Catalyst Biosciences, Inc. (CBIO) is a biopharmaceutical company that has undergone a significant transformation in recent years. Once focused on the development of protease-based therapeutics, the company has pivoted its strategy to pursue new opportunities in the pharmaceutical landscape.

Business Overview

Catalyst Biosciences was previously engaged in the research and development of product candidates from its protein engineering platform. In 2022, the company made the strategic decision to cease its research and development activities and explore alternative options to monetize its assets. This led to the sale of its complement portfolio, including CB 2782-PEG and CB 4332, as well as its complement-related intellectual property, to Vertex Pharmaceuticals Inc. for $60.0 million in cash consideration.

In December 2022, Catalyst Biosciences executed an asset purchase agreement to acquire the F351 Assets from GNI Group Ltd. and GNI Hong Kong Limited. The F351 Assets include 15 issued or pending patents and patent applications outside of the People's Republic of China, with the last acquired issued patent expected to expire in August 2037. Concurrent with this acquisition, the company entered into a business combination agreement to acquire an indirect controlling interest in Beijing Continent Pharmaceutical Co., Ltd. ("BC"), a commercial-stage pharmaceutical company based in China.

Financials

For the fiscal year ended December 31, 2022, Catalyst Biosciences reported annual net income of -$8,242,000, annual revenue of $794,000, annual operating cash flow of -$33,096,000, and annual free cash flow of -$33,096,000. The company's financial performance has been impacted by its strategic shift and the divestiture of its legacy assets.

In the first nine months of 2023, Catalyst Biosciences reported a net loss of $3,788,000 and no revenue. The company's operating cash flow for the nine-month period was -$11,904,000, and its free cash flow was also -$11,904,000. These results reflect the company's ongoing transition and the costs associated with the acquisition of the F351 Assets and the pending business combination with BC.

For the third quarter of 2023, Catalyst Biosciences reported a net loss of $1,576,000 and no revenue. The company's operating cash flow for the quarter was -$3,980,000, and its free cash flow was also -$3,980,000. These results demonstrate the continued impact of the company's strategic shift and the costs associated with its ongoing initiatives.

Liquidity

As of September 30, 2023, Catalyst Biosciences had $2,228,000 in cash and cash equivalents. The company's primary uses of cash have been to fund operating expenses and general and administrative expenditures. Given the uncertainties related to the pending business combination with BC, there is substantial doubt about the company's ability to continue as a going concern for at least 12 months following the issuance of its latest financial statements.

Risks and Challenges

Catalyst Biosciences faces several risks and challenges as it navigates its transformation. The successful completion of the business combination with BC is critical to the company's future, and any delays or failures in this process could have a significant impact on its financial position and operations. Additionally, the company's ability to secure additional funding to support its ongoing initiatives is a key concern, as its current cash position may not be sufficient to sustain its operations in the long term.

Outlook

Catalyst Biosciences has not provided any formal guidance or outlook for the future. The company's focus remains on the successful completion of the business combination with BC and the integration of the F351 Assets into its portfolio. The outcome of these initiatives will be crucial in determining the company's long-term prospects and its ability to generate value for shareholders.

Conclusion

Catalyst Biosciences is at a critical juncture in its evolution, having shifted its strategic focus to pursue new opportunities in the pharmaceutical industry. The company's recent acquisitions and pending business combination represent significant milestones, but the successful execution of these initiatives will be essential to its future success. Investors should closely monitor the company's progress and the potential risks and challenges it faces as it navigates this transformative period.