Novartis picks up option for Conatus NASH drug
- Swiss pharma Novartis said Thursday it will pick up an option to license Conatus Pharmaceuticals' mid-stage drug for liver scarring caused by nonalcoholic steatohepatitis, a chronic and more advanced type of fatty liver disease commonly referred to by its acronym, NASH.
- Conatus will receive a $7 million payment from Novartis later this year, a milestone laid out in the companies' December 2016 collaboration and license deal for Conatus' drug, called emricasan. Under initial terms, Novartis paid Conatus $50 million upfront and invested another $15 million though a convertible promissory note.
- Novartis has dipped its toe into NASH drug development. In addition to the Conatus deal, the company inked a partnership with Allergan to test the Irish pharma's experimental cenicriviroc with one of its FXR agonists for treatment of NASH with liver fibrosis.
The option, triggered by Conatus' initiation of the ENCORE-LF Phase 2b trial in NASH cirrhosis, further validates the San Diego biotech's approach, and provides additional financial resources for the company, which has no commercial products.
Novartis' commitment to emricasan will help Conatus fund operations and clinical development through to the end of 2019. The Swiss pharma has also committed to share 50% of the costs of emricasan's Phase 2b trials after the license becomes effective later this year.
Conatus' stock shot up 13% from $8.11 per share to $9.20 a share immediately following the news, but then fell back to close down nearly 5% Thursday.
The Novartis deal has bolstered Conatus stock overall, though, and lays out a roadmap towards potential commercialization of emricasan in the future. Per the deal, Conatus retains an option to co-commercialize the drug in the U.S., along with any combination therapies, on a cost- and revenue-sharing basis.
Multiple Phase 2b trials are laid out, including one in NASH fibrosis, two in NASH cirrhosis and a fourth in post-liver transplant hepatitis C virus patients.
If those turn up positive, Novartis is on the hook for Phase 3 studies of the drug as a monotherapy or in combination with its own FXR agonists.
The entire NASH space is heating up at the moment, with big pharma showing a greater interest in several biotech's advancing clinical development.
Gilead and Bristol-Myers Squib have also made investments in the field, and Johnson & Johnson has picked up an exclusive option to acquire Bird Rock Bio, a biotech in early-stage testing of a biologic treatment for fatty liver disease as well as NASH.
Biotechs remain in the mix, with Intercept Pharmaceuticals and French Genfit SA in mid- to late-stage testing of their respective NASH candidates.
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