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

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-- Favorable Results Seen in 12-week Edasalonexent Phase 2 MoveDMD®
Trial in Duchenne Muscular Dystrophy; Phase 3 Clinical Trial Plan
Expected Second Half of 2017
--

-- Preclinical Data Support CAT-5571 as a Potential Treatment to
Enhance Host Defenses by Restoring Autophagy in Cystic Fibrosis --

Catabasis
Pharmaceuticals, Inc.
(NASDAQ:CATB), a clinical-stage
biopharmaceutical company, today reported financial results for the
second quarter ended June 30, 2017, and reviewed recent business
progress.

"In the second quarter, we presented an important prespecified crossover
analysis of data from boys with Duchenne in our Phase 2 edasalonexent
trial. We are very excited to see improvements in the rate of decline of
muscle function across multiple assessments in boys treated with
edasalonexent for 12 weeks. The results are very consistent with and
support our earlier analysis of functional assessments in boys treated
with edasalonexent for 12 weeks as compared to placebo and further
strengthen our confidence in the potential of edasalonexent as a novel
treatment for DMD. We continue to advance the open-label extension and
expect to share 24-week edasalonexent results in the third quarter as
well as announce our Phase 3 clinical trial plan for edasalonexent in
the second half of 2017," said Jill C. Milne, Ph.D., Chief Executive
Officer of Catabasis.

Dr. Milne continued, "We are also encouraged by the results of our
preclinical studies of CAT-5571, supporting its potential as an oral
treatment for cystic fibrosis, and with our progress across our research
programs driven by our SMART Linker℠ drug discovery technology."

Recent and Upcoming Corporate Highlights

Edasalonexent (CAT-1004) for the Treatment of Duchenne Muscular
Dystrophy (DMD)

  • In the MoveDMD Phase 2 edasalonexent trial, a crossover analysis of
    the rates of change across five assessments of muscle function in
    patients after 12 weeks of treatment compared to off-treatment prior
    to Phase 2 dosing showed clinically meaningful numerical improvements
    in rates of decline. The analysis was presented at the American
    Academy of Neurology 69th Annual Meeting in April and was
    the second of two prespecified analyses of the 12-week data. The first
    analysis was presented in March and showed meaningful improvements in
    assessments of muscle function in boys treated with edasalonexent
    compared to placebo. Functional assessments have precedence as
    endpoints in pivotal trials in DMD. The MoveDMD 12-week Phase 2
    results are consistent with the therapeutic goal of treatment, to
    delay the predictable, sequential loss of function in DMD. There were
    no safety signals and edasalonexent was well tolerated in this study.
  • The open-label extension of the MoveDMD trial is progressing as
    planned and results from 24 weeks of edasalonexent treatment are
    expected to be announced in the third quarter of 2017. All boys
    participating in the open-label extension have now moved to the higher
    100 mg/kg/day edasalonexent treatment group. Pending IRB approval, the
    open-label extension will be extended for an additional 52 weeks so
    that participating boys can continue to receive edasalonexent.
  • Catabasis expects to announce the Phase 3 clinical trial plan for
    edasalonexent in DMD in the second half of 2017.
  • The first boy in the MoveDMD trial who is amenable to exon 51 skipping
    treatment has started EXONDYS 51™ treatment along with edasalonexent
    in the open-label extension. The Catabasis and Sarepta joint research
    collaboration previously showed increased dystrophin expression in the mdx
    mouse with edasalonexent in combination with an exon-skip modality.
    Edasalonexent may have the potential to increase dystrophin levels in
    combination with dystrophin-targeted therapies.

CAT-5571 for the Treatment of Cystic Fibrosis (CF)

  • CAT-5571 demonstrated in preclinical studies improved intracellular
    clearance of bacterial pathogens that are clinically important in CF,
    as reported at the European Cystic Fibrosis Society Conference in
    June. This activity has the potential to improve lung function by
    reducing the intracellular load of multiple types of bacteria,
    including the pathogens, Pseudomonas aeruginosa and Burkholderia
    cenocepacia
    , which are the leading cause of morbidity and
    mortality for patients with CF. CAT-5571 restores autophagy, a host
    defense mechanism, which is known to be impaired in CF. Catabasis
    expects to initiate a Phase 1 trial for CAT-5571 in 2018.

