After NASH flops, Conatus becomes Histogen via reverse merger

The combined company of Conatus Pharma and Histogen expects its capital to carry it into 2021. (Pixabay)

After its Novartis-partnered nonalcoholic steatohepatitis (NASH) drug failed a third midphase trial, Conatus Pharma was in trouble. It unveiled a plan to lay off 40% of its staffers and find “strategic alternatives” to stay afloat. Now, the company has found its lifeline—a reverse merger with regenerative medicine player Histogen. 

“After completing a comprehensive review of multiple strategic alternatives, we determined that the proposed merger with Histogen would provide the best opportunity for Conatus shareholders moving forward,” said Conatus CEO and co-founder Steven Mento, Ph.D., in a statement. “We believe that Histogen’s clinical-stage dermatological and orthopedic product development programs, under the continued guidance of the established Histogen senior management team, offer significant potential to drive future value for the combined company.” 

Histogen’s work is based on its multipotent stem cell platform—multipotent stem cells can develop into multiple kinds of cells but are more limited than pluripotent stem cells, which can become any cell type in the body. The company has one marketed product, a cell conditioned media based on multipotent stem cells and used in skincare products, and three clinical-stage programs for stimulating hair growth, repairing joint cartilage and for use as skin-smoothing dermal fillers. 

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RELATED: Conatus wields ax as Novartis-partnered NASH drug fails again 

The combined company expects its capital to carry it into 2021. In the second quarter this year, Histogen plans to kick off a phase 1b/2a study of its hair growth program, HST 001, for male pattern baldness, which is slated to post top-line data by the end of the year. It will also start a phase 1 study of HST 002 as a dermal filler.  

Later in the year, it will begin a phase 1 study of HST 003, designed to repair articular cartilage of the knee and report top-line data from a phase 1 study testing the ability of HST 002 to smooth nasolabial folds—also called smile lines. 

The merger is slated to close in the second quarter. 

RELATED: 8 programs to watch in NASH: Four letters and a multibillion-dollar opportunity 

“This merger is transformative for Histogen as we look to advance our novel regenerative medicine pipeline,” said Histogen CEO Richard Pascoe in the statement. “We believe the target product profile of our product candidates combined with their market potential provides an opportunity for Histogen to become a leader in the aesthetics and orthopedic medicine markets.” 

Conatus’ fate “serves to underline the risks of NASH,” Vantage wrote in June after its pan-capsase inhibitor, emricasan, failed its third NASH study. Unlike other players in the NASH space that have multiple shots on goal or diversified pipelines, “emricasan was effectively all Conatus had, and similarly exposed Nash players should be looking on with trepidation at the company’s fate,” Vantage wrote.

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