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Catabasis Pharmaceuticals Reports First Quarter 2017 Financial Results and Reviews Business Progress

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Catabasis
Pharmaceuticals, Inc.
(NASDAQ:CATB), a clinical-stage
biopharmaceutical company, today reported financial results for the
first quarter ended March 31, 2017, and reviewed recent business
progress.

"We made important progress across our portfolio in the first quarter,
including the presentation of encouraging results from our edasalonexent
MoveDMD trial and the advancement of our rare disease pipeline," said
Jill C. Milne, Ph.D., Chief Executive Officer of Catabasis. "Our
recently completed prespecified analysis of functional assessments in
Part B of the MoveDMD trial strengthens our confidence in the potential
of edasalonexent as a novel treatment for boys with Duchenne muscular
dystrophy."

Dr. Milne continued, "We see consistent numerical improvements across
prespecified functional analyses of boys treated with edasalonexent. We
expect to report interim results from Part C of the MoveDMD trial in the
third quarter, and we look forward to gaining important information on
the persistence of treatment signals with edasalonexent as well as
determining functional endpoints for possible future clinical trials.
The MoveDMD trial is progressing as planned, and we are focused on the
next steps for the development of edasalonexent while continuing to
advance our pipeline programs in cystic fibrosis and neurodegenerative
diseases."

Recent and Upcoming Corporate Highlights

Edasalonexent (CAT-1004) and the MoveDMD Trial

  • Continued execution of open-label extension (Part C) of the MoveDMD
    trial in which patients are treated with edasalonexent following
    completion of Part B. The institutional review boards have approved
    moving all boys in Part C to the higher 100 mg/kg/day dose group of
    edasalonexent and extending Part C to 60 weeks. Catabasis intends to
    report results from Part C in 2017, with an interim update in Q3 after
    all boys participating have completed 24 weeks of dosing with
    edasalonexent.
  • In April, presented data from the MoveDMD trial of edasalonexent at
    the American Academy of Neurology 69th Annual Meeting. The
    prespecified analysis of Part B data showed numerical improvement in
    rates of change across five functional assessments for patients on 12
    weeks of edasalonexent compared to off-treatment prior to Part B
    dosing. These results are in addition to and consistent with numerical
    improvements in the same functional assessments with edasalonexent
    compared to placebo as reported in the top-line results from Part B in
    January. These functional assessments are meaningful to boys affected
    by Duchenne and are known to correlate with loss of milestones and
    disease progression. The MoveDMD trial was not powered for functional
    assessments and these analyses were generally not statistically
    significant.
  • In March, reported results from the Catabasis and Sarepta joint
    research collaboration showing increased dystrophin expression in the mdx
    mouse with edasalonexent in combination with an exon-skip modality.
    The companies believe that these results warrant further research.
  • In January, the primary endpoint for Part B of MRI T2, an exploratory
    early biomarker, was not met. However, we continue to see numerical
    improvements across the functional assessments, as described above,
    which have precedence as endpoints in pivotal trials in DMD.

Additional Rare Disease Programs

  • In January, published research on CAT-5571, a novel activator of
    autophagy and potential oral treatment for cystic fibrosis (CF), in
    the Journal of Medicinal Chemistry; upcoming presentation on CAT-5571
    planned at the European Cystic Fibrosis Conference in June.
  • Continued ongoing preclinical activities exploring the potential of
    CAT-4001 in diseases such as amyotrophic lateral sclerosis (ALS) and
    Friedreich's ataxia.

First Quarter 2017 Financial Results

Cash Position: As of March 31, 2017, Catabasis had cash and cash
equivalents of $31.8 million, compared to $38.5 million in cash, cash
equivalents and available-for-sale securities as of December 31, 2016.
Catabasis expects that its current cash and cash equivalents as of April
30, 2017, will fund operating expenses, debt service and capital
expenditure requirements based on its current operating plan for at
least 12 months from today. Net cash used in operating activities for
the three months ended March 31, 2017 was $8.1 million, compared to $9.1
million for the three months ended March 31, 2016.

R&D Expenses: Research and development expenses were $5.4
million for the three months ended March 31, 2017, compared to $6.4
million for the three months ended March 31, 2016. The decrease in
research and development expenses was primarily attributable to the
completion of certain clinical activities.

G&A Expenses: General and administrative expenses were $2.4
million for the three months ended March 31, 2017, compared to $2.8
million for the three months ended March 31, 2016. The decrease in
general and administrative expenses was primarily attributable to
decreased G&A headcount.

Operating Loss: Loss from operations was $7.8 million for the
three months ended March 31, 2017, compared to $9.2 million for the
three months ended March 31, 2016.

Net Loss: Net loss was $7.9 million, or $0.41 per share, for the
three months ended March 31, 2017, compared to a net loss of $9.4
million for the three months ended March 31, 2016.

Conference Call and Webcast

Catabasis will host a conference call and webcast at 4:30pm ET today to
provide an update on corporate developments and to discuss first quarter
2017 financial results.

Participant Toll-Free Dial-In Number: (877) 388-2733
Participant
International Dial-In Number: (541) 797-2984
Pass Code: 99023963

Please specify to the operator that you would like to join the
"Catabasis First Quarter 2017 Results Call."

Interested parties may access a live audio webcast of the conference
call via the investor section of the Catabasis website, www.catabasis.com.
Please connect to the Catabasis website several minutes prior to the
start of the broadcast to ensure adequate time for any software download
that may be necessary. The webcast will be archived for 90 days.

