Will Conatus Liver Disease Candidate Drive Long-Term Growth?

On Sep 26, 2017, we issued an updated report on Conatus Pharmaceuticals Inc. (NASDAQ:CNAT) .

With no approved product in Conatus’s portfolio at the moment, the company is yet to generate revenues. However, it is focused on developing the lead candidate emricasan, an orally active pan-caspase protease inhibitor.

Emricasan is being developed for treating patients with chronic liver disease. There are now four ongoing emricasan phase IIb clinical studies. These comprise three ENCORE studies on patients with fibrosis or cirrhosis caused by nonalcoholic steatohepatitis (NASH) in various patient populations and a fourth ENCORE program on POLT-HCV-SVR patients. Data from all these studies are expected to be released between 2018 and 2019.

Results of the combined ENCORE studies are expected to support the undertrial candidate’s efficacy and safety in phase III. Further, the strength of this outcome would determine discussions with regulatory agencies to secure a potential accelerated approval for the candidate.

With no treatments currently sanctioned for NASH fibrosis, the market opportunity for emricasan seems significant. NASH is predicted to be the leading cause for liver transplantation by 2020.

However, emricasan is still quite a few years away from entering the market, if at all. Any setback in developing emricasan will pull the stock down substantially.

Notably, several companies are working to develop treatments for NASH namely, Allergan plc (NYSE:AGN) , Intercept Pharmaceuticals (NASDAQ:ICPT) , Galectin Therapeutics and Enanta Pharmaceuticals (NASDAQ:ENTA) among others. Hence, emricasan is expected to face some intense competition once approved.

Another candidate in the company’s portfolio other than emricasan is IDN-7314, currently undergoing a phase II assessment for treatment of primary sclerosing cholangitis (PSC). In June, the FDA had granted Orphan Drug Designation (ODD) to IDN-7314 for the indication.

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