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HIGHLIGHTS
- Catabasis Pharmaceuticals Inc (NASDAQ:CATB, CATB:US) saw its stocks catapult by about 580 per cent on Friday, August 20 (9.40AM EST).
- The surge saw the pharma stock hit a value of US$ 8.3, up from its previous close of US$ 1.22.
- Back in January this year, it announced the acquisition of private biopharma company Quellis Biosciences Inc.
Biopharma firm Catabasis Pharmaceuticals Inc (NASDAQ:CATB, CATB:US) saw its stocks catapult by about 580 per cent on Friday, August 20 (9.40AM EST).
The surge saw the pharma stock hit a value of US$ 8.3, up from its previous close of US$ 1.22, and a Nasdaq Last Sale (NLS) volume of 1.46 million at the time of writing this.
What caused this giant leap? Let’s find out.
Why is Catabasis Pharmaceuticals Inc (NASDAQ:CATB, CATB:US) stock rising?
The US-based biopharmaceutical enterprise works on the clinical-stage discovery, manufacture and marketing of novel therapeutics.
It primarily focuses on products to treat hereditary angioedema (HAE), for which it is developing of a product candidate, QLS-215, which is a monoclonal antibody inhibitor of plasma kallikrein.
QLS-215 is presently in its pre-clinical stage and the company expects to release the preliminary results from its trial by the end of 2022.
Also read: Entera Bio (ENTX ) & Orphazyme (OPRH): 2 biopharma stocks to buy?
The latest announcement by the company saw the release of its earnings report for the second quarter ending June 30, 2021. In it, Catabasis reported cash, cash equivalents and short-term investments worth about US$ 139.5 million for Q2 2021, which was down from that of US$ 146.9 million quarter-over-quarter (QoQ).
The firm, however, expects that this cash would be “sufficient” to fund its present operating plan through 2023.
Founded in 2008, Catabasis is presently situated in Boston, Massachusetts. Back in January this year, it announced the acquisition of private biopharma company Quellis Biosciences Inc, which works on detecting new molecules to heal rare diseases.
At the time of this purchase, Catabasis initiated a private placement for its Series X convertible preferred stock, which drew in investors such as hedge fund sponsor Perceptive Advisors, Acorn Bioventures, among others.
The company does not appear to have noted any announcements or updates this week.
Also read: AnPac Bio (ANPC) stock is soaring. A biopharma stock to buy?
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Catabasis Pharmaceuticals latest financials
Catabasis Pharmaceuticals’ net cash used in operating activities dropped to US$ 7.4 million in Q2 2021 from US$ 7.5 million in Q2 2020.
While its research and development expenses amounted to US$ 3.5 million in the latest quarter, which was significantly lower from US$ 6.8 million Q2 2020, its general and administrative expenses increased to about US$ 4 million.
Catabasis also incurred an operating loss of US$ 7.5 million and a net loss of some US$ 7.5 million in Q2 2021.
Bottomline
Biopharma-focused companies have noted a rise in demand since the onset of the pandemic. However, investors should practice caution before investing in stocks that record unexplained surges.
