Catabasis Pharmaceuticals, Inc. (NASDAQ:CATB), a
biopharmaceutical company, today reported financial results for the
second quarter ended June 30, 2021 and provided a corporate
update.
“We are focused on advancing the development of our lead
program, QLS-215, as a differentiated and potentially the most
patient-friendly treatment option for the chronic treatment of
patients with hereditary angioedema to prevent attacks,” said Jill
C. Milne, Ph.D., Chief Executive Officer of Catabasis. “We
anticipate that our first clinical trial with QLS-215 could
demonstrate clinical proof of concept of its differentiated profile
and long antibody half-life. Initial results from this trial are
anticipated by the end of 2022.”
QLS-215 for the Treatment of Hereditary Angioedema
(HAE)
- The vision for the lead program, QLS-215, is to develop a
monoclonal antibody inhibitor of plasma kallikrein for HAE with
dosing once every three months or longer and sustained inhibitory
blood levels. QLS-215 has the potential to be the most
patient-friendly chronic treatment option, based on the data
generated to date and the existing HAE treatment landscape.
- HAE is a rare genetic disorder characterized by severe,
recurrent, unpredictable, painful and sometimes life-threatening
swelling in the face, limbs, abdomen and airway. Targeted plasma
kallikrein inhibition can prevent HAE attacks by suppressing the
pathway that generates bradykinin and causes excessive
swelling.
- QLS-215 is a humanized monoclonal antibody targeting plasma
kallikrein that has demonstrated potent inhibition of plasma
kallikrein as well as a long plasma half-life in non-human
primates.
- Recent discussions with physicians and patients confirm the
need for effective treatments that reduce HAE attacks as well as
reduce the burden of treatment.
- Catabasis expects to file an Investigational New Drug
application for QLS-215 in mid-2022 and plans to initiate a Phase 1
clinical trial with initial results anticipated by year end 2022.
Catabasis expects that the results of this trial, if positive,
could provide clinical proof of concept for the activity and plasma
half-life improvements for QLS-215.
Capital Structure
- Stockholders of the Company approved the conversion of the
Company’s non-voting Series X Preferred Stock at the 2021 Annual
Meeting held on June 2, 2021. As a result, each share of Series X
Preferred Stock converted automatically into 1,000 shares of
Catabasis common stock, subject to certain beneficial ownership
limitations. 53,532 shares of Series X Preferred Stock have
converted and, as of August 9, 2021, approximately 76.9 million
shares of common stock are outstanding. 32,545 shares of Series X
Preferred Stock remain unconverted as a result of beneficial
ownership limitations, which shares are convertible into
approximately 32.5 million shares of common stock. After giving
effect to the conversion of these shares on a pro forma basis,
approximately 109.5 million shares of common stock would have been
outstanding as of August 9, 2021.
- Catabasis will effect a reverse stock split of its shares of
common stock at a ratio of 1-for-6, effective as of August 19,
2021, with trading of Catabasis’ common stock on the Nasdaq Capital
Market to begin on a split-adjusted basis at market open on August
20, 2021. The common stock will continue to trade on the Nasdaq
Capital Market under the ticker symbol “CATB,” although a new CUSIP
number (14875P 305) has been assigned.
- Catabasis’s stockholders approved the reverse stock split at
the 2021 Annual Meeting and granted Catabasis’s board of directors
the authority to effect a reverse stock split.
- As a result of the reverse stock split, every 6 shares of
Catabasis’s pre-reverse split common stock will be combined and
reclassified into one share of common stock. No fractional shares
will be issued in connection with the reverse stock split, and if
the stock split results in any stockholders owning a fractional
share, then such stockholders will receive a cash payment in lieu
of such fractional share. The reverse stock split will not modify
any rights of Catabasis’s common stock. The reverse stock split
will proportionately reduce the number of shares of common stock
issuable upon the conversion of Catabasis’s outstanding shares of
Series X Preferred Stock and upon the exercise of its outstanding
stock options and warrants, and with a proportionate increase in
the exercise prices of such stock options and warrants. Catabasis
has chosen its transfer agent, American Stock Transfer & Trust
Company, LLC, to act as exchange agent for the reverse stock split.