Second Quarter 2017 Financial Results

Cash Position: As of June 30, 2017, Catabasis had cash and cash
equivalents of $29.4 million, compared to $31.8 million in cash, cash
equivalents and available-for-sale securities as of March 31, 2017.
Catabasis expects that its current operating plan provides for cash to
fund operations through August, 2018. Net cash used in operating
activities for the three months ended June 30, 2017 was $5.7 million,
compared to $8.8 million for the three months ended June 30, 2016. Net
cash used in operating activities for the six months ended June 30, 2017
was $13.8 million, compared to $18.0 million for the six months ended
June 30, 2016.

R&D Expenses: Research and development expenses were $4.5
million for the three months ended June 30, 2017, compared to $6.8
million for the three months ended June 30, 2016 and $9.9 million for
the six months ended June 30, 2017, compared to $13.3 million for the
six months ended June 30, 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 June 30, 2017, compared to $2.6
million for the three months ended June 30, 2016 and $4.8 million for
the six months ended June 30, 2017, compared to $5.3 million for the six
months ended June 30, 2016. The decrease in general and administrative
expenses was primarily attributable to headcount reductions.

Operating Loss: Loss from operations was $6.9 million for the
three months ended June 30, 2017, compared to $9.4 million for the three
months ended June 30, 2016, and $14.7 million for the six months ended
June 30, 2017, compared to $18.6 million for the six months ended June
30, 2016.

Net Loss: Net loss was $7.0 million, or $0.32 per share, for the
three months ended June 30, 2017, compared to a net loss of $9.4
million, or $0.61 per share, for the three months ended June 30, 2016.
Net loss for the six months ended June 30, 2017 was $14.9 million,
compared to $18.9 million for the six months ended June 30, 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 second quarter 2017 financial results.

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

47693255

 

Please specify to the operator that you would like to join the
"Catabasis Second 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 enrolled at 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 CF with potential effects on both the
cystic fibrosis transmembrane conductance regulator (CFTR) and on the
clearance of multiple types of bacteria including 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 observed 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 observed that CAT-5571 enhances the
clearance of P. aeruginosa infection in preclinical models of CF.

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 including, among
other things, statements about our plans to identify, develop and
commercialize novel therapeutics based on our SMART Linker drug
discovery platform, our plans to continue to evaluate data from the
open-label extension of our MoveDMD® clinical trial of
edasalonexent for the treatment of DMD, our plans for ongoing and
planned clinical trials for edasalonexent and other product candidates,
whether conducted by us or by any future collaborators, including the
timing of initiation of these trials and of the anticipated results, 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 June
30, 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 June 30, Six Months Ended June 30,
2017   2016 2017   2016
 
Operating expenses:
Research and development $ 4,519 $ 6,818 $ 9,917 $ 13,254
General and administrative   2,400     2,578     4,763     5,348  
Total operating expenses   6,919     9,396     14,680     18,602  
Loss from operations (6,919 ) (9,396 ) (14,680 ) (18,602 )
Other (expense) income:
Interest expense (127 ) (220 ) (276 ) (463 )
Interest and investment income 44 80 83 133
Other income, net   28     91     23     69  
Total other expense, net   (55 )   (49 )   (170 )   (261 )
Net loss $ (6,974 ) $ (9,445 ) $ (14,850 ) $ (18,863 )
Net loss per share - basic and diluted $ (0.32 ) $ (0.61 ) $ (0.73 ) $ (1.23 )

Weighted-average common shares outstanding
used in net loss
per share - basic and diluted

  21,796,194     15,373,964     20,452,200     15,354,740  
 
 

Catabasis Pharmaceuticals, Inc.
Condensed
Consolidated Balance Sheets

(In thousands)
(Unaudited)

     

June 30,

  December 31,
2017 2016
Assets
Cash and cash equivalents $ 29,369 $ 23,596
Available-for-sale securities - 14,931
Total assets 30,816 40,209
Liabilities and stockholders' equity
Current portion of notes payable, net of discount 3,278 3,243
Notes payable, net of current portion and discount 831 2,479
Total liabilities 9,266 11,123
Total stockholders' equity $ 21,550 $ 29,086
 
 

Catabasis Pharmaceuticals, Inc.
Condensed
Consolidated Statements of Cash Flows

(In thousands)
(Unaudited)

   
Six Months Ended June 30,
2017   2016
Net cash used in operating activities $ (13,785 ) $ (17,976 )
Net cash provided by (used in) investing activities 14,901 (18,971 )
Net cash provided by (used in) financing activities   4,657     (1,555 )
Net increase (decrease) in cash and cash equivalents $ 5,773   $ (38,502 )
 

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