Company Update (NASDAQ:CNAT): Conatus Pharmaceuticals Inc Reports Second Quarter 2015 Financial Results and Program Updates


Conatus Pharmaceuticals Inc (NASDAQ:CNAT), a biotechnology company focused on the development and commercialization of novel medicines to treat liver disease, today announced financial results for the quarter and six months ended June 30, 2015, and provided updates on its clinical development programs.

Financial Results

The net loss for the second quarter of 2015 was $6.1 million compared with $5.3 million for the second quarter of 2014. The net loss for the first six months of 2015 was $12.0 million compared with $10.5 million for the first six months of 2014.

Research and development expenses were $4.1 million for the second quarter of 2015 compared with $3.5 million for the second quarter of 2014. Research and development expenses were $8.0 million for the first six months of 2015 compared with $7.1 million for the first six months of 2014. The increases in research and development expenses were primarily due to an increase in external emricasan clinical trial costs and higher personnel costs, including noncash stock-based compensation expense, partially offset by a decrease in external emricasan manufacturing costs.

General and administrative expenses were $2.0 million for the second quarter of 2015 compared with $1.8 million for the second quarter of 2014. General and administrative expenses were $4.1 million for the first six months of 2015 compared with $3.4 million for the first six months of 2014. The increases in general and administrative expenses were primarily due to higher personnel costs, including noncash stock-based compensation expense.

Including $21.4 million of net proceeds from a public offering of common stock completed in April 2015, cash, cash equivalents and marketable securities were $48.1 million at June 30, 2015, compared with $37.1 million at December 31, 2014. The company is projecting a year-end 2015 balance of cash, cash equivalents and marketable securities in the mid $20 million range.

Program Updates

Conatus is developing its lead compound, emricasan, for the treatment of patients with chronic liver disease including three active Phase 2 clinical trials:

  • POLT-HCV-SVR: post-orthotopic liver transplant (POLT) recipients with liver fibrosis or cirrhosis post-transplant as a result of recurrent hepatitis C virus (HCV) infection who have successfully achieved a sustained viral response (SVR) following HCV antiviral therapy;
  • Portal Hypertension: patients with liver cirrhosis (LC) and portal hypertension (PH); and
  • Liver Cirrhosis: patients with LC and Model for End-stage Liver Disease (MELD) scores of 11 to 18.

POLT-HCV-SVR Trial Update

In May 2014, the company initiated a double-blind, placebo-controlled Phase 2b clinical trial in approximately 60 POLT-HCV-SVR patients who will receive 25 mg of emricasan or placebo orally twice daily for two years. In June 2015, the company announced initial pre-treatment biomarker and histology data from the trial, confirming that the underlying mechanisms addressed by emricasan are active, and that the target population may be suitable for demonstrating potential histology benefits. Consistent with the company’s initial registration focus on the development of a treatment for cirrhosis, the trial was expanded in early 2015 to include patients with Ishak 5 (early-stage cirrhosis) and further expanded in mid-2015 to include patients with Ishak 6 (advanced-stage cirrhosis). The primary endpoint in this exploratory proof-of-concept trial is the change in the Ishak Fibrosis Score compared with placebo. The trial will also evaluate histological markers of inflammation, key serum biomarkers, and the safety and tolerability of emricasan. Enrollment of patients is on track for release of final top-line results expected in the first half of 2018.

Portal Hypertension Trial Update

In September 2014, the company initiated an exploratory, open-label Phase 2 clinical trial in approximately 20 patients with LC of mixed etiologies and PH confirmed by hepatic venous pressure gradient (HVPG) procedure prior to enrollment. Patients received 25 mg of emricasan orally twice daily for 28 days. The co-primary endpoints are the changes from baseline in HVPG, which is a direct measurement of blood pressure in the portal vein, and cleaved Cytokeratin-18 (cCK18), a mechanism-specific biomarker that increases with liver disease severity and is associated with biologically active microparticles that can be both proinflammatory and vasoactive. Secondary endpoints include changes from baseline in MELD score and Child-Pugh-Turcotte (CPT) score. Patients in this trial had mild liver function impairment and most patients were classified as CPT-A at baseline. The trial included patients with lower risk of clinical liver decompensation, with baseline HVPG values of less than 12 mmHg, and patients with higher risk of clinical liver decompensation, with baseline HVPG values greater than or equal to 12 mmHg. The trial was designed to determine whether emricasan could decrease elevated portal vein pressures in a short period of time, unlike the lengthy periods expected to be required to affect the structural damage in the liver resulting from fibrosis or cirrhosis. Enrollment in this trial was completed during the second quarter of 2015, and top-line results are expected to be available in the third quarter of 2015.

Liver Cirrhosis Trial Update

Also in September 2014, the company initiated a double-blind, placebo-controlled Phase 2 clinical trial in approximately 80 patients with LC of mixed etiologies, mild to moderate liver impairment and a MELD score of 11 to 18 during the screening period. In the first stage, which is double-blind and placebo-controlled, patients were randomized 1:1 to receive either 25 mg of emricasan or placebo orally twice daily for three months. The primary endpoint is change from baseline in cCK18. Secondary endpoints include changes from baseline in MELD score and CPT score. These secondary endpoints reflect blood chemistry related to organ function such as bilirubin, creatinine and blood clotting times as well as related clinical indicators such as ascites and encephalopathy that worsen with declining organ function. In the second stage, which is open-label, patients who complete the first stage of the trial, either on treatment or placebo, may receive emricasan for up to an additional three months. Most of the patients in this trial were classified as CPT-B. Enrollment in this trial was completed during the second quarter of 2015, and initial results from the first stage are expected to be available in the fourth quarter of 2015. (Original Source)

Shares of Conatus Pharmaceuticals closed today at $4.31, down $0.10 or 2.27%. CNAT has a 1-year high of $11.74 and a 1-year low of $4.32. The stock’s 50-day moving average is $5.21 and its 200-day moving average is $5.79.

On the ratings front, Conatus Pharmaceuticals has been the subject of a number of recent research reports. In a report issued on July 1, Brean Murray Carret analyst Difei Yang reiterated a Buy rating on CNAT, with a price target of $13, which represents a potential upside of 195.5% from where the stock is currently trading. Separately, on April 27, MLV & Co.’s Vernon Bernardino maintained a Buy rating on the stock and has a price target of $16.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Difei Yang and Vernon Bernardino have a total average return of 23.6% and -10.4% respectively. Yang has a success rate of 61.8% and is ranked #125 out of 3724 analysts, while Bernardino has a success rate of 30.8% and is ranked #3632.

Overall, 5 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $12.00 which is 172.7% above where the stock opened today.

Conatus Pharmaceuticals Inc is a biotechnology company focused on the development and commercialization of novel medicines to treat liver disease.