Conatus Pharmaceuticals Inc. CNAT announced top-line results from a phase IIb ENCORE-LF study on its lead pipeline candidate, emricasan. The mid-stage study, which evaluated emricasan on patients with decompensated nonalcoholic steatohepatitis (NASH) cirrhosis failed to meet its primary endpoint. Consequently, the company has decided to discontinue further development of emricasan in the ENCORE-LF study.
Conatus also announced results from the phase IIb ENCORE-PH program, which evaluated emricasan for a 24-week extension period. Although, results were consistent from the initial 24-week treatment period, the study missed predefined objectives.
Shares of Conatus have plummeted 83.2% year to date against the industry’s increase of 16%.
Notably, in the second quarter of 2017, Conatus initiated the randomized, double-blind phase IIb ENCORE-LF analysis. In February 2019, the company completed enrolling patients in the study. Recruited subjects were randomized 1:1:1 to receive 5 mg of emricasan, 25 mg of emricasan or placebo twice daily for 48 weeks. The investigation was conducted across 73 sites in the United States.
The primary endpoint was event-free survival or ≥4 points advancement in Model for End-stage Liver Disease (MELD) score. However, the candidate fell short of its primary goal and did not show statistically significant differences in event rates between the treatment and placebo arms and failed to indicate any potential treatment effect.
Last December, Conatus announced top-line results from the ENCORE-PH probe. In the same, emricasan demonstrated clinically meaningful treatment effects on compensated NASH cirrhosis patients, who face the peril of passing to the decompensation state. However, the study failed to meet its primary endpoint. Following a post hoc analysis, emricasan showed a clinically meaningful treatment impact compared with placebo.
Per this press release, the outcomes following the 24-week extension period too did not show statistically significant differences between treatment and the placebo arm.
Earlier this March, Conatus announced that the ENCORE-NF study, which evaluated emricasan for treating patients with biopsy-confirmed NASH and liver fibrosis, could not achieve the primary goal as it lacked the desired effect on these earlier-stage NASH fibrosis patients. Shares of the company significantly dropped back then.
Failure of all these studies significantly hurt the stock as the shares have been persistently down for a considerable amount of time.
We would like to remind investors that Conatus acquired the worldwide rights to emricasan from Pfizer PFE in July 2010. In December 2016, Conatus signed an exclusive option, collaboration and license agreement with Novartis NVS for the worldwide development and commercialization of emricasan.
In a separate press release, the company announced that it is planning to explore and evaluate strategic alternatives to increase its shareholder value. The company has appointed an independent investment bank and financial services company — Oppenheimer & Co., Inc — as its financial advisor for assistance.
Conatus has also decided to slash staff headcount by almost 40% as part of its restructuring plan and suspend the development of its preclinical candidate — CTS-2090 — which was being assessed for treating autoinflammatory diseases. Conatus updated its financial guidance and now expects the 2019-end balance in the range of $10-$15 million.
Zacks Rank & Key Pick
Conatus currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the healthcare sector is Acorda Therapeutics, Inc. ACOR, which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Acorda’s loss per share estimates have been narrowed 6.5% for 2019 and 6.9% for 2020 over the past 60 days.
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