Washington Editor

Catalyst Pharmaceutical Partners Inc. priced its initial public offering, raising $20.1 million to further fund research into its investigational product for cocaine addiction.

The specialty pharmaceutical company, of Coral Gables, Fla., sold 3.35 million shares at $6 apiece. Its stock (NASDAQ:CPRX) gained 10 cents Wednesday in its first trading day, closing at $6.10.

Net proceeds are expected to total about $17.7 million, and after the offering, Catalyst should have about 12.5 million shares outstanding. The funding, coupled with existing cash reserves, should be sufficient to sustain operations for two years.

In its prospectus filed with the SEC, the company outlined clinical development plans as the primary beneficiary of this IPO. In the near term, Catalyst plans to begin a Phase II study next quarter to test its initial product candidate, CPP-109, as a treatment for cocaine addiction. That U.S. trial is expected to be a double-blind, randomized, placebo-controlled study in about 375 patients, though details aren't yet final.

In addition, the company plans to conduct Phase I trials of CPP-109 to better understand its pharmacokinetics and cardiac function, as well as drug-drug interaction studies and studies in special populations. Catalyst also is supporting a double-blind, placebo-controlled trial in Mexico in 100 patients that's expected to begin this quarter.

If warranted, the company would use the collective data to support a new drug application for FDA approval, though additional trials such as a U.S.-based Phase III study likely would be needed for filing.

CPP-109, which has fast-track status from the FDA, is based on the epilepsy treatment vigabatrin, or gamma-vinyl-GABA (Sabril, Sanofi-Aventis Group). It eliminates the feeling of pleasure associated with the use of dopamine-enhancing drugs by inhibiting the enzyme GABA transaminase (GABA-T).

The compound's use in treating addictions stems from two open-label studies conducted in Mexico. In one, of the 30 patients enrolled, 18 completed the study and 16 tested negative for methamphetamine and cocaine addiction during the trial's last six weeks.

In the other, of the 20 patients enrolled, eight completed the study and remained drug-free for periods ranging from 46 days to 58 days. During those trials and for at least six weeks following their completion, many of the patients reported reduced cravings, beneficial weight gain and other positive behavioral changes, the company said.

Down the road, Catalyst plans to develop CPP-109 for methamphetamine addiction, subject to the availability of funding for that purpose. The company sees its platform as a springboard to produce therapies for other addictions to nicotine, prescription pain medications, alcohol and marijuana, as well as treatments for related addictive disorders such as obesity and compulsive gambling.

The company was formed almost five years ago, based on research conducted at the Brookhaven National Laboratory in Upton, N.Y.

Through an agreement with that research group, Catalyst has an exclusive worldwide license to nine U.S. patents and two U.S. patent applications relating to the use of vigabatrin for a range of indications, including the treatment of a variety of substance addictions.

Should CPP-109 receive approval, the company would pay Brookhaven $100,000 in the first year, $250,000 in each of the second and third years following approval, and $500,000 per year until the last patent expires. The intellectual property runs out between 2018 and 2020.

Catalyst registered to go public over the summer, filing for a $40.25 million offering. (See BioWorld Today, July 27, 2006.)

The IPO's underwriters include First Albany Capital Inc., the sole book-running lead manager, and Stifel, Nicolaus & Co. Inc., the co-manager. Both New York firms have a 30-day overallotment option on an additional 502,500 shares, which if fully exercised would increase the offering's net proceeds to about $20.5 million.

After the offering, CEO Patrick McEnany would own about 30 percent of Catalyst's outstanding shares, and director Hubert Huckel would control about 14 percent. Previously, the co-founders had a 60 percent stake in the business.