About Edasalonexent (CAT-1004)

Edasalonexent (CAT-1004) is an investigational oral small molecule that
is being developed as a potential disease-modifying therapy for all
patients affected by DMD, regardless of their underlying mutation.
Edasalonexent inhibits NF-kB, a protein that is activated in DMD and
drives inflammation and fibrosis, muscle degeneration and suppresses
muscle regeneration. We are currently conducting the MoveDMD trial, a
three-part clinical trial investigating the safety and efficacy of
edasalonexent in boys ages 4 – 7 affected with DMD (any confirmed
mutation). The third part of the trial, an open-label extension with
edasalonexent, is ongoing. The FDA has granted orphan drug, fast track
and rare pediatric disease designations and the European Commission has
granted orphan medicinal product designation to edasalonexent for the
treatment of DMD. For a summary of clinical results reported to-date,
please visit www.catabasis.com.

About CAT-5571

Catabasis is developing CAT-5571 as a potential oral treatment for
cystic fibrosis (CF) with potential effects on both the cystic fibrosis
transmembrane conductance regulator (CFTR) and on the clearance of Pseudomonas
aeruginosa
. CAT-5571 is a small molecule that activates autophagy, a
process that maintains cellular homeostasis and host defense mechanisms,
and is known to be impaired in CF. Catabasis has shown in preclinical
studies that CAT-5571, in combination with lumacaftor/ivacaftor,
enhances cell-surface trafficking and function of CFTR with the F508del
mutation. Catabasis has also shown that CAT-5571 enhances the clearance
of P. aeruginosa infection in preclinical models of CF.

About CAT-4001

Catabasis is developing CAT-4001 as a potential treatment for
neurodegenerative diseases such as Friedreich's ataxia (FA) and
amyotrophic lateral sclerosis (ALS). CAT-4001 is a small molecule that
activates Nrf2 and inhibits NF-kB, two pathways that have been
implicated in FA and ALS. Catabasis has shown that CAT-4001 modulates
the Nrf2 and NF-kB pathways in both cellular assays and animal models.

About Catabasis

At Catabasis Pharmaceuticals, our mission is to bring hope and
life-changing therapies to patients and their families. Our SMART
(Safely Metabolized And Rationally Targeted) linker drug discovery
platform enables us to engineer molecules that simultaneously modulate
multiple targets in a disease. We are applying our SMART linker platform
to build an internal pipeline of product candidates for rare diseases
and plan to pursue partnerships to develop additional product
candidates. For more information on the Company's drug discovery
platform and pipeline of drug candidates, please visit www.catabasis.com.

Forward Looking Statements

Any statements in this press release about future expectations, plans
and prospects for the Company, including statements about future
clinical trial plans and other statements containing the words
"believes," "anticipates," "plans," "expects," "may" and similar
expressions, constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from those indicated by such forward-looking
statements as a result of various important factors, including:
uncertainties inherent in the initiation and completion of preclinical
studies and clinical trials and clinical development of the Company's
product candidates; availability and timing of results from preclinical
studies and clinical trials; whether interim results from a clinical
trial will be predictive of the final results of the trial or the
results of future trials; expectations for regulatory approvals to
conduct trials or to market products; availability of funding sufficient
for the Company's foreseeable and unforeseeable operating expenses and
capital expenditure requirements; other matters that could affect the
availability or commercial potential of the Company's product
candidates; and general economic and market conditions and other factors
discussed in the "Risk Factors" section of the Company's Quarterly
Report on Form 10-Q for the period ended March 31, 2017, which is on
file with the Securities and Exchange Commission, and in other filings
that the Company may make with the Securities and Exchange Commission in
the future. In addition, the forward-looking statements included in this
press release represent the Company's views as of the date of this press
release. The Company anticipates that subsequent events and developments
will cause the Company's views to change. However, while the Company may
elect to update these forward-looking statements at some point in the
future, the Company specifically disclaims any obligation to do so.
These forward-looking statements should not be relied upon as
representing the Company's views as of any date subsequent to the date
of this release.

 

Catabasis Pharmaceuticals, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(Unaudited)

 
 
  Three Months Ended March 31,
  2017       2016  
 
Operating expenses:
Research and development $ 5,398 $ 6,436
General and administrative   2,363     2,770  
Total operating expenses   7,761     9,206  
Loss from operations (7,761 ) (9,206 )
Other (expense) income:
Interest expense (149 ) (243 )
Interest and investment income 39 53
Other expense, net   (5 )   (22 )
Total other expense, net   (115 )   (212 )
Net loss $ (7,876 ) $ (9,418 )
Net loss per share - basic and diluted $ (0.41 ) $ (0.61 )
Weighted-average common shares outstanding used in net loss per
share - basic and diluted
  19,093,273     15,335,516  
 
 

Catabasis Pharmaceuticals, Inc.

Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

 
 
  March 31,   December 31,
  2017     2016
Assets
Cash and cash equivalents $ 31,795 $ 23,596
Available-for-sale securities - 14,931
Total assets 33,422 40,209
Liabilities and stockholders' equity
Current portion of notes payable, net of discount 3,260 3,243
Notes payable, net of current portion and discount 1,657 2,479
Total liabilities 9,467 11,123
Total stockholders' equity $ 23,955 $ 29,086
 
 

Catabasis Pharmaceuticals, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 
 
  Three Months Ended March 31,
  2017       2016  
Net cash used in operating activities $ (8,105 ) $ (9,147 )
Net cash provided by (used in) investing activities 14,901 (29,069 )
Net cash provided by (used in) financing activities   1,403     (746 )
Net increase (decrease) in cash and cash equivalents $ 8,199   $ (38,962 )

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