On August 1, 2018 Conatus Pharmaceuticals Inc. (Nasdaq:CNAT), a biotechnology company focused on the development and commercialization of novel medicines to treat liver disease, reported financial results for the quarter and six months ended June 30, 2018, and provided updates on its clinical development programs (Press release, Conatus Pharmaceuticals, AUG 1, 2018, View Source [SID1234528294]).
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Program Updates
The company is conducting three Phase 2b clinical trials in collaboration with Novartis – the EmricasaN, a Caspase inhibitOR, for Evaluation (ENCORE) trials, designed to evaluate emricasan in patients with fibrosis or cirrhosis caused by nonalcoholic steatohepatitis (NASH):
ENCORE-PH (for Portal Hypertension), initiated in the fourth quarter of 2016, in approximately 240 patients with compensated or early decompensated NASH cirrhosis and severe portal hypertension, with top-line results expected in the fourth quarter of 2018 followed by an integrated treatment extension period for clinical outcomes;
ENCORE-NF (for NASH Fibrosis), initiated in the first quarter of 2016, in approximately 330 patients with NASH fibrosis, with top-line results expected in the first half of 2019; and
ENCORE-LF (for Liver Function), initiated in the second quarter of 2017, in approximately 210 patients with decompensated NASH cirrhosis, with top-line results expected in the second half of 2019.
During the second quarter, the company announced completion of enrollment in the ENCORE-PH clinical trial. In addition, the company announced an oral presentation at The International Liver Congress 2018, the Annual Meeting of the European Association for the Study of the Liver (EASL), reporting reductions in bacteria-driven inflammation and related liver injury with the company’s pan-caspase inhibitor IDN-7314 in a mouse model of primary sclerosing cholangitis (PSC).
Financial Results
The net loss for the second quarter of 2018 was $4.5 million compared with $5.4 million for the second quarter of 2017. The net loss for the first six months of 2018 was $9.5 million compared with $9.0 million for the first six months of 2017.
All revenues were related to the company’s collaboration with Novartis. Total revenues were $8.8 million for the second quarter of 2018 compared with $10.0 million for the second quarter of 2017. The decrease was primarily due to lower research and development expenses resulting in corresponding lower revenues from Novartis, partially offset by the effects of adopting the ASC 606 revenue recognition standard. Total revenues were $18.5 million for the first six months of 2018 compared with $17.0 million for the first six months of 2017. The increase was primarily due to higher research and development expenses resulting in corresponding higher revenues from Novartis, and the effects of adopting the ASC 606 revenue recognition standard.
Research and development expenses were $10.7 million for the second quarter of 2018 compared with $13.2 million for the second quarter of 2017. The decrease was primarily due to lower spending related to the ENCORE-NF and ENCORE-PH clinical trials and manufacturing activities, partially offset by higher spending related to the ENCORE-LF clinical trial and new product candidate development. Research and development expenses were $22.8 million for the first six months of 2018 compared with $21.1 million for the first six months of 2017. The increase was primarily due to higher spending related to the ENCORE-LF and ENCORE-PH clinical trials and new product candidate development, partially offset by lower spending related to the ENCORE-NF clinical trial.
General and administrative expenses were $2.6 million for the second quarter of 2018 compared with $2.2 million for the second quarter of 2017. General and administrative expenses were $5.3 million for the first six months of 2018 compared with $5.0 million for the first six months of 2017. The increases in general and administrative expenses for both periods were primarily due to higher personnel costs.
Cash, cash equivalents and marketable securities were $57.7 million at June 30, 2018, compared with $74.9 million at December 31, 2017, and a projected year-end 2018 balance of between $35 million and $40 million. The company believes that current financial resources, together with the anticipated reimbursements for 50% of the costs for the ongoing clinical trials, without including any potential milestone payments under the Novartis collaboration, are sufficient to maintain operations through top-line results from the three ENCORE Phase 2b clinical trials by the end of 2019, as well as to fund initial pipeline expansion activities.
Conference Call and Audio Webcast
Conatus will host a conference call and audio webcast at 4:30 p.m. Eastern Time today to discuss the financial results and provide a corporate update. To access the conference call, please dial 877-312-5857 (domestic) or 970-315-0455 (international) at least five minutes prior to the start time and refer to conference ID 9853049. A live and archived audio webcast of the call will also be available in the Investors section of the Conatus website at www.conatuspharma.com.