior to Firdapse’s approval, the main source of amifampridine for the 3,000 or so patients affected by the disease was from Jacobus, which had been supplying the drug free of charge on a compassionate use basis.

The FDA’s approval had given Catalyst several years of market exclusivity under US laws, allowing it to hike the price of the drug.

Catalyst had argued that the price was justified because of the clinical trials it had conducted to bring the drug to market, to demonstrate its safety and efficacy in the disease.

The company had also argued that most of the costs of the drug were covered by the healthcare system, rather than the patients, and that more patients would gain access as a result of the approval.

But the move caused a political storm, with independent senator and drug price campaigner Bernie Sanders among those calling for action.

Jacobus has not publicly announced a price for the drug, which will be branded as Ruzurgi. But Laura Jacobus, who runs the company, has said that the price will be lower than that charged by Catalyst.

Shares in Catalyst were down more than 43% on the Nasdaq following the announcement.