Catalyst Pharmaceutical Partners, Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[Mark One]
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the Quarterly Period Ended June 30, 2008
OR
o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
Commission File No. 001-33057
CATALYST PHARMACEUTICAL PARTNERS, INC.
(Exact name of registrant as specified in its charter)
|
|
|
Delaware
|
|
76-0837053 |
|
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(IRS Employer
Identification No.) |
|
|
|
355 Alhambra Circle
Suite 1370
Coral Gables, Florida
|
|
33134 |
|
|
|
(Address of principal executive offices)
|
|
(Zip Code) |
Registrants telephone number, including area code: (305) 529-2522
Indicate by checkmark whether the registrant: (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such report(s), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See definitions of accelerated filer, large
accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act (Check one):
|
|
|
|
|
|
|
Large accelerated filer o
|
|
Accelerated filer o
|
|
Non-accelerated filer o
|
|
Smaller reporting company x |
|
|
|
(Do not check if a smaller reporting company) |
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes [ ] No [X]
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date: 12,572,053 shares of common stock, $0.001 par value per share, were
outstanding as of August 8, 2008.
1
CATALYST PHARMACEUTICAL PARTNERS, INC.
INDEX
2
Item 1. CONDENSED FINANCIAL STATEMENTS
CATALYST PHARMACEUTICAL PARTNERS, INC.
(a development stage company)
CONDENSED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2008 |
|
|
2007 |
|
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
13,084,108 |
|
|
$ |
15,943,896 |
|
Interest receivable |
|
|
24,167 |
|
|
|
63,709 |
|
Prepaid expenses |
|
|
288,318 |
|
|
|
524,081 |
|
|
|
|
|
|
|
|
Total current assets |
|
|
13,396,593 |
|
|
|
16,531,686 |
|
Property and equipment, net |
|
|
112,694 |
|
|
|
127,788 |
|
Deposits |
|
|
25,448 |
|
|
|
20,448 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
13,534,735 |
|
|
$ |
16,679,922 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
181,276 |
|
|
$ |
219,866 |
|
Accrued expenses and other liabilities |
|
|
558,867 |
|
|
|
83,419 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
740,143 |
|
|
|
303,285 |
|
|
|
|
|
|
|
|
|
|
Accrued expenses and other liabilities, non-current |
|
|
48,720 |
|
|
|
53,880 |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
788,863 |
|
|
|
357,165 |
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity: |
|
|
|
|
|
|
|
|
Preferred stock, $.001 par value, 5,000,000 shares authorized: none
outstanding |
|
|
|
|
|
|
|
|
Common stock, $.001 par value, 100,000,000 shares authorized
12,567,226 shares and 12,527,564 shares issued and outstanding
at June 30, 2008 and December 31, 2007, respectively |
|
|
12,567 |
|
|
|
12,528 |
|
Additional paid-in capital |
|
|
26,593,499 |
|
|
|
26,208,936 |
|
Deficit accumulated during the development stage |
|
|
(13,860,194 |
) |
|
|
(9,898,707 |
) |
|
|
|
|
|
|
|
Total stockholders equity |
|
|
12,745,872 |
|
|
|
16,322,757 |
|
|
|
|
|
|
|
|
Total liabilities and stockholders equity |
|
$ |
13,534,735 |
|
|
$ |
16,679,922 |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed financial statements.
3
CATALYST PHARMACEUTICAL PARTNERS, INC.
(a development stage company)
CONDENSED STATEMENTS OF OPERATIONS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period from |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 4, 2002 |
|
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
|
(date of inception) |
|
|
|
June 30, |
|
|
June 30, |
|
|
to June 30, |
|
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
Revenues |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
1,902,144 |
|
|
|
1,002,780 |
|
|
|
2,986,503 |
|
|
|
1,815,300 |
|
|
|
9,131,584 |
|
General and administrative |
|
|
561,533 |
|
|
|
434,208 |
|
|
|
1,201,206 |
|
|
|
1,118,834 |
|
|
|
6,040,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
costs and expenses |
|
|
2,463,677 |
|
|
|
1,436,988 |
|
|
|
4,187,709 |
|
|
|
2,934,134 |
|
|
|
15,172,548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(2,463,677 |
) |
|
|
(1,436,988 |
) |
|
|
(4,187,709 |
) |
|
|
(2,934,134 |
) |
|
|
(15,172,548 |
) |
Interest income |
|
|
86,237 |
|
|
|
228,858 |
|
|
|
226,222 |
|
|
|
473,926 |
|
|
|
1,312,354 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
(2,377,440 |
) |
|
|
(1,208,130 |
) |
|
|
(3,961,487 |
) |
|
|
(2,460,208 |
) |
|
|
(13,860,194 |
) |
Provision for income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,377,440 |
) |
|
$ |
(1,208,130 |
) |
|
$ |
(3,961,487 |
) |
|
$ |
(2,460,208 |
) |
|
$ |
(13,860,194 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share basic and
diluted |
|
$ |
(0.19 |
) |
|
$ |
(0.10 |
) |
|
$ |
(0.32 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding basic and
diluted |
|
|
12,567,226 |
|
|
|
12,527,564 |
|
|
|
12,560,085 |
|
|
|
12,523,210 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed financial statements.
4
CATALYST PHARMACEUTICAL PARTNERS, INC.
(a development stage company)
CONDENSED STATEMENT OF STOCKHOLDERS EQUITY (unaudited)
For the six months ended June 30, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the |
|
|
|
|
|
|
Preferred |
|
|
Common |
|
|
Additional |
|
|
Development |
|
|
|
|
|
|
Stock |
|
|
Stock |
|
|
Paid-in Capital |
|
|
Stage |
|
|
Total |
|
Balance at
December 31, 2007 |
|
$ |
|
|
|
$ |
12,528 |
|
|
$ |
26,208,936 |
|
|
$ |
(9,898,707 |
) |
|
$ |
16,322,757 |
|
Issuance of stock options
for services |
|
|
|
|
|
|
|
|
|
|
262,956 |
|
|
|
|
|
|
|
262,956 |
|
Amortization of restricted
shares for services |
|
|
|
|
|
|
|
|
|
|
25,855 |
|
|
|
|
|
|
|
25,855 |
|
Issuance of restricted stock
units, net of cancellations |
|
|
|
|
|
|
39 |
|
|
|
95,752 |
|
|
|
|
|
|
|
95,791 |
|
Net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,961,487 |
) |
|
|
(3,961,487 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
June 30, 2008 |
|
$ |
|
|
|
$ |
12,567 |
|
|
$ |
26,593,499 |
|
|
$ |
(13,860,194 |
) |
|
$ |
12,745,872 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed financial statements.
5
CATALYST PHARMACEUTICAL PARTNERS, INC.
(a development stage company)
CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative Period |
|
|
|
|
|
|
|
|
|
|
|
from January 4, |
|
|
|
|
|
|
|
|
|
|
|
2002 (date of |
|
|
|
For the Six Months Ended |
|
|
inception) through |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(3,961,487 |
) |
|
$ |
(2,460,208 |
) |
|
$ |
(13,860,194 |
) |
Adjustments to reconcile net loss to net cash used in
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
16,440 |
|
|
|
4,670 |
|
|
|
38,868 |
|
Stock-based compensation |
|
|
386,612 |
|
|
|
382,601 |
|
|
|
3,822,943 |
|
Change in assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Decrease (increase) in interest receivable |
|
|
39,542 |
|
|
|
7,270 |
|
|
|
(24,167 |
) |
Decrease (increase) in other prepaid expenses and
deposits |
|
|
247,757 |
|
|
|
(439,721 |
) |
|
|
(296,772 |
) |
(Decrease) increase in accounts payable |
|
|
(38,589 |
) |
|
|
(301,689 |
) |
|
|
181,276 |
|
Increase in accrued expenses and other
liabilities |
|
|
470,286 |
|
|
|
6,613 |
|
|
|
550,066 |
|
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
|
(2,839,439 |
) |
|
|
(2,800,464 |
) |
|
|
(9,587,980 |
) |
Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(1,345 |
) |
|
|
(34,068 |
) |
|
|
(94,041 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(1,345 |
) |
|
|
(34,068 |
) |
|
|
(94,041 |
) |
Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock |
|
|
|
|
|
|
|
|
|
|
18,789,536 |
|
Payment of shelf registration costs |
|
|
(16,994 |
) |
|
|
|
|
|
|
(16,994 |
) |
Proceeds from issuance of preferred stock |
|
|
|
|
|
|
|
|
|
|
3,895,597 |
|
Payment of employee withholding tax related to RSUs |
|
|
(2,010 |
) |
|
|
|
|
|
|
(2,010 |
) |
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by financing activities |
|
|
(19,004 |
) |
|
|
|
|
|
|
22,666,129 |
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash |
|
|
(2,859,788 |
) |
|
|
(2,834,532 |
) |
|
|
12,984,108 |
|
Cash and cash equivalents at beginning of period |
|
|
15,943,896 |
|
|
|
20,434,702 |
|
|
|
100,000 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
$ |
13,084,108 |
|
|
$ |
17,600,170 |
|
|
$ |
13,084,108 |
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash operating
activity: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash incentive received from lessor |
|
$ |
|
|
|
$ |
|
|
|
$ |
52,320 |
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed financial statements.
