SAN DIEGO, May 04, 2017 (GLOBE NEWSWIRE) -- Conatus Pharmaceuticals Inc. (Nasdaq:CNAT) today announced that Novartis has exercised its option to an exclusive license for the global development and commercialization of emricasan, the company's first-in-class, orally-active pan-caspase inhibitor, under terms of the Option, Collaboration and License Agreement signed in December 2016. Subject to usual and customary conditions, including required anti-trust approvals, the license will become effective upon Conatus' receipt of a $7 million option exercise payment, expected in mid-2017. The option exercise by Novartis followed notification by Conatus of the initiation of the Phase 2b ENCORE-LF (for Liver Function) randomized, double-blind, placebo-controlled clinical trial evaluating emricasan in patients with decompensated liver cirrhosis caused by nonalcoholic steatohepatitis (NASH). With the $50 million upfront payment received in December 2016, the $15 million received in exchange for a convertible promissory note issued to Novartis in February 2017, the anticipated $7 million option exercise payment, and Novartis sharing 50% of the costs of Conatus' four ongoing Phase 2b emricasan clinical trials after the license becomes effective, the company believes that current financial resources are sufficient to maintain operations and ongoing clinical development activities through the end of 2019. In addition, with the Novartis commitment to fund Phase 3 single agent emricasan development and all combination drug development activities, the company believes the resources are in place to complete emricasan development both as a single agent for NASH cirrhosis, and as a single agent or part of a combination drug therapy for NASH fibrosis. Conatus is eligible to receive significant payments if certain clinical development, regulatory and commercial milestones are met, as well as tiered double digit royalties on emricasan single agent sales and tiered single to double digit royalties on sales of combination drug products containing emricasan. Conatus has the option to co-commercialize emricasan in the United States, including combination drug therapies, on a cost-sharing and revenue-sharing basis in lieu of U.S. royalties and with reduced ex-U.S. royalties.