(Reuters) – Conatus Pharmaceuticals Inc said on Monday it plans to explore options and implement a restructuring plan after its liver disease drug failed in a mid-stage trial.
The drug developer’s shares halved to 48 cents after the bell.
The company said its drug emricasan failed to meet the main goal in a mid-stage trial and it will be discontinuing further treatment of patients in the trial.
The drug was being developed to treat patients with nonalcoholic steatohepatitis (NASH), a fatty liver disease where fat accumulation and inflammation can lead to scarring, or fibrosis, that impairs liver function.
Novartis AG in 2017 had exercised its option with Conatus to develop emricasan. Positive mid-stage trial results would have lead to Novartis conducting late-stage studies of the drug. Conatus said on Monday it will work with Novartis to ensure that all remaining obligations related to the emricasan program are fulfilled.
The results follow another failed mid-stage trial of the drug in March, which caused shares to plunge 56%.
Conatus said it will reduce its staff by 40% and suspend the development of its drug candidate CTS-2090, as part of its restructuring plan. The company had 31 employees as of Feb. 26.
(Reporting by Saumya Sibi Joseph in Bengaluru; Editing by Arun Koyyur and Shounak Dasgupta)