Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Catalyst Pharmaceuticals, Inc. (NASDAQ: CPRX) is a commercial-stage biopharmaceutical company. The Company is focused on in-licensing, developing, and commercializing novel medicines for patients living with rare diseases. With the patient focus, the Company is engaged in developing a robust pipeline of cutting-edge medicines for rare diseases.

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 21.69% in the last three months as well as by 33.58% in past six months.
• The stock is leaning towards its lower band of its 52-week range of USD 22.11 and 52-week low price of USD 8.68. Post the announcement of Q1FY23 results the stock has corrected by 22.30% with the price at an important resistance zone of USD 14.00- USD 15.00, if broken upward will open new upside larger targets.
• The price is currently trading between its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 58.59.

        

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

Over the past four years, CPRX has achieved notable growth in both its top-line and gross profit figures. The company's revenue has significantly increased from USD 102.2 million in FY19 to USD 214.2 million in FY22, indicating a substantial upward trajectory. Similarly, CPRX's gross profit has also seen significant growth, rising from USD 87.5 million in FY19 to USD 179.8 million in FY22.

Moreover, CPRX's focus on improving its operational efficiency has resulted in enhanced profitability across various levels of its operations. This improvement is evident from the higher profitability margins achieved in Q1FY23 compared to Q1FY22, indicating the company's continued efforts to optimize its financial performance.

Given CPRX's consistent upward trend in revenue and gross profit, coupled with its emphasis on operational efficiency, it suggests that the company has been successful in executing its growth strategies and has the potential to further strengthen its financial position in the market.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~49.54% of the total shareholding, signifying diverse shareholding. BlackRock Institutional Trust Company, N.A. and Deerfield Management Company, L.P. are the biggest shareholders, holding the maximum stake in the company at ~13.21% and ~9.72 %, respectively.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q1FY23:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

Stock Performance:

• The stock has corrected by 21.69% in the last three months as well as by 33.58% in past six months.
• The stock is leaning towards its lower band of its 52-week range of USD 22.11 and 52-week low price of USD 8.68. Post the announcement of Q1FY23 results the stock has corrected by 22.30% with the price at an important resistance zone of USD 14.00- USD 15.00, if broken upward will open new upside larger targets.
• The price is currently trading between its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 58.59.

4.2 Fundamental Valuation

Valuation Methodology: EV/Sales Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 19, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.