Conatus Pharmaceuticals Inc. (Nasdaq:CNAT) today announced
financial results for the fourth quarter and full year ended
December 31, 2016, and provided updates on its clinical development
programs. Conatus is developing emricasan, its first-in-class,
orally active pan-caspase inhibitor, for the treatment of patients
with chronic liver disease, with an initial focus on cirrhosis
driven by nonalcoholic steatohepatitis (NASH). The company is
conducting a parallel set of EmricasaN, a Caspase inhibitOR, for
Evaluation (ENCORE) clinical trials in various patient populations.
In December 2016, Conatus entered into an exclusive option,
collaboration and license agreement with Novartis for the global
development and commercialization of emricasan.
Financial ResultsTotal revenues were $0.8
million for the fourth quarter and full year 2016 compared with
$0.0 million for the fourth quarter and full year 2015. Total
revenues for the fourth quarter and full year 2016 consisted of
collaboration revenue related to the Novartis agreement.
Research and development expenses were $6.5 million for the
fourth quarter of 2016 compared with $4.2 million for the fourth
quarter of 2015. Research and development expenses were $20.3
million for the full year 2016 compared with $16.3 million for the
full year 2015. The full year increase in research and development
expenses was primarily due to an increase in external costs related
to emricasan and higher personnel costs.
General and administrative expenses were $3.5 million for the
fourth quarter of 2016 compared with $1.8 million for the fourth
quarter of 2015. General and administrative expenses were $10.3
million for the full year 2016 compared with $7.8 million for the
full year 2015. The full year increase in general and
administrative expenses was primarily due to higher consulting and
legal fees and higher personnel costs.
The net loss for the fourth quarter of 2016 was $9.1 million
compared with $6.0 million for the fourth quarter of 2015. The net
loss for the full year 2016 was $29.7 million compared with $24.1
million for the full year 2015.
In December 2016, Conatus received an upfront payment of $50.0
million under the Novartis agreement. In January 2017, Conatus
voluntarily prepaid a $1.0 million note to Pfizer Inc. which was
scheduled to mature in 2020. In February 2017, Conatus issued a
$15.0 million convertible promissory note to Novartis.
Cash, cash equivalents and marketable securities were $77.0
million at December 31, 2016, compared with $36.5 million at
December 31, 2015, and a projected year-end 2017 balance of between
$45 million and $55 million. The company believes that current
financial resources, together with the anticipated license option
exercise milestone payment and expense reimbursements related to
the Novartis agreement, are sufficient to maintain operations and
ongoing clinical development activities through the end of
2019.
Program UpdatesDuring 2016, the company
announced:
- positive results from the three-month, double-blind,
placebo-controlled first stage and six-month open-label second
stage of its Phase 2 Liver Cirrhosis clinical trial;
- the initiation of its Phase 2b ENCORE-NF (NASH Fibrosis)
clinical trial;
- U.S. Food and Drug Administration (FDA) Fast Track designation
for the development of emricasan in patients with liver cirrhosis
caused by NASH;
- the initiation of its Phase 2b ENCORE-PH (Portal Hypertension)
clinical trial; and
- the option, collaboration and license agreement for emricasan
with Novartis.
Novartis AgreementUnder the terms of the
agreement with Novartis, Conatus is eligible to receive $7.0
million following the exercise of the license option, and to
receive significant additional 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 reimburse 50% of Conatus’ Phase 2b
emricasan development expenses after the option exercise, and 100%
of certain expenses for required registration-supportive
nonclinical activities. Novartis will assume full responsibility
for emricasan’s Phase 3 development and all combination product
development.
Conatus has three ongoing emricasan Phase 2b clinical
trials:
- ENCORE-PH: A randomized, double-blind,
placebo-controlled Phase 2b clinical trial initiated in November
2016 evaluating dosing, efficacy and safety of emricasan in
approximately 240 patients with compensated or early decompensated
liver cirrhosis caused by nonalcoholic steatohepatitis (NASH), and
severe portal hypertension confirmed by hepatic venous pressure
gradient (HVPG) of ≥12 mmHg at baseline. Results after 24 weeks of
twice-daily treatment with emricasan or placebo are expected in
2018.
