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After Shift to Duchenne and Cholesterol Drugs, Catabasis Files For IPO

Xconomy Boston — 

Catabasis Pharmaceuticals appeared headed for the Nasdaq a few years ago when it brought in some investors known better for backing public companies than biotech startups. The Cambridge, MA-based company has since done some strategic tinkering, however, and now finally appears ready to take the plunge.

Catabasis outlined plans yesterday for an IPO to advance drugs it’s developing for Duchenne Muscular Dystrophy and high cholesterol levels, respectively. The two drugs are in early-stage testing, and the IPO cash would help Catabasis complete those studies. Should Catabasis complete the IPO, it’ll trade under the ticker symbol “CATB.”

With a 25.8 percent stake, SV Life Sciences is Catabasis’s largest shareholder. Others include Clarus Lifesciences II (24.9 percent stake), MedImmune Ventures (14.8 percent), Advanced Technology Ventures VIII (10.3 percent), and Lightstone Ventures (6.8 percent). The company has raised about $93 million in venture cash and $10 million in debt since it started up in 2008.

Catabasis was formed by two ex-Sirtris Pharmaceuticals executives, Jill Milne and Michael Jirousek, after Sirtris was bought by GlaxoSmithKline. (Milne is Catabasis’s president and CEO; Jirousek its chief scientific officer.) The company is based on a technology called “SMART-Linker” used to attach two compounds together. That resulting combination forms a new chemical entity meant to hit two targets in a disease pathway at once. Its most advanced drug prospect, for instance, CAT-2003, is a chemically-linked combination of niacin and the omega 3 fatty acid eicosapentaeonic acid, or EHA; a second drug, CAT-1004, links a different fatty acid, docosahexaeonic acid (DHA), to salicylate.

Catabasis has shuffled its priorities a bit in deciding the best path forward for its technology. Several years ago, for instance, the company talked up CAT-1004 as a potential treatment for type 2 diabetes before shifting to inflammatory bowel disease and Duchenne Muscular Dystrophy, a crippling muscle-wasting genetic disorder with no cure (IBD no longer appears to be part of its plans). Duchenne and CAT-1004—meant to tamp down the inflammation associated with the disorder—get top billing in Catabasis’s IPO prospectus, followed by a newer drug called CAT-2054, which is a next-gen version of CAT-2003. Catabasis has an orphan drug designation for CAT-1004

Indeed, despite the fact that CAT-2003 is furthest along in Catabasis’s pipeline—it’s completed three Phase 2a studies for “niche” disorders associated with high triglyceride levels, like multifactorial chylomicronemia syndrome—the company has “prioritized” CAT-2054 over that drug. Catabasis says the data for CAT-2003 “support the utility” of its technology, but it’s not carrying the drug forward on its own. Instead, Catabasis is looking to work with a partner to test CAT-2003 in “other serious diseases” like nonalcoholic steatohepatitis or liver cancer—it’s not going to use any of its IPO cash to move CAT-2003 forward.

Instead, that cash will go towards a Phase 1/2 trial of CAT-1004 in Duchenne, expected to start in the second quarter; and CAT-2054, which began early-stage testing for patients with high cholesterol who don’t respond to other treatments, in January. Catabasis anticipates top-line data for CAT-1004 next year, and to start a mid-stage study of CAT-2054 later this year if the early data are promising.

Both Duchenne and high cholesterol are very competitive fields, of course. It’s possible that the first Duchenne therapy could be approved later this year, a drug BioMarin Pharmaceutical (NASDAQ: BMRN) acquired when it bought Prosensa in 2014. Sarepta Therapeutics (NASDAQ: SRPT), PTC Therapeutics (NASDAQ: PTCT) and many others are also in the mix. And there are a number of drugs already available for high cholesterol, not to mention the new class of drugs—so-called PCSK9 blockers—that could hit the market later this year.

Catabasis had about $14.7 million in cash at the end of 2014. It’s burned through about $75 million since inception.

Citigroup, Cowen and Co., Wedbush, and Oppenheimer & Co. are underwriting the IPO.