When Cat­a­lyst Phar­ma­ceu­ti­cals’ drug for Lam­bert-Eaton myas­thenic syn­drome (LEMS) — a rare, au­toim­mune dis­or­der that af­fects the con­nec­tion be­tween nerves and mus­cles — was ap­proved last year, car­ry­ing a $375,000 an­nu­al price tag, some pa­tients were not ex­act­ly thrilled. Hun­dreds of pa­tients had been able to ac­cess a sim­i­lar drug from com­pound­ing phar­ma­cies for a frac­tion of the cost, or from a small, fam­i­ly-run New Jer­sey-based com­pa­ny called Ja­cobus Phar­ma­ceu­ti­cals for free, as part of an FDA-rat­i­fied com­pas­sion­ate use pro­gram.

Once the Cat­a­lyst treat­ment, Fir­dapse, won ap­proval for adult LEMS pa­tients, it al­so won mar­ket ex­clu­siv­i­ty span­ning sev­en years — ef­fec­tive­ly pre­clud­ing Ja­cobus and com­pound­ing phar­ma­cies from sell­ing their ver­sions.

On Mon­day, how­ev­er, the FDA may have dis­rupt­ed that sta­tus quo by ap­prov­ing the Ja­cobus ver­sion for pa­tients aged 6 to 17, based on da­ta from a 32 adult pa­tient-study. The agency said it had used adult LEMS da­ta to de­duce a safe dos­ing reg­i­men for pe­di­atric pa­tients. As far as the FDA is con­cerned, doc­tors can pre­scribe drugs for un­ap­proved use, when they judge that it is med­ical­ly ap­pro­pri­ate for their pa­tient.

Shares of Coral Gables, Flori­da-based Cat­a­lyst $CPRX cratered af­ter-mar­ket on Mon­day. On Tues­day, the stock was down 36.5% at $3.88 be­fore the bell.

“The ap­proval of Ja­cobus’ Ruzur­gi for the treat­ment of pe­di­atric pa­tients with LEMS comes as a sur­prise, as in­vestors had all but writ­ten off this ver­sion of 3,4-DAP fol­low­ing Fir­dapse’s ap­proval (for adults, who com­prise near­ly all of the LEMS pop­u­la­tion) un­der the pre­sump­tion that oth­er forms would be blocked by or­phan ex­clu­siv­i­ty. With CPRX shares -43% af­ter Mon­day’s close, the mar­ket ap­pears to be fac­tor­ing sig­nif­i­cant im­pact to Fir­dapse’s com­mer­cial prospects from off-la­bel use of a (pre­sum­ably cheap­er) agent,” Op­pen­heimer an­a­lysts wrote in a note on Tues­day.

End­points News has con­tact­ed Ja­cobus for com­ment. De­pend­ing on how Ja­cobus prices its drug, Ruzur­gi — in­sur­ers could be per­suad­ed to fa­vor it over Cat­a­lyst’s prod­uct, de­spite the fact that it is of­fi­cial­ly ap­proved for on­ly pe­di­atric use.

Ac­cord­ing to a re­port by STAT, while Ja­cobus has not so far made a de­ci­sion on pric­ing, the own­er has sug­gest­ed that the com­pa­ny had spent $60 mil­lion on R&D and man­u­fac­tur­ing, and that post-ap­proval oblig­a­tions will like­ly cost the com­pa­ny an­oth­er $10 mil­lion to $20 mil­lion.

The Ruzur­gi for­mu­la­tion re­quires re­frig­er­a­tion — while the Fir­dapse for­mu­la­tion is sta­ble at room tem­per­a­ture, which gives Cat­a­lyst a slight ad­van­tage over Ja­cobus, Sun­Trust Robin­son Humphrey an­a­lyst Ed­ward Nash wrote in a note on Tues­day. “How­ev­er, the com­mer­cial po­ten­tial for Fir­dapse now would be de­pen­dent on rel­a­tive pric­ing as well as re­im­burse­ment cov­er­age”

In LEMS pa­tients, the body’s own im­mune sys­tem launch­es an at­tack on the neu­ro­mus­cu­lar junc­tion — which con­nects nerves and mus­cles. The con­di­tion can as­so­ci­at­ed with oth­er au­toim­mune dis­eases, but tends to oc­curs in pa­tients with can­cer. It’s preva­lence in pe­di­atric pa­tients is not known, but glob­al­ly it is es­ti­mat­ed to af­fect three per mil­lion in­di­vid­u­als, ac­cord­ing to the FDA.

