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Conatus (CNAT) Reports Narrower-than-Expected Loss in Q3

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Conatus Pharmaceuticals Inc. reported third-quarter 2016 loss of 31 cents per share, narrower than the Zacks Consensus Estimate of a loss of 33 cents. The reported loss was, however, in line with the year-ago figure.

With no approved product in its portfolio at the moment, Conatus does not generate any revenue yet.

In the third quarter of 2016, research and development expenses were $4.8 million, up 17.6% from the year-ago quarter, mainly due to the advancement of the company's ENCORE program. General and administrative were $2.1 million, up 5.7% from the year-ago quarter, reflecting higher personnel costs, and higher consulting, legal and accounting fees.

Emricasan in Focus

Conatus’ lead candidate, emricasan, is being developed for the treatment of patients with chronic liver disease.

Earlier this month, Conatus started a randomized, double-blind, placebo-controlled, phase IIb study evaluating the effect of emricasan for the reduction of hepatic venous pressure gradient (HVPG) in patients with compensated or early decompensated liver cirrhosis caused by nonalcoholic steatohepatitis (NASH), and severe portal hypertension confirmed by HVPG of ≥12 mmHg at baseline. Data after 24 weeks of twice-daily treatment with emricasan or placebo are anticipated in 2018.

The company is conducting two additional phase IIb studies on emricasan. These include the POLT-HCV-SVR study evaluating potential improvements in Ishak fibrosis score in post-orthotropic liver transplant (POLT) recipients with liver fibrosis or cirrhosis post-transplant caused by recurrent hepatitis C virus (HCV) infection in those who have successfully achieved a sustained viral response (SVR) following HCV antiviral therapy. Data after two years of twice-daily treatment with emricasan or placebo are expected in the first half of 2018.

ENCORE-NF is the other study, which is evaluating potential improvements in fibrosis and steatohepatitis in patients with fibrosis caused by NASH. Results after 18 months of twice-daily treatment with emricasan or placebo are expected in 2018.

The company also plans to initiate two studies – ENCORE-LF and ENCORE-XT – on emricasan under the ENCORE program.

Meanwhile, Conatus expects its current financial resources to be sufficient to maintain operations for at least the next 12 months. However, the company would need additional capital to fully implement its development plans. It expects to achieve this through opportunistic financings, strategic partnerships or a combination of both.

Investor focus should remain on updates pertaining to the candidate’s development.

CONATUS PHARMA Price, Consensus and EPS Surprise

 

Zacks Rank & Stocks to Consider

Conatus is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Exelixis, Inc. (EXEL - Free Report) , Infinity Pharmaceuticals, Inc. and Anika Therapeutics Inc. (ANIK - Free Report) . While Infinity and Anika sport a Zacks Rank #1 (Strong Buy), Exelixis has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Infinity’s loss estimates narrowed from $3.84 to $3.79 for 2016 over the last 60 days. The company has posted a positive surprise in all of the four trailing quarters with an average beat of 67.62%.

Anika’s earnings estimates increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company has posted a positive surprise in all of the four trailing quarters with an average beat of 33.14%. Its share price has gained 13% year to date.

Exelixis’ loss estimates narrowed from 71 cents to 54 cents for 2016 and from a loss of 16 cents to earnings of 4 cents for 2017 over the last 60 days. The company has posted a positive surprise twice in the trailing four quarters with an average beat of 38.52%. Its share price has skyrocketed above 100% year to date.

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