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Conatus' Liver Disease Drug Gets Orphan Drug Tag in the EU

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Conatus Pharmaceuticals Inc. announced that the European Medicines Agency (EMA) has granted orphan drug designation (ODD) to its pipeline candidate, IDN-7314, currently undergoing a phase II study for treatment of primary sclerosing cholangitis (PSC). PSC is a liver disease that affects bile ducts in liver with a possibility to eventually leading to cirrhosis and liver failure.

IDN-7314 is an oral pan-caspase protease inhibitor, designed to reduce the activity of enzymes that mediate inflammation and cell death. Notably, in June, the FDA had also granted ODD to IDN-7314 for the aforementioned indication.

The EMA generally grants an orphan drug designation to the drugs, intended for treatment, prevention or diagnosis of a disease that is life-threatening or chronically debilitating and which does not impact more than five in 10,000 people.

Shares of Conatus have underperformed the industry so far this year. The stock has lost 5.5% in contrast to the broader industry’s gain of 22.6%.

ODD was conferred with the EMA based on positive results from two preclinical studies evaluating IDN-7314 for treatment of PSC. IDN-7314 has demonstrated a reduction in relevant PSC biomarkers in both the studies. This set of data would act as a positive proof of concept for future clinical trials in humans.

Apart from IDN-7314, another candidate in the Conatus’ pipeline portfolio is emricasan, also developed to treat a chronic liver disease, including NASH fibrosis. It is presently in phase II development for the given indication. In fact, several phase I and phase II studies are evaluating emricasan across a broad range of liver disease etiologies and stages of progression.

Notably in December 2016, Conatus had signed an exclusive option, collaboration and license agreement with Novartis AG (NVS - Free Report) for the worldwide development and commercialization of emricasan.

The company expects to provide an update on IDN-7314 and other candidates in its early-stage pan-caspase inhibitor pipeline, later in 2017.

Zacks Rank & Key Picks

Conatus currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in healthcare sector include Ionis Pharmaceuticals, Inc. (IONS - Free Report) and Omeros Corporation (OMER - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ionis’ loss per share estimates narrowed from 18 cents to 17 cents for 2017 and from 35 cents to 29 cents, over the last 60 days. The company delivered positive earnings surprises in all the trailing four quarters with an average beat of 21.90%. Ionis’ shares have surged 33.1% so far this year.

Omeros’ loss per share estimates narrowed from $1.33 to $1.32 for 2017 and from 76 cents to 61 cents for 2018, over the last 60 days. The company delivered positive earnings surprises in all the trailing four quarters with an average beat of 34.35%. Omeros’ shares have soared 92.8% so far this year.

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