(CNAT) Positive Results with Emricasan in Initial Stage of Phase 2 Trial

– Consistent Treatment Effect Observed on Biomarkers in Overall Patient Population –

– Emricasan Improves Key Measures of Liver Function in High Medical Need Subgroup –

– Conference Call and Webcast Presentation at 4:30 p.m. ET Today –

SAN DIEGO, Jan. 05, 2016  — Conatus Pharmaceuticals Inc. (NASDAQ:CNAT) today announced that the three-month, double-blind, placebo-controlled stage of the company’s multicenter Phase 2 Liver Cirrhosis clinical trial showed a statistically significant reduction in caspase-cleaved cytokeratin 18 (cCK18) vs. placebo (p=0.04) in the overall patient population when adjusted for differences between treatment and placebo groups in baseline Model for End-stage Liver Disease (MELD)¹ score and disease etiology as specified in the trial statistical analysis plan. cCK18 is a mechanism-specific biomarker of caspase-driven cell death. Multiple additional liver disease biomarkers achieved statistically significant reductions vs. placebo in the overall patient population after three months of treatment, while others achieved positive trends. The company believes that the consistent pattern of improvement across these biomarkers in the overall patient population provides strong evidence of a favorable treatment effect with emricasan, the company’s first-in-class, orally-active pan-caspase inhibitor.

Overall Patient Population	Placebo (N=42)						Emricasan (N=44)		p-value*
	Baseline	Change at Month 3†					Baseline	Change at Month 3†
cCK18 (U/L)	296		+9.3			%	289	‒4.6%	0.04
Caspase 3/7 (RLU)	2503		+8.8			%	2656	‒45.5%	<0.0001
flCK18 (U/L)	582	‒3%					714	‒18%	0.005
ALT (U/L)	25.5	‒1.0					27.5	‒3.0	0.03
AST (U/L)	41.5	‒1.5					50.0	‒5.0	0.08
*p-values for treatment effect at Month 3, adjusting for baseline, MELD, etiology; not adjusted for multiple testing. †Based on last observation carried forward. Data presented are geometric mean for baseline cCK18, caspase 3/7, flCK18, and median change for ALT and AST.

Collectively, two key secondary endpoints and clinically relevant measures of liver function, MELD score and Child-Pugh-Turcotte (Child-Pugh)² score, along with other key liver function parameters, demonstrated favorable trends vs. placebo in the overall patient population after three months of treatment.

Overall Patient Population	Placebo (N=42)		Emricasan (N=44)		p-value*
	Baseline	Change at Month 3†	Baseline	Change at Month 3†
MELD score	12.9	+0.1	12.8	­‒0.1	0.50
Child-Pugh score	6.9	+0.1	6.9	‒0.2	0.10
Total bilirubin (mg/dL)	2.59	+0.07	2.25	‒0.05	0.19
INR	1.31	+0.02	1.33	‒0.02	0.12
Albumin (g/dL)	3.48	+0.06	3.46	+0.02	0.38
*p-values for treatment effect at Month 3, adjusting for baseline, MELD, etiology; not adjusted for multiple testing. †Based on last observation carried forward.

Exploratory Subgroup Analyses Yield Clinically Meaningful Results

Importantly, the trends in the overall patient population were driven by statistically significant improvements in a subgroup of patients with baseline MELD scores ≥15, the established prerequisite for listing a patient for liver transplant. This pattern of greatest responses in highest need patients is consistent with the results from the company’s Phase 2 Portal Hypertension clinical trial announced in the third quarter of 2015.

Baseline MELD Score ≥15 Patient Population	Placebo (N=10)		Emricasan (N=9)		p-value*
	Baseline	Change at Month 3†	Baseline	Change at Month 3†
MELD score	16.3	+0.6	16.0	­‒1.6	0.003
Child-Pugh score	8.2	+0.6	7.8	‒0.6	0.003
Total bilirubin (mg/dL)	4.30	‒0.06	3.17	‒0.55	0.03
INR	1.45	+0.06	1.54	‒0.14	0.0004
Albumin (g/dL)	3.19	+0.05	3.41	+0.07	0.78
*p-values for treatment effect at Month 3, adjusting for baseline, MELD, etiology; not adjusted for multiple testing. †Based on last observation carried forward.

Additional analyses of the three-month data showed the following broadly evident treatment effects in this subgroup:

• 1.6 reduction in mean MELD score with emricasan vs. 0.6 increase with placebo (p=0.003)
  • Patients achieving at least 2-point reductions in MELD score
    • 6 of 9 with emricasan vs. 2 of 10 with placebo
  • Patients achieving reductions in MELD score to ≤14
    • 4 of 9 with emricasan vs. 1 of 10 with placebo
• 0.6 reduction in mean Child-Pugh score with emricasan vs. 0.6 increase with placebo (p=0.003)
  • Patients achieving at least 1-point changes in Child-Pugh score
    • 4 of 9 had decreases with emricasan vs. 2 of 10 with placebo
    • 0 of 9 had increases with emricasan vs. 4 of 10 with placebo

Consistent with the company’s previous 15 clinical trials, emricasan was generally well-tolerated in the placebo-controlled stage of the Liver Cirrhosis clinical trial, and the overall safety profile was similar in the emricasan and placebo groups with regard to both serious and other adverse events.

