Novartis announced today that it has notified Conatus Pharmaceuticals Inc., of its exercise of the option to an exclusive license for the global development and commercialization of emricasan, under the option, collaboration and license agreement signed with Conatus on December 19, 2016. The exercise of the option with Conatus, a biotechnology company focused on the development of novel medicines to treat liver disease, and grant of exclusive license to Novartis will be effective upon receipt of all required anti-trust approvals and payment of USD 7 million option exercise fee to Conatus.

This follows the initiation of the Phase IIb ENCORE-LF trial by Conatus evaluating emricasan in patients with decompensated liver cirrhosis caused by nonalcoholic steatohepatitis (NASH). This collaboration has the potential to expand treatment options for people in various stages of fatty liver disease, where no approved medicines currently exist.

"We are pleased to add another important medicine to our liver portfolio with emricasan, which has shown potential in patients with advanced fibrosis and cirrhosis," said Vas Narasimhan, Global Head, Drug Development and Chief Medical Officer, Novartis. "We look forward to advancing our broad portfolio of NASH and chronic liver disease programs to address this growing unmet need."

Novartis is developing Farnesoid X receptor (FXR) agonists for the treatment of chronic liver diseases. As part of this collaboration, Conatus will conduct multiple Phase IIb clinical trials with emricasan in NASH. If results are positive, Novartis would then conduct Phase III studies of emricasan as a single treatment as well as development of combination therapies with an FXR agonist.

FXR agonists have been shown to address three of the most important aspects of NASH progression by reducing fat, inflammation and fibrosis in the liver. The most advanced Novartis investigational compounds, both non-bile acid FXR agonists, are in Phase II clinical trials. Both of these FXR agonists have received Fast Track designation from the US Food and Drug Administration (FDA) for NASH with liver fibrosis. In addition, the FDA has granted Fast Track designation for the development of emricasan in patients with NASH cirrhosis.

Recently, Novartis announced a clinical collaboration with Allergan to conduct a Phase IIb study, involving the combination of a Novartis FXR agonist and Allergan's cenicriviroc (CVC) for the treatment of NASH with liver fibrosis. Both collaborations with Conatus and Allergan continue to support the growing Novartis portfolio to develop new therapies in chronic liver diseases, including NASH.

About emricasan
Emricasan is an investigational, first-in-class, oral, pan-caspase inhibitor for the treatment of non-alcoholic steatohepatitis (NASH) with advanced fibrosis (scarring) and cirrhosis.

To date, emricasan has been studied in over 650 patients in sixteen clinical trials across a broad range of liver diseases. In multiple clinical Phase II trials conducted by Conatus, emricasan has demonstrated significant, rapid and sustained reductions in elevated levels of key biomarkers of inflammation and cell death, which play a role in the severity and progression of liver disease.

About Novartis FXR agonists
Novartis scientists began to develop leads for the FXR agonism program in 2007. Through this effort, several non-bile acid FXR agonists have been identified and pre-clinical data demonstrates that these compounds are very selective with differentiated biological profiles. In animal models, FXR agonists have been shown to address three of the most important aspects of NASH progression by reducing fat, inflammation and fibrosis in the liver. First-in-human studies have continued to support their differentiated profiles and their potential for further development. Two Novartis FXR agonists are now in worldwide clinical studies in NASH patients.

About Non-Alcoholic Steatohepatitis (NASH)
NASH is a chronic, progressive form of non-alcoholic fatty liver disease. It is a leading cause of liver disease worldwide and it is estimated to affect 3% to 5% of the US population alone[2]. As fat builds up in the liver, it triggers a vicious cycle of chronic inflammation and liver scarring called fibrosis. Over time, liver inflammation and fibrosis may progress to cirrhosis, which can lead to liver failure and, barring a transplant, death. NASH is expected to be the principal cause of liver transplantation in the US by 2020[1] and is currently the leading cause of liver transplants for people under 50 in the US[3].

About Novartis
Novartis provides innovative healthcare solutions that address the evolving needs of patients and societies. Headquartered in Basel, Switzerland, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, cost-saving generic and biosimilar pharmaceuticals and eye care. Novartis has leading positions globally in each of these areas. In 2016, the Group achieved net sales of USD 48.5 billion, while R&D throughout the Group amounted to approximately USD 9.0 billion. Novartis Group companies employ approximately 118,000 full-time-equivalent associates. Novartis products are sold in approximately 155 countries around the world.

1. Charlton MR, Burns JM, Pedersen RA, Watt KD, Heimbach JK, Dierkhising RA. Frequency and Outcomes of Liver Transplantation for Nonalcoholic Steatohepatitis in the United States. Gastroenterology; 2011:141 (4):e22-e23.
2. Vernon G, Baranova A, Younossi ZM. Systematic review: the epidemiology and natural history of non-alcoholic fatty liver disease and non-alcoholic steatohepatitis in adults. Aliment Pharmacol Ther. 2011;34(3):274-85.
3. Banini BA, et al. Abstract #46. Presented at: American College of Gastroenterology Annual Scientific Meeting; Oct. 14-19, 2016; Las Vegas, NV.