Conatus heralds success for its NASH drug and plots Phase III

San Diego's Conatus Pharmaceuticals ($CNAT) said its in-development liver disease drug came through in a Phase II trial, results the company believes create a path to late-stage development.

The drug is designed to treat nonalcoholic fatty liver disease (NAFLD) and its subset, nonalcoholic steatohepatitis (NASH), which is a prevalent liver-scarring disorder with no approved therapies. In a midstage study on 38 NAFLD patients, Conatus' emricasan reduced levels of the liver enzyme alanine amino transferase (ALT) by 39% after 28 days, a statistically significant improvement over the 14% reduction with placebo. The drug also met its secondary goals of reducing serum levels of three other chemical biomarkers of NAFLD, Conatus said, and emricasan charted no dose-limiting toxicities or drug-related adverse events in the study.

However, unlike NASH leader Intercept Pharmaceuticals ($ICPT), Conatus didn't test whether its drug improved actual disease scores or reduced tissue fibrosis, instead relying on surrogate endpoints. But the company contends that emricasan's performance against those chemical biomarkers is a strong sign the drug can reduce the inflammation and cell death that characterize NAFLD and NASH. And investors would seem to agree, sending Conatus' shares up roughly 30% on Thursday morning.

Now Conatus is planning to home in on NAFLD patients with liver cirrhosis due to NASH, a particularly dire population. The FDA and Association for the Study of Liver Diseases have indicated that surrogate endpoints like serum ALT levels could be grounds for accelerated approval in that indication, according to Conatus, and the company says its mid-stage data merit a Phase III effort for emricasan.

"With this comprehensive information package, we are prepared for planned discussions with regulatory authorities to seek guidance on the appropriate use and analysis of these endpoints in registrational trials including patients with NASH cirrhosis," Executive Vice President David Hagerty said in a statement.

Elsewhere in NASH, Intercept Pharmaceuticals is leading the way with its obeticholic acid, an FDA-designated breakthrough therapy on its way to Phase III. Gilead Sciences ($GILD) is paying $470 million to get its hands on a Phase II treatment for the disease, and the hepatitis C experts at Enanta Pharmaceuticals ($ENTA) are entering the field. Shire ($SHPG) is also toiling in the space after buying Lumena Pharmaceuticals for up to $260 million and getting its hands on a Phase I NASH treatment, trailed by La Jolla Pharmaceuticals ($LJPC), Raptor Pharmaceuticals ($RPTP) and others.

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