6
CATALYST PHARMACEUTICAL PARTNERS, INC.
(a development stage company)
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. |
|
Organization and Description of Business. |
Catalyst Pharmaceutical Partners, Inc. (the Company) is a development-stage
biopharmaceutical company focused on the acquisition, development and commercialization of
prescription drugs for the treatment of drug addiction and obsessive compulsive disorders. The
Company was incorporated in Delaware in July 2006. It is the successor by merger to Catalyst
Pharmaceutical Partners, Inc., a Florida corporation, which commenced operations in January 2002.
The Company has incurred operating losses in each period from inception through June 30, 2008.
The Company has been able to fund its cash needs to date through an initial funding from its
founders, four subsequent private placements and an initial public offering (IPO) of its common
stock.
Capital Resources
At the present time, the Company estimates that it will require additional funding to complete
the Phase III clinical trial that its management believes the Company will be required to complete
before the Company is in a position to file a new drug application, or NDA, for its initial
product candidate, CPP-109. The Company will also require additional working capital to support
its operations in periods after the second quarter of 2009. To that
end, in June 2008 the Company
filed a shelf registration statement on Form S-3 in order to be able to sell up to $30,000,000 of its
authorized but unissued common stock in various offerings. See Note 8.
The Company expects
to raise required additional funds through public or private equity
offerings (which may involve the use of the shelf registration statement described above), debt financings,
corporate collaborations or other means. The Company may also seek to raise additional capital to
fund additional product development efforts, even if it has sufficient funds for its planned
operations. Any sale by the Company of additional equity or convertible debt securities could
result in dilution to the Companys stockholders. There can be no assurance that any such required
additional funding will be available to the Company at all or available on terms acceptable to the
Company. Further, to the extent that the Company raises additional funds through collaborative
arrangements, it may be necessary to relinquish some rights to the Companys technologies or grant
sublicenses on terms that are not favorable to the Company. If the Company is not able to secure
additional funding when needed, the Company may have to delay, reduce the scope of or eliminate one
or more research and development programs, which could have an adverse effect on the Companys
business.
2. |
|
Basis of Presentation and Significant Accounting Policies. |
|
a. |
|
DEVELOPMENT STAGE COMPANY. Since inception, the Company has devoted
substantially all of its efforts to business planning, research and development,
recruiting management and technical staff, acquiring operating assets and raising
capital. Accordingly, the Company is considered to be in the development stage and the
Companys financial statements are presented in accordance with Statement of Financial
Accounting Standard No. 7, Accounting and Reporting by Development Stage Enterprises.
The Companys primary focus is on the development and commercialization of CPP-109,
which is the chemical compound gamma-vinyl-GABA, commonly referred to as vigabatrin, as
a potential treatment for drug addiction, including cocaine addiction, methamphetamine
addiction, and certain obsessive compulsive disorders. |
|
|
b. |
|
INTERIM FINANCIAL STATEMENTS. The accompanying unaudited interim condensed
financial statements have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission for reporting of interim financial information.
Pursuant to such rules and regulations, certain information and footnote disclosures
normally included in financial statements prepared in accordance with accounting
principles generally accepted in the United States have been condensed or omitted. |
7
2. |
|
Basis of Presentation and Significant Accounting Policies. (continued) |
|
|
|
In the opinion of management, the accompanying unaudited interim condensed financial
statements of the Company contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial position of the
Company as of the dates and for the periods presented. Accordingly, these
statements should be read in conjunction with the financial statements and notes
thereto for the year ended December 31, 2007 included in the Form 10-K filed by the
Company with the Securities and Exchange Commission. The results of operations for
the six months ended June 30, 2008 are not necessarily indicative of the results to
be expected for any future period or for the full 2008 fiscal year. |
|
|
c. |
|
USE OF ESTIMATES. The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates. |
|
|
d. |
|
COMPREHENSIVE INCOME (LOSS). SFAS No. 130, Reporting Comprehensive Income
(Loss), requires that all components of comprehensive income (loss) be reported in the
financial statements in the period in which they are recognized. Comprehensive income
(loss) is net income (loss), plus certain other items that are recorded directly into
stockholders equity. The Company has reported comprehensive income (loss) in the
statement of stockholders equity as net loss. |
|
|
e. |
|
EARNINGS (LOSS) PER SHARE. Basic earnings (loss) per share is computed by
dividing net earnings (loss) for the period by the weighted
average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed by
dividing net earnings (loss) for the period by the weighted
average number of common shares outstanding during the period, plus the dilutive effect of common stock
equivalents, such as unvested restricted common stock and stock options. Due to the
net loss for all periods presented, all common stock equivalents were excluded because
their inclusion would have been anti-dilutive. |
|
|
|
|
Potentially dilutive common stock equivalents as of June 30, 2008 include (i) stock
options to purchase up to 2,667,149 shares of common stock at exercise prices
ranging from $0.69 to $6.00 per share and (ii) 15,241 shares of restricted common
stock that will vest over the next two years. |
|
|
|
|
Potentially dilutive common stock equivalents as of June 30, 2007 include (i) stock
options to purchase up to 2,568,149 shares of common stock at exercise prices
ranging from $0.69 to $6.00 per share and (ii) 15,000 shares of restricted common
stock, none of which were vested. |
|
|
f. |
|
CASH AND CASH EQUIVALENTS. The Company considers all highly liquid instruments
purchased with an original maturity of three months or less to be cash equivalents. The
Company has substantially all of its cash and cash equivalents deposited with one
financial institution. The Company had cash balances at certain financial institutions
in excess of federally insured limits periodically throughout the period. |
|
|
g. |
|
PREPAID EXPENSES. Prepaid expenses consist primarily of advances under research
and development contracts, including advances to the Contract Research Organization
(CRO) that is overseeing the Companys U.S. Phase II cocaine and methamphetamine
clinical trials. Such advances are recorded as expense as the related goods are
received or the related services are performed. |
|
|
h. |
|
STOCK COMPENSATION PLANS. Through July 2006, the Company did not have a formal
stock option plan, although stock options were granted pursuant to written agreements.
