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Conatus Shares Fall By More Than 50% After Midstage Study Shows NASH Candidate Lagged Placebo

Shanthi Rexaline

Shares of microcap biotech Conatus Pharmaceuticals Inc (NASDAQ: CNAT) are heading crashing following the release of results from a midstage trial of its non-alcoholic steatohepatitis candidate.

What Happened

Conatus, which is developing emricasan along with Novartis AG (NYSE: NVS) for treating patients with biopsy-confirmed NASH and liver fibrosis, released top-line results from a Phase 2b study that showed the candidate did not have the desired effect in the earlier-stage NASH fibrosis patients.

The primary endpoint of the study dubbed ENCORE-NF was a one or more CRN fibrosis stage improvement with no worsening of steatohepatitis compared with placebo at week 72.

"The response rates in the 5 mg emricasan, 50 mg emricasan and placebo treatment groups were 11.2 percent, 12.3 percent and 19 percent, respectively," the company said in an  8-K filing with the SEC.

Emricasan is an orally active pan-capase inhibitor which is said to reduce the activity of enzymes that mediate inflammation and apoptasis, with the potential to interrupt the progression of a variety of diseases.

In the ENCORE-NF study, 318 patients with biopsy-confirmed NASH CRN fibrosis stages F1-F3 were treated, randomizing them 1:1:1 to receive 5mg of emricasan, 50mg of emricasan or placebo twice daily for 72 weeks.

Conatus, however, said emricasan demonstrated biomarker activity across a broad spectrum of liver disease, warranting continued evaluation in more-advanced stage NASH cirrhosis patients.

It was also generally well-tolerated in the trial.

Why It's Important

NASH has no FDA-approved treatment, and R&D in this area is fraught with risk. Incidentally, Gilead Sciences, Inc. (NASDAQ: GILD) failed to ace a late-stage trial evaluating its NASH candidate selonsertib in February.

Another leading contender in the NASH race,  Intercept Pharmaceuticals Inc (NASDAQ: ICPT), reported positive results for a Phase 3 study of its NASH candidate Ocaliva, chemically obeticholic acid.

What's Next

Conatus said it expects clinical results outcomes from the ENCORE-LF liver function trial in about 210 patients with decompensated NASH cirrhosis in mid-2019. Additionally, results from the ENCORE-PH portal hypertension trial evaluating 263 patients with NASH cirrhosis and severe portal hypertension after 48 weeks of treatment are expected in mid-2019.

The company said it awaits these readouts over the coming months and plans to review the totality of data with partner Novartis in deciding the appropriate path forward.

Conatus shares were plummeting 55.84 percent to $1.28 at the time of publication Friday. 

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