- ENCORE-NF: A randomized, double-blind,
placebo-controlled Phase 2b clinical trial initiated in January
2016 evaluating potential improvements in fibrosis and
steatohepatitis in approximately 330 patients with NASH fibrosis.
Results after 18 months of twice-daily treatment or placebo are
expected in 2018.
- POLT-HCV-SVR: A randomized,
double-blind, placebo-controlled Phase 2b clinical trial initiated
in May 2014 evaluating potential improvements in Ishak Fibrosis
Score in approximately 60 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. Results after two years of twice-daily
treatment or placebo are expected in the first half of 2018.
Conatus plans to initiate an additional emricasan Phase 2b
clinical trial in the second quarter of 2017:
- ENCORE-LF: A planned randomized,
double-blind, placebo-controlled Phase 2b clinical trial to assess
a composite clinical endpoint, related serum biomarkers and
laboratory parameters associated with liver function, and chronic
administration safety information in patients with decompensated
NASH cirrhosis and baseline Model for End-stage Liver Disease
(MELD) scores of ≥15. Initiation of the ENCORE-LF (Liver Function)
clinical trial is a trigger for Novartis to exercise its license
option.
Conatus also plans to roll out pipeline development
opportunities beyond emricasan later in 2017.
Conference Call and Audio WebcastConatus will
host a conference call and audio webcast at 4:30 p.m. Eastern Time
today to discuss the financial results and provide a corporate
update. To access the conference call, please dial 877-312-5857
(domestic) or 970-315-0455 (international) at least five minutes
prior to the start time and refer to conference ID 75917141. A live
and archived audio webcast of the call will also be available in
the Investors section of the Conatus website at
www.conatuspharma.com.
About Conatus PharmaceuticalsConatus is a
biotechnology company focused on the development and
commercialization of novel medicines to treat liver disease.
Conatus is developing its lead compound, emricasan, for the
treatment of patients with chronic liver disease. Emricasan is
designed to reduce the activity of enzymes that mediate
inflammation and apoptosis. Conatus believes that by reducing the
activity of these enzymes, emricasan has the potential to interrupt
the disease progression across the spectrum of liver disease. For
additional information, please visit www.conatuspharma.com.
Forward-Looking StatementsThis press release
contains forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical facts contained in
this press release are forward looking statements, including
statements regarding: projected year-end cash balance; the
sufficiency of current financial resources to maintain operations
and ongoing clinical development activities through 2019; payments
and events contingent on Novartis’ exercise of the option; the
exercisability of Novartis’ option; eligibility to receive payments
related to development, regulatory and commercial milestones and
royalties; the timelines to announce results from the POLT-HCV-SVR,
the ENCORE-NF, and the ENCORE-PH trials; the plan and details to
initiate the ENCORE-LF trial in the second quarter of 2017; plans
to announce pipeline development opportunities in 2017; and
emricasan's potential to interrupt the disease progression across
the spectrum of liver disease. In some cases, you can identify
forward-looking statements by terms such as “may,” “will,”
“should,” “expect,” “plan,” “anticipate,” “could,” “intend,”
“target,” “project,” “contemplates,” “believes,” “estimates,”
“predicts,” “potential” or “continue” or the negative of these
terms or other similar expressions. These forward-looking
statements speak only as of the date of this press release and are
subject to a number of risks, uncertainties and assumptions,
including: Conatus’ ability to successfully enroll patients
in and complete its ongoing and planned clinical trials; the option
being exercised by Novartis and Novartis continuing development and
commercialization of emricasan; Conatus’ reliance on third parties
to conduct its clinical trials, including the enrollment of
patients, and manufacture its clinical drug supplies of emricasan;
potential adverse side effects or other safety risks associated
with emricasan that could delay or preclude its approval; results
of future clinical trials of emricasan; Conatus’ ability to obtain
additional financing in order to co-commercialize emricasan or
develop other compounds; and those risks described in Conatus’
prior press releases and in the periodic reports it files with the
Securities and Exchange Commission. The events and
circumstances reflected in Conatus’ forward-looking statements may
not be achieved or occur and actual results could differ materially
from those projected in the forward-looking statements. Except as
required by applicable law, Conatus does not plan to publicly
update or revise any forward-looking statements contained herein,
whether as a result of any new information, future events, changed
circumstances or otherwise.