In July 2006, the Company adopted the 2006 Stock Incentive Plan (the Plan). See Note
9. |
8
2. |
|
Basis of Presentation and Significant Accounting Policies. (continued) |
|
|
|
As of June 30, 2008, there were outstanding stock options to purchase 2,667,149
shares of common stock (including options to purchase 369,791 shares granted under
the Plan), of which stock options to purchase 2,374,780 shares of common stock were
exercisable as of June 30, 2008. Additionally, as of June 30, 2008 there were
55,484 shares of restricted common stock granted under the Plan, of which 40,243
were vested. |
|
|
|
|
For the three and six month periods ended June 30, 2008 and 2007, the Company
recorded stock-based compensation expense as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months |
|
|
For the six months ended |
|
|
|
ended June 30, |
|
|
June 30, |
|
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
Research and development |
|
$ |
99,532 |
|
|
$ |
161,320 |
|
|
$ |
274,088 |
|
|
$ |
239,713 |
|
General and administrative |
|
|
23,676 |
|
|
|
20,913 |
|
|
|
112,524 |
|
|
|
142,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation |
|
$ |
123,208 |
|
|
$ |
182,233 |
|
|
$ |
386,612 |
|
|
$ |
382,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
i. |
|
RECENT ACCOUNTING PRONOUNCEMENTS |
|
|
|
|
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS
No. 157). This standard provides guidance for using fair value to measure assets
and liabilities. The standard also responds to investors requests for expanded
information about the extent to which companies measure assets and liabilities at
fair value, the information used to measure fair value, and the effect of fair value
measurements on earnings. The standard applies whenever other standards require (or
permit) assets or liabilities to be measured at fair value, but does not expand the
use of fair value in any new circumstances. There are numerous previously issued
statements dealing with fair values that are amended by SFAS No. 157. SFAS No. 157
is effective for financial statements issued for fiscal years beginning after
November 15, 2007. In February 2008, the FASB issued Staff Position (FSP) FAS
157-1, Application of FASB Statement No. 157 to FASB Statement No. 13 and Other
Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease
Classification or Measurement under Statement 13, which scopes out leasing
transactions accounted for under SFAS No. 13,
Accounting for Leases. In February
2008, FSP FAS 157-2, Effective Date of FASB Statement
No. 157, was issued, which
delays the effective date of SFAS No. 157 to fiscal years and interim periods within
those fiscal years beginning after November 15, 2008 for nonfinancial assets and
nonfinancial liabilities, except for items that are recognized or disclosed at fair
value in the financial statements on a recurring basis (at least annually). The
implementation of SFAS No. 157 for financial assets and financial liabilities,
effective January 1, 2008, did not have a material impact on the Companys results
of operations or financial condition. The Company is currently assessing the impact
of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities on its
financial statements. |
|
|
|
|
In February 2007, the FASB issued Statement of Financial Accounting Standards No.
159, The Fair Value Option for Financial Assets and Financial Liabilities (SFAS
No. 159). SFAS No. 159 permits entities to choose to measure many financial
instruments and certain other items at fair value. The provisions of SFAS No. 159
were effective for the Company beginning January 1, 2008. The adoption of SFAS No.
159 did not have any impact on the Companys results of operations or financial
position. |
9
2. |
|
Basis of Presentation and Significant Accounting Policies. (continued) |
|
|
|
In June 2007, the FASB ratified a consensus opinion reached by the Emerging Issues
Task Force (EITF) on EITF Issue 07-3, Accounting for Nonrefundable Advance
Payments for Goods or Services Received for Use in Future Research and Development
Activities. The guidance in EITF Issue 07-3 requires the Company to defer and
capitalize nonrefundable advance payments made for goods or services to be used in
research and development activities until the goods have been delivered or the
related services have been performed. If the goods are no longer expected to be
delivered nor the services expected to be performed, the Company would be required
to expense the related capitalized advance payments. The consensus in EITF Issue
07-3 was effective for fiscal years, and interim periods within those fiscal years,
beginning after December 15, 2007 and is applied prospectively to new contracts
entered into on or after December 15, 2007. The Company adopted EITF Issue 07-3
effective January 1, 2008. The adoption of EITF Issue 07-3 did not have a material
impact on the Companys results of operations or financial condition. |
|
|
|
|
In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles. SFAS No. 162 identifies the sources of accounting principles
to be used in the preparation of financial statements that are presented in
conformity with generally accepted accounting principles in the United States for
non-governmental entities. SFAS No. 162 is effective 60 days following approval by
the Securities and Exchange Commission of the Public Company Accounting Oversight
Boards amendments to AU Section 411, The Meaning of Present Fairly in Conformity
with Generally Accepted Accounting Principles. The Company does not expect SFAS No.
162 to have a material impact on its financial statements. |
3. |
|
Prepaid Expenses. |
|
|
|
Prepaid expenses consist of the following: |
|
|
|
|
|
|
|
|
|
|
|
June 30, 2008 |
|
|
December 31, 2007 |
|
Advances to CRO |
|
$ |
|
|
|
$ |
314,503 |
|
Prepaid clinical research fees |
|
|
119,483 |
|
|
|
121,303 |
|
Prepaid insurance |
|
|
105,611 |
|
|
|
82,162 |
|
Other |
|
|
63,224 |
|
|
|
6,113 |
|
|
|
|
|
|
|
|
Total prepaid expenses |
|
$ |
288,318 |
|
|
$ |
524,081 |
|
|
|
|
|
|
|
|
4. |
|
Property and Equipment. |
|
|
|
Property and equipment, net consists of the following: |
|
|
|
|
|
|
|
|
|
|
|
June 30, 2008 |
|
|
December 31, 2007 |
|
Computer equipment |
|
$ |
27,211 |
|
|
$ |
25,866 |
|
Furniture and equipment |
|
|
44,175 |
|
|
|
44,175 |
|
Leasehold improvements |
|
|
80,176 |
|
|
|
80,176 |
|
|
|
|
|
|
|
|
|
|
|
151,562 |
|
|
|
150,217 |
|
Less: Accumulated depreciation |
|
|
(38,868 |
) |
|
|
(22,429 |
) |
|
|
|
|
|
|
|
Total property and equipment, net |
|
$ |
112,694 |
|
|
$ |
127,788 |
|
|
|
|
|
|
|
|
Depreciation expense was $8,233 and $16,440, and $2,580 and $4,670, respectively, for the
three and six month periods ended June 30, 2008 and 2007.
10
5. |
|
Accrued Expenses and Other Liabilities. |
|
|
|
Accrued expenses and other liabilities consist of the following: |
|
|
|
|
|
|
|
|
|
|
|
June 30, 2008 |
|
|
December 31, 2007 |
|
Deferred rent and lease incentive |
|
$ |
9,966 |
|
|
$ |
9,470 |
|
Accrued compensation and benefits |
|
|
76,139 |
|
|
|
40,831 |
|
Accrued professional fees |
|
|
160,500 |
|
|
|
10,000 |
|
Accrued clinical trial expense |
|
|
292,503 |
|
|
|
|
|
Other |
|
|
19,759 |
|
|
|
23,118 |
|
|
|
|
|
|
|
|
Current accrued expenses and other liabilities |
|
|
558,867 |
|
|
|
83,419 |
|
|
|
|
|
|
|
|
|
|
Deferred rent and lease incentive- non-current |
|
|
48,720 |
|
|
|
53,880 |
|
|
|
|
|
|
|
|
Non-current accrued expense and other liabilities |
|
|
48,720 |
|
|
|
53,880 |
|
|
|
|
|
|
|
|
Total accrued expenses and other liabilities |
|
$ |
607,587 |
|
|
$ |
137,299 |
|
|
|
|
|
|
|
|
The Company has contracted with a CRO, various drug manufacturers, and other vendors to assist
in the execution of the Companys clinical trials, analysis, and the preparation of material
necessary for the filing of an NDA with the U.S. Food and Drug Administration (FDA). The
contracts are cancelable at any time, but obligate the Company to reimburse the providers for any
costs incurred through the date of termination.
The Company has entered into a license agreement with Brookhaven Science Associates, LLC, as
operator of Brookhaven National Laboratory under contract with the United States Department of
Energy (Brookhaven), whereby the Company has obtained an exclusive license for several patents
and patent applications in the U.S. and outside the U.S. relating to the use of vigabatrin as a
treatment for cocaine and other addictions. This license agreement runs concurrently with the term
of the last to expire of the licensed patents, the last of which currently expires in 2021. The
Company paid a fee to obtain the license in the amount of $50,000. Under the license agreement, the
Company has agreed to pay Brookhaven a fee of $100,000 in the year of the approval of an NDA for
CPP-109, $250,000 in each of the second and third years following approval and $500,000 per year
thereafter until the license agreement expires. The Company is also obligated to reimburse
Brookhaven for certain of their patent related expenses. The Company believes that as of June 30,
2008 it had a contingent liability of approximately $166,000, related to this obligation. Of these
costs, approximately $69,000 will become payable in six equal monthly installments at the time the
Company submits an NDA to the FDA, and the remaining $97,000 will be due commencing within 60 days
of obtaining FDA regulatory approval to sell any product. The Company also has the right to enter
into sub-license agreements, and if it does, a royalty of 20% of any sub-license fees will be
payable to Brookhaven.
During November 2007, Brookhaven formally advised the Company that they believe that the
amount potentially due from the Company to Brookhaven for patent related expenses as of that date
was approximately $1,000,000. The Company believes that it is potentially only liable to
Brookhaven for the approximately $166,000 described above, and it has advised Brookhaven that it
disputes their determination of patent-related expenses due under the license agreement. The
Company intends to consult with Brookhaven in an effort to resolve this dispute. However, 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 the Company has not filed yet an NDA for CPP-109, no amounts are accrued relating
to this matter in the accompanying June 30, 2008 and December 31, 2007 condensed balance sheets.
