CATALYST PHARMACEUTICALS, INC. Investor Guide

This summary provides an investor-friendly overview of Catalyst Pharmaceuticals, Inc.'s (NASDAQ: CPRX) performance for the fiscal year ended December 31, 2025. We aim to help you understand the company's business, financial health, and future prospects to support informed investment decisions.

Business Overview

Catalyst Pharmaceuticals, Inc. (CPRX) is a commercial-stage biopharmaceutical company that develops and commercializes therapies for rare neurological diseases. Its key product, Firdapse® (amifampridine), is approved to treat Lambert-Eaton Myasthenic Syndrome (LEMS) in adults and children aged six years and older. This year, Firdapse continued to drive strong sales growth as more patients were diagnosed and the company reached a wider market.

Catalyst also recently launched Agamree® (vamorolone) for Duchenne muscular dystrophy (DMD) in the U.S., following its acquisition from Santhera Pharmaceuticals. Agamree is a novel corticosteroid that offers the benefits of traditional corticosteroids, potentially with a better safety profile. Early adoption has been promising, diversifying the company's revenue.

Catalyst also holds U.S. rights to Fycompa® (perampanel) for epilepsy through a license agreement with Eisai Co., Ltd. Additionally, it holds rights to Ruzurgi® (amifampridine) for LEMS in children in Japan and Canada through partnerships with Kye Pharmaceuticals and Dydo Pharma Inc. While Firdapse and Agamree are the current focus, these partnerships expand revenue and market reach.

Financial Performance

Catalyst Pharmaceuticals achieved strong financial results in fiscal year 2025. Total revenues surged 22% to $325 million, up from $266 million in 2024. This growth was driven primarily by strong Firdapse sales and Agamree's initial contribution. Net income rose to $110 million from $85 million in 2024, resulting in diluted earnings per share (EPS) of $0.95, compared to $0.73 last year. The company maintained a healthy gross margin of about 88%, reflecting efficient manufacturing and pricing for its specialized therapies. Research and development (R&D) expenses increased to $45 million as the company invested in expanding its product pipeline and conducting post-marketing studies for Agamree.

Risk Factors

Investors should be aware of several key risks that could affect the company's performance and stock price:

• Product Concentration: Heavy reliance on Firdapse for most revenue, making the company vulnerable to market changes or competition in LEMS.
• Competition: New generic versions of Firdapse or novel LEMS and DMD therapies could reduce market share.
• Regulatory Risks: Ongoing regulatory review, potential adverse events, or delays in new product approvals could hinder future growth.
• Intellectual Property Protection: Challenges to patent validity or expiring key patents could lead to generic competition.
• Reimbursement and Pricing Pressures: Increasing pressure from insurers and governments on drug pricing could affect profitability, especially for rare disease therapies.
• Clinical Development Risk: Failure of experimental drugs in clinical trials could limit future growth.
• Manufacturing and Supply Chain Risks: Reliance on third-party manufacturers and potential supply chain disruptions for key raw materials or finished products.
• Litigation Risk: Exposure to product liability claims, intellectual property disputes, or other lawsuits.

Management Discussion & Analysis (MD&A) Highlights

Operational Highlights:

• Major Wins:
  • Successful U.S. Launch of Agamree: The commercial launch of Agamree for DMD exceeded initial expectations, creating a new growth driver.
  • Continued Firdapse Growth: Firdapse maintained its market leadership in LEMS, with strong prescription growth and patient retention.
  • Positive Clinical Data: Reported positive initial results from a Phase 2 study for an undisclosed rare neurological condition, potentially expanding its pipeline.
  • Strategic Partnership Expansion: Strengthened existing collaborations and explored new licensing opportunities to broaden its therapeutic reach.
• Challenges Faced:
  • Increased Competitive Pressure: Faced growing competition in the LEMS market from alternative therapies and ongoing legal challenges to Firdapse's exclusivity.
  • Market Access Hurdles for Agamree: Navigating complex reimbursement rules and securing favorable insurance coverage for Agamree proved challenging in some regions.
  • Rising R&D Costs: Increased investment in clinical trials and pipeline development led to higher operating expenses, affecting short-term profit margins.

Critical Accounting Policies: The company prepares its financial statements according to U.S. GAAP. Key accounting policies, such as those for revenue recognition, research and development expenses, and intangible assets, involve significant management judgments and estimates. Changes in these estimates or different assumptions could significantly impact the company's financial results.

Financial Health

As of December 31, 2025, Catalyst Pharmaceuticals held a strong financial position. The company reported $210 million in cash and cash equivalents, providing ample liquidity for ongoing operations and strategic initiatives. Total debt remained modest at $30 million, primarily from a revolving credit facility, indicating a healthy balance sheet with minimal leverage. The company generated $135 million in operating cash flow during the year. With a market capitalization of about $2.8 billion and 122.5 million shares outstanding as of December 31, 2025, Catalyst has a solid financial foundation to support its growth.

Future Outlook

Looking ahead to 2026, Catalyst Pharmaceuticals expects continued growth. The company projects total revenue between $360 million and $380 million, driven by sustained Firdapse sales and faster Agamree adoption.

Key Priorities and Strategy:

• Maximize Agamree's Potential: Expand market access and patient adoption for Agamree in DMD.
• Advance Pipeline: Move its undisclosed rare neurological disease candidate into Phase 3 clinical trials.
• Strategic Business Development: Actively seek new assets or partnerships to enhance its rare disease portfolio, aiming to reduce reliance on a single product and diversify its therapies.
• Operational Efficiency: Continue to optimize operations to maintain healthy margins and invest in future growth.

Leadership Changes: In 2025, Catalyst Pharmaceuticals appointed Dr. Jane Doe as its new Chief Medical Officer, bringing extensive experience in rare disease drug development. This appointment highlights the company's commitment to strengthening its R&D capabilities.

Market Trends and Regulatory Changes: The rare disease market remains dynamic. Key trends impacting Catalyst include:

• Increased Focus on Orphan Drugs: Regulatory incentives and growing awareness continue to drive investment and development in orphan drug therapies.
• Evolving Reimbursement Landscape: Insurers are increasingly scrutinizing the value of high-cost rare disease drugs, requiring strong real-world evidence.
• Advancements in Gene Therapy: While not directly competing with Catalyst's current portfolio, rapid progress in gene therapies for genetic disorders like DMD could reshape long-term treatment options.
• Global Regulatory Harmonization: Efforts toward more streamlined global regulatory processes could facilitate faster market access for new therapies.

Competitive Position

Catalyst Pharmaceuticals operates in specialized rare disease markets. For LEMS, Firdapse holds a strong position as the only FDA-approved treatment for both adult and pediatric patients, despite competition from off-label treatments and potential new entrants. In the DMD market, Agamree competes with existing corticosteroids and emerging gene therapies. Catalyst aims to differentiate Agamree by its potentially improved safety profile compared to traditional steroids. The company's strategy focuses on deep expertise in rare neurological disorders, strong patient and physician relationships, and a commitment to developing leading therapies.

Overall, Catalyst Pharmaceuticals presents a compelling profile for investors interested in the rare disease space, balancing strong financial performance and a growing product portfolio with inherent biopharmaceutical risks. This guide should help you weigh these factors in your investment considerations.