Stockholders owning shares via a bank, broker or other nominee will
have their positions automatically adjusted to reflect the reverse
stock split and will not be required to take further action in
connection with the reverse stock split, subject to brokers’
particular processes. For those stockholders holding physical stock
certificates, the exchange agent will send instructions for
exchanging those certificates for shares held in book-entry form
representing the post-split number of shares.
- The par value of the Company’s common stock will remain
unchanged at $0.001 per share after the reverse stock split. The
reverse stock split will not change the authorized number of shares
of the Company’s common stock. The reverse stock split will affect
all stockholders uniformly and will not alter any stockholder’s
percentage interest in the Company’s equity, except to the extent
that the reverse stock split results in some stockholders owning a
fractional share as described above.
- The reverse stock split will reduce the number of shares of
common stock issued and outstanding from approximately 76.9 million
to approximately 12.8 million and the number of shares of common
stock issuable upon conversion of the Company’s outstanding shares
of Series X Preferred Stock from approximately 32.5 million to
approximately 5.4 million.
Second Quarter 2021 Financial Results
Cash Position: As of June 30, 2021, Catabasis had cash,
cash equivalents and short-term investments of $139.5 million,
compared to $146.9 million as of March 31, 2021. The Company
expects that it has sufficient cash to fund its current operating
plan through 2023. Net cash used in operating activities for the
three months ended June 30, 2021, was $7.4 million, compared to
$7.5 million for the three months ended June 30, 2020.
R&D Expenses: Research and development expenses were
$3.5 million for the three months ended June 30, 2021, compared to
$6.8 million for the three months ended June 30, 2020.
G&A Expenses: General and administrative expenses
were $4.0 million for the three months ended June 30, 2021,
compared to $2.8 million for the three months ended June 30,
2020.
Operating Loss: Loss from operations was $7.5 million for
the three months ended June 30, 2021, compared to $9.6 million for
the three months ended June 30, 2020.
Net Loss: Net loss was $7.5 million for the three months
ended June 30, 2021, compared to a net loss of $9.5 million for the
three months ended June 30, 2020.
Net Loss Per Share Basic and Diluted: Net loss per share
basic and diluted was $0.89 for the three months ended June 30,
2021, compared to a net loss basic and diluted of $0.53 per share
for the three months ended June 30, 2020.
About Catabasis At Catabasis Pharmaceuticals, our mission
is to bring hope with life-changing therapies to patients and
families affected by rare and niche diseases. Our lead program,
QLS-215, is a monoclonal antibody inhibitor of plasma kallikrein in
preclinical development for the treatment of hereditary
angioedema.
Forward Looking Statements This press release contains
forward-looking statements within the meaning of applicable
securities laws and regulations including, but not limited to,
statements regarding: the Company’s projected cash runway;
expectations regarding the timing for the filing of an IND and
commencement of a Phase 1 clinical trial for QLS-215, the timing
and nature of the initial results from such trial; the potential
attributes and differentiated profile of QLS-215; and the need for
effective treatments for HAE. The use of words such as, but not
limited to, “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“potential,” “predict,” “project,” “should,” “target,” “will,” or
“would” and similar words expressions are intended to identify
forward-looking statements. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
they are based on the Company’s current beliefs, expectations and
assumptions regarding the future of its business, future plans and
strategies, future financial performance, results of pre-clinical
and clinical results of the Company’s product candidates and other
future conditions. Actual results may differ materially from those
indicated by such forward-looking statements as a result of various
important factors, including risks and uncertainties: related to
the Company’s ability to recognize the anticipated benefits of the
Quellis acquisition; the outcome of any legal proceedings that may
be instituted against the Company or Quellis following the
announcement of the Quellis acquisition and related transactions;
changes in applicable laws or regulations; the possibility that the
