Let's give Saab the benefit of history here and assume its reasons for cancelling development on the Catherina were the right ones. Designed by Sixten Sason, the man who literally penned the lines we most closely associate with Saab, the Catherina was designed as a personal sports car and competed against the MFI 13 prototype for what would become the Sonnett II coupé.
The first Sonnetts were a pretty awesome series of prototype race cars, and they helped show the world that Saab mechanicals worked pretty well in a more sporty chassis. One thing you've got to give Saab credit for is its willingness to listen to enthusiasts and other owners who suggested the possible circuit racing credentials of its components.
While the MFI-13 was a little more of an extreme sports coupe and rather, let's face it, dorky-looking, the Catherina beat even Porsche to the punch with its targa top. Based on the Saab 96, Paul Niedermeyer says at curbsideclassic.com that the Catherina was more of a sporty car based on a member of the normal lineup, whereas the MFI-13 was closer in design to the original Sonnett and what would later become the Sonnett II.
Completed in 1965—yes, this is another from the '60s—various sources online cite the car's "roof-mounted" headlights, but I can't seem to find any photographic evidence for them.
It's not a bad-looking car, eh? Niedermeyer also rightfully mentions its similarities with the Datsun Fairlady Z, and I agree—especially from the front 3/4. But again, Saab had its reasons for cancelling the car…