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SAN DIEGO, Aug. 06, 2019 (GLOBE NEWSWIRE) -- Conatus Pharmaceuticals Inc. (Nasdaq:CNAT) today announced financial results for the quarter and six months ended June 30, 2019, and provided updates on its development programs.
During the second quarter, Conatus announced that top-line results from the company’s ENCORE-LF clinical trial of emricasan did not meet its primary endpoint, results from the 24-week extension in the company’s ENCORE-PH clinical trial of emricasan did not meet predefined objectives, and the company is discontinuing further treatment of patients enrolled in the ENCORE-LF trial. Consequently, Conatus and its partner, Novartis, have no further development plans for emricasan. Conatus plans to complete its ongoing clinical trials of emricasan for which the company is responsible under the collaboration agreement and is in discussions with Novartis for the wind-down of the collaboration.
In June 2019, Conatus announced that the company was implementing a restructuring plan in order to extend its resources, which included reducing staff and suspending development of its inflammasome disease candidate, CTS-2090. The company also announced that it had engaged Oppenheimer & Co., Inc., as its financial advisor to assist in the exploration and evaluation of strategic alternatives to enhance shareholder value. There can be no assurance of a successful outcome from these efforts, or of the form or timing of any such outcome.
The net loss for the second quarter of 2019 was $0.7 million compared with $4.5 million for the second quarter of 2018. The net loss for the first six months of 2019 was $5.4 million compared with $9.5 million for the first six months of 2018.
Total revenues consisted of collaboration revenue related to the company’s collaboration with Novartis. Total revenues were $10.8 million for the second quarter of 2019 compared with $8.8 million for the second quarter of 2018. The increase of $2.0 million was primarily due to a net cumulative catch-up in revenue recognized under the Novartis agreement, partially offset by lower revenues under the Novartis agreement due to lower emricasan-related research and development expenses.
Total revenues were $17.8 million for the first six months of 2019 compared with $18.5 million for the first six months of 2018. The decrease of $0.7 million was primarily due to lower revenues under the Novartis agreement due to lower emricasan-related research and development expenses, partially offset by a net cumulative catch-up in revenue recognized under the Novartis agreement.
Research and development expenses were $8.6 million for the second quarter of 2019 compared with $10.7 million for the second quarter of 2018. Research and development expenses were $17.9 million for the first six months of 2019 compared with $22.8 million for the first six months of 2018. These decreases were primarily due to lower emricasan-related research and development expenses and lower personnel costs, partially offset by recognition of severance and noncash stock compensation costs for research and development employees related to the restructuring plan announced in June 2019.
General and administrative expenses were $3.1 million for the second quarter of 2019 compared with $2.6 million for the second quarter of 2018. General and administrative expenses were $5.6 million for the first six months of 2019 compared with $5.3 million for the first six months of 2018. These increases were primarily due to recognition of severance and noncash stock compensation costs for general and administrative employees related to the restructuring plan announced in June 2019.
Cash, cash equivalents and marketable securities were $28.7 million at June 30, 2019, compared with $40.7 million at December 31, 2018. The company is projecting a year-end 2019 net balance of cash, cash equivalents and marketable securities of between $10 million and $15 million.
This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release are forward-looking statements, including statements regarding: plans to complete ongoing trials of emricasan; concerning or implying the company will successfully complete a strategic alternative or that the company will be able to enhance shareholder value; and the company’s financial guidance. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continues” or the negative of these terms or other similar expressions. These forward-looking statements speak only as of the date of this press release and are subject to a number of risks, uncertainties and assumptions, including: Conatus’ ability to successfully complete its ongoing clinical trials; whether desirable strategic alternatives can be identified; and the company’s ability to conserve cash or to complete a strategic alternative. In addition, if the company does not or is unable to retain certain remaining personnel, it may be difficult to complete a transaction. The company’s existing or future liabilities, including litigation, if any, could also be seen as detrimental to any potential parties to a strategic alternative. There can be no assurance that the company will be able to conserve sufficient cash or complete any transaction. Other risks regarding the company’s business are described in Conatus’ prior press releases and in the periodic reports it files with the Securities and Exchange Commission. The events and circumstances reflected in Conatus’ forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, Conatus does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
|Conatus Pharmaceuticals Inc.|
|Selected Condensed Financial Information|
|(In thousands, except per share data)|
|Three Months Ended||Six Months Ended|
|Statements of Operations||June 30,||June 30,|
|Research and development||8,565||10,737||17,948||22,818|
|General and administrative||3,054||2,594||5,645||5,307|
|Total operating expenses||11,619||13,331||23,593||28,125|
|Loss from operations||(828||)||(4,557||)||(5,778||)||(9,614||)|
|Net loss per share, basic and diluted||$||(0.02||)||$||(0.15||)||$||(0.16||)||$||(0.32||)|
|Weighted average shares outstanding used in computing|
|net loss per share, basic and diluted||33,168||30,114||33,167||30,081|
|June 30,||December 31,|
|Cash, cash equivalents and marketable securities||$||28,749||$||40,692|
|Prepaid and other current assets||3,468||3,057|
|Total current assets||35,411||47,426|
|Property and equipment, net||124||154|
|Liabilities and stockholders' equity|
|Accounts payable and other current liabilities||$||9,811||$||8,446|
|Current portion of deferred revenue||2,130||10,075|
|Total current liabilities||11,941||18,521|
|Deferred revenue, less current portion||-||2,815|
|Other long-term liabilities||116||68|
|Total liabilities and stockholders' equity||$||36,166||$||48,803|
CONTACT: Keith Marshall
Conatus Pharmaceuticals Inc.