The microcap biotech Conatus Pharmaceuticals $CNAT just struck a licensing deal with Novartis for its lead drug that’s worth about as much as its market cap at today’s close — and that’s just the cash portion of the agreement. Its share price rocketed up, climbing 146% in early-morning trading Tuesday.
San Diego-based Conatus is getting $50 million upfront from pharma giant Novartis, which gets an option on emricasan 9 months after the drug hit a slate of biomarker endpoints in a small mid-stage study for fatty liver disease and NASH. Novartis is paying half of the Phase IIb costs and will hand over another $7 million if it exercises its option in the deal.
Novartis will also hand over an unspecified batch of milestones and has retained the right to co-commercialize the drug in the US. Novartis is responsible for late-stage testing.
The Novartis deal substantially changes the fortunes of this small biotech. Conatus ended the day with a market cap of $51 million. Its CEO Steven J. Mento had this to say:
This collaboration validates the Conatus emphasis on the initial development of emricasan as a single agent treatment for NASH cirrhosis in both compensated and decompensated patients, and sets the stage for simultaneous development of oral combination therapies for the treatment of NASH fibrosis including emricasan and one of the Novartis internal FXR (Farnesoid X receptor) agonists in clinical development. Their strong commitment to and expertise in liver disease, and proven record of success in drug development provide our best opportunity to deliver these potentially groundbreaking new therapies to chronic liver disease patients with high unmet medical need.
The best place to read Endpoints News? In your inbox.
Comprehensive daily news report for those who discover, develop, and market drugs. Join 24,000+ biopharma pros who read Endpoints News by email every day.Free Subscription