Conatus Pharmaceuticals Reports Second Quarter 2019 Financial Results and Program Updates
August 06 2019 - 4:05PM
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.
Program Updates 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.
Financial ResultsThe 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.
Forward-Looking Statements 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) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
Statements of
Operations |
|
June 30, |
|
June 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
Collaboration revenue |
|
$ |
10,791 |
|
|
$ |
8,774 |
|
|
$ |
17,815 |
|
|
$ |
18,511 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
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 |
) |
Other income/expense |
|
|
172 |
|
|
|
60 |
|
|
|
375 |
|
|
|
99 |
|
Net loss |
|
$ |
(656 |
) |
|
$ |
(4,497 |
) |
|
$ |
(5,403 |
) |
|
$ |
(9,515 |
) |
|
|
|
|
|
|
|
|
|
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, |
Balance Sheets |
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash, cash equivalents and marketable securities |
|
|
|
|
|
$ |
28,749 |
|
|
$ |
40,692 |
|
Collaboration receivables |
|
|
|
|
|
|
3,194 |
|
|
|
3,677 |
|
Prepaid and other current assets |
|
|
|
|
|
|
3,468 |
|
|
|
3,057 |
|
Total current assets |
|
|
|
|
|
|
35,411 |
|
|
|
47,426 |
|
Property and equipment, net |
|
|
|
|
|
|
124 |
|
|
|
154 |
|
Other assets |
|
|
|
|
|
|
631 |
|
|
|
1,223 |
|
Total assets |
|
|
|
|
|
$ |
36,166 |
|
|
$ |
48,803 |
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders'
equity |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
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 |
|
Stockholders' equity |
|
|
|
|
|
|
24,109 |
|
|
|
27,399 |
|
Total liabilities and stockholders' equity |
|
|
|
|
|
$ |
36,166 |
|
|
$ |
48,803 |
|
|
|
|
|
|
|
|
|
|
CONTACT: Keith MarshallConatus Pharmaceuticals
Inc.(858) 376-2600IR@conatuspharma.com
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