Conatus Pharmaceuticals Inc. (NASDAQ: CNAT)
Conatus Pharmaceuticals Inc. (CNAT), a biotechnology company made an announcement yesterday regarding positive Phase 2 results of their portal hypertension (PH) clinical trial of emricasan. The clinical trial met its primary endpoints. Emricasan is used in the treatment of liver diseases.
Conatus Pharmaceuticals Inc. CEO’s Comments
CEO Steven J. Mento said.
“We believe the results from this trial establish the near-term effects of emricasan on portal hypertension. We are evaluating emricasan’s potential longer-term effects on liver function and liver structure in our other two ongoing clinical trials: the Phase 2 Liver Cirrhosis (LC) trial and the Phase 2b post-transplant trial.” 24/7 Wall St.
Executive VP of Clinical Development David T. Hagerty:
“We were excited to demonstrate that a drug candidate with the potential to achieve long-term resolution of fibrosis and cirrhosis also has the ability to induce a rapid and clinically meaningful reduction of severe portal hypertension. The reduction of portal pressure over a relatively short time frame in the patients with therapeutically relevant portal hypertension may reflect the initial impact of emricasan on the hyperdynamic circulation that is the predominant contributor to portal hypertension as cirrhosis progresses and/or a direct effect upon intrahepatic vasculature resistance. Future studies will be needed to assess the relative contribution of these mechanisms to the observed clinical effect. Decreasing HVPG has been identified by the FDA (U.S. Food and Drug Administration) as a validated, objective measure that may be acceptable as a surrogate endpoint for clinical trials of patients with liver cirrhosis. These results set the stage for future Phase 2b clinical trials in patients with cirrhosis and therapeutically relevant portal hypertension.” 24/7 Wall St.
CNAT Technical Analysis
CNAT gapped up in price yesterday to $6.69, up from the prior day’s close of $5.74, which is a 17% increase in price based on favorable news. Taking a look at the daily chart, we can see the last time the stock traded above this price level was back on April 23rd when the stock closed at $6.81. Looking a little further back on the daily chart, we can see the stock had a big drop down back on January 8th when it traded at $10.33, only to fall all the way down to $6.19 the next day. That is equivalent to a 40% drop in a one day period of trading. The stock does have a low float of 14.54 million shares and was trading on extremely heavy volume, 31 times the normal daily trading volume. Both of these factors make the stock a good candidate for the gap and go strategy. The stock did reach pre market highs of $8.20 which means that it gave back $1.51 at the open or equivalent to 18%. For trading purposes, my entry point would have been $6.80 looking for a run through $7.00. My stop loss would have been $6.60 fearing anything below that and the stock would start to fill in the gap up.
Conatus Pharmaceuticals Inc., a biotechnology company, focuses on the development and commercialization of novel medicines to treat liver diseases in the United States. Its products include Emricasan, an orally active pan-caspase protease inhibitor, which is in Phase 2 clinical trials for the treatment of liver cirrhosis, acute-on-chronic liver failure, post liver transplant clearance of hepatitis C virus infection with sustained viral response, non-alcoholic steatohepatitis, and nonalcoholic fatty liver disease. The company was founded in 2005 and is headquartered in San Diego, California. Yahoo Finance