Fir­dapse land­ed on the US mar­ket this Jan­u­ary, and in its fourth-quar­ter earn­ings call, Cat­a­lyst said the launch was off to a strong start, with man­age­ment not­ing min­i­mal push­back from pay­ers, and in­di­cat­ing that cov­ered pa­tients pay less than $10 per month out of pock­et.

Patrick McE­nany

But the com­pa­ny’s list price had al­ready trig­gered a tem­pest of crit­i­cism in pa­tient cir­cles and in Wash­ing­ton. Ver­mont Sen­a­tor Bernie Sanders — ahead of his an­nounce­ment to make a sec­ond at­tempt at the pres­i­den­cy — spot­light­ed Cat­a­lyst for “fleec­ing” tax­pay­ers and the “im­moral ex­ploita­tion of pa­tients,” un­der­scor­ing the is­sue as yet an­oth­er in­stance of a drug com­pa­ny’s “cor­po­rate greed.”

The FDA’s de­ci­sion on Ruzur­gi was like­ly in­flu­enced by pres­sure from Sanders, Sun­Trust’s Nash not­ed.

Cat­a­lyst chief Patrick McE­nany re­butted Sander’s as­ser­tions by say­ing the biotech had spent “mil­lions” test­ing the drug; that the com­pa­ny’s pric­ing pol­i­cy is in line with ul­tra-or­phan dis­eases of sim­i­lar sever­i­ty — and the firm is do­ing its ut­most to lim­it pa­tients’ out of pock­et cost; as well as down­played Ja­cobus’ free sup­ply, say­ing it was ben­e­fit­ting not more than a few hun­dred US pa­tients.

The com­pa­ny de­clined to com­ment on the Ja­cobus ap­proval.

Biotech is one of the smartest, best educated industries on the planet. PhDs abound. We’ve had a long enough track record to see a new generation of savvy, experienced execs coming together to run startups.

And in these times, they are being tested as never before.

Biotech is going through quite a rough patch right now. For 2 years, practically anyone with a decent resume and some half-baked ideas on biotech could start a company and get it funded. The pandemic made it easy in many ways to pull off an IPO, with traditional road shows shut down in exchange for a series of quick Zoom meetings. Generalist investors flocked as the numbers raised soared into the stratosphere.

While calls to diversify clinical trials have grown louder in recent years — gaining support from federal agencies such as the FDA and NIH — progress has largely stalled, according to a new report from the National Academies of Sciences, Engineering and Medicine.

Swaths of patients in racial and ethnic minority groups, as well as LGBTQIA+, pregnant and older adult populations continue to be left out of clinical trials. While some advances have been made in the last 30 years — women now account for roughly half of clinical trial participants — growth in other areas remains stagnant, according to the report, which was mandated by Congress and sponsored by the NIH.

It seems that smallpox vaccination production is weighing on the mind of the US government. And manufacturer Bavarian Nordic is the latest company to benefit.

Just a few days after Emergent, a company that has made government contracts its lifeblood, acquired the exclusive rights to Tembexa from Chimerix, with a $225 million cash payment and an expected BARDA contract, the agency has offered a contract for smallpox vaccine production.

The Senate last week voted along party lines, 51-50, with Vice President Kamala Harris casting the tie-breaker, to make President Biden appointee Alvaro Bedoya the deciding vote on a split 2-2 Federal Trade Commission.

The addition of Bedoya to the FTC could not only spell more trouble for biopharma M&A activity, as he may align with his Democrat partners to break the FTC ties, but it may also mean that FTC Chair Lina Khan has what she needs to move forward on a study around the pharma middlemen known as pharmacy benefit managers.

It looks like Warren Buffett is sticking to ice cream and railroads for the moment.

The billionaire CEO of Berkshire Hathaway backed out of two major holdings in the pharma industry, Forexlive first reported, including a $410 million investment in AbbVie and a $324.4 million stake in Bristol Myers Squibb.

The move comes after Berkshire abandoned its Teva shares just last quarter, Bloomberg reported.