Does Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) Have The Zika Answer?

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The spotlight is on Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) after a team of scientists found that its liver drug called emricasan could treat Zika virus. More than a dozen drugs, which have either been approved or under clinical trials, have been identified as potential Zika treatments.

Conatus Pharmaceuticals Inc. (NASDAQ: CNAT)’s emricasan is among the more than a dozen substances that have shown promise in tackling Zika. The scientists involved in the so-called drug repurposing study were initially looking at a list of 6,000 substances to see if they could treat the virus. They have now narrowed their selection to a handful of potential medicines.

Conatus holds several patent claims to emricasan. It is no wonder that the company’s CSO, Alfred Spada, said that they would be excited if the ongoing research found that emricasan was effective in treating Zika virus.

Preventing cell death

In the case of emricasan, the scientists working on drug repurposing noted that it prevented the death of brain cells that had been exposed to Zika virus. That is an important attribute considering that Zika is known to cause fetal brain defects. Pregnant women infected by Zika end up giving birth to babies with abnormally small heads, a condition known medically as microcephaly.

Some of Conatus Pharmaceuticals Inc (NASDAQ: CNAT)’s patent claims to emricasan will remain in force until 2028. As such, if the scientists doing the drug repurposing study settle on emricasan as a viable Zika treatment, it could open up an important source of new revenue for Conatus. However, some analysts have pointed out that selection of emricasan as a treatment for Zika virus could put much pressure on Conatus to license the drug for little or even no money.

Other potential Zika treatment

Outside of Conatus’ emricasan, the other substance that the scientists have identified as potential treatment for Zika is one that capable of suppressing multiplication of the virus in the body.

How Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) fared in 2Q

Conatus Pharmaceuticals Inc. (NASDAQ: CNAT) posted EPS loss of $0.30, better than EPS loss of $0.38 that analysts were looking for. The company finished the quarter with cash and equivalents of $30.2 million, which the management said should be adequate to fund operations for the next 12 months.

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