CATALYST PHARMACEUTICAL PARTNERS INC. is a biopharmaceutical company focused on the development and commercialization of prescription drugs for the treatment of addiction and obsessive compulsive disorders. The Company has obtained from Brookhaven National Laboratory an exclusive worldwide license for Brookhaven's patent portfolio in the US relating to the right to use vigabatrin to treat a wide variety of substance addictions and obsessive compulsive disorders. Catalyst has also been granted rights to Brookhaven's vigabatrin-related foreign patents or patents pending worldwide. The Company's initial product candidate based on vigabatrin is CPP-109. CPP-109 has been granted `Fast Track` status by the U.S. Food & Drug Administration for the treatment of cocaine addiction. This indicates that the FDA has recognized that CPP-109 is intended for the treatment of a serious or life-threatening condition for which there is no effective treatment and which demonstrates the potential Catalyst Pharmaceutical Partners Inc. has a market cap of $30.8 million; its shares were traded at around $2.17 . Highlight of Business Operations: Research and Development Expenses. Research and development expenses for the three months ended March 31, 2009 and 2008 were $2,322,632 and $1,084,359, respectively, including stock-based compensation expense in each of the three month periods of $71,700 and $174,556, respectively. Research and development expenses, in the aggregate, represented approximately 76% and 63% of total operating costs and expenses, respectively, for the three months ended March 31, 2009 and 2008. 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, directors and scientific advisors. Our expenses for research and development for the three month period ended March 31, 2009 grew significantly compared to amounts expended in the same period in 2008 as we incurred expenses for services related to 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 months ended March 31, 2009 and 2008 were $721,911 and $639,673, respectively, including stock-based compensation expense in each of the three months periods of $70,574 and $88,848, respectively. General and administrative expenses represented 24% and 37%, respectively, of total operating costs and expenses, for the three months ended March 31, 2009 and 2008. The increase of $82,238 in general and administrative expenses for the three months ended March 31, 2009 when compared to the same period in 2008 is due primarily to increases in payroll expenses and benefits and professional fees, as we expanded our administrative staff, offset by a decrease in non-cash stock based compensation. General and administrative expenses include among other expenses, managements 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. We expect general and administrative costs to remain relatively constant through the end of 2009.
Since our inception, we have financed our operations primarily through the net proceeds of private placements, the IPO and the Shelf Offering. At March 31, 2009, we had cash and cash equivalents of $8.9 million and working capital of $7.6 million. At December 31, 2008, we had cash and cash equivalents of $11.8 million and working capital of $10.5 million. At March 31, 2009, 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.
On September 12, 2008, we filed a prospectus supplement and offered for sale 1,488,332 shares of our common stock at $3.00 per share pursuant to the registration statement, and the prospectus. We received gross proceeds of approximately $4.5 million before commissions and incurred expenses of approximately $377,000 for the sale of 1,488,332 shares of common stock to institutional investors.
Net cash used in operations was $2,836,612 and $1,224,029, respectively, for the three months ended March 31, 2009 and 2008. During the three months ended March 31, 2009, net cash used in operating activities was primarily attributable to our net loss of $3,031,201 and increases of $68,781 in prepaid expenses and deposits and $301,325 in accrued expenses and other liabilities. This
was offset in part by $150,314 of non-cash expenses, a decrease of $9,462 in interest receivable, and an increase of $404,919 in accounts payable. During the three months ended March 31, 2008, net cash used in operating activities was primarily attributable to our net loss of $1,584,047 and an increase in prepaid expenses and deposits of $66,104. This was offset in part by $271,611 of non-cash expenses, a decrease of $22,542 in interest receivable, and increases of $96,712 in accounts payable and $35,257 in accrued expenses and other liabilities. Non-cash expenses include depreciation and stock-based compensation expense.
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