U.S. appeals court sides with Catalyst, calling FDA approval of Jacobus' Ruzurgi 'arbitrary,' 'capricious' and unlawful

Since it came online with a breakthrough drug for a rare autoimmune disorder, Lambert-Eaton myasthenic syndrome (LEMS), Catalyst Pharmaceuticals has had a running feud with another company that later won approval for the same condition.

On Thursday, Catalyst not only one-upped rival Jacobus in scoring a key win over the FDA in a court case but that ruling could also affect future approvals and drug infringement squabbles.

In U.S. appeals court, a three-judge Florida panel ruled that the FDA should not have approved Jacobus’ treatment for LEMS, calling the nod “arbitrary, capricious and not in accordance with the law."

"The purpose of the Orphan Drug Act is to encourage pharmaceutical companies to make the R&D investments necessary to bring FDA-approved therapies to patient populations living with very rare diseases," Catalyst CEO Patrick McEnany said in a statement. "And the biggest incentive the Orphan Drug Act provides is the ability to have an exclusive market within that rare disease for their drug for seven years once they obtain approval."

RELATED: Catalyst's long-delayed Firdapse snags FDA nod, but pricing questions loom

With the FDA facing internal strife and under fire for its approval of Biogen’s Aduhelm and for inconsistencies in other rulings, the Catalyst appeal has drawn significant attention in the industry.

The appeal overturns a ruling from September of last year in which a federal judge dismissed Catalyst’s lawsuit, which contended that the FDA violated federal law when it signed off on Jacobus’ rival drug Ruzurgi in 2019.

The previous year, when Catalyst earned its green light from the FDA for Firdapse, it was the first-ever treatment for LEMS. The nod came after the FDA granted the treatment a breakthrough designation and orphan drug status only to reject it, which forced Catalyst to endure more trials.

Upon the approval, controversy ensued when Catalyst put a $375,000 annual price tag on the drug. The hefty price drew the ire of some in Congress, most notably Sen. Bernie Sanders (I-Vt.), who urged the FDA to take action.

“Catalyst may be the most recent company to exploit their monopoly after receiving FDA approval for an inexpensive old drug, but they were certainly not the first,” Sanders wrote in a letter to the agency in February of 2019.

Sanders pointed to Jacobus, a small, family-run company, which had distributed the drug for free for nearly three decades under the FDA’s compassionate use program.

Three months later, the FDA approved Ruzurgi for patients age 6-17, while Firdapse was approved only for adults.

LEMS, which damages the connection between nerves and muscles and can be fatal when it strikes the respiratory system, affects approximately 100,000 in the United States and 3 million worldwide.

RELATED: First, a pricing scandal for Catalyst's Firdapse. Next, off-label competition?

Thursday’s ruling strengthens the exclusivity of the orphan drug status the FDA granted to Firdapse.

“The FDA’s approval of Ruzurgi was contrary to the unambiguous language of the Orphan Drug Act,” the judges wrote, adding that the designation extends exclusivity for seven years.