Conatus Pharmaceuticals Inc (NASDAQ:CNAT) announced it has entered into an exclusive option, collaboration and license agreement for the global development and commercialization of its first-in-class, orally active pan-caspase inhibitor emricasan with Novartis. Under the terms of the agreement with Novartis, Conatus will receive $50 million upfront, and is eligible to receive $7 million following the exercise of the license option. Conatus can borrow up to $15 million in the form of convertible promissory notes under an investment agreement with Novartis.
Conatus is eligible to receive significant payments if certain development, regulatory and commercial milestones are met. Furthermore, Conatus is eligible to receive tiered double digit royalties on emricasan single agent sales and tiered single to double digit royalties on sales of combination products containing emricasan. Conatus has the option to co-commercialize emricasan in the United States, including combination therapies, on a cost-sharing and revenue-sharing basis in lieu of U.S. royalties and with reduced ex-U.S. royalties. Conatus retains limited rights to develop other pan-caspase inhibitors.
In addition, Novartis will pay 50% of Conatus’ Phase 2b emricasan development costs after the option exercise, including the planned ENCORE-LF trial in decompensated NASH cirrhosis which, under the current development plan consistent with recent regulatory agency recommendations, will be conducted as Phase 2b rather than Phase 2b/3. Phase 2b emricasan development costs also encompass the ongoing ENCORE-PH trial in primarily compensated NASH cirrhosis, POLT-HCV-SVR trial in post-transplant HCV fibrosis and cirrhosis, and ENCORE-NF trial in NASH fibrosis. Novartis will assume full responsibility for emricasan’s Phase 3 development and all combination product development.
“We believe Novartis is ideally suited to collaborate with Conatus in the further development of emricasan for chronic liver diseases,” said Conatus co-founder, President and Chief Executive Officer Steven J. Mento, Ph.D. “This collaboration validates the Conatus emphasis on the initial development of emricasan as a single agent treatment for NASH cirrhosis in both compensated and decompensated patients, and sets the stage for simultaneous development of oral combination therapies for the treatment of NASH fibrosis including emricasan and one of the Novartis internal FXR (Farnesoid X receptor) agonists in clinical development. Their strong commitment to and expertise in liver disease, and proven record of success in drug development provide our best opportunity to deliver these potentially groundbreaking new therapies to chronic liver disease patients with high unmet medical need.”
“For Conatus, the near-term infusion of capital and Phase 2b cost-sharing allows us to fund ongoing operations through 2019. In addition, with the Novartis commitment to fund Phase 3 single agent emricasan development and all combination development activities, the resources are in place to complete emricasan development both as a single agent for NASH cirrhosis and as a single agent or part of a combination therapy for NASH fibrosis,” added Dr. Mento. “The option to co-commercialize in the United States preserves future flexibility for Conatus, and the ability to continue pursuing independent development of other compounds affords us the opportunity to build a portfolio of potential products to drive further long-term value for our shareholders.”(Original Source)
Shares of Conatus Pharmaceuticals closed today at $1.96, up $0.05 or +2.62%. CNAT has a 1-year high of $4.05 and a 1-year low of $1.40. The stock’s 50-day moving average is $1.84 and its 200-day moving average is $1.99.
On the ratings front, Conatus Pharmaceuticals has been the subject of a number of recent research reports. In a report issued on November 15, Roth Capital analyst Sa’ar Yaniv reiterated a Buy rating on CNAT, with a price target of $4, which implies an upside of 104% from current levels. Separately, on November 9, JMP’s Liisa Bayko reiterated a Buy rating on the stock .
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Sa’ar Yaniv and Liisa Bayko have a yearly average loss of -4.0% and a return of 1.3% respectively. Yaniv has a success rate of 42% and is ranked #3284 out of 4283 analysts, while Bayko has a success rate of 45% and is ranked #1824.
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 $6.00 which is 206.1% above where the stock opened today.
Conatus Pharmaceuticals, Inc. is a biotechnology company engages in the development and commercialization of medicines to liver diseases treatment. It focuses in development of Emricasan, orally active protease inhibitor designed to reduce the activity of enzymes that mediate inflammation and cell death or apoptosis for the interruption of progress of liver disease.