Conatus Pharmaceuticals Inc (NASDAQ:CNAT) has entered into a collaboration deal with Novartis AG (ADR)(NYSE:NVS) to advance their lead drug emricasan. The company has obtained $50 million up front, and anticipate for up to $650 million in momentous payments down the line.
The highlights
Conatus reported its association in the NASH field with Novartis on December 19. The latter firm has bought worldwide rights to company’ lead drug emricasan under the deal. Both the companies have medication candidates in the NASH segment. For Novartis, it works as an FXR agonist that functions by reducing lipid accumulation, stellate cell activation, and liver cell inflammation, which mainly aims NASH fibrosis.
Conatus has emricasan as its drug candidate which is presently predominately examined for NASH cirrhosis. Both the companies consider their medications can work well as combination treatments to both reduce the effects and prevent liver insult in NASH. If successful, the agreement will offer Novartis a treatment alternative for late and early stage NASH cure, making it as a powerful player in the segment.
From the 8K, Conatus has obtained $50 million, that will be compensated to Conatus within five days of the agreement being reported. This imbursement efficiently doubles company’ market capitalization from its closing stock price of $1.96 per share indicating around $48 million cap before the deal’s announcement. The company is also slated to get up to $650 million in record payments once the agreement is closed with Novartis. Presently, the trigger for the agreement to be consummated is start of Conatus’ ENCORE-LF study into liver fibrosis.
This study was reported as being a Phase 2b study, planned to commence in 2Q2017. Novartis has given a deadline to initiate the study by close of October 2017, if ENCORE-LF starts by then, the deal will kick in and the deal terms will take full impact.
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