With the economy showing signs of cooling off, investors will have to tread carefully when it comes to buying growth stocks. That said, there are still a handful of names worth buying, even in this uncertain economic climate.
The rare-disease drugmaker Catalyst Pharmaceuticals (Nasdaq: CPRX) and the Canadian pot grower HEXO (NYSEMKT: HEXO) are perfect examples. These two names are on the cusp of some truly mind-boggling levels of top-line growth, making them great additions to any portfolio. Here’s what investors need to know right now.
A bright future
Catalyst’s shares have more than doubled in value since the start of the year. The reason? The drugmaker’s shares have taken flight in response to the strong commercial start for its newly approved Lambert-Eaton myasthenic syndrome (LEMS) treatment Firdapse. LEMS is a rare autoimmune disorder that reportedly affects around 3,000 individuals in the United States.
What’s the big deal? While Catalyst garnered a fair amount of criticism for pricing Firdapse at $375,000 for a year’s supply, the drug reportedly isn’t getting much pushback from insurance companies in terms of coverage. That’s especially good news since there is a far cheaper alternative called 3,4 DAP, which has been on the market for over 20 years at this point.
The long and short of it is that this cheaper version of the drug was expected to dampen Firdapse’s commercial opportunity — or at least slow its adoption rate in a big way. But that key threat simply hasn’t materialized in the marketplace since the drug’s launch earlier this year.
Although Firdapse’s initial target market consists of the 300 or so patients presently on 3,4 DAP, the company expects to ramp up the number of patients on therapy to about 1500 in the next few years. If the market remains stable and Catalyst can maintain this premium pricing point going forward, there’s a good chance that Firdapse will generate over $600 million in peak sales for this single indication by 2025.
As an added bonus, Catalyst is also close to two…
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