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

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-- Edasalonexent Substantially Slowed Duchenne Muscular Dystrophy
Disease Progression Through 36 Weeks; Plan to Initiate Phase 3 Trial in
the First Half of 2018
--

-- Additional Preclinical Data Demonstrate Potential of CAT-5571 as a
Treatment for Cystic Fibrosis; Plan to Initiate Phase 1 Trial in the
Second Half of 2018 --

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

"We have achieved an important milestone for the edasalonexent program,"
said Jill C. Milne, Ph.D., Chief Executive Officer of Catabasis. "In our
Phase 2 open-label extension of the MoveDMD® trial, we saw
improvements across assessments of muscle function and muscle health as
well as a continued strong safety profile through 36 weeks of
edasalonexent treatment. Based on the consistency of these promising
data from prespecified analyses as well as supportive input from the
FDA, we plan to further evaluate edasalonexent as a potential novel
disease-modifying therapy for boys with Duchenne regardless of mutation
type in a global Phase 3 trial that we plan to begin in the first half
of 2018."

Dr. Milne continued, "Our team also advanced our research of CAT-5571, a
potential oral treatment for cystic fibrosis-associated respiratory
infections, which are the leading cause of morbidity and mortality for
patients with cystic fibrosis. We expect to initiate a Phase 1 trial for
CAT-5571 in the second half of 2018."

Recent and Upcoming Corporate Highlights

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

  • In the MoveDMD Phase 2 trial and open-label extension, sustained
    disease-modifying effects were seen through 36 weeks of treatment with
    edasalonexent. Across all assessments of muscle function, prespecified
    analyses showed improvements in the rate of decline after 24 and 36
    weeks of oral 100 mg/kg/day edasalonexent treatment in the open-label
    extension compared to the rate of change in the control period for
    boys prior to receiving edasalonexent treatment. The totality of these
    data provides clinically meaningful evidence that edasalonexent
    substantially slowed the progression of DMD. Additionally,
    statistically significant changes in supportive measures of muscle
    health were seen in muscle enzymes and the magnetic resonance imaging
    (MRI) T2 composite measure of lower leg muscles. Edasalonexent
    continued to be well tolerated with no safety signals observed in the
    trial. These data were presented at the World Muscle Society
    Conference in October.
  • New biomarker results from the MoveDMD Phase 2 trial and open-label
    extension showed that C-reactive protein (CRP) was significantly
    decreased with edasalonexent at 12 and 24 weeks compared to baseline
    in the 100 mg/kg/day treatment group. CRP is a well-characterized
    blood test marker that provides a global assessment of inflammation.
    CRP is elevated in boys affected by DMD. The significant decrease
    observed in CRP supports the biological activity of NF-kB inhibition
    by edasalonexent treatment decreasing inflammation.
  • Based on the consistency of the MoveDMD results and supportive
    regulatory input from FDA, Catabasis plans to initiate a single global
    Phase 3 trial with edasalonexent in patients with DMD regardless of
    mutation type in the first half of 2018 with top-line results expected
    in 2020.

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

  • In preclinical models of CF, CAT-5571 improved cellular clearance of
    the opportunistic and often fatal pathogen Burkholderia cenocepacia
    as reported at the North American Cystic Fibrosis Conference in
    November. This activity has the potential to address cystic
    fibrosis-associated respiratory infections by enhancing the clearance
    of pathogens, including Pseudomonas aeruginosa and Burkholderia
    cenocepacia
    , which are the leading cause of morbidity and
    mortality for patients with CF. CAT-5571 is designed to restore host
    defense by activating autophagy, which is known to be depressed in CF.
  • Catabasis expects to initiate a Phase 1 trial for CAT-5571 in the
    second half of 2018 and report top-line results in 2019.

Third Quarter 2017 Financial Results

Cash Position: As of September 30, 2017, Catabasis had cash and
cash equivalents of $21.7 million, compared to $29.4 million in cash,
cash equivalents and available-for-sale securities as of June 30, 2017.
Catabasis' current operating plan provides for cash to fund operations
through August 2018. To advance edasalonexent in the Phase 3 trial,
Catabasis expects to seek additional funds through equity or debt
financings or through collaboration or licensing transactions. Net cash
used in operating activities for the three months ended September 30,
2017 was $7.4 million, compared to $6.9 million for the three months
ended September 30, 2016. Net cash used in operating activities for the
nine months ended September 30, 2017 was $21.2 million, compared to
$24.9 million for the nine months ended September 30, 2016. Recognized
revenue for the three and nine months ended September 30, 2017 was $0.3
million from an option agreement with an unaffiliated party.

R&D Expenses: Research and development expenses were $4.8
million for the three months ended September 30, 2017, compared to $5.9
million for the three months ended September 30, 2016 and $14.7 million
for the nine months ended September 30, 2017, compared to $19.2 million
for the nine months ended September 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 September 30, 2017, compared to $2.3
million for the three months ended September 30, 2016 and $7.2 million
for the nine months ended September 30, 2017, compared to $7.7 million
for the nine months ended September 30, 2016.