11
The Company is subject to income taxes in the U.S. federal jurisdiction and various states
jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the
related tax laws and regulations and require significant judgment to apply. The Company is not
subject to U.S. federal, state and local tax examinations by tax authorities for the years before
2003. If the Company were to subsequently record an unrecognized tax benefit, associated penalties
and tax related interest expense would be reported as a component of income tax expense.
On June 2, 2008, the Company filed a shelf registration statement with the United States
Securities and Exchange Commission (SEC) to sell up to $30 million of common stock. This shelf
registration was declared effective by the SEC on June 26, 2008. Under this registration statement, the Company
may sell shares of common stock periodically to provide additional funds for its operations. The number of
shares that the Company can sell and the amount of the gross proceeds that the Company can raise
are limited to 20% of the number of shares of outstanding common stock and 33% of the Companys
public float, respectively, pursuant to applicable NASDAQ marketplace and SEC rules.
In addition, on June 2, 2008 the Company filed two registration statements on Form S-8 to
register: (i) shares of restricted common stock and shares of common stock underlying stock options
issued under its 2006 Stock Incentive Plan, and (ii) shares of common stock underlying the
stock options granted by the Company prior to its initial public offering.
Stock Options
During the three and six months periods ended June 30, 2008, respectively, the Company granted
40,000 and 99,000 common stock options to employees, officers, directors and consultants, generally
at exercise prices equal to the market value of the stock at the date of grant, with a
weighted-average grant date fair value of $2.35 and $2.87, respectively. During the three and six
months ended June 30, 2007, respectively, the Company granted 110,000 and 194,000 common stock
options, with a weighted-average grant date fair value of $2.59 and $2.65, respectively. The
Company recorded stock-based compensation related to stock options totaling $110,280 and $177,195
and $262,956 and $372,525, respectively, during the three months and six months ended June 30, 2008
and 2007. The total fair value of vested stock options during the three and six months ended June
30, 2008 and 2007 was $85,322 and $85,322 and $246,263 and $215,075, respectively.
The calculated value of the employee stock options was determined using the Black-Scholes
option-pricing model with the following assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
2008 |
|
|
2007 |
|
|
2008 |
|
|
2007 |
|
Risk free interest rate |
|
|
3.11 |
% |
|
|
4.57 |
% |
|
|
2.84 to 3.11 |
% |
|
|
4.57 |
% |
Expected term |
|
|
4 to 5 years |
|
|
|
4 to 5 years |
|
|
|
4 to 5 years |
|
|
|
4 to 5 years |
|
Expected volatility |
|
|
80 |
% |
|
|
100 |
% |
|
|
80 |
% |
|
|
100 |
% |
Expected dividend yield |
|
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
|
% |
Expected forfeiture rate |
|
|
|
% |
|
|
|
% |
|
|
|
% |
|
|
|
% |
As of June 30, 2008, there was approximately $627,000 of unrecognized compensation expense
related to non-vested stock compensation awards granted under the Plan. The cost is expected to be
recognized over a weighted average period of approximately 0.89 years.
12
9. |
|
Stock Compensation. (continued) |
Restricted Stock Units
No restricted stock units were granted during the three months ended June 30, 2008 and 2007.
During the six months ended June 30, 2008 and 2007, the Company granted 30,000 and 15,000
restricted stock units, respectively. The Company recorded stock-based compensation related to
restricted stock units totaling $12,928 and $5,038 and $123,656 and $10,076, respectively, during
the three and six month periods ended June 30, 2008 and 2007. As of June 30, 2008, there was
$30,224 of total restricted stock unit compensation expense related to non-vested awards not yet
recognized, which is expected to be recognized over a weighted average period of 1.50 years.
10. |
|
Related Party Transactions. |
Since its inception in 2002, the Company has entered into various consulting agreements with
non-employee officers and with members of the Companys Scientific Advisory Board. During the
three and six month periods ended June 30, 2008 and 2007, the Company paid approximately $14,000
and $14,000, and $126,000 and $27,000, respectively, in consulting fees to related parties.
Certain prior period amounts in the condensed financial statements have been reclassified to
conform to the current year presentation.
13
|
|
|
ITEM 2. |
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report includes forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. We intend these forward-looking statements to be covered by the
safe harbor provisions for forward-looking statements in these sections. All statements regarding
our expected financial position and operating results, our business strategy, our product
development efforts, including the anticipated timing of receipt of results from our clinical
trials, our financing plans and trends relating to our business and industry are forward-looking
statements. These statements can sometimes be identified by our use of forward-looking words such
as may, will, anticipate, estimate, expect, intend and similar expressions. These
statements involve known and unknown risks, uncertainties and other factors that may cause our
actual results, performance or achievements to be materially different from the results,
performance or achievements expressed or implied by our forward-looking statements. We cannot
promise that our expectations described in such forward-looking statements will turn out to be
correct. Factors that may impact such forward-looking statements include, among others, our ability
to successfully complete clinical trials required for us to file a new drug application, or NDA, for
CPP-109, our version of vigabatrin, our ability to complete such trials on a timely basis and
within the budgets we establish for such trials, our ability to protect our intellectual property,
whether others develop and commercialize products competitive to our products, changes in the
regulations affecting our business, our ability to attract and retain skilled employees, and
changes in general economic conditions and interest rates. The risk factors section of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2007 describes the significant risks
associated with our business. We undertake no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future events or otherwise,
except as required by law.
Overview
We are a development-stage biopharmaceutical company focused on the acquisition, development
and commercialization of prescription drugs for the treatment of drug addiction and obsessive
compulsive disorders. Our initial product candidate is CPP-109.
In November 2006, we completed an initial public offering in which we raised net proceeds of
approximately $17.6 million. We are using these proceeds to complete clinical and non-clinical
studies evaluating the use of CPP-109 to treat cocaine and methamphetamine addiction and where
feasible to conduct proof-of-concept studies for other indications, such as alcohol and nicotine
addiction and certain eating disorders.
During July 2007, we initiated a randomized, double-blind, placebo-controlled U.S. Phase II
clinical trial in patients with cocaine addiction. During June 2008, we initiated a similar U.S.
Phase II clinical trial evaluating CPP-109 as a treatment for methamphetamine addiction (see Recent
Developments section below).
The successful development of CPP-109 or any other product we may develop, acquire, or license
is highly uncertain. We cannot reasonably estimate or know the nature, timing, or estimated
expenses of the efforts necessary to complete the development of, or the period in which material
net cash inflows are expected to commence due to the numerous risks and uncertainties associated
with developing, such products, including the uncertainty of:
|
|
the scope, rate of progress and expense of our clinical trials and our other product
development activities; |
|
|
the results of future clinical trials, and the number of clinical trials (and the scope of
such trials) that will be required to seek and obtain approval of an NDA for CPP-109; and |
|
|
the expense of filing, prosecuting, defending and enforcing any patent claims and other
intellectual property rights. |
14
We currently estimate that we will require additional funding to complete the Phase III
clinical trial that we believe will be required before we are in a position to file an NDA for CPP-109. We also expect to require additional funding to support our
operations in periods after the second quarter of 2009. There can be no assurance that such funding will
be available when required or on terms acceptable to us. See Liquidity and Capital Resources
below.
Recent Developments
Status of U.S. Phase II clinical trial for cocaine addiction
During July 2007, we initiated a randomized, double-blind, placebo-controlled U.S. Phase II
clinical trial evaluating the use of CPP-109 in treating patients with cocaine addiction. We have
retained Health Decisions, Inc. as the Contract Research Organization (CRO) to oversee the trial on
our behalf. We currently estimate that the cost of this trial will be
approximately $6,100,000.
