Catalyst Pharmaceuticals Q4 2025 Earnings: Steady Execution Amid Portfolio and Patent Risks

What happened

Catalyst Pharmaceuticals reported Q4 2025 earnings, largely confirming its raised 2025 revenue guidance of $565-585 million, driven by multi-product execution. The call highlighted FIRDAPSE's resilience due to orphan protection and favorable patent settlements, while AGAMREE's uptake in DMD showed progress but faces payer coverage challenges. Management addressed FYCOMPA's loss of exclusivity risks, emphasizing retention strategies as patents begin expiring in 2025, though generic erosion remains a near-term headwind. Updates on ongoing FIRDAPSE ANDA litigation indicated no adverse rulings, supporting extended exclusivity, but litigation with other filers persists. Capital allocation was reinforced with the $200 million share repurchase program active, reflecting confidence in durable cash flows despite competitive pressures.

Implication

The earnings call reinforces Catalyst's ability to meet 2025 targets, reducing execution risk and supporting the BUY thesis. FIRDAPSE's protection via patents and settlements bolsters cash flow durability, though litigation remains a wildcard. AGAMREE's growth is on track but hinges on payer acceptance, requiring ongoing monitoring for pricing pressures. FYCOMPA's LOE impact is managed for now, but faster-than-expected generic erosion could pressure revenues. Overall, the $200 million buyback and net cash position provide downside protection, but investors must stay vigilant on the key watch items outlined in the DeepValue report.

Thesis delta

The earnings call did not materially alter the BUY thesis, as it confirmed guidance and ongoing execution across the three-product portfolio. However, management's optimistic tone on FYCOMPA retention and litigation timelines may mask underlying risks, necessitating a critical eye on future quarterly updates for any signs of deviation from projections.