Company may be adversely affected by other economic, business,
and/or competitive factors, including the COVID-19 pandemic; risks
inherent in pharmaceutical research and development, such as:
adverse results in our drug discovery, preclinical and clinical
development activities, the risk that the results of pre-clinical
studies may not be replicated in clinical studies, the Company’s
ability to enroll patients in our clinical trials, and the risk
that any of the Company’s clinical trials may not commence,
continue or be completed on time, or at all; decisions made by, or
feedback received from, the U.S. FDA and other regulatory
authorities, investigational review boards at clinical trial sites
and other review bodies with respect to QLS-215 and any future
product candidates; the Company’s ability to manufacture sufficient
quantities of drug substance and drug product on a cost-effective
and timely basis; the Company’s ability to obtain, maintain and
enforce intellectual property rights for QLS-215 and any other
future product candidates; competition; the Company’s ability to
manage its cash usage and the possibility of unexpected cash
expenditures; the Company’s ability to obtain necessary financing
to conduct its planned activities and to manage unplanned cash
requirements; general economic and market conditions; as well as
the risks and uncertainties set forth under the caption “Risk
Factors” in the Company’s most recent Annual Report on Form 10-K
filed with the SEC, as well as discussions of potential risks,
uncertainties, and other important factors in the Company’s
subsequent filings with the SEC. New risks and uncertainties may
emerge from time to time, and it is not possible to predict all
risks and uncertainties. The Company may not actually achieve the
forecasts or expectations disclosed in our forward-looking
statements, and investors and potential investors should not place
undue reliance on the Company’s forward-looking statements. Neither
the Company, nor its affiliates, advisors or representatives,
undertake any obligation to publicly update or revise any
forward-looking statement, whether as result of new information,
future events or otherwise, except as required by law. These
forward-looking statements should not be relied upon as
representing the Company’s views as of any date subsequent to the
date hereof.
Catabasis Pharmaceuticals,
Inc.
Consolidated Statements of
Operations
(In thousands, except share and
per share data)
(Unaudited)
Three Months Ended June 30, Six Months Ended June
30,
2021
2020
2021
2020
Operating expenses: Research and development
$
3,478
$
6,750
$
6,071
$
12,039
General and administrative
4,008
2,803
6,881
5,555
Acquired in-process research and development
-
-
164,617
-
Total operating expenses
7,486
9,553
177,569
17,594
Loss from operations
(7,486
)
(9,553
)
(177,569
)
(17,594
)
Other income (expense): Interest and investment income
40
60
53
227
Other expense, net
(20
)
(15
)
(34
)
(93
)
Total other income, net
20
45
19
134
Net loss
(7,466
)
(9,508
)
(177,550
)
(17,460
)
Dividend on convertible preferred stock related to beneficial
conversion feature and issuance costs
(24,437
)
-
(24,437
)
-
Net loss attributable to common shareholders
$
(31,903
)
$
(9,508
)
$
(201,987
)
$
(17,460
)
Net loss per share - basic and diluted
$
(0.89
)
$
(0.53
)
$
(6.93
)
$
(1.03
)
Weighted-average common shares outstanding used in net loss per
share - basic and diluted
35,880,580
17,967,495
29,167,672
16,933,079
Catabasis Pharmaceuticals,
Inc.
Selected Consolidated Balance
Sheets Data
(In thousands)
(Unaudited)
June 30, December 31,
2021
2020
Assets Cash and cash equivalents
$
139,520
$
24,930
Short-term investments
-
20,000
Right-of-use asset
717
966
Other current and long-term assets
708
1,560
Total assets
140,945
47,456
Liabilities and stockholders’ equity Current portion of
operating lease liabilities
655
649
Long-term portion of operating lease liabilities
58
397
Other current and long-term liabilities
3,333
5,741
Total liabilities
4,046
6,787
Total stockholders’ equity
$
136,899
$
40,669
Catabasis Pharmaceuticals,
Inc.
Selected Consolidated
Statements of Cash Flows Data
(In thousands)
(Unaudited)
Six Months Ended June 30,
2021
2020
Net cash used in operating activities
$
(16,116
)
$
(14,455
)
Net cash provided by investing activities
26,445
24,310
Net cash provided by financing activities
104,261
31,889
Net increase in cash, cash equivalents and restricted cash
$
114,590
$
41,744
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Catabasis Contacts: Investor
relations: Andrea Matthews investors@catabasis.com
Media: Elizabeth Higgins media@catabasis.com
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