It's Catalyst vs. the feds as tiny drugmaker sues FDA over 'capricious' approval for rival

Florida's Catalyst Pharmaceuticals is taking on the FDA over the agency's approval for a possible competitor to its Firdapse. (Pixabay)

For a relatively unknown drugmaker, Catalyst Pharmaceuticals has made plenty of headlines since it won approval for its rare disease drug Firdapse. And isn’t shying away from more controversy.

Even after coming under intense criticism for its $375,000 Firdapse price, the company has sued the FDA for approving a potential competitor. 

In its lawsuit, Catalyst asks the court to toss out the FDA’s recent approval of Jacobus Pharmaceutical’s Ruzurgi, which won its green light to treat Lambert-Eaton myasthenic syndrome (LEMS) in pediatric patients. Firdapse is approved to treat adults.

There's quite a backstory leading to the lawsuit. To start, before Catalyst won its approval for Firdapse last year, Jacobus had been giving the drug away for free under the FDA’s compassionate use program. Catalyst had licensed certain rights to the compound, scored an FDA nod and priced its brand at $375,000 per year. 

An outcry ensued. Sen. Bernie Sanders asked the FDA to allow unbranded copies so patients could continue getting access to the med. David Mitchell, founder of Patients for Affordable Drugs, asked trade group BIO to kick Catalyst off its membership rolls.

Catalyst, for its part, said its new med fills a large unmet need for an FDA-approved drug. Before the FDA nod, only about 200 of an estimated 3,000 LEMS patients in the U.S. were using the unapproved version, the company said, and those patients faced considerable red tape to get it. Plus, the company has patient-assistance programs and is using a portion of sales to fund other research. 

But that response didn't do much to silence critics, and the FDA seemed to offer patients a workaround last month when it approved Jacobus’ Ruzurgi for patients aged six to less than 17. Adults make up most of the patient population, but analysts noted that doctors could choose to prescribe the Jacobus alternative off-label for their patients. 

Now, Catalyst is pushing back. The small drugmaker—which has lost more than 40% of its value since Jacobus' approval—sued the agency claiming violations of statutory rights and more. The company says the approval was in many ways “arbitrary, capricious, and contrary to law.”

“We believe the FDA has misapplied its regulations, contradicting decades of precedent, and has undercut Catalyst’s orphan drug exclusivity,” Catalyst CEO Patrick McEnany said in a statement. “We are compelled to bring this action, to preserve the specialized regulatory framework provided by the Orphan Drug legislation, and the prospect of future rare disease drug development for all rare disease patients in need of an approved treatment.” 

An FDA spokeswoman said the agency doesn't comment on pending litigation.

After Catalyst’s stock fell sharply on the Jacobus nod, Oppenheimer analysts argued that investor fear may have been overblown. In a note to clients, the analysts said the free fall was "driven more by fear than by fact” but that they would keep an eye on the situation. 

On a conference call after the FDA’s Jacobus approval, McEnany said Catalyst was “actively assessing the impact of the decision on our company, the legality of the FDA's actions and our options going forward.” He warned that the decision could harm future rare disease investment.