Stifel cuts Conatus Pharma to hold; PT to $4 from $10


Stifel downgraded Conatus Pharmaceuticals (NASDAQ:CNAT) to “hold” from “buy” and slashed its price target to $4 from $10 after the company’s ENCORE-PH trial missed its pre-specified primary endpoint. The stock closed at $4.50 on Dec. 4.

Encore-PH is one of three trials of emricasan in NASH cirrhosis patients. Analyst Stephen Willey writes that the company pointed to “clinically important improvements” in patients’ hepatic venous pressure gradient, despite the changes not being statically significant, and suggested a bigger trial might have been more successful.

“Despite this trend, we believe these results (and the totality of data observed across the emricasan development program to date) still highlight a number of lingering uncertainties,” he added.

Mr. Willey said uncertainties about the remaining two trials “limit our ability to confidently recommend the stock into the next two data read-outs (the ENCORE-NF trial in the first quarter of 2019 and ENCORE-LF in mid-2019), which will now ultimately determine the company’s longer-term fate.”

Stephen Kilmer