The trial is expected to enroll 180 cocaine addicted patients at not less than 11 addiction
treatment clinical centers in the United States. Patients will be treated for a period of 12 weeks,
with an additional 12 weeks of follow-up. The primary endpoint of the trial is to demonstrate that
a larger proportion of CPP-109-treated subjects than placebo-treated subjects will be cocaine-free
during their last two weeks of treatment (weeks 11 and 12). Additionally, we will be measuring
several secondary endpoints based on reductions of cocaine use and craving. To be eligible to
participate in this trial, participants must meet specific clinical standards for cocaine
dependence, as specified in DSM-IV, a set of diagnosis guidelines established for clinical
professionals. Additionally, trial participants cannot meet the DSM-IV criteria for dependence on
most other addictive substances. Further, eye safety studies will be conducted on all trial
participants before and after the trial to determine the extent of visual field defects that may
occur as a result of the trial among such participants, if any. We began enrolling patients in our
trial in January 2008 after the protocol for our trial was accepted by the U.S. Food and Drug
Administration (FDA). Based on currently available information, we expect to have initial
top-line results from this trial in the first quarter of 2009. However, the date we obtain the
results from our study will ultimately depend on the timing of patient enrollment into our study,
which cannot be predicted with absolute certainty. Additional information about our cocaine trial
can be found at www.clinicaltrials.gov.
Status of U.S. Phase II clinical trial for methamphetamine addiction
During June 2008, we initiated a similar randomized, double-blind, placebo-controlled U.S.
Phase II clinical trial evaluating the use of CPP-109 in treating patients with methamphetamine
addiction. We have retained Health Decisions, Inc. as the CRO to oversee the trial on our behalf.
We currently estimate that the cost of this trial will be approximately $7,300,000.
The trial is expected to enroll 180 methamphetamine addicted patients at 15 addiction
treatment clinical centers in the United States. Patients will be treated for a period of 12
weeks, with an additional 12 weeks of follow-up. The primary endpoint of the trial is to
demonstrate that a larger proportion of CPP-109-treated subjects than placebo-treated subjects will
be methamphetamine-free during their last two weeks of treatment (weeks 11 and 12). Additionally,
we will be measuring several secondary endpoints based on reductions of methamphetamine use and
craving. To be eligible to participate in this trial, participants must meet specific clinical
standards for methamphetamine dependence, as specified in DSM-IV, a set of diagnosis guidelines
established for clinical professionals. Additionally, trial participants cannot meet the DSM-IV
criteria for dependence on most other addictive substances. Further, eye safety studies will be
conducted on all trial participants before and after the trial to determine the extent of visual
field defects that may occur as a result of the trial among such participants, if any. Based on
currently available information, we expect to have initial top-line results from this trial during
the third quarter of 2009. However, the date we obtain the results from our study will ultimately
depend on the timing of patient enrollment into our study, which cannot be predicted with absolute
certainty. Additional information about our methamphetamine trial can be found at
www.clinicaltrials.gov.
15
Contemplated pilot clinical trials
We are seeking to conduct a Phase II clinical trial evaluating CPP-109 for the treatment of
Binge Eating Disorder. Binge eating disorder, or BED, which impacts a subset of the obese
population, affects approximately four million people in the United States. Those afflicted with
binge eating disorder frequently eat large amounts of food while feeling a loss of control over
their eating. Catalyst is very interested in BED for several reasons. First, we are advised that
Brookhaven National Laboratories, our exclusive licensing partner, intends to publish in the near
future positive results from a series of animal studies that they have conducted evaluating the use
of vigabatrin to treat obesity. In addition, research conducted by scientists sponsored by the
National Institute on Drug Abuse (NIDA) has shown that addiction and compulsive eating both involve
impaired impulse control and distorted valuation of the rewards to be derived from a certain
behaviori.e., drug-taking or eating. Studies have indicated that there is a neurological overlap
between addiction and eating disorders.
We are also hoping to conduct, subject to the availability of funds, additional pilot studies
evaluating the use of CPP-109 for the treatment of other addictions, which may include addictions
to alcohol and nicotine.
Ongoing Discussions with strategic partners
We continue to have discussions with potential strategic partners interested in working with
us on the development of CPP-109. These discussions are very preliminary and may not result in
relationships that we determine to pursue, and no agreements have been entered into to date with
any potential strategic partners.
Basis of presentation
Revenues
We are a development stage company and have had no revenues to date. We will not have
revenues until such time as we receive approval of CPP-109, successfully commercialize our products
or enter into a licensing agreement which may include up-front licensing fees, of which there can
be no assurance.
Research and development expenses
Our research and development expenses consist of costs incurred for company-sponsored research
and development activities. The major components of research and development costs include clinical
manufacturing costs, clinical trial expenses, consulting, scientific advisors and other third-party
costs, salaries and employee benefits, stock-based compensation expense, supplies and materials and
allocations of various overhead costs related to our product development efforts. To date, all of
our research and development resources have been devoted to the development of CPP-109, and we
expect this to continue for the foreseeable future. Costs incurred in connection with research and
development activities are expensed as incurred.
Our cost accruals for clinical trials are based on estimates of the services received and
efforts expended pursuant to contracts with numerous clinical trial sites and the CRO overseeing our clinical trials. In the normal course of business we contract with third parties to perform various
clinical trial activities in the on-going development of potential products. The financial terms of
these agreements are subject to negotiation and vary from contract to contract and may result in
uneven payment flows. Payments under the contracts depend on factors such as the achievement of
certain events, the successful enrollment of patients, and the completion of portions of the
clinical trial or similar conditions. The objective of our accrual policy is to match the recording
of expenses in our financial statements to the actual services received and efforts expended. As
such, expense accruals related to clinical trials are recognized based on our estimate of the
degree of completion of the event or events specified in the specific clinical study or trial
contract. We monitor service provider activities to the extent possible; however, if we
underestimate activity levels associated with various studies at a given point in time, we could be
required to record significant additional research and development expenses in future periods.
Clinical trial activities require significant up front expenditures. We anticipate paying
significant portions of a trials cost before it begins, and incurring additional expenditures as
the trial progresses and reaches certain milestones.
16
Selling and marketing expenses
We do not currently have any selling or marketing expenses, as we have not yet received
approval for the commercialization of CPP-109. We expect we will begin to incur such costs upon
our filing of an NDA, so that we can have a sales force in place to commence our selling efforts
immediately upon receiving approval of such NDA, of which there can be no assurance.
General and administrative expenses
Our general and administrative expenses consist primarily of salaries, personnel expenses for
accounting, corporate and administrative functions. Other costs include administrative facility
costs, regulatory fees, and professional fees for legal, information technology, accounting and
consulting services.
Stock-based compensation
We recognize costs related to the issuance of stock-based awards to employees and consultants
by using the estimated fair value of the award at the date of grant, in accordance with SFAS 123R.
Income taxes
We have incurred operating losses since inception. Our net deferred tax asset has a 100%
valuation allowance as of June 30, 2008 and December 31, 2007, as we believe it is more likely than
not that the deferred tax asset will not be realized. If an ownership change, as defined under
Internal Revenue Code Section 382, occurs, the use of any of our carry-forward tax losses may be
subject to limitation.
We adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income
Taxes (FIN 48), on January 1, 2007. Previously, we had accounted for tax contingencies in
accordance with Statement of Financial Accounting Standards No. 5, Accounting for Contingencies.
As required by FIN 48, which clarifies SFAS No. 109, Accounting for Income Taxes, we recognize
the financial statement benefit of a tax position only after determining that the relevant tax
authority would more likely sustain the position following the audit. For tax positions meeting the
more-likely-than-not threshold, the amount recognized in the financial statements is the largest
benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement
with the relevant tax authority. At the adoption date, we applied FIN 48 to all tax positions for
which the statute of limitation remained open. No resulting unrecognized tax benefits were
identified in connection with the implementation of FIN 48, and none have been identified subsequent to our implementation of FIN 48.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based on
our financial statements, which have been prepared in accordance with accounting principles
generally accepted in the U.S. The preparation of these financial statements requires us to make
judgments, estimates, and assumptions that affect the reported amounts of assets and liabilities
and the disclosure of contingent assets and liabilities at the date of the financial statements, as
well as the reported revenue and expenses during the reporting periods. We continually evaluate
our judgments, estimates and assumptions. We base our estimates on the terms of underlying
agreements, our expected course of development, historical experience and other factors we believe
are reasonable based on the circumstances, the results of which form our managements basis for
making judgments about the carrying value of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
The list below is not intended to be a comprehensive list of all of our accounting policies.
In many cases, the accounting treatment of a particular transaction is specifically dictated by
generally accepted accounting principles, or GAAP. There are also areas in which our managements
judgment in selecting any available alternative would not produce a materially different result.
