CPRX - Catalyst Pharmaceuticals: Undervalued Cash Flow Generator With High Probability Of Outperformance

• Catalyst Pharmaceuticals is a small cap biopharma company with a highly profitable ultra-orphan drug, Firdapse, for the treatment of patients with lambert-eaton myasthenic syndrome (LEMS).
• Firdapse was the subject of a pricing controversy. Subsequently, FDA granted off-label approval of a competing drug, Ruzurgi, to Jacobus. These developments have been priced into Catalyst’s stock price.
• Catalyst Pharmaceuticals has superior gross margins and EBITDA of more than 65% and 30% respectively, with a fortress balance sheet that gives them headroom to invest in R&D and M&A.
• Catalyst is undervalued at its current valuation with a P/E GAAP (TTM) of 8.13, when compared against the sector median of 36.43.

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