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

May 17, 2010 | About:
10qk

10qk

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Catalyst Pharmaceutical Partners Inc. (CPRX) filed Quarterly Report for the period ended 2010-03-31.

Catalyst Pharmaceutical Partners Inc. has a market cap of $23.81 million; its shares were traded at around $1.32 .

Highlight of Business Operations:

On April 13, 2010, we announced that we signed a definitive Clinical Trial Agreement (CTA) with the National Institute on Drug Abuse (NIDA) to jointly conduct a U.S. Phase II(b) clinical trial evaluating CPP-109, Catalysts formulation of vigabatrin, for the treatment of cocaine addiction. As part of the CTA, NIDA, under their agreement with the Veterans Administration Cooperative Studies Program, will provide substantial resources for the estimated $10 million trial cost. We will contribute approximately $2.8 million in resources. It is anticipated that an approximately 200 patient double-blind, placebo-controlled trial will be initiated during the summer of 2010 and will take 18 months to complete. It will be conducted at eight leading addiction research facilities across the United States. The clinical trial is designed to confirm the safety and efficacy of CPP-109 for the treatment of cocaine addiction and if successful, we believe will qualify to be one of the adequate and well controlled trials to support approval of an NDA.

Research and Development Expenses. Research and development expenses for the three month periods ended March 31, 2010 and 2009 were $439,587 and $2,460,632, respectively, including stock-based compensation expense in each of the three month periods of $60,468 and $71,700, respectively. Research and development

General and Administrative Expenses. General and administrative expenses for the three months ended March 31, 2010 and 2009 were $610,825 and $583,911, respectively, including stock-based compensation expense in each of the three month periods of $21,879 and $70,574, respectively. General and administrative expenses represented 58% and 19%, respectively, of total operating costs and expenses for the three months ended March 31, 2010 and 2009. The increase of $26,914 in general and administrative expenses for the three months ended March 31, 2010 when compared to the same period in 2009 is primarily due to an increase in professional fees partially offset by a decrease in stock-based compensation expense. 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 that our general and administrative expenses will average approximately $500,000 per quarter over the next seven quarters. This estimate is based on currently available information, and there can be no assurance that actual general and administrative expenses will be in the amount estimated.

Since our inception, we have financed our operations primarily through the net proceeds of private placements, the IPO and two registered direct offerings under our shelf registration statement. At March 31, 2010, we had cash and cash equivalents of $6.8 million and working capital of $6.6 million. At December 31, 2009, we had cash and cash equivalents of $7.8 million and working capital of $7.6 million. At March 31, 2010, substantially all of our cash and cash equivalents were deposited with one financial institution. We had cash balances at this financial institution in excess of federally insured limits throughout the quarter.

Net cash used in operating activities was $1,021,588 and $2,836,612, respectively, for the three month periods ended March 31, 2010 and 2009. During the three months ended March 31, 2010, net cash used in operating activities was primarily attributable to our net loss of $1,045,043, a decrease of $161,371 in accounts payable and an increase of $98,535 in prepaid expenses and deposits. This was offset in part by $89,098 of non-cash expenses and an increase of $194,263 in accrued expenses and other liabilities. 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, a decrease of $301,325 in accrued expenses and other liabilities and an increase of $68,781 in prepaid expenses and deposits. This was offset in part by $150,314 of non-cash expenses, an increase of $404,919 in accounts payables and a decrease of $9,462 in interest receivable. Non-cash expenses include depreciation and stock-based compensation expense.

Brookhaven has formally advised us that they believe that the amount due them for patent related expenses as of March 31, 2010 and December 31, 2009 was approximately $1.2 million. We believe that we are only liable to Brookhaven for the approximately $166,000 described above, and we have advised Brookhaven that we dispute their determination of patent-related expenses due under the license agreement. There can be no assurance as to the outcome of this matter. In any event, no patent-related expenses are due to Brookhaven under the license agreement until the submission by the Company of an NDA for CPP-109. As we have not filed an NDA for CPP-109, no amounts are accrued relating to this matter in the accompanying March 31, 2010 and December 31, 2009 balance sheets.

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