Shares of Conatus Pharmaceuticals (CNAT) were up as much as 30% today after the company reported positive phase 2 results in the their NASH Trial. The disease NASH stands for "non-alcoholic steatohepatitis". As the name suggests NASH is fatty liver disease and not a liver disease due to excessive alcohol use. This trial was a phase 2 trial that recruited 38 patients that were randomized to either take 25 mg of emricasan -- Coantus' drug-- or a placebo compound over a 28 day period.  

The phase 2 results showed that the trial met the primary endpoint, showing a statistically significant reduction in alanine amino transferase (ALT) obtaining a p value of  -- p < .05. ALT are enzymes that are found in the cells of the liver and kidney. So the primary endpoint was testing for a reduction of this ALT level in each individual patient. Healthy patients have normal amounts of ALT in the liver but these NASH patients have an abundant amount of these ALT enzymes. More specifically reduction of ALT from baseline in the emricasan group was 39%  compared to placebo that only achieved 14%. 

Conatus has already tested emricasan against other liver diseases seeing similar efficacy results. With these positive results on hand the company will be moving forward with Its NASH trial. For the time being the company has had previous discussions with the FDA on surrogate endpoints -- clinical endpoints for early approval -- so that the company may apply for Accelerated Approval. Accelerated approval would possibly get the emricasan drug approved earlier with the surrogate endpoint mentioned above. One thing to note is that NASH is an unmet medical need, which meets the requirements for accelerated approval, but now the FDA must determine what surrogate endpoint would be appropriate for early approval. We believe that Conatus is a great long term buy and these results reduce the risk profile of the NASH trial.