Catabasis Pharmaceuticals, Inc. (NASDAQ:CATB) Plunges 70% on DMD Drug Failure

Pharmaceutical company, Catabasis Pharmaceuticals, Inc. (NASDAQ:CATB), announces DMD drug failure as the share price goes in the tank.

Catabasis Pharmaceuticals Inc. (CATB) announced negative Phase 2 data for its Duchenne muscular dystrophy drug candidate CAT-1004 (edasalonexent). Catabasis’ stock price plunged more than 70% on the news Wednesday afternoon, trading at $1.20 per share, down $2.84.

Although the company had reported positive data from an early-stage study two weeks ago, the recent data shows the drug failed to beat a placebo in 31 trial patients. A placebo is a substance that has no therapeutic effect, and is used as a control in testing new drugs. (For more, see Catabasis Reports Muscular Dystrophy Drug Data.)

The CAT-1004 drug works by reducing the levels of NF-kb, an inflammatory substance that is found to be active in the initial stages of Duchenne muscular dystrophy. Catabasis believed that NF-kb compound is a significant contributor to the progressive muscle deterioration observed in the DMD disease, and was developing the drug to treat DMD regardless of the underlying genetic mutations.

With the disappointing results from Catabasis, Sarepta Therapeutics Inc.’s (SRPT) Exondys 51 remains the only approved Duchenne muscular dystrophy drug to treat a specific genetically-defined group of patients.

Duchenne Muscular Dystrophy Drugs

DMD continues to be a troubled area for therapy development. Last year, Sarepta’s Exondys 51 (eteplirsen) drug approval and follow-on developments resulted in wide swings in its stock price.

Based on the positive results achieved for the drug during its Phase 1 trial, Catabasis had entered into a research partnership with Sarepta in October 2016. The partnership was aimed at exploring a combination of CAT-1004 and Exondys 51 to retard the damage caused to the muscles in DMD patients. (For more, see Sarepta’s Partnership Spikes Catabasis.)

Catabasis also suffered a setback in June 2016, when it was forced to dump a mid-stage trial of its cholesterol drug CAT-2054.

The Cambridge, Massachusetts-based company has other two drugs in the pipeline which are in the pre-clinical stage. They include CAT-4001 for treating Friedreich’s ataxia, amyotrophic lateral sclerosis and CAT-5571 for treating cystic fibrosis.

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Catabasis GRAPH

Catabasis Pharmaceuticals, Inc. (NASDAQ:CATB) shares are trading -70.79% on the news and in the range of $1.08 – 1.30 during the current trading session.  When taking a look at which direction the stock might be headed, investors often look to brokerage analysts who cover the stock.  Sell-side research firms on Wall Street currently have a consensus one-year price target of $17.00 on the stock.  This is according to brokerage analysts polled by Thomson Reuters First Call.

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Sell-side analysts are projecting earnings per share of $-0.50 for the next fiscal quarter.  For the current year, analysts are predicting earnings of $-2.28 per share according to First Call.

In looking at where the stock is trading on a technical level, the stock is trading -70.53% away from its 50-day moving average of $4.00.  Based on the most recent available data, the equity is -85.52% off of its 52-week high of $8.15 and +9.26% away from its 52-week low which is $1.08.

Today, the stock opened at $1.28 and the last bid at the time of writing stood at $1.18.  During the session thus far, the equity dipped down to $1.08 and touched $1.30 as the high point.  Catabasis Pharmaceuticals, Inc. (NASDAQ:CATB) has a market cap of $22.01M and has seen an average daily volume of 199,177 over the past three months.

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Disclaimer: Nothing contained in this publication is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

 

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