Operating Loss: Loss from operations was $7.0 million for the
three months ended September 30, 2017, compared to $8.3 million for the
three months ended September 30, 2016, and $21.6 million for the nine
months ended September 30, 2017, compared to $26.9 million for the nine
months ended September 30, 2016.

Net Loss: Net loss was $7.0 million, or $0.31 per share, for the
three months ended September 30, 2017, compared to a net loss of $8.4
million, or $0.54 per share, for the three months ended September 30,
2016. Net loss for the nine months ended September 30, 2017 was $21.9
million, compared to $27.3 million for the nine months ended September
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 third quarter 2017 financial results.

Participant Toll-Free Dial-In Number:     (877) 388-2733
Participant International Dial-In Number: (541) 797-2984
Pass Code: 99108456
 

Please specify to the operator that you would like to join the
"Catabasis Third 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. In the Phase 2
and open-label extension of the MoveDMD trial investigating the safety
and efficacy of edasalonexent in boys enrolled at ages 4 to 7 affected
with DMD (any confirmed mutation), edasalonexent substantially slowed
DMD disease progression through 36 weeks of treatment. Across all key
assessments of muscle function, consistent improvements were observed in
the rate of decline after 24 and 36 weeks of oral 100 mg/kg/day
edasalonexent treatment compared to the rate of change in the control
period for boys prior to receiving edasalonexent treatment. Improvements
were also seen across measures of muscle health. Edasalonexent continued
to be well tolerated with no safety signals observed in the trial.
Catabasis plans to initiate a single global Phase 3 trial to evaluate
the efficacy and safety of edasalonexent for registration purposes in
the first half of 2018. 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
CAT-5571 is an investigational oral small
molecule that is being developed as a potential host-directed therapy
for cystic fibrosis. CAT-5571 is designed to restore host defense by
activating autophagy, a mechanism for recycling cellular components and
digesting pathogens. Autophagy is depressed in CF, and by restoring
autophagy, CAT-5571 reestablishes host defense to enhance the clearance
of pathogens, including Pseudomonas aeruginosa and Burkholderia
cenocepacia
, in preclinical models of CF. People with CF suffer from
persistent lung infections with opportunistic pathogens such as P.
aeruginosa
 and B. cenocepacia, causing chronic
infections that are difficult to eradicate and lead to respiratory
failure. CAT-5571 has the potential to augment the efficacy of
antibiotics and could also be used with other CF therapies, including
transmembrane conductance receptor (CFTR) targeted agents.

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 LinkerSM 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 the Company's plans to commence a single
global Phase 3 trial in DMD in the first half of 2018 to evaluate the
efficacy and safety of edasalonexent for registration purposes, the
Company's plans to report top-line results from this trial in 2020, the
Company's plans to initiate a Phase 1 trial for CAT-5571 in the second
half of 2018 and report top-line results in 2019 and the Company's
expectation that its current operating plan provides for cash to fund
operations through August 2018, 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, including the final trial design of the Company's
planned Phase 3 trial in DMD; availability and timing of results from
preclinical studies and clinical trials, including the availability of
top-line results from the Company's planned Phase 3 trial in DMD in 2020
and from the Company's planned Phase 1 trial in CF in 2019; 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; the
Company's ability to obtain financing on acceptable terms and in a
timely manner to fund the Company's planned Phase 3 trial of
edasalonexent in DMD for registration purposes and the Company's planned
Phase 1 trial of CAT-5571 in CF; 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 September 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 September 30,   Nine Months Ended September 30,
2017     2016   2017     2016
 
Revenue $ 250 $ - $ 250 $ -
Operating expenses:
Research and development 4,776 5,936 14,693 19,190
General and administrative   2,426   2,347   7,189   7,695
Total operating expenses   7,202   8,283   21,882   26,885
Loss from operations (6,952) (8,283) (21,632) (26,885)
Other (expense) income:
Interest expense (105) (199) (381) (662)
Interest and investment income 45 50 128 183
Other (expense) income, net   (5)   13   18   82
Total other expense, net   (65)   (136)   (235)   (397)
Net loss $ (7,017) $ (8,419) $ (21,867) $ (27,282)
Net loss per share - basic and diluted $ (0.31) $ (0.54) $ (1.03) $ (1.77)
Weighted-average common shares outstanding used in net loss per
share - basic and diluted
  22,563,174   15,512,608   21,163,591   15,407,747
 
Catabasis Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets

(In thousands)

(Unaudited)

    September 30,     December 31,
2017 2016
Assets
Cash and cash equivalents $ 21,713 $ 23,596
Available-for-sale securities - 14,931
Total assets 23,313 40,209
Liabilities and stockholders' equity
Current portion of notes payable, net of discount 3,296 3,243
Notes payable, net of current portion and discount - 2,479
Total liabilities 7,656 11,123
Total stockholders' equity $ 15,657 $ 29,086
 
Catabasis Pharmaceuticals, Inc.
Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

    Nine Months Ended September 30,
2017       2016  
Net cash used in operating activities $ (21,199 ) $ (24,874 )
Net cash provided by (used in) investing activities 14,883 (21,300 )
Net cash provided by financing activities   4,433     9,858  
Net decrease in cash and cash equivalents $ (1,883 ) $ (36,316 )
 

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