Our condensed financial statements and the notes thereto included elsewhere in this report contain
accounting policies and other disclosures as required by GAAP.
17
Pre-clinical study and clinical trial expenses
Research and development expenditures are charged to operations as incurred. Our expenses
related to clinical trials are based on actual and estimated costs of the services received and
efforts expended pursuant to contracts with multiple research institutions and the CRO that oversees our clinical trials. The financial terms of these agreements are subject to
negotiation and will vary from contract to contract and may result in uneven payment flows.
Generally, these agreements will set forth the scope of the work to be performed at a fixed fee or
unit price. Payments under these contracts will depend on factors such as the successful enrollment
of patients or the completion of clinical trial milestones. Expenses related to clinical trials
generally are accrued based on contracted amounts applied to the level of patient enrollment and
activity according to the protocol. If timelines or contracts are modified based upon changes in
the clinical trial protocol or scope of work to be performed, we would be required to modify our
estimates accordingly on a prospective basis.
Stock-based compensation
Effective January 1, 2006, we adopted the fair value recognition provisions of SFAS 123R,
"Share-Based Payment. We utilize the Black-Scholes option pricing model to determine the fair
value of stock options on the date of grant. This model derives the fair value of stock options
based on certain assumptions related to expected stock price volatility, expected option life,
risk-free interest rate and dividend yield. Our expected volatility is based on the historical
volatility of other publicly traded development stage companies in the same industry. The estimated
expected option life is based upon estimated employee exercise patterns and considers whether and
the extent to which the options are in-the-money. The risk-free interest rate assumption is based
upon the U.S. Treasury yield curve appropriate for the estimated expected life of our stock options
awards. For the three and six months ended June 30, 2008 and 2007, respectively, the assumptions
used were an estimated annual volatility of 80% and 100% and 80% and 100%, average expected holding
periods of four to five years, and risk-free interest rates of 3.11% and 4.57%, and 2.84% to 3.11%
and 4.57%, respectively.
Results of Operations
Revenues. We had no revenues for the three and six month periods ended June 30, 2008 and
2007.
Research and Development Expenses. Research and development expenses for the three and six
months ended June 30, 2008 and 2007 were $1,902,144 and
$1,002,780 and $2,986,503 and $1,815,300,
respectively, including stock-based compensation expense in each of the three and six month periods
of $99,532 and $161,320, and $274,088 and $239,713, respectively. Research and development
expenses, in the aggregate, represented approximately 77% and 70% and
71% and 62% of total
operating costs and expenses, respectively, for the three and six months ended June 30, 2008 and
2007. The stock-based compensation is non-cash and relates to the expense of stock
options awards and restricted stock awards to our employees, officers and scientific advisors. Our
expenses for research and development for the three and six months ended June 30, 2008 grew
significantly compared to amounts expended in the same periods in 2007 as we incurred expenses for
services related to the initiation of our Phase II clinical trials evaluating CPP-109 for use in
the treatment of cocaine addiction and methamphetamine addiction and incurred expenses for raw
materials and finished products for use in our current clinical trials. In addition, payroll
expenses and benefits increased for the three and six months ended June 30, 2008 as compared to the
same periods in 2007, as we expanded our research and development staff.
We expect that research and development activities will continue to increase substantially now
that we have initiated our U.S. Phase II cocaine and methamphetamine clinical trials, and plan to
expand our product development activities generally.
Selling and Marketing Expenses. We had no selling and marketing expenses during the three and
six months ended June 30, 2008 and 2007. We anticipate that we will begin to incur sales and
marketing expenses when we file an NDA for CPP-109, in order to develop a sales organization to
market CPP-109 and other products we may develop upon the receipt of required approvals.
18
General and Administrative Expenses. General and administrative expenses were $561,533 and
$434,208, and $1,201,206 and $1,118,834 respectively, for the three and six months ended June 30,
2008 and 2007. These expenses include $23,676 and $20,913 and $112,524 and $142,888, respectively,
in stock-based compensation expense relating to the vesting of stock options and restricted stock
grants. General and administrative expenses represented 23% and 30%
and 29% and 34%, respectively,
of total operating costs and expenses, for the three and six months ended June 30, 2008 and 2007.
The increase of $82,372 in general and administrative expenses for the six months ended June 30,
2008 when compared to the same period in 2007 is due primarily to increases in payroll expenses and
benefits, professional fees, rent and depreciation, as we expanded our administrative staff and
facilities, offset by a decrease in franchise taxes. The increase of $127,325 for the three months
ended June 30, 2008 from the same period in 2007 is primarily due to increases in payroll expenses
and benefits, professional fees, rent and depreciation, as we expanded our administrative staff and
facilities, offset by a decrease in stock-based compensation and franchise taxes. General and
administrative expenses include among other expenses, office expenses, legal and accounting fees
and travel expenses for our employees, consultants, directors and members of our Scientific
Advisory Board. We expect general and administrative efforts to increase in future periods as we
incur general non-research expenses relating to the monitoring and oversight of our clinical trials
and otherwise expend funds to continue to develop our business as described herein and in our
Annual Report on Form 10-K for 2007.
Stock-Based Compensation. Total stock based compensation for the three and six months ended
June 30 2008 and 2007 was $123,208 and $182,233 and $386,612 and $382,601, respectively. As of
June 30, 2008, we had outstanding stock options to purchase 2,667,149 shares of our common stock,
of which options to purchase 2,374,780 shares were vested and options to purchase 292,369 shares
were unvested. We also have granted 55,484 shares of restricted common stock as of June 30, 2008,
of which 40,243 had vested at that date.
Interest Income. We reported interest income in all periods relating to our investment of
funds received from our private placements and IPO. The decrease in interest income in the three
and six month period ended June 30, 2008 when compared to the same periods in 2007 is due to lower
interest rates and lower investment amounts as we use the proceeds from our IPO to fund our
operations. All such funds were invested in bank savings accounts, money market funds, short term
interest bearing obligations, certificates of deposit and direct or guaranteed obligations of the
United States government.
Income taxes. We have incurred net operating losses since inception. For the three and six
month periods ended June 30, 2008 and 2007, we have applied a 100% valuation allowance against our
deferred tax asset as we believe that it is more likely than not that the deferred tax asset will
not be realized.
Liquidity and Capital Resources
Since our inception, we have financed our operations primarily through the net proceeds of
private placements of our equity securities and through our IPO. At June 30, 2008, we had cash and
cash equivalents of $13.1 million and working capital of $12.7 million. At December 31, 2007 we
had cash and cash equivalents of $15.9 million and working capital of $16.2 million. At June 30,
2008, the Company has substantially all of its cash and cash equivalents deposited with one
financial institution. The Company had cash balances at certain financial institutions in excess
of federally insured limits periodically throughout the quarter.
Operating Capital and Capital Expenditure Requirements
We have to date incurred operating losses, and we expect these losses to increase
substantially in the future as we expand our product development programs and prepare for the
commercialization of CPP-109. We anticipate using current cash on hand to finance these
activities. It may take several years to obtain the necessary regulatory approvals to
commercialize CPP-109 in the United States.
We believe that our existing cash, cash equivalents and short-term investments, will be
sufficient to meet our projected operating requirements through the
second quarter of 2009.
19
Our future funding requirements will depend on many factors, including:
|
|
the scope, rate of progress and cost of our clinical trials and other product development
activities; |
|
|
future clinical trial results; |
|
|
the terms and timing of any collaborative, licensing and other arrangements that we may
establish; |
|
|
the cost and timing of regulatory approvals; |
|
|
the cost and delays in product development as a result of any changes in regulatory
oversight applicable to our products; |
|
|
the cost and timing of establishing sales, marketing and distribution capabilities; |
|
|
the effect of competition and market developments; |
|
|
the cost of filing, prosecuting, defending and enforcing any patent claims and other
intellectual property rights; and |
|
|
the extent to which we acquire or invest in other products. |
At the present time, we estimate that we will require additional funding to complete the Phase
III clinical trial that we believe we will be required to complete before we are in a position to
file an NDA for CPP-109. We will also require additional working capital to support our operations
in periods after the second quarter of 2009.
