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Blog Coverage: Novartis Exercises Option for Global Development and Commercialization of Conatus Pharmaceuticals’ Drug Emricasan

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Active Wall St. blog coverage looks at the headline from Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) as the Biotech Pharma Company announced on May 04, 2017 that Swiss Pharma major Novartis AG (NYSE: NVS) is exercising its option for an exclusive license for the global development and commercialization of Emricasan, used for treating liver disease NASH Cirrhosis. Novartis had signed an exclusive Option, Collaboration and License Agreement with Conatus for the global development and commercialization of Emricasan in December 2016. The license will become effective once Novartis pays $7 million as option exercise payment to Conatus. The license is expected to be in place by mid-2017 subject to approvals from anti-trust regulators and other closing conditions. Register with us now for your free membership and blog access at:

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One of Conatus Pharma’s competitors within the Biotechnology space, Bioverativ Inc. (NASDAQ: BIVV), reported on May 03, 2017, its financial results for Q1 2017. AWS will be initiating a research report on Bioverativ in the coming days.

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Novartis’s decision to exercise its option follows the initiation of the Phase II b ENCORE-LF (for Liver Function) randomized, double-blind, placebo-controlled clinical trial by Conatus. The ENCORE-LF clinical trial will evaluate the effectiveness of Emricasan in treating patients with decompensated liver cirrhosis caused by non-alcoholic steatohepatitis (NASH).

Commenting on the exercising of option by Novartis, Steven J. Mento, Ph.D., Co-Founder, President and CEO of Conatus said:

“We believe this collaboration provides Emricasan with its best opportunity to advance through the remaining development process toward making this novel treatment available to patients. We remain focused on the timely completion of our Emricasan Phase 2b clinical development program, with expected data readouts beginning in the first half of 2018, and on rolling out independent pipeline development opportunities later in 2017 to build additional long-term value for our shareholders.”

Vas Narasimhan, Global Head, Drug Development and Chief Medical Officer, Novartis added:

“We are pleased to add another important medicine to our liver portfolio with Emricasan, which has shown potential in patients with advanced fibrosis and cirrhosis. We look forward to advancing our broad portfolio of NASH and chronic liver disease programs to address this growing unmet need.”

Conatus’ financial situation with regards to development of Emricasan

So far, Novartis has paid Conatus the following amounts – $50 million as upfront payment in December 2016, $15 million in February 2017 in exchange of convertible promissory note issued to Novartis and the current $7 million as option exercise payment. Apart from this Novartis will also shoulder 50% costs of the four ongoing Phase 2b Emricasan clinical trials being conducted by Conatus, once the license becomes effective. With all these financials in place, Conatus is confident that it will be able to maintain operations and ongoing clinical development activities till end of FY19. Given that Novartis has committed to fund Conatus’s Phase 3 single agent Emricasan development and all combination drug development activities, Conatus is confident that it has enough resources to complete the development of Emricasan both as a single agent for NASH cirrhosis as well as a single agent or part of a combination drug therapy for NASH fibrosis.

Conatus is also entitled to receive certain milestone payments as well as tiered double digit royalties on sales of Emricasan as a single agent and tiered single to double digit royalties on sales of combination drug products containing Emricasan. Conatus holds the option to co-commercialize Emricasan in the US on a cost and revenue sharing basis instead of receiving US and ex-US royalties. This includes the use of Emricasan in combination with other drugs.

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