- Shares of Conatus Pharmaceuticals hit an all-time low Tuesday morning, following an announcement the company is restructuring and looking at "strategic alternatives."
- The restructuring includes a headcount reduction of roughly 40% and suspension of development of CTS-2090, an experimental drug in preclinical testing for inflammasome diseases. As of Feb. 26, Conatus had 17 employees in R&D and 14 in general and administrative positions, for a total of 31.
- Conatus estimates about $1.5 million in restructuring costs. For 2019, it now forecasts a net balance of $10 million to $15 million in cash, cash equivalents and marketable securities.
Tuesday's announcement adds to a 14-month string of clinical setbacks that progressively knocked down Conatus' share value.
Last April, the San Diego-based company disclosed its lead compound, named emricasan, failed a Phase 2b proof-of-concept study in liver transplant patients with fibrosis or cirrhosis. By December, the drug had missed the primary endpoint of another Phase 2b study testing it in patients with cirrhosis due to nonalcoholic steatohepatitis, or NASH, and severe portal hypertension.
Wall Street analysts predict NASH, a type of fatty liver disease, will become a multi-billion-dollar market opportunity over the next decade. Conatus is keen on pushing emricasan into the space, but the likelihood of that happening has diminished with the data released in December — as well as results from two more recent failed NASH studies, including one that was announced alongside the restructuring.
It looks like Conatus will continue to invest in emricasan, given it is now the only drug left in the company's pipeline. As for CTS-2090, CEO Steven Mento said Conatus will explore a "variety of opportunities."
Notably, Conatus didn't explicitly say whether a sale of either CTS-2090 or the entire company is on the table — though that's typically considered in strategic reviews. Whether there's a potential buyer for either remains to be seen.
Conatus shares were down 62% at market's open Tuesday, trading at 35 cents apiece.