“The improvement after only three months of treatment in patients with cirrhosis and impaired hepatic function in nearly all of the mechanism-specific and mechanism-independent biomarkers, as well as favorable overall trends driven by statistically significant subgroup improvements in clinically relevant markers of liver function – MELD and Child Pugh scores – is highly encouraging,” said David T. Hagerty, M.D., Executive Vice President of Clinical Development at Conatus. “The magnitude of the treatment effect was much more meaningful in patients with high baseline MELD scores. We believe these results, if confirmed and sustained, will be very important clinically. We look forward to the availability of the six-month data from this clinical trial to understand whether longer dosing may also demonstrate a treatment effect as measured by MELD and Child-Pugh in patients with lower baseline MELD scores and the overall patient population.”

“With these latest results, we have now demonstrated emricasan’s ability to cause meaningful improvements in targeted patient populations using all three measures identified by the FDA (U.S. Food and Drug Administration) as potentially acceptable surrogate endpoints for clinical trials in patients with liver cirrhosis,” said Conatus co-founder, President and Chief Executive Officer Steven J. Mento, Ph.D. “The evidence of emricasan’s clinical activity across the spectrum of liver disease continues to build. Over the past year, we have generated clinical data defining acceptable emricasan dosing in patients with all levels of liver function impairment, and confirming that emricasan is active across multiple etiologies of liver disease. The two latest clinical trials demonstrate emricasan’s ability to provide statistically significant improvements rapidly in clinically important validated surrogate endpoints of portal hypertension and liver function in the subgroups of patients with highest medical need. These results reinforce our commitment to the further development of emricasan with a focus on an initial registration in liver cirrhosis. We believe the planned ENCORE liver cirrhosis and nonalcoholic steatohepatitis (NASH) fibrosis clinical trials announced in November offer the optimal path forward toward that objective. We expect that the upcoming six-month Liver Cirrhosis clinical trial data will allow us to determine, with the continued engagement of the regulatory authorities, whether the ENCORE-LF clinical trial – originally planned as a Phase 2 clinical trial – may be redesigned to qualify as Phase 3. We are advancing well with our plans to initiate the ENCORE clinical trials on a staggered basis through early 2017.”

Liver Cirrhosis Trial

The double-blind, placebo-controlled Phase 2 Liver Cirrhosis clinical trial was conducted at 26 U.S. sites and enrolled 86 patients with liver cirrhosis due to different etiologies, mild to moderate liver impairment and baseline MELD scores of 11 to 18. In the double-blind and placebo-controlled stage, patients were randomized 1:1 to receive either 25 mg of emricasan or placebo orally twice daily for three months. The primary endpoint was change from baseline in cCK18. Secondary endpoints included changes from baseline in MELD and Child-Pugh scores, which include laboratory parameters associated with liver synthetic and excretory function, such as serum albumin levels, international normalized ratio (INR) and total bilirubin levels. In the open-label stage, all patients either on emricasan or placebo receive emricasan for an additional three months. Six-month data from patients who continued treatment and three-month data from placebo patients who crossed over to emricasan treatment are expected in the second quarter of 2016.

Among the 86 subjects enrolled and dosed, liver cirrhosis etiologies included alcohol (38%), hepatitis C virus, or HCV (29%), NASH (23%), and other causes (9%). Baseline MELD scores were ≤14 in 78% of enrolled subjects and ≥15 in 22% of enrolled subjects. Baseline Child-Pugh status was A (Child-Pugh score of 5-6) in 43% of subjects and B (Child-Pugh score of 7-9) in 56% of subjects.

Conference Call/Webcast/Presentation

Conatus will host a conference call and webcast at 4:30 p.m. Eastern Time today, January 5, to discuss the initial top-line results. To access the conference call, please dial 877-312-5857 (domestic) or 970-315-0455 (international) at least five minutes prior to the start time and refer to conference ID 17708674. An associated presentation and live and archived audio webcast of the call will be available in the Investors section of the company’s website at http://ir.conatuspharma.com/events.cfm.

About Emricasan Clinical Development

To date, emricasan has been studied in over 650 subjects in sixteen clinical trials across a broad range of liver disease etiologies and stages of progression. In multiple clinical trials, emricasan has demonstrated statistically significant, rapid and sustained reductions in elevated levels of key biomarkers of inflammation and apoptosis that are implicated in the severity and progression of liver disease. Importantly, these key biomarkers are known to be elevated and to have prognostic value in multiple hepatic indications that Conatus is currently pursuing. The company also is evaluating emricasan’s potential longer-term effects on liver structure in its ongoing Phase 2b clinical trial in post-orthotopic liver transplant (POLT) recipients who have reestablished liver fibrosis or cirrhosis post-transplant as a result of recurrent HCV infection and have successfully achieved a sustained viral response following HCV antiviral therapy (POLT-HCV-SVR). In November 2015, the company announced plans to conduct multiple clinical trials covering various liver cirrhosis patient populations for different chronic dosing periods using different endpoints – the ENCORE trials – as a strategy for initial registration of emricasan as a potential treatment for patients with liver cirrhosis.