We expect to raise any required additional funds through public or private equity offerings,
corporate collaborations or other means. We may also seek to raise additional capital to fund
additional product development efforts, even if we have sufficient funds for our planned
operations. Any sale by us of additional equity or convertible debt securities could result in
dilution to our stockholders. There can be no assurance that any such required additional funding
will be available to us at all or available on terms acceptable to us. Further, to the extent that
we raise additional funds through collaborative arrangements, it may be necessary to relinquish
some rights to our technologies or grant sublicenses on terms that are not favorable to us. If we
are not able to secure additional funding when needed, we may have to delay, reduce the scope of or
eliminate one or more research and development programs, which could have an adverse effect on our
business.
On June 2, 2008, we filed a shelf registration statement with the United States Securities and
Exchange Commission (SEC) to sell up to $30 million of common stock. This shelf registration was
declared effective by the SEC on June 26, 2008. Under this shelf
registration statement, shares may be sold
periodically to provide additional funds for our operations. The number of shares we can sell and
the amount of proceeds we can raise from the sale of such shares are limited to 20% of the number of shares of outstanding
common stock and 33% of our public float, respectively, pursuant to applicable NASDAQ marketplace
and SEC rules. There can be no assurance that we will be able to successfully sell shares under
our shelf registration statement.
Cash Flows
Net cash used in operations was $2,839,439 and $2,800,464, respectively, for the six months
ended June 30, 2008 and 2007. During the six months ended June 30, 2008, net cash used in
operating activities was primarily attributable to our net loss of $3,961,487, and decreases in
prepaid expenses and deposits of $247,757 and in accounts payable of
$38,589. This was offset in
part by $403,052 of non-cash expenses, a decrease of $39,542 in
interest receivable, and an increase
of $470,286 in accrued expenses and other liabilities. Non-cash expenses include depreciation and
stock-based non-cash compensation expense. During the six months ended June 30, 2007, net cash
used in operating activities was primarily attributable to our net loss of $2,460,208, an increase
in prepaid expenses and deposits of $439,721 and a decrease of $301,689 in accounts payable. This
was offset in part by $387,271 of non-cash expenses, a decrease of $7,270 in interest receivable
and an increase of $6,613 in accrued expenses.
20
Net cash used in investing activities was $1,345 and $34,068, respectively, for the six months
ended June 30, 2008 and 2007. Such funds were used primarily for purchases of computer equipment
and furniture.
Net cash used in financing activities for the six months ended June 30, 2008 was $19,004. Of
these funds, $16,994 were used for the payment of shelf registration costs and $2,010 for the
payment of employee withholding tax related to vesting of restricted stock units. No cash was
provided by (used in) financing activities for the six months ended June 30, 2007.
Contractual Obligations
We have entered into the following contractual arrangements:
|
|
|
Payment to Brookhaven under our license agreement. We have agreed to pay Brookhaven a
fee of $100,000 in the year of NDA approval for CPP-109, $250,000 in each of the second and
third years following approval, and $500,000 per year thereafter until the license
agreement expires. We are also obligated to reimburse Brookhaven upon the filing of an NDA
for CPP-109 and upon obtaining FDA regulatory approval to sell any licensed products for
certain of their patent-related expenses. We believe that such potential obligation is
approximately $166,000 at June 30, 2008 and December 31, 2007. See Dispute with
Brookhaven below. |
|
|
|
|
Payments to our contract manufacturer. We estimate that we will pay our contract
manufacturer approximately $1,092,000, with payments to be based on the achievement of
milestones relating to the schedule of work that it has agreed to perform for us. At June
30, 2008, we had paid approximately $893,000 of this amount. |
|
|
|
|
Payments to our CRO. We estimate that we will pay our CRO approximately $5,376,000 and
$6,466,000, respectively, for our U.S. Phase II cocaine trial and U.S. Phase II
methamphetamine trial, with payments to be based on the achievement of milestones relating
to the agreed-upon service agreements. This includes estimated payments to be made to sites conducting these clinical trials on our behalf. At June 30, 2008, we had paid approximately
$1,613,000 and $486,000 of these amounts, respectively. |
|
|
|
|
Payments for laboratories and other trial related tests. We estimate that we will pay
approximately $627,000, in connection with laboratories and other tests related to our U.S.
Phase II cocaine clinical trial. At June 30, 2008, we had paid approximately $229,000 of
this amount, $61,000 of which have been advanced upon signing of the contracts and as such
have been included in prepaid expenses in the accompanying condensed balance sheet at June
30, 2008. In addition, we estimate we will pay approximately $662,000 in connection with
laboratories related to our U.S. Phase II methamphetamine trial. At June 30, 2008, we have
paid approximately $138,000 of this amount, $58,000 of which have been advanced upon
signing of the contracts and as such have been included in prepaid expenses in the
accompanying condensed balance sheet at June 30, 2008. |
|
|
|
|
Employment agreements. We have entered into employments agreements with two of our
executive officers that require us to make aggregate base salary payments of $515,000 per
annum. |
|
|
|
|
Leases for office space. We have entered into lease agreements for our office space that
require payments of approximately $6,000 per month. |
Dispute with Brookhaven
During November 2007, Brookhaven formally advised us that they believe that the amount
potentially due for patent related expenses as of that date was approximately $1,000,000. We
believe that we are potentially 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. We intend to consult with Brookhaven in an effort to
resolve this dispute. However, 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 the Company has not filed an NDA for CPP-109,
no amounts are accrued relating to this matter in the accompanying June 30, 2008 and December
31, 2007 balance sheets.
21
Off-Balance Sheet Arrangements
We currently have no debt. Capital lease obligations as of June 30, 2008 and December 31, 2007
were not material. We have operating leases for our office facilities. We do not have any
off-balance sheet arrangements as such term is defined in rules promulgated by the SEC.
Recent Accounting Pronouncements
In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (SFAS No. 157).
This standard provides guidance for using fair value to measure assets and liabilities. The
standard also responds to investors requests for expanded information about the extent to which
companies measure assets and liabilities at fair value, the information used to measure fair value,
and the effect of fair value measurements on earnings. The standard applies whenever other
standards require (or permit) assets or liabilities to be measured at fair value, but does not
expand the use of fair value in any new circumstances. There are numerous previously issued
statements dealing with fair values that are amended by SFAS No. 157. SFAS No. 157 is effective for
financial statements issued for fiscal years beginning after November 15, 2007. In February 2008,
the FASB issued Staff Position (FSP) FAS 157-1, Application of FASB Statement No. 157 to FASB
Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for
Purposes of Lease Classification or Measurement under Statement 13, which scopes out leasing
transactions accounted for under SFAS No. 13, Accounting for Leases. In February 2008, FSP FAS
157-2, Effective Date of FASB Statement No. 157, was issued, which delays the effective date of
SFAS No. 157 to fiscal years and interim periods within those fiscal years beginning after November
15, 2008 for nonfinancial assets and nonfinancial liabilities, except for items that are recognized
or disclosed at fair value in the financial statements on a recurring basis (at least annually).
The implementation of SFAS No. 157 for financial assets and financial liabilities, effective
January 1, 2008, did not have a material impact on our financial statements. We are currently
assessing the impact of SFAS No. 157 for nonfinancial assets and nonfinancial liabilities on our
financial statements.
In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159 The
Fair Value Option for Financial Assets and Financial Liabilities (SFAS No. 159). SFAS No. 159
permits entities to choose to measure many financial instruments and certain other items at fair
value. The provisions of SFAS No. 159 were effective for the Company beginning January 1, 2008. The
adoption of SFAS No. 159 did not have a material impact on our financial statements.
In June 2007, the FASB ratified a consensus opinion reached by the Emerging Issues Task Force
(EITF) on EITF Issue 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services
Received for Use in Future Research and Development Activities. The guidance in EITF Issue 07-3
requires the Company to defer and capitalize nonrefundable advance payments made for goods or
services to be used in research and development activities until the goods have been delivered or
the related services have been performed. If the goods are no longer expected to be delivered nor
the services expected to be performed, the Company would be required to expense the related
capitalized advance payments. The consensus in EITF Issue 07-3 was effective for fiscal years, and
interim periods within those fiscal years, beginning after December 15, 2007 and is applied
prospectively to new contracts entered into on or after December 15, 2007. We adopted EITF Issue
07-3 effective January 1, 2008. The adoption of EITF Issue 07-3 did not have a material impact on
our financial statements.
