Catabasis Pharmaceuticals, Inc. (CATB) stock prices enjoyed an 8.48% uptrend as of market close on April 19th, 2021, settling into a price of USD$2.43 per share. Subsequent pre-market fluctuations saw CATB stock prices climb further to hit UDS$2.44, a 0.41% increase.
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CATB Acquires Quellis
In January 2021, Quellis Biosciences Inc. was acquired by CATB in an agreement wherein a combination of CATB’s common and Series X Preferred Stock were traded for all of Quellis’ outstanding equity interests. Quellis is a privately-held biopharmaceutical company that focuses on discovering new molecules that are best-in-class and could treat rare diseases.
CATB Raises Capital
Concurrently, CATB started a PIPE (private investment in public equity), which offers shares of its Series X Preferred Stock to current and prospective investors. The expected proceeds from this move come out to USD$110 million, with each Series X Preferred Stock being valued at USD$3,093. Each Preferred Stock share can be converted into 1,000 shares of CATB common stock, each of which will be priced at USD$3.09.
Allocation of Generated Capital
The generated capital will be put towards funding the completion of CATB’s IND-enabling studies, alongside Phase 1a and Phase 1b/2 clinical trials of its lead program QLS-215, which aims to treat angioedema. With operations expected to run through to 2023, CATB anticipates cash proceeds in the vicinity of USD$150 million being generated.
CATB Stock Situation
Following the acquisition of Quellis and the closing of the private placement, CATB had roughly 23.4 million shares of its common stock and roughly 86,000 shares of its Series X Preferred Stock outstanding. Should the Preferred Stock shares be converted into common stock shares, CABT will have roughly 109.5 million shares outstanding.
2020 Financial Reports
In the release of their financial reports for the year ended 30th December 2021, CATB reported USD$44.9 million in cash, cash equivalents and short-term investments. With the USD$104 million generated from the private placement after the deduction of costs associated with the offering, CATB finds itself with enough cash to fund its operation plan as it stands through to 2023.
Investing in R&D
With USD$5.7 million going towards research and development in Q4 2020, CATB is shown to be gradually investing more money in their R&D. This is indicated by the increase in Q4 2020 from the USD$4.3 million that was invested in R&D in Q4 2019. 2020 reported R&D costs for the whole year at USD$25.6 million, while costs for 2019 were USD$18.3 million.
CATB’s Future Outlook
With the acquisition of Quellis and the strong financial foothold offered by the private placement, CATB finds itself in a prime position to leverage its resources to increase shareholder value. How their clinical trials and product development proceed will determine the long-term future of the company.