Conatus Pharmaceuticals Inc. |
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Selected Condensed Financial
Information |
|
(Unaudited) |
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|
|
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|
|
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Three Months Ended |
|
Twelve Months Ended |
|
Statements of
Operations |
|
December 31, |
|
December 31, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
Collaboration revenue |
|
$ |
799,046 |
|
|
$ |
- |
|
|
$ |
799,046 |
|
|
$ |
- |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research
and development |
|
|
6,523,261 |
|
|
|
4,240,620 |
|
|
|
20,293,632 |
|
|
|
16,297,617 |
|
|
General
and administrative |
|
|
3,453,474 |
|
|
|
1,799,346 |
|
|
|
10,337,182 |
|
|
|
7,833,085 |
|
|
Total operating
expenses |
|
|
9,976,735 |
|
|
|
6,039,966 |
|
|
|
30,630,814 |
|
|
|
24,130,702 |
|
|
Loss from
operations |
|
|
(9,177,689 |
) |
|
|
(6,039,966 |
) |
|
|
(29,831,768 |
) |
|
|
(24,130,702 |
) |
|
Other income
(expense) |
|
|
54,187 |
|
|
|
(4,196 |
) |
|
|
98,327 |
|
|
|
(17,924 |
) |
|
Net loss |
|
$ |
(9,123,502 |
) |
|
$ |
(6,044,162 |
) |
|
$ |
(29,733,441 |
) |
|
$ |
(24,148,626 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net loss per share,
basic and diluted |
|
$ |
(0.35 |
) |
|
$ |
(0.30 |
) |
|
$ |
(1.31 |
) |
|
$ |
(1.30 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding used in computing |
|
|
|
|
|
|
|
|
|
net loss
per share, basic and diluted |
|
|
25,994,155 |
|
|
|
19,834,477 |
|
|
|
22,649,911 |
|
|
|
18,617,537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, |
|
Balance Sheets |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
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|
|
|
|
|
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Assets |
|
|
|
|
|
|
|
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Current assets: |
|
|
|
|
|
|
|
|
Cash, cash equivalents and marketable securities |
|
|
|
|
$ |
77,015,124 |
|
|
$ |
36,508,109 |
|
|
Other receivables |
|
|
|
|
|
2,500,000 |
|
|
|
- |
|
|
Prepaid and other current assets |
|
|
|
|
|
937,436 |
|
|
|
1,982,031 |
|
|
Total current assets |
|
|
|
|
|
80,452,560 |
|
|
|
38,490,140 |
|
|
Property and equipment, net |
|
|
|
|
|
261,446 |
|
|
|
344,734 |
|
|
Other assets |
|
|
|
|
|
1,609,834 |
|
|
|
892,394 |
|
|
Total assets |
|
|
|
|
$ |
82,323,840 |
|
|
$ |
39,727,268 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders'
equity |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable and other accrued expenses |
|
|
|
|
$ |
7,662,796 |
|
|
$ |
3,982,698 |
|
|
Current
portion of deferred revenue |
|
|
|
|
|
|
30,897,192 |
|
|
|
- |
|
|
Note payable |
|
|
|
|
|
1,000,000 |
|
|
|
- |
|
|
Total
current liabilities |
|
|
|
|
|
|
39,559,988 |
|
|
|
3,982,698 |
|
|
Deferred
revenue, less current portion |
|
|
|
|
|
|
20,803,762 |
|
|
|
- |
|
|
Note payable |
|
|
|
|
|
- |
|
|
|
1,000,000 |
|
|
Deferred
rent |
|
|
|
|
|
|
171,544 |
|
|
|
204,224 |
|
|
Stockholders' equity |
|
|
|
|
|
21,788,546 |
|
|
|
34,540,346 |
|
|
Total liabilities and stockholders' equity |
|
|
|
|
$ |
82,323,840 |
|
|
$ |
39,727,268 |
|
|
CONTACT: Alan Engbring
Conatus Pharmaceuticals Inc.
(858) 376-2637
aengbring@conatuspharma.com
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