In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting
Principles. SFAS No. 162 identifies the sources of accounting principles to be used in the
preparation of financial statements that are presented in conformity with generally accepted
accounting principles in the United States for non-governmental entities. SFAS No. 162 is effective
60 days following approval by the Securities and Exchange Commission of the Public Company
Accounting Oversight Boards amendments to AU Section 411, The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles. We do not expect SFAS No. 162 to have a
material impact on our financial statements.
22
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
As a smaller reporting company as defined by Item 10 of Regulation S-K, we are not required
to provide information required by this section.
ITEM 4T. CONTROLS AND PROCEDURES
|
a. |
|
We have carried out an evaluation, under the supervision and with the
participation of our management, including our principal executive officer and
principal financial officer, of the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rules 13a- 15(c) and 15d-15(e) of the
Securities Exchange Act of 1934, as amended (the Exchange Act). Based on such
evaluation, our principal executive officer and principal financial officer have
concluded that as of June 30, 2008, our disclosure controls and procedures were
effective to ensure that the information required to be disclosed by us in the reports
filed or submitted by us under the Exchange Act, was recorded, processed, summarized or
reported within the time periods specified in the rules and regulations of the SEC, and
include controls and procedures designed to ensure that information required to be
disclosed by us in such reports was accumulated and communicated to management,
including our principal executive officer and principal financial officer, as
appropriate to allow timely decisions regarding required disclosures. |
|
|
b. |
|
There have been no changes in our internal controls or in other factors that
could have a material effect, or are reasonably likely to have a material effect, on our
internal control over financial reporting. |
23
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not a party to any legal proceedings.
ITEM 1A. RISK FACTORS
There are many factors that affect our business, our financial condition, and the results of
our operations. In addition to the information set forth in this quarterly report, you should
carefully read and consider Item 1A. Risk Factors in Part I, and Item 7. Managements Discussion
and Analysis of Financial Condition and Results of Operations in Part II, of our Annual Report on
Form 10-K for the year ended December 31, 2007, which contain a description of significant factors
that might cause our actual results of operations in future periods to differ materially from those
currently expected or desired.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
At our Annual Meeting of Stockholders held on June 18, 2008, our stockholders elected six
directors (P. McEnany, P. Coelho, H. Huckel, C. OKeeffe, D. Tierney and M. Wallace) to serve a
term of one year or until their successors are elected and qualified, or until their earlier death,
resignation or removal. The security holders elected all nominated Directors with votes cast as
follows: Mr. McEnany: 9,823,498 shares for and 108,917 shares withheld; Mr. Coelho: 9,827,698
shares for and 104,717 shares withheld; Dr. Huckel: 9,872,098 shares for and 60,317 shares
withheld; Mr. OKeeffe: 9,823,498 shares for and 108,917 shares withheld; Dr. Tierney: 9,872,098
shares for and 60,317 shares withheld; and Mr. Wallace: 9,873,098 shares for and 59,317 shares
withheld. There were no abstentions or broker non-votes applicable to the election of Directors.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
|
|
|
|
|
|
|
|
|
|
31.1 |
|
|
Certification of Principal Executive Officer under Section 302 of the
Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
|
|
|
|
31.2 |
|
|
Certification of Principal Financial Officer under Section 302 of the
Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
|
|
|
|
32.1 |
|
|
Certification of Principal Executive Officer under Section 906 of the
Sarbanes-Oxley Act of 2002 |
|
|
|
|
|
|
|
|
|
|
32.2 |
|
|
Certification of Principal Financial Officer under Section 906 of the
Sarbanes-Oxley Act of 2002 |
24
SIGNATURES
Pursuant to the Securities Exchange Act of 1934, the Registrant has caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
|
Catalyst Pharmaceutical Partners, Inc.
|
|
|
By: |
/s/ Jack Weinstein
|
|
|
|
Jack Weinstein |
|
|
|
Chief Financial Officer |
|
|
Date: August 14, 2008
25
Exhibit Index
|
|
|
Exhibit |
|
|
Number |
|
Description |
|
|
|
31.1
|
|
Certification of Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
31.2
|
|
Certification of Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.1
|
|
Certification of Principal Executive Officer under Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.2
|
|
Certification of Principal Financial Officer under Section 906 of the Sarbanes-Oxley Act of 2002 |
26
EX-31.1 Section 302 Certification of CEO
Exhibit 31.1
Certification of Principal Executive Officer
I, Patrick J. McEnany, certify that:
1. |
|
I have reviewed this quarterly report on Form 10-Q of Catalyst
Pharmaceutical Partners, Inc.; |
|
2. |
|
Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report; |
|
3. |
|
Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report; |
|
4. |
|
The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: |
|
a) |
|
Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant is made known to us by others within those entities,
particularly during the period in which this report is being prepared; |
|
|
b) |
|
Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
c) |
|
Evaluated the effectiveness of the registrants disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation;
and |
|
|
d) |
|
Disclosed in this report any change in the registrants
internal control over financial reporting that occurred during the
registrants most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
5. |
|
The registrants other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrants auditors and the audit committee of registrants board of directors
(or persons performing the equivalent functions): |
|
a) |
|
all significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrants ability
to record, process, summarize and report financial information; and |
|
|
b) |
|
any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal control over financial reporting. |
Date: August 14, 2008
|
|
|
|
|
|
|
|
|
/s/ Patrick J. McEnany
|
|
|
Patrick J. McEnany |
|
|
Chief Executive Officer
(Principal Executive Officer) |
|
|
EX-31.2 Section 302 Certification of CFO
Exhibit 31.2
Certification of Principal Financial Officer
I, Jack Weinstein, certify that:
1. |
|
I have reviewed this quarterly report on Form 10-Q of Catalyst
Pharmaceutical Partners, Inc.; |
2. |
|
Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report; |
3. |
|
Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report; |
4. |
|
The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and we have: |
|
a) |
|
Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant is made known to us by others within those entities,
particularly during the period in which this report is being prepared; |
|
|
b) |
|
Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted
accounting principles; |
|
|
c) |
|
Evaluated the effectiveness of the registrants disclosure
controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such evaluation;
and |
|
|
d) |
|
Disclosed in this report any change in the registrants
internal control over financial reporting that occurred during the
registrants most recent fiscal quarter that has materially affected, or
is reasonably likely to materially affect, the registrants internal
control over financial reporting; and |
5. |
|
The registrants other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to the
registrants auditors and the audit committee of registrants board of directors
(or persons performing the equivalent functions): |
|
a) |
|
all significant deficiencies and material weaknesses in
the design or operation of internal control over financial reporting
which are reasonably likely to adversely affect the registrants ability
to record, process, summarize and report financial information; and |
|
b) |
|
any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal control over financial reporting. |
Date: August 14, 2008
|
|
|
|
|
|
|
|
|
/s/ Jack Weinstein
|
|
|
Jack Weinstein |
|
|
Chief Financial Officer
(Principal Financial Officer) |
|
|
EX-32.1 Section 906 Certification of CEO
Exhibit 32.1
Certification Required by 18 U.S.C. Section 1350
(as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)
I, Patrick J. McEnany as Principal Executive Officer of Catalyst Pharmaceutical Partners,
Inc. (the Company), certify, pursuant to 18 U.S.C. Section 1350 (as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002), that to my knowledge:
1. |
|
the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly
period ended June 30, 2008 (the Report), filed with the U.S. Securities and Exchange
Commission, fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended; and |
2. |
|
the information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Company. |
|
|
|
|
|
|
|
|
Date: August 14, 2008 |
/s/ Patrick J. McEnany
|
|
|
Patrick J. McEnany |
|
|
Chief Executive Officer
(Principal Executive Officer) |
|
|
EX-32.2 Section 906 Certification of CFO
Exhibit 32.2
Certification Required by 18 U.S.C. Section 1350
(as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002)
I, Jack Weinstein as Principal Financial Officer of Catalyst Pharmaceutical Partners, Inc. (the
Company), certify, pursuant to 18 U.S.C. Section 1350 (as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002), that to my knowledge:
1. |
|
the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period
ended June 30, 2008 (the Report), filed with the U.S. Securities and Exchange Commission,
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934, as amended; and |
2. |
|
the information contained in the Report fairly presents, in all material respects, the
financial condition and results of operations of the Company. |
|
|
|
|
|
|
|
|
Date: August 14, 2008 |
/s/ Jack Weinstein
|
|
|
Jack Weinstein |
|
|
Chief Financial Officer
(Principal Financial Officer) |
|
|