Novartis adds to NASH pipeline, activating license for Conatus' emricasan

Novartis is building a portfolio of assets in NASH.

Novartis has bolstered its R&D portfolio for NASH, a progressive fatty liver disease tipped to become a $20 billion to $35 billion market in the coming years, with its second deal in a month.

The Swiss pharma giant says it has exercised an option to license emricasan, a midstage NASH (nonalcoholic steatohepatitis) drug developed by Conatus that will slot into its pipeline alongside its own, homegrown NASH candidates, headed by an FXR agonist in phase 2 testing.

The two companies first announced a tie-up on the first-in-class pan-caspase inhibitor drug last December, with Novartis paying $50 million upfront for an option on emricasan and prompting a surge in the microcap's share price. Since then, Novartis has also signed a deal that will see its FXR agonists paired with Allergan's CCR2/CCR5 inhibitor cenicriviroc in clinical trials.

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With emricasan, Novartis is buying into a candidate that has already been studied in several phase 2 trials involving hundreds of patients with a range of liver diseases, with early signs that it can have a positive impact on biomarkers linked to disease progression.

Emricasan blocks caspase enzymes thought to be involved in inflammation and cell death processes that cause fatty liver disease progression, and like cenicriviroc could have potential in combination therapy.

Conatus has just kicked off a phase 2b trial of emricasan—called ENCORE LF—that will enroll around 210 NASH patients who have already gone on to develop severe or "decompensated" liver cirrhosis, in which severe scarring of the liver means there is a greater risk of dying from complications. First results are due in the first six months of 2018, while the ongoing ENCORE-NF phase 2b trial in earlier-stage patients with NASH-related fibrosis (scarring) will also read out next year.

The conversion of the option into a full license puts another $7 million into Conatus' coffers, adding to a $15 million promissory note in February and with the promise of more to come if the NASH drug meets its clinical potential. For now, details of those future biobucks are being kept quiet.

In the meantime, Novartis will also pay half of the costs of ongoing trials and fully fund a phase 3 program if all goes according to plan, and Conatus keeps an option to co-commercialize emricasan in the U.S. market.

Conatus Chief Executive Steve Mento, Ph.D., said recently that there were clear advantages to retaining control of the program through the completion of phase 2b, with Novartis coming in to support the design and conduct of late-stage trials, regulatory filings and commercialization.

The company is planning to use a composite clinical endpoint in ENCORE LF which could lead directly to a phase 3 trial supporting full rather than accelerated approval, said Mento, adding: "We are not aware of any competitive development programs directing patients with decompensated NASH cirrhosis."

Estimates for the prevalence of NASH in industrialized countries range from 3% to 5% of the population, and it is estimated that the disease affects several million people in the U.S. alone, with no approved therapies. It is more common in people who are overweight or who have diabetes, particularly among those who eat a high-fat diet.

It is reckoned that around one in 10 patients with NASH go on to develop cirrhosis, although that could be an underestimate, as often the liver damage is only discovered postmortem. The disease is predicted to become the leading cause of liver transplants by 2020.