Conatus Pharmaceuticals Reports Second Quarter 2014 Financial Results and Program Updates

Conatus Pharmaceuticals Reports Second Quarter 2014 Financial Results and
Program Updates

SAN DIEGO, Aug. 13, 2014 (GLOBE NEWSWIRE) -- Conatus Pharmaceuticals Inc.
(Nasdaq:CNAT), a biotechnology company focused on the development and
commercialization of novel medicines to treat liver disease, today announced
financial results for the quarter and six months ended June 30, 2014, and
provided updates on its clinical development programs.

Financial Results

The net loss for the second quarter of 2014 was $5.3 million compared with
$4.9 million for the second quarter of 2013. The net loss for the first six
months of 2014 was $10.5 million compared with $7.2 million for the first six
months of 2013.

Research and development expenses were $3.5 million for the second quarter of
2014 compared with $1.1 million for the second quarter of 2013. Research and
development expenses were $7.1 million for the first six months of 2014
compared with $2.1 million for the first six months of 2013. The increases in
research and development expenses were primarily due to increases in external
costs for clinical trials and manufacturing related to emricasan and personnel
costs.

General and administrative expenses were $1.8 million for the second quarter
of 2014 compared with $0.7 million for the second quarter of 2013. General and
administrative expenses were $3.4 million for the first six months of 2014
compared with $1.4 million for the first six months of 2013. The increases in
general and administrative expenses were primarily due to additional personnel
costs and costs associated with being a public company.

Cash, cash equivalents and marketable securities were $47.0 million at June
30, 2014, compared with $56.4 million at December 31, 2013. The company is
projecting a year-end 2014 balance of cash, cash equivalents and marketable
securities of between $28 million and $32 million.

Program Updates

Conatus is developing its lead compound, emricasan, for the treatment of
patients with chronic liver disease and acute exacerbations of chronic liver
disease, including:

  *Patients with acute-on-chronic liver failure (ACLF);
  *Patients with chronic liver failure (CLF);
  *Post-orthotopic liver transplant (POLT) recipients with reestablished
    liver fibrosis post-transplant as a result of recurrent hepatitis C virus
    (HCV) infection who have successfully achieved a sustained viral response
    (SVR) following HCV antiviral therapy (POLT-HCV-SVR); and
  *Patients with nonalcoholic fatty liver disease (NAFLD), including the
    subset of NAFLD patients with inflammatory and/or fibrotic nonalcoholic
    steatohepatitis (NASH).

ACLF Update

Conatus is conducting three clinical trials of emricasan in patients with
impaired organ function to support dose selection and prioritization for
advancement in its overall clinical development program: a Phase 2b trial
initiated in September 2013 in ACLF patients who may have simultaneous
impairment of both liver and kidney function; a Phase 1 trial initiated in
January 2014 in patients with severe renal impairment; and a Phase 1 trial
initiated in April 2014 in patients with various degrees of hepatic
impairment.

The company today confirmed its guidance that top-line pharmacokinetic (PK)
data from these three trials are expected in the second half of 2014. The
company further announced that it expects to complete dosing in the ACLF trial
by year-end 2014. The company does not expect to dose the maximum of 60
patients stipulated in the protocol, but expects that enrollment and results
will be sufficient to determine the future direction for the clinical
development of emricasan in this critically ill patient population by the end
of 2014.

CLF Update

The company believes that emricasan may provide meaningful clinical benefit
for CLF patients with long-term cirrhosis whose disease symptoms progress in
severity over time. Patients with more advanced cirrhosis may include those on
the transplant waiting list and those not eligible for the transplant waiting
list. We believe emricasan may help stabilize these patients long enough to
get a liver transplant, or improve their condition enough to qualify for a
transplant. Dosing and PK information from the severe renal impairment trial
and the hepatic impairment trial is expected to support the design of a CLF
trial.

Initiation of a Phase 2 trial in CLF patients is expected in the second half
of 2014.

POLT-HCV-SVR Update

The company initiated a Phase 2b clinical trial in POLT-HCV-SVR patients with
fibrosis in May 2014. The placebo-controlled, double-blind (open to sponsor)
clinical trial is designed to enroll approximately 60 patients at
approximately 15 planned clinical sites in the United States. Patients will be
randomized 2:1 to receive either 25 mg of emricasan or placebo orally twice
daily for 24 months and will then be followed for another month
post-treatment. The primary endpoint in this exploratory proof-of-concept
clinical trial is the change in the Ishak Fibrosis Score compared to placebo.
The clinical trial will also evaluate other histological markers, key serum
biomarkers, and the safety and tolerability of emricasan in the target patient
population.

Initial open-label data from the POLT-HCV-SVR Phase 2b trial are expected to
be available in the first half of 2015.

If, as expected, a subset of patients in this trial also has histological
evidence of fat in their livers (steatosis), their baseline NAFLD Activity
Scores (NAS) and subsequent changes will be evaluated.

NAFLD/NASH Update

The company initiated a Phase 2 clinical trial of emricasan in patients with
NAFLD, including patients with NASH, in March 2014. The trial is intended to
confirm the appropriate dosing in this patient population for potential future
studies, to expand emricasan's safety database, and to evaluate changes in
relevant biomarkers of liver damage.

Dosing data from this clinical trial are expected to position the company to
be ready to move forward once appropriate Phase 3 endpoints are confirmed and
a regulatory approval pathway is established in the NASH population.
Announcement of top-line results from the Phase 2 NAFLD/NASH clinical trial is
being deferred to the first quarter of 2015.

Conference Call and Audio Webcast

Conatus will host a conference call and audio webcast at 4:30 p.m. Eastern
Time today to discuss the quarterly results and provide a corporate update. To
access the conference call, please dial 877-312-5857 (domestic) or
970-315-0455 (international) at least five minutes prior to the start time and
refer to conference ID 83518440. A live and archived audio webcast of the call
will also be available in the Investor Center of the company's website at
http://ir.conatuspharma.com/events.cfm.

About Emricasan Clinical Development

To date, emricasan has been studied in over 500 subjects in more than ten
clinical trials. In a completed Phase 2b clinical trial, emricasan
consistently demonstrated clinically meaningful, statistically significant,
rapid and sustained reduction in elevated levels of key biomarkers of
inflammation and cell death that are implicated in the severity and
progression of liver disease. Importantly, these key biomarkers are known to
be elevated and to have prognostic value in multiple hepatic indications that
Conatus is currently pursuing. Conatus is also supporting a pilot clinical
study funded by the National Institute on Alcohol Abuse and Alcoholism (NIAAA)
in patients with severe alcoholic hepatitis.

About Conatus Pharmaceuticals

Conatus is a biotechnology company focused on the development and
commercialization of novel medicines to treat liver disease. Conatus is
developing its lead compound, emricasan, for the treatment of patients with
chronic liver disease and acute exacerbations of chronic liver disease.
Emricasan is a first-in-class, orally active pan-caspase protease inhibitor
designed to reduce the activity of enzymes that mediate inflammation and cell
death, or apoptosis. Conatus believes that by reducing the activity of these
enzymes, emricasan has the potential to interrupt the disease progression
across the spectrum of liver disease. For additional information, please visit
http://www.conatuspharma.com.

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 Conatus'
projected cash, cash equivalents and marketable securities; the completion of
dosing in the Phase 2b clinical trial in ACLF and the sufficiency of the data
from such trial to determine Conatus' future direction for clinical
development in ACLF; the timeline to announce results of PK data from the
ACLF, severe renal impairment and hepatic impairment trials, and open-label
data from the POLT-HCV-SVR Phase 2b trial; the timeline to initiate the Phase
2 clinical trial in CLF patients; the timeline to evaluate top-line results
from the Phase 2 NAFLD/NASH clinical trial and the sufficiency of the dosing
data from such trial to position Conatus to be ready to move forward in
clinical development in this patient population; the expected numbers of
patients and trial sites in clinical trials, and future clinical development
plans for emricasan; and emricasan's therapeutic potential in patients with
liver disease.In some cases, you can identify forward-looking statements by
terms such as "may," "will," "should," "expect," "plan," "anticipate,"
"could," "intend," "target," "project," "contemplates," "believes,"
"estimates," "predicts," "potential" or "continue" 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 initiate
and successfully complete current and planned clinical trials;Conatus'
dependence on its ability to obtain regulatory approval for, and then
successfully commercialize emricasan, which is Conatus' only drug candidate;
Conatus' reliance on third parties to conduct its clinical trials, enroll
patients, manufacture its preclinical and clinical drug supplies and
manufacture commercial supplies of emricasan, if approved; potential adverse
side effects or other safety risks associated with emricasan that could delay
or preclude its approval; Conatus' ability to obtain orphan drug exclusivity
for emricasan for any indication; results of future clinical trials of
emricasan; the potential for competing products to limit the clinical trial
enrollment opportunities for emricasan in certain indications; the uncertainty
of the U.S. Food and Drug Administration's (FDA's) and other regulatory
agencies' approval processes and other regulatory requirements; Conatus'
ability to fully comply with numerous federal, state and local laws and
regulatory requirements applicable to it; Conatus' limited operating history
and its ability to operate successfully as a public company; Conatus' ability
to obtain additional financing in order to complete the development and
commercialization of emricasan; and those risks 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
(Unaudited)
                                                             
                    Three Months Ended          Six Months Ended
Statements of        June 30,                    June 30,
Operations
                    2014           2013         2014            2013
                                                             
Operating expenses:                                           
Research and         $3,467,068   $1,117,096 $7,117,666    $2,084,874
development
General and          1,837,688     670,430     3,432,935      1,419,226
administrative
Total operating      5,304,756     1,787,526   10,550,601     3,504,100
expenses
Other income                                                  
(expense):
Interest income      15,343        --         36,116         132
Interest expense     (17,500)      (196,244)   (35,000)       (213,744)
Other income         3,889         726         3,105          (14,951)
(expense)
Other financing      --           (2,890,258) --            (3,437,422)
expense
Total other income   1,732         (3,085,776) 4,221          (3,665,985)
(expense)
Net loss             (5,303,024)   (4,873,302) (10,546,380)   (7,170,085)
                                                             
Reconciliation of
net loss to net
(loss) income                                                 
applicable to common
stockholders:
Gain on
extinguishment of    --           11,491,043  --            11,491,043
convertible
preferred stock
Deemed distribution
from promissory note --           (474,561)   --            (474,561)
issuance
Net income
applicable to        --           (5,919,404) --            (3,846,397)
participating
securities
Net (loss) income
applicable to common $(5,303,024) $223,776   $ (10,546,380) $--
stockholders
                                                             
Net (loss) income per share                                    
applicable to common stockholders:
Basic                $(0.34)      $0.20      $(0.68)       $--
Diluted              $(0.34)      $0.16      $(0.68)       $--
Weighted average
shares outstanding
used in computing
net (loss) income                                             
per share applicable
to common
stockholders:
Basic                15,445,835    1,138,695   15,429,731     1,099,830
Diluted              15,445,835    1,439,211   15,429,731     1,400,229
                                                             
                                              June 30,        December 31,
Balance Sheets                                 2014            2013
                                                             
Assets                                                        
Current assets:                                               
Cash, cash
equivalents and                                $46,963,990   $56,352,987
marketable
securities
Prepaid and other                              639,733        545,504
current assets
Total current assets                           47,603,723     56,898,491
Property and                                   83,398         23,068
equipment, net
Other assets                                   77,376         14,395
Total assets                                   $47,764,497   $56,935,954
                                                             
Liabilities and                                               
stockholders' equity
Current liabilities                            $3,261,678    $2,817,004
Note payable                                   1,000,000      1,000,000
Stockholders' equity                           43,502,819     53,118,950
Total liabilities
and stockholders'                              $47,764,497   $56,935,954
equity
                                                             

CONTACT: INVESTORS
         Alan Engbring, Conatus Pharmaceuticals
         (858) 376-2637, aengbring@conatuspharma.com
        
         MEDIA
         Mariesa Kemble, Sam Brown Inc.
         (608) 850-4745, mariesakemble@sambrown.com
 
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