Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) saw its shares make a handy gain on Friday after the firm announced an exclusive license agreement with Novartis A.G. (NYSE: NVS). Specifically, the firm is licensing the global development and commercialization of emricasan, which is currently being evaluated for a few different indications. The license became effective on July 5, when Conatus received $7 million, which followed a U.S. Federal Trade Commission (FTC) review.
For some quick background: Emricasan, Conatus’s first-in-class, orally-active pan-caspase inhibitor, has demonstrated activity across a broad spectrum of liver diseases, and it is currently being evaluated in four Phase 2b clinical trials as a potential treatment for liver cirrhosis and fibrosis caused by nonalcoholic steatohepatitis (NASH) or hepatitis C virus infection.
With the secured and anticipated funding provided under the Novartis agreement, along with the retained net proceeds from an underwritten public offering of its common stock completed in May 2017, Conatus believes that current financial resources are sufficient to maintain operations and ongoing clinical development activities through the end of 2019, as well as to fund anticipated pipeline expansion activities.
Steven J. Mento, Ph.D., Conatus co-founder, president and CEO, commented:
We are very pleased to advance to effective license status in our collaboration with Novartis. And we look forward to working together on emricasan’s development, both as a single agent for NASH cirrhosis and as a component of potential drug combinations for NASH fibrosis. In parallel, we are advancing toward a planned announcement later in 2017 of independent pipeline development opportunities aimed at building additional long-term value for our shareholders beyond emricasan.
After this deal, Conatus now projects a balance of cash, cash equivalents and marketable securities of between $55 million and $65 million at year-end 2017, compared with a balance of $77.0 million at year-end 2016.
Shares of Conatus Pharma closed Thursday up at $6.18, with a consensus analyst price target of $16.20 and a 52-week range of $1.45 to $9.40. Following the release, the stock was up just over 2% at $6.33 in early trading indications Friday.