2012-09-26 18:10:34 -

By Jake King

Wednesday morning, Catalyst Pharmaceutical Partners (NASDAQ:CPRX) announced that
its previous guidance for top-line trial data at the end of September would be
delayed until November. Shares have in turn declined by 14% today to $1.58. CPRX
anticipates that the data for lead candidate CPP-109 will justify further
development of the product, which the company says demonstrates a better side-
effect profile than existing GABA agonists for short-term addiction treatment.
Since the announcement in mid-July that trial data would be released in late
September, CPRX has experienced a run-up from $.78 to a high of over $2.10. At
the same time, trading volume has picked up considerably for this $48M market
cap. From a daily volume of less than 100K for the five years it's been trading
publicly, CPRX   now averages more than 2M shares daily, attributable in part to a
series of bullish articles on Seeking Alpha that began appearing in July.

Regardless of Catalyst's rise to stardom or CPP-109's prospects, weakness today
presents a good opportunity to enter a short-term trade. If we anticipate that
CPRX was nearing the top of its pre-data run-up, around $2.00, shares should
perform similarly as the pending data release approaches in November. Today's
announcement was little more than a delay of this run-up, but traders oversold
nonetheless. Holding through the data release is inadvisable with so many
investors holding their breath in suspense; anything less than positive results
will create a formidable collapse of the stock price.

In August, we advised a short-term trade in CPRX after a capital raise, also in
expectation of this run-up; that trade could have netted a 33% profit.
Wednesday's weakness is a second chance at this play.

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