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Catalyst Pharmaceutical Partners Inc. Reports Operating Results (10-Q)

November 15, 2010 | About:
10qk

10qk

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Catalyst Pharmaceutical Partners Inc. (CPRX) filed Quarterly Report for the period ended 2010-09-30.

Catalyst Pharmaceutical Partners Inc. has a market cap of $21.33 million; its shares were traded at around $1.1 .

Highlight of Business Operations:

Our common stock currently trades on the Nasdaq Capital Market. On November 13, 2009, we were informed by the Nasdaq Stock Market (Nasdaq) that, as a result of our common stock no longer meeting the requirement that it trade at a bid price of at least $1.00 per share, our common stock would be delisted from the Nasdaq Capital Market if, by May 12, 2010, we did not regain compliance with the requirement by our common stock trading at a bid price of at least $1.00 per share for a period of at least ten consecutive trading days. On April 26, 2010, we received notice from Nasdaq confirming that we had regained compliance with the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market, as a result of our common stock closing with a bid price of at least $1.00 for at least ten consecutive trading days.

Research and Development Expenses. Research and development expenses for the three and nine months ended September 30, 2010 and 2009 were $500,091 and $850,998 and $1,737,613 and $4,549,883, respectively, including stock-based compensation expense in each of the three and nine months periods of $11,318 and $42,642 and $133,749 and $162,782, respectively. Research and development expenses, in the aggregate, represented approximately 55% and 66% and 53% and 75% of total operating costs and expenses, respectively, for the three and nine months ended September 30, 2010 and 2009. The stock-based compensation is non-cash and relates to the expense of stock options awards and restricted stock unit awards to our employees, officers, consultants and scientific advisors. Expenses for research and development for the three and nine month periods ended September 30, 2010 decreased compared to amounts expended in the same period in 2009 during which we completed our Phase II clinical trial evaluating CPP-109 for use in the treatment of cocaine addiction and our proof-of-concept study evaluating CPP-109 for use in the treatment of methamphetamine addiction.

General and Administrative Expenses. General and administrative expenses for the three and nine months ended September 30, 2010 and 2009 were $408,374 and $441,316 and $1,554,396 and $1,555,786, respectively, including stock-based compensation expense in each of the three and nine month periods of $24,654 and $32,713 and $70,358 and $119,379, respectively. General and administrative expenses represented 45% and 34% and 47% and 25%, respectively, of total operating costs and expenses for the three and nine months ended September 30, 2010 and 2009. General and administrative expenses for the three and nine months periods ended September 30, 2010 were consistent with comparable periods in 2009. General and administrative expenses include among other expenses, management salaries and benefits, office expenses, legal and accounting fees and travel expenses for certain employees and consultants, directors and members of our Scientific Advisory Board.

Stock-Based Compensation. Total stock-based compensation for the three and nine months ended September 30, 2010 and 2009 was $35,972 and $75,355 and $204,107 and $282,161, respectively. The reduction in expense for the nine month ended September 30, 2010 from the comparable period in 2009 is mostly due to granted awards to directors which vested immediately in 2009. There were no such grants in 2010.

Since our inception, we have financed our operations primarily through the net proceeds of private placements, the IPO and registered direct offerings under our shelf registration statement. At September 30, 2010, we had cash and cash equivalents of $6.2 million and working capital of $6.0 million. At December 31, 2009, we had cash and cash equivalents of $7.8 million and working capital of $7.6 million. At September 30, 2010, substantially all of our cash and cash equivalents were deposited with one financial institution. We had cash balances at certain financial institutions in excess of federally insured limits throughout the quarter.

Net cash used in operating activities was $2,988,253 and $6,854,283, respectively, for the nine month periods ended September 30, 2010 and 2009. During the nine months ended September 30, 2010, net cash used in operating activities was primarily attributable to our net loss of $3,277,569 and a decrease of $8,364 in accounts payable. This was offset in part by $223,421 of non-cash expenses, and an increase of $74,679 in accrued expenses and other liabilities. During the nine months ended September 30, 2009, net cash used in operating activities was primarily attributable to our net loss of $6,079,808 and decreases of $169,640 in accounts payable and $987,823 in accrued expenses and other liabilities. This was offset in part by $305,306 of non-cash expenses and decreases of $65,529 in prepaid expenses and deposits and $12,153 in interest receivable. Non-cash expenses include depreciation and stock-based compensation expense.

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