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Conatus’ Emricasan Misses Primary Endpoint in Mid-Stage Study


Conatus Pharmaceuticals Inc. CNAT announced top-line results from a phase IIb ENCORE-PH study on its lead pipeline candidate, emricasan. The ENCORE-PH study is evaluating emricasan on patients with compensated or early decompensated nonalcoholic steatohepatitis (NASH) cirrhosis and severe portal hypertension.

Following the news on Wednesday, shares of Conatus were down 3.2%. As a matter of fact, the stock has lost 2.6% year to date against the industry’s increase of 0.6%.

Under the program, emricasan demonstrated clinically meaningful treatment effects on compensated NASH cirrhosis patients, who stand at a risk of passing to the decompensation state. The study evaluated the capacity of emricasan to reduce hepatic venous pressure gradient (HVPG) in NASH cirrhosis patients. However, it failed to meet the primary endpoint.

The primary endpoint of the analysis was to observe the change in mean HVPG from baseline to week 24 across the three dosing groups of emricasan as compared to placebo. The phase IIb study enrolled two subgroups of patients — one with compensated NASH cirrhosis and the other with early decompensated NASH cirrhosis. The assessment mostly enrolled compensated NASH cirrhosis patients whose treatment was effective and encouraging.

NASH cirrhosis patients develop the risk of decompensation with progressive increases in HVPG, which might cause in death. Moreover, patients with compensated cirrhosis and severe portal hypertension are at a higher risk of passing on to the decompensated state, which means they can develop complications such as variceal hemorrhage, hepatic encephalopathy and ascites. A minor decrease in HVPG can lower the risk of decompensation in such patients.

Though emricasan has potential to treat such patients and benefiting them, Conatus believes that separate investigations would be needed for compensated and decompensated NASH cirrhosis to confirm its validity.

We would like to remind investors that Conatus acquired the worldwide rights to emricasan from Pfizer PFE in July 2010. Presently, the company has no approved product in its portfolio. In December 2016, Conatus signed an exclusive option, collaboration and license agreement with Novartis NVS for the worldwide development and commercialization of emricasan. Conatus initiated the ENCORE-PH study in November of the same year.

Apart from this, there are two other phase IIb ENCORE studies, which are examining emricasan for the treatment of fibrosis or cirrhosis caused by NASH. The studies are ENCORE-NF (for NASH fibrosis) and ENCORE-LF (for liver function).

Notably, the NASH market holds untapped prospects. People suffering diabetes, high cholesterol or high triglycerides are often diagnosed with the disease, which is feared to become the fastest-growing cause for liver transplant and liver cancer. With no treatments currently available for this indication, the market opportunity seems significant. It has been estimated that by 2025, the worldwide market for NASH treatments would reach a value of $35 billion.

Given this scenario, we believe that emricasan has the power to capture a large market share on approval.

Zacks Rank & Other Stock to Consider

Conatus currently carries a Zacks Rank #2 (Buy). Another top-ranked stock in the same sector is Bovie Medical Corp. BVX, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bovie Medical’s loss per share estimates has been narrowed 21.1% for 2018 and 13.5% for 2019 in the last 60 days. The stock has skyrocketed 161.2% year to date.

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