Conatus Pharma aims for $69M IPO to fund liver-disease drug

Conatus Pharmaceuticals has joined a long line of drug developers seeking to go public. The San Diego-based company, which has a lead drug candidate acquired from Pfizer ($PFE), revealed plans on Friday to complete an initial public offering of up to $69 million.

With this deal, investors are treated to another story of a drug developer built around a compound from Pfizer, which has shed many drug candidates amid recent efforts to shrink its R&D budget. Conatus acquired rights to its lead compound emricasan in a 2010 deal with the U.S. drug giant, which had acquired the asset in a 2005 buyout of Idun Pharmaceuticals for $298 million. Pfizer had sidelined the program in 2008 after evidence of inflammation in mice. Yet the former Idun execs now in charge of Conatus have advanced the candidate through mid-stage development.

In the second half of 2013, Conatus aims to begin a late-stage study of emricasan for an orphan condition in hepatitis C patients who develop liver fibrosis after getting liver transplants. The company expects the trial to serve as a Phase III trial for its plans to gain approval in Europe and a Phase IIb trial in the U.S. Its plans also include a Phase IIb study of the compound for next year in patients with chronic liver failure.

Emricasan, an oral caspase protease inhibitor, blocks enzyme involved in inflammation and cell death or apoptosis, which could slow the progression of liver disease. It was the lead asset of Idun, which was co-founded by MIT's H. Robert Horvitz for his pioneering research of apoptosis, according to Conatus. Horvitz is not listed as an adviser or director of Conatus.

Conatus had an accumulated deficit of $61.1 million as of March 31. The company raised money from backers such as Aberdare Ventures, which is its largest shareholder with a 23.3% stake, and Advent, which is the second-largest investor with a 21.1% stake. Roche Finance has a 6.7% stake.

In its acquisition of Idun from Pfizer, Conatus also gained an anticancer compound, which its partner Abbott ($ABT) is developing in mid-stage clinical trials.

Conatus joins an IPO queue that includes Esperion Therapeutics, which is another clinical-stage company with a lead asset acquired from Pfizer. Conatus aims to be traded on the Nasdaq under the symbol "CNAT."

- here's the release
- check out the S-1

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