About Conatus Pharmaceuticals

Conatus is a biotechnology company focused on the development and commercialization of novel medicines to treat liver disease. Conatus is developing its lead compound, emricasan, for the treatment of patients with chronic liver disease. Emricasan is a first-in-class, orally active pan-caspase inhibitor designed to reduce the activity of enzymes that mediate inflammation and apoptosis. Conatus believes that by reducing the activity of these enzymes, emricasan has the potential to interrupt the disease progression across the spectrum of liver disease. For additional information, please visit www.conatuspharma.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release are forward looking statements, including statements regarding:  improvements in biomarkers as evidence of a favorable treatment effect with emricasan; the clinical importance of the three-month results if confirmed and/or sustained over longer treatment periods with emricasan; the use of the six-month data from the Liver Cirrhosis trial to determine whether longer dosing with emricasan may lead to improvements in patients with lower baseline MELD scores and the overall patient population; the potential of measures identified by the FDA to be used as surrogate endpoints in future clinical trials in patients with liver cirrhosis; further development of emricasan with a focus on an initial registration in liver cirrhosis; the planned ENCORE clinical trials being the optimal registration path forward for emricasan; the ability of the six-month Liver Cirrhosis trial data to allow the company, with continued engagement of the regulatory authorities, to determine whether the ENCORE-LF clinical trial may be redesigned as a Phase 3 trial; the planned initiation of the ENCORE trials through early 2017; the expected results of the six-month data from patients who continued treatment and the three-month data from placebo patients who crossed over to emricasan treatment in the Liver Cirrhosis trial in the second quarter of 2016; the company’s plans to conduct multiple clinical trials covering various liver cirrhosis patient populations for different chronic dosing periods using different endpoints as a strategy for initial registration of emricasan as a potential treatment for patients with liver cirrhosis; and emricasan’s potential to interrupt the disease progression across the spectrum of liver disease. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. These forward-looking statements speak only as of the date of this press release and are subject to a number of risks, uncertainties and assumptions, including:  Conatus’ ability to initiate and successfully complete current and future clinical trials; the potential that further analysis of the data described herein or additional data may yield different results; Conatus’ ability to evaluate emricasan’s potential medium-term and longer-term effects on liver function and liver structure in its other two ongoing clinical trials; Conatus’ ability to develop and implement a registration strategy and pathway for emricasan; FDA’s and other regulatory agencies’ interactions and guidance relating to the development of emricasan; Conatus’ dependence on its ability to obtain regulatory approval for, and then successfully commercialize emricasan, which is Conatus’ only drug candidate; Conatus’ reliance on third parties to conduct its clinical trials, enroll subjects, manufacture its preclinical and clinical drug supplies and manufacture commercial supplies of emricasan, if approved; the potential that earlier clinical trials may not be predictive of future results; potential adverse side effects or other safety risks associated with emricasan that could delay or preclude its approval; results of future clinical trials of emricasan; the potential for competing products to limit the clinical trial enrollment opportunities for emricasan in certain indications; the uncertainty of the FDA’s and other regulatory agencies’ approval processes and other regulatory requirements; Conatus’ ability to fully comply with numerous federal, state and local laws and regulatory requirements applicable to it; Conatus’ limited operating history and its ability to operate successfully as a public company; Conatus’ ability to obtain additional financing in order to complete the development and commercialization of emricasan; and those risks described in Conatus’ prior press releases and in the periodic reports it files with the Securities and Exchange Commission. The events and circumstances reflected in Conatus’ forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, Conatus does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

¹ MELD score is a numerical value ranging from 6 (less ill) to 40 (gravely ill) calculated by a formula using three routine serum biomarkers:  total bilirubin, creatinine, and INR, and used to position patients on the liver transplant waiting list. Biomarker values below 1 are rounded to 1 to avoid negative values in the MELD formula. Scores of 15 or greater are required for listing eligibility.

² Child-Pugh score is a numerical value ranging from 5 (least severe) to 15 (most severe) calculated by totaling the individual scores on a 1-3 scale for three routine serum biomarkers:  bilirubin, INR, and albumin; and two clinical factors:  encephalopathy and ascites. Scores of 5-6 are classified as Child-Pugh A (mild liver impairment); scores of 7-9 are classified as Child-Pugh B (moderate liver impairment); scores of 10-15 are classified as Child-Pugh C (severe liver impairment).

MEDIA:  David Schull
Russo Partners, LLC
(858) 717-2310
David.Schull@RussoPartnersLLC.com

INVESTORS:  Alan Engbring
Conatus Pharmaceuticals Inc.
(858) 376-2637
aengbring@conatuspharma.com