Novartis has exercised its license option for the global development and commercialization of Conatus Pharmaceuticals’ oral pan-caspase inhibitor emricasan, under terms of the firms’ $50 million up-front agreement reported in December 2016. Novartis’ decision to exercise the option follows the start by Conatus of a Phase IIb study evaluating emricasan in patients with decompensated liver cirrhosis caused by nonalcoholic steatohepatitis (NASH). The placebo-controlled ENCORE-LF study will evaluate two dose levels of oral emricasan therapy in approximately 210 patients over 48 weeks.

Conatus co-founder, president, and CEO Steven J. Mento, Ph.D., said, “With the initiation of ENCORE-LF, we believe emricasan is the only treatment candidate being evaluated in clinical trials in patients with both compensated and decompensated NASH cirrhosis, reflecting emricasan’s demonstrated ability to improve both portal hypertension and liver function.”

Novartis will pay Conatus a $7 million option exercise fee, and will also share 50% of the costs of Conatus’ ongoing Phase IIb clinical trials with emricasan. The latter will earn clinical development, regulatory, and commercial milestones, plus royalties on sales of both single-agent and combination emricasan therapies. Conatus retains an option to co-commercialize the drug in the U.S., on a cost- and revenue-sharing basis, in lieu of U.S. royalties, and with lower ex-U.S. royalties.

Novartis is separately developing farnesoid X receptor (FXR) agonists for the treatment of chronic liver diseases. If results from the Phase IIb emricasan studies are positive, Novartis will conduct and fund Phase III studies with emricasan as a single treatment as well as fund the development of combination therapies with an FXR agonist.

Emricasan is currently being evaluated in three additional Phase IIb studies, including ENCORE-NF in patients with NASH fibrosis and ENCORE-PH in patients with NASH cirrhosis and severe portal hypertension. The POL-HCV-SVR emricasan trial is assessing improvements in fibrosis in post-orthotopic liver transplant (POLT) recipients with liver fibrosis or cirrhosis post-transplant as a result of recurrent HCV infection, who have successfully achieved a sustained viral response following HCV antiviral therapy.

Conatus said that the combination of payments received from Novartis since November, with trials funding and an additional $15 million received in exchange for a convertible promissory note issued to Novartis in February 2017, mean that it should have sufficient financial resources to continue operations and ongoing clinical development activities through to the end of 2019.

Just last month, Novartis and Allergan agreed to carry out a Phase IIb study combining a Novartis FXR agonist with Allergan’s cenicriviroc for treating NASH.

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