A drug going generic is usually a sad day for healthcare stocks. It represents the loss of a kind-of-monopoly and opens up the floor to competitors. That’s just what happened to Catalyst Pharmaceuticals (NASDAQ:CPRX) as one of its big competitors, Teva (NYSE:TEVA), took aim at one of its biggest names: Firdapse.
Teva posted the application just recently, which, if approved, would allow it to make a generic version of Firdapse. Firdapse primarily targets Lambert-Easton myasthenic syndrome or LEMS. LEMS prompts the body’s immune system to consider the connection between nerve and muscle tissue a hostile threat to the body. Thus, the body’s own immune system attacks the joints. This leads to muscle weakness, particularly in the hips and thighs.
Teva noted in its application that the current patents around Firdapse are either “not valid,” “not enforceable,” or wouldn’t really stop a generic version from being sold, to begin with. Catalyst, meanwhile, has 45 days to respond and file a patent infringement suit. Said suit, if successful, would halt Teva’s efforts until mid-2026. Catalyst stock is plummeting in today’s trading; the stock fell off the IBD 50 as a result.
Overall, analyst consensus calls Catalyst a Strong Buy, while Teva is a Moderate Sell. Catalyst stock has 54.12% upside potential, while Teva